<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF SECURITIES EXCHANGE ACT OF 1934
For the quarter ended March 31, 1995 Commission File
Number 0-15495
MESA AIR GROUP, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New Mexico 85-0302351
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2325 East 30th Street, Farmington, New Mexico 87401
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (505) 327-0271
--------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
On July 7, 1995, the Registrant had outstanding 32,859,261 shares of Common
Stock.
-1-
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Item 6. Exhibits and Reports on Form 8-K
Exhibit 10.79 - Bombardier Purchase Agreement
B95-7701-PA-299 between Bombardier, Inc.
and Mesa Airlines, Inc. This Exhibit is
subject to a confidential treatment
request and certain confidential
portions have been omitted as
indicated by the bracketed language
[CONFIDENTIAL PORTION DELETED] and
filed separatly with the SEC.
-2-
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Mesa Air Group, Inc.
Registrant
Date: 11/1/95 /s/ W. Stephen Jackson
--------------------------------------
W. Stephen Jackson
Chief Financial Officer, Treasurer and
Vice President of Finance
(Principal Accounting Officer)
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EXHIBIT INDEX
MESA AIR GROUP
COMMISSION FILE NO. 0-15495
FORM 10-Q/A
FOR THE QUARTER ENDED MARCH 31, 1995
NO. DESCRIPTION
- --- -----------
10.79 Bombardier Purchase Agreement B95-7701-PA-299 between
Bombardier, Inc. and Mesa Airlines, Inc. This exhibit
is subject to a confidential treatment request and
certain confidential portions have been omitted as
indicated by the bracketed language [CONFIDENTIAL
PORTION DELETED] and filed separatly with the SEC
<PAGE> 1
"CONFIDENTIAL TREATMENT REQUESTED"
REDACTED VERSION
<PAGE> 2
The following mark [CONFIDENTIAL PORTION DELETED] as it appears throughout
the Agreement indicates a redaction of information for which the
registrant has requested confidential treatment. This confidential portion has
been separately filed with the Securites and Exchange Commission.
<PAGE> 3
========================================================
BOMBARDIER REGIONAL AIRCRAFT DIVISION
PURCHASE AGREEMENT
B95-7701-PA-299
BETWEEN
BOMBARDIER INC.
AND
MESA AIRLINES, INC.
Relating to the Purchase of
Twenty-five (25) de Havilland DHC-8 aircraft
========================================================
<PAGE> 4
TABLE OF CONTENTS
ARTICLE
-------
1 INTERPRETATION
2 SUBJECT MATTER OF SALE
3 CUSTOMER SUPPORT SERVICES AND WARRANTY
4 PRICE
5 PAYMENT
6 DELIVERY PROGRAM
7 BUYER INFORMATION
8 CERTIFICATION FOR EXPORT
9 ACCEPTANCE PROCEDURE
10 TITLE AND RISK
11 CHANGES
12 BUYER'S REPRESENTATIVES AT MANUFACTURE SITE
13 EXCUSABLE DELAY
14 NON-EXCUSABLE DELAY
15 LOSS OR DAMAGE
16 TERMINATION
17 NOTICES
18 INDEMNITY AGAINST PATENT INFRINGEMENT
19 LIMITATION OF LIABILITY
20 ASSIGNMENT
21 SUCCESSORS
22 APPLICABLE LAWS
23 CONFIDENTIAL NATURE OF AGREEMENT
24 AGREEMENT
APPENDIX
--------
I ECONOMIC ADJUSTMENT FORMULA
II DELIVERY SCHEDULE
III SPECIFICATION
IV BUYER SELECTED OPTIONAL FEATURES
V ESTIMATED AIRCRAFT DELIVERY PRICES
EXHIBIT
-------
I CERTIFICATE OF ACCEPTANCE
II BILL OF SALE
III CERTIFICATE OF RECEIPT OF AIRCRAFT
IV CHANGE ORDER
<PAGE> 5
This Agreement is made on the 24th day of March, 1995.
BY AND BETWEEN: BOMBARDIER INC., a Canadian Corporation
represented by its BOMBARDIER REGIONAL AIRCRAFT
DIVISION (BRAD) having an office at Garratt
Boulevard, Downsview, Ontario, Canada.
Unless the context requires otherwise, references
made herein to BRAD herein also include de
Havilland Inc. and its subsidiaries and Canadair
Division,
(collectively "BRAD")
AND: MESA AIRLINES, INC.
2325 East 30th
Farmington, New Mexico
U.S.A. 87401
("Buyer")
WHEREAS de Havilland Inc., an affiliate of BRAD, is
engaged in the manufacture of the Dash-8 aircraft
products; and
BRAD has been created for the purpose of
providing marketing, sales and customer support
services for the de Havilland Dash-8 aircraft and
related products;
WHEREAS Buyer desires to purchase twenty-five (25)
Aircraft, (as later defined), and related data,
documents, and services according to this
Agreement, (as later defined), and BRAD desires
to arrange he sale of such Aircraft, data,
documents and services to Buyer,
NOW THEREFORE, in consideration of the mutual covenants herein contained, Buyer
and BRAD agree as follows:
<PAGE> 6
ARTICLE 1. INTERPRETATION
1.1 The recitals above have been inserted for convenience only and do not
form part of the Agreement.
1.2 The headings of the Articles of this Agreement are included for
convenience only and shall not be used in the construction and
interpretation of this Agreement.
1.3 In this Agreement, unless otherwise expressly provided, the singular
includes the plural and vice-versa.
1.4 In this Agreement the following expressions shall, unless otherwise
expressly provided, mean:
a. "Acceptance Period" shall have the meaning attributed to it in
Article 9.3;
b. "Acceptance Date" shall have the meaning attributed to it in
Article 9.7.(a);
c. "Agreement" means this Agreement, including its Exhibits,
Annexes, Appendices and Letter Agreements, if any, attached
hereto (each of which is incorporated in the Agreement by this
reference), as they may be amended pursuant to the provisions
of the Agreement;
d. "Aircraft" shall have the meaning attributed to it in Article
2.1;
e. "Aircraft Purchase Price" shall have the meaning attributed to
it in Article 4.2;
f. "BFE" shall have the meaning attributed to it in Article 11.1;
g. "Delivery Date" shall have the meaning attributed to it in
Article 9.7.(c);
h. "DOT" shall have the meaning attributed to it in Article 8.1;
i. "Excusable Delay" shall have the meaning attributed to it in
Article 13.1;
j. "FAA" shall have the meaning attributed to it in Article 8.1;
k. "Notice" shall have the meaning attributed to it in Article
17.1;
l. "Permitted Change" shall have the meaning attributed to it in
Article 11.2;
<PAGE> 7
m. "Readiness Date" shall have the meaning attributed to it in
Article 9.1;
n. "Regulatory Change" shall have the meaning attributed to it in
Article 8.4;
o. "Specification" shall have the meaning attributed to it in
Article 2.1; and
p. "Taxes" shall have the meaning attributed to it in Article
4.3.
1.5 All dollar amounts in this Agreement are in United States Dollars.
<PAGE> 8
ARTICLE 2 - SUBJECT MATTER OF SALE
2.1 Subject to the provisions of this Agreement, BRAD will sell and Buyer
will purchase twenty-five (25) de Havilland Dash-8 aircraft
manufactured pursuant to specification no. DS8-200, dated February
1994, as that specification may be modified from time to time in
accordance with this Agreement (the "Specification"), as supplemented
by the Buyer selected optional features ("Buyer Selected Optional
Features") set forth in Appendix IV hereto (collectively the
"Aircraft). The Specification is incorporated by reference as Appendix
III hereto.
<PAGE> 9
ARTICLE 3 - CUSTOMER SUPPORT SERVICES AND WARRANTY
(a) BRAD shall provide to Buyer the Customer Support Services pursuant to
the provisions of letter agreement MJR-009.
(b) BRAD shall provide to Buyer the warranty and the service life policy
described in letter agreement MJR-009 which shall be the exclusive
warranty applicable to the Aircraft.
(c) Unless expressly stated otherwise, the services referred to in (a) and
(b) above are incidental to the sale of the Aircraft and are included
in the Aircraft Purchase Price.
<PAGE> 10
ARTICLE 4 - PRICE
4.1.1 The base price for each of the Aircraft (excluding Buyer Selected
Optional Features), flyaway BRAD's facilities in Downsview, Ontario, is
[CONFIDENTIAL PORTION DELETED]
.
4.1.2 The base price of the Buyer Selected Optional Features is
[CONFIDENTIAL PORTION DELETED]
.
4.2.1 The price of the Aircraft (the "Aircraft Purchase Price") shall be
[CONFIDENTIAL PORTION DELETED]
, adjusted to the Delivery
Date to reflect economic fluctuations during the period from February
1, 1995 to the Delivery Date of each Aircraft. Such adjustments shall
be based on the formula attached as Appendix I.
4.2.2 As the Aircraft Purchase Price cannot be established at this time due
to the effect of price escalation, an estimated delivery price has been
established for the Aircraft pursuant to Appendix I (the "Estimated
Delivery Price"). However, these prices are not to exceed the prices
set out in the such Appendix I which are based on a maximum
[CONFIDENTIAL PORTION DELETED] per year.
4.3 The Aircraft Purchase Price does not include any taxes, fees or duties
including, but not limited to, sales, use, value added (including the
Canadian Goods and Services Tax), personal property, gross receipts,
franchise, excise taxes, assessments or duties, (hereafter "Taxes")
which are or may be imposed by law upon BRAD, any affiliate of BRAD,
Buyer or the Aircraft whether or not there is an obligation for BRAD to
collect same from Buyer, by any taxing authority or jurisdiction
occasioned by, relating to or as a result of the sale, lease, delivery,
storage, use or other consumption of any Aircraft, BFE or any other
matter, good or service provided under or in connection with this
Agreement. According to current legislation, Canadian taxes, duties and
Goods and Services Tax are not applicable to aircraft sold and
immediately exported from Canada.
4.4 If any Taxes (other than Canadian income taxes charged on the income of
BRAD) are imposed upon Buyer or become due or are to be collected from
BRAD by any taxing authority, that may result from execution of this
Agreement,
<PAGE> 11
[CONFIDENTIAL PORTION DELETED]
, as the case may be, [CONFIDENTIAL PORTION DELETED]. However,
[CONFIDENTIAL PORTION DELETED]
4.5 Upon BRAD's request, Buyer shall execute and deliver to BRAD any
documents that BRAD deems necessary or desirable in connection with any
exemption from or reduction of or the contestation of or the defence
against any imposition of Taxes.
<PAGE> 12
ARTICLE 5 - PAYMENT
5.1 Buyer shall make payment or cause payment to be made for each Aircraft
based on the provisions set forth in letter Agreement B95-7701-MJR-004
which forms part of the present Agreement.
5.2 Subject to the provisions of Article 9.9 hereof, should Buyer fail to
make any of the aforementioned payments on or before the stipulated
date and Buyer does not correct the default
[CONFIDENTIAL PORTION DELETED]
. BRAD shall have the option (but not the obligation) [CONFIDENTIAL
PORTION DELETED] should Buyer make arrangements satisfactory to BRAD
[CONFIDENTIAL PORTION DELETED]
.
5.3 Buyer shall pay BRAD [CONFIDENTIAL PORTION DELETED]
the day prior to receipt of payment, [CONFIDENTIAL
PORTION DELETED]
.
5.4 Buyer shall make all payments due under this Agreement in immediately
available United States Dollars by deposit on or before the due date to
BRAD's account at:
Morgan Guarantee Trust Co.
New York, New York, United States of America
ABA # 021000238
To pay:
Canadian Imperial Bank of Commerce
Head Office
Toronto, Ontario, Canada
Account # 64101470
<PAGE> 13
For the credit of the beneficiary bank:
Canadian Imperial Bank of Commerce
Main Branch Transit # 00002
Toronto, Ontario, Canada
Account # 64101470
For the further credit of the beneficiary:
de Havilland Inc.
Account # 03-51717
5.5 All other amounts due with respect to each Aircraft shall be paid on or
prior to the Delivery Date of the respective Aircraft.
5.6 All payments provided for under this Agreement shall be made so as to
be received in [CONFIDENTIAL PORTION DELETED] by BRAD on the dates
stipulated herein.
5.7 BRAD shall remain the exclusive owner of the Aircraft, free and clear
of all rights, liens, charges or encumbrances, until such time as all
payments referred to in this Article 5 have been made.
<PAGE> 14
ARTICLE 6 - DELIVERY PROGRAM
6.1 The Aircraft shall be offered for acceptance to Buyer at BRAD's
facility in Toronto, Ontario during the months set forth in Appendix II
attached hereto (the "Scheduled Delivery Dates").
<PAGE> 15
ARTICLE 7 - BUYER INFORMATION
7.1 During the manufacture of the Aircraft, Buyer shall provide to BRAD on
or before the date required by BRAD, all information as BRAD may
reasonably request to manufacture the Aircraft including, without
limitation, the selection of furnishings, internal and external colour
schemes.
Within sixty (60) days of signing this Agreement, Buyer shall:
(a) Provide BRAD with an external paint scheme agreed on by the
parties;
(b) select interior colours (from BRAD's standard colours);and
(c) Provide to BRAD, on drawings which will be forwarded to Buyer,
language translations for interior and exterior Aircraft labels.
Failure of Buyer to comply with these requirements may
result in an increase in price, a delay in delivery of the
Aircraft, or both.
7.2 On or before execution of this Agreement Buyer shall notify BRAD in
writing of the BFE (if any) that Buyer wishes to have incorporated into
each Aircraft. Buyer shall also provide details of:
a. weights and dimensions of the BFE;
b. test equipment or special tools required to
incorporate the BFE; and
c. any other information BRAD may reasonably require.
Within one hundred and twenty (120) calendar days thereafter, BRAD
shall advise Buyer of its acceptance or rejection of the BFE and of the
dates by which each item of BFE is required by BRAD. If required the
parties hereto shall execute a Change Order in accordance with Article
9.1 to cover those BFE accepted by BRAD.
7.3 The BFE accepted by BRAD pursuant to this Article shall be incorporated
in the manufacturing process of the Aircraft subject to the following
conditions:
a. Title to the BFE shall remain at all times with Buyer and
risk of loss of the BFE shall remain at all times with
Buyer except for damages caused by BRAD's gross negligence.
<PAGE> 16
b. The BFE must be received F.O.B. BRAD's plant or such other
place as BRAD may designate, no later than the date agreed
upon between Buyer and BRAD, free and clear of any taxes,
duties, licenses, charges, liens or other similar claims;
c. The BFE shall meet:
1) the standards of quality of BRAD, and
2) the requirements of the applicable airworthiness
certification agency;
d. The BFE shall be delivered to BRAD in good condition and
ready for immediate incorporation into the Aircraft. BRAD
shall, upon receipt, inspect the BFE as to quantity and
apparent defects and inform Buyer of any discrepancies and
the required corrective actions to be taken;
e.
[CONFIDENTIAL PORTION DELETED]
. Buyer shall also furnish information necessary for its
proper storage, fitment, servicing, maintenance and
operation and availability of test equipment or special
tools;
f.
[CONFIDENTIAL PORTION DELETED]
7.4 If at any time between receipt of the BFE by BRAD and the Delivery
Date, it is determined by BRAD that an item of BFE supplied does not
meet the standards and requirements described above or its fitment,
integration and testing in the Aircraft or
<PAGE> 17
Aircraft systems create delays in the manufacturing or certification
process, then such BFE may be removed and replaced by other BFE or by
BRAD's equipment.
[CONFIDENTIAL PORTION DELETED]
.
7.5 In the event that the Scheduled Delivery Date is delayed due to any
delay caused by Buyer's failure to:
a. deliver, or have BFE delivered by the date required;
b. ensure satisfactory design, suitability, use or
operation of the BFE;
c. furnish or obtain applicable BFE data;
d. perform any adjusting, calibrating, retesting or
updating of BFE;
e. furnish or obtain any approvals in compliance with the
provisions of this Article; or
f. comply with the conditions of this Article.
BRAD agrees to discuss with Buyer on the steps to be taken to minimize,
cure, eliminate or work around the delay
[CONFIDENTIAL PORTION DELETED]
.
7.6 Should there be a delay caused by an event to which reference is made
in Article 13.0 in connection with the BFE and if such delay cannot
reasonably be minimized, cured, eliminated or worked around by
agreement of the parties,
[CONFIDENTIAL PORTION DELETED]
.
7.7 If this Agreement is terminated in whole or in part in accordance with
the provisions thereof BRAD may elect to, by written notice to Buyer,
either:
a. purchase the BFE ordered by Buyer and/or received by
BRAD at the invoice price paid by Buyer; or
b. return the BFE to Buyer FOB BRAD's plant, or such other
place that BRAD may designate.
<PAGE> 18
ARTICLE 8 - CERTIFICATION
8.1 BRAD has obtained from Transport Canada, the Canadian Department of
Transportation ("DOT"), a DOT Type Approval (Transport Category) and
will obtain from the Federal Aviation Administration of the United
States ("FAA") an FAA Type Certificate for the type of aircraft
purchased under this Agreement.
8.2 BRAD shall provide to Buyer a DOT Certificate of Airworthiness For
Export (Transport Category) on or before the Delivery Date.
8.3 BRAD shall not be obligated to obtain any other certificates or
approvals as part of this Agreement. The obtaining of any import
licence or authority required to import or operate the Aircraft into
any country outside of Canada shall be the responsibility of Buyer.
BRAD shall, to the extent permitted by law, and with Buyer's
assistance, seek the issuance of a Canadian export licence to enable
Buyer to export the Aircraft from Canada subject to prevailing export
control regulations in effect on the Delivery Date.
8.4 If any addition or change to, or modification or testing of the
Aircraft is required by any law or governmental regulation or
requirement or interpretation thereof by any governmental agency having
jurisdiction in order to meet the requirements of Article 8.2, (a
"Regulatory Change") such Regulatory Change shall be made to the
Aircraft prior to Delivery Date, or at such other time after the
Delivery Date as the parties may agree upon.
8.5 The Regulatory Change shall be made without additional charge to Buyer
unless such Regulatory Change is:
(a) necessary to comply with any requirement of the United States,
the country of import, which varies from or is in addition to
its requirements in effect on the date hereof for the issuance
of a Certificate of Airworthiness, in which case Buyer shall pay
BRAD's reasonable charges for such Regulatory Change, or
(b) required by any governmental law or regulations or
interpretation thereof promulgated by DOT or the FAA which is
effective subsequent to the date of this Agreement but before
the Delivery Date and is applicable to all aircraft in general
or to all aircraft of the same category as the Aircraft, in
which case Buyer shall pay BRAD's reasonable charges for such
Regulatory Change incorporated in any such Aircraft.
<PAGE> 19
8.6 If delivery of the Aircraft is delayed by the incorporation of any
Regulatory Change, such delay shall be an Excusable Delay within the
meaning of Article 13.
8.7 BRAD shall issue a Change Order, reflecting any Regulatory Change
required to be made under this Article 8, which shall set forth in
detail the particular changes to be made and the effect, if any, of
such changes on design, guaranteed performance, weight, balance, time
of delivery, Base Price and estimated Purchase Price. Any Change Orders
issued pursuant to this Article shall be effective and binding upon the
date of BRAD's transmittal of such Change Order.
8.8 If the use of any of the certificates identified in this Article 8 are
discontinued during the performance of this Agreement, reference to
such discontinued certificate shall be deemed a reference to any other
certificate or instrument which corresponds to such certificate or, if
there should not be any such other certificate or instrument, then BRAD
shall be deemed to have complied with such discontinued Certificate(s)
upon demonstrating that the Aircraft complies substantially with the
Specification.
<PAGE> 20
ARTICLE 9 - ACCEPTANCE PROCEDURE
9.1.1 BRAD shall give Buyer at least thirty (30) days advance notice, by
facsimile or telegraphic communication or other expeditious means, of
the projected date of readiness of each Aircraft for inspection and
delivery.
9.1.2 BRAD shall give Buyer at least ten (10) working days advance notice, by
facsimile or telegraphic communication or other expeditious means, of
the date on which an Aircraft will be ready for Buyer's inspection,
flight test and acceptance (the "Readiness Date").
9.2 Within two (2) days following receipt by Buyer of the notice of
Readiness Date Buyer shall:
(a) provide notice to BRAD as to the source and method of payment of
the balance of the Aircraft Purchase Price;
(b) identify to BRAD the names of Buyer's representatives who will
participate in the inspection and/or acceptance flight and
Aircraft acceptance and provide evidence of the authority of the
designated persons to execute the Certificate of Acceptance and
other delivery documents on behalf of Buyer.
9.3 Buyer shall have three (3) consecutive working days commencing on the
Readiness Date in which to complete said inspection and acceptance
flight (such three (3) working day period being the "Acceptance
Period").
9.4 Up to four (4) representatives of Buyer may participate in Buyer's
inspection of the Aircraft and two (2) representatives of Buyer may
participate in the acceptance flight. BRAD shall, if requested by
Buyer, perform an acceptance flight of not less than one (1) and not
more than three (3) hours duration. Ground inspection and acceptance
flight shall be conducted in accordance with BRAD's acceptance
procedures (a copy of which shall be provided to Buyer at least 30 days
prior to the Scheduled Delivery Date of the Aircraft hereunder) and at
BRAD's expense. BRAD shall retain care, custody and control over the
Aircraft.
9.5 If no Aircraft defect or discrepancy is revealed during the inspection
and/or flight test, Buyer shall accept the Aircraft, on or before the
last day of the Acceptance Period in accordance with the provisions of
this Article 9.7.
9.6 If any defect or discrepancy in the Aircraft is revealed by Buyer's
ground inspection and/or flight test, the defect or discrepancy will
promptly be corrected by BRAD, at no cost to Buyer, which correction
may occur during or after the Acceptance Period depending on the nature
of the defect or discrepancy and of the time required for correction.
To the extent necessary to verify such correction, BRAD shall perform
one (1) or more further acceptance flights.
<PAGE> 21
9.7 Upon completion of the ground inspection and acceptance flight of the
Aircraft and correction of any defects or discrepancies:
(a) Buyer will sign a Certificate of Acceptance (in the
form of Exhibit I hereto) for the Aircraft. Execution
of the Certificate of Acceptance by or on behalf of
Buyer shall be evidence of and Buyer will be deemed to
have examined the Aircraft and found it in accordance
with the provisions of this Agreement. The date of
signature of the Certificate of Acceptance shall be the
"Acceptance Date";
(b) BRAD will supply a DOT Certificate of Airworthiness for
Export and
(c) Buyer shall pay BRAD the balance of the Aircraft
Purchase Price and any other amounts due, at which time
BRAD shall cause a bill of sale to be issued (in the
form of Exhibit II hereto) passing to Buyer good title
to the Aircraft free and clear of all liens, claims,
charges and encumbrances except for those liens,
charges or encumbrances created by or claimed through
Buyer (the "Bill of Sale"). The date on which BRAD
delivers the Bill of Sale and Buyer takes delivery of
the Aircraft shall be the "Delivery Date".
Delivery of the Aircraft shall be evidenced by the execution of the
Bill of Sale and of the Certificate of Receipt of Aircraft (in the form
of Exhibit III hereto).
9.8 Provided that BRAD has met all of its obligations under this Article 9,
should Buyer
[CONFIDENTIAL PORTION DELETED]
.
9.9 Buyer shall promptly, upon demand,
[CONFIDENTIAL PORTION DELETED]
Provided that BRAD has met all of its obligations under this Article 9,
should Buyer not accept, pay for and/or take delivery of any one of the
Aircraft
[CONFIDENTIAL PORTION DELETED]
, make arrangements satisfactory to BRAD to accept
delivery and provide payment for all amounts owing or to become due
pursuant to this Agreement.
<PAGE> 22
ARTICLE 10 - TITLE AND RISK
10.1 Title to the Aircraft passes to Buyer when BRAD presents the Bill of
Sale to Buyer on the Delivery Date. Except as provided in Article 9.7
(c), risk of loss of or damage to the Aircraft passes to Buyer on the
Delivery Date.
10.2 If, after transfer of title on the Delivery Date, the Aircraft remains
in or is returned to the care, custody or control of BRAD, Buyer shall
retain risk of loss of, or damage to the Aircraft and for itself and on
behalf of its insurer(s) hereby waives and renounces to, and releases
BRAD and any of BRAD's affiliates from any claim whether direct,
indirect or by way of subrogation for damages to or loss of the
Aircraft arising out of, or related to, or by reason of such care,
custody or control.
<PAGE> 23
ARTICLE 11 - CHANGES
11.1 Other than a Permitted Change as described in Article 11.2, or a
Regulatory Change as described in Articles 8.4 and 8.5, any change to
this Agreement (including without limitation the Specification) or any
features or Buyer Furnished Equipment ("BFE"), if any, changing the
Aircraft from that described in the Specification attached hereto,
requested by Buyer, and as may be mutually agreed upon by the parties
hereto, shall be made using a change order ("Change Order")
substantially in the format of Exhibit IV hereto. Should Buyer request
a change, BRAD shall advise Buyer of the effect, if any, of such change
request on:
(a) the Scheduled Delivery Date;
(b) the price and payment terms applicable to the Change Order; and
(c) any other material provisions of this Agreement which will be
affected by the Change Order.
Such Change Order shall become effective and binding on the parties
hereto when signed by a duly authorized representative of each party.
11.2 BRAD, prior to the Delivery Date and without a Change Order or Buyer's
consent, may:
(a) substitute the kind, type or source of any material, part,
accessory or equipment with any other material, part, accessory or
equipment of like, equivalent or better kind or type; or
(b) make such change or modification to the Specification as it deems
appropriate to:
1) improve the Aircraft, its maintainability or appearance, or
2) to prevent delays in manufacture or delivery, or
3) to meet the requirements of Articles 2 and 8, other than for a
Regulatory Change to which the provisions of Articles 8.4 and
8.5 shall apply,
provided that such substitution, change or modification shall not
affect the Aircraft Purchase Price or materially affect the Scheduled
Delivery Date, interchangeability or replaceability of spare parts or
performance characteristics of the Aircraft. Any change made in
accordance with the provisions of this Article 11.2 shall be deemed to
be a "Permitted Change" and the cost thereof shall be borne by BRAD.
<PAGE> 24
ARTICLE 12 - BUYER'S REPRESENTATIVES AT MANUFACTURE SITE
12.1 From time to time, commencing with the date of this Agreement and
ending with the Delivery Date of the last Aircraft purchased hereunder,
BRAD shall furnish, without charge, office space at BRAD's facility for
one (1) representative of Buyer. Buyer shall be responsible for all
expenses of its representative and shall notify BRAD at least thirty
(30) calendar days prior to the first scheduled visit of such
representative and three (3) days for each subsequent visit.
12.2 BRAD's and BRAD's affiliates facilities shall be accessible to Buyer's
representative during normal working hours. Buyer's representative
shall have the right to periodically observe the work at BRAD's or
BRAD's affiliates' facilities where the work is being carried out
provided there shall be no disruption in the performance of the work.
12.3 BRAD shall advise Buyer's representative of BRAD's or BRAD's
affiliates' rules and regulations applicable at the facilities being
visited and Buyer's representative shall conform to such rules and
regulations.
12.4 At any time prior to delivery of the Aircraft, Buyer's representative
may request, in writing, correction of parts or materials which they
reasonably believe are not in accordance with the Specification. BRAD
shall provide a written response to any such request. Communication
between Buyer's representative and BRAD shall be solely through BRAD's
Contract Department or its designate.
12.5
[CONFIDENTIAL PORTION DELETED]
<PAGE> 25
ARTICLE 13 - EXCUSABLE DELAY
13.1 In the event of a delay on the part of BRAD in the performance of its
obligations or responsibilities under the provisions of this Agreement
due directly or indirectly to a cause which is beyond the reasonable
control or without the fault or negligence of BRAD (an "Excusable
Delay"), BRAD shall not be liable for, nor be deemed to be in default
under this Agreement on account of such delay in delivery of the
Aircraft or other performance hereunder and the time fixed or required
for the performance of any obligation or responsibility in this
Agreement shall be extended for a period equal to the period during
which any such cause or the effect thereof persist. Excusable Delay
shall include, without limitation, delays occasioned by the following
causes:
(a) force majeure or acts of God;
(b) war, warlike operations, act of the enemy, armed aggression,
civil commotion, insurrection, riot or embargo;
(c) fire, explosion, earthquake, lightning, flood, draught,
windstorm or other action of the elements or other catastrophic
or serious accidents;
(d) epidemic or quarantine restrictions;
(e) any legislation, act, order, directive or regulation of any
governmental or other duly constituted authority;
(f) strikes, lock-out, walk-out, and/or other labour troubles
causing cessation, slow-down or interruption of work;
(g) lack or shortage or delay in delivery of supplies, materials,
accessories, equipment, tools or parts;
(h) delay or failure of carriers, subcontractors or suppliers for
any reason whatsoever; or
(i) delay in obtaining any airworthiness approval or certificate, or
any equivalent approval or certification, by reason of any law
or governmental order, directive or regulation or any change
thereto, or interpretation thereof, by a governmental agency,
the effective date of which is subsequent to the date of this
Agreement, or by reason of any change or addition made by BRAD
or its affiliates or requested by a governmental agency to the
compliance program of BRAD or of its affiliate, or any part
thereof, as same may have been approved by DOT, or change to the
interpretation thereof to obtain any such airworthiness approval
or certificate.
13.2 (a) If BRAD concludes, based on its appraisal of the facts and
normal scheduling procedures, that due to Excusable Delay
delivery of any Aircraft will be delayed for more than nine (9)
months after the originally Scheduled Delivery Date or any
revised date agreed to in writing by the parties, BRAD shall
promptly notify Buyer in writing and either party may then
terminate this Agreement with respect
<PAGE> 26
to such Aircraft by giving written notice to the other within
fifteen (15) days after receipt by Buyer of BRAD's notice.
(b) If, due to Excusable Delay, delivery of any Aircraft is
delayed for more than twelve (12) months after the Scheduled
Delivery Date, either party may terminate this Agreement
with respect to such Aircraft by giving written notice to
the other within fifteen (15) days after the expiration of
such twelve (12) month period.
13.3 Termination under Article 13.2 shall discharge all obligations and
liabilities of Buyer and BRAD hereunder with respect to such delayed
Aircraft and all related undelivered items and services, except that
BRAD shall promptly repay to Buyer, and BRAD's sole liability and
responsibility shall be limited to the repayment to Buyer, of all
advance payments for such Aircraft received by BRAD
[CONFIDENTIAL PORTION DELETED]
, less any amount due by Buyer to BRAD.
13.4 The termination rights set forth in Article 13.2 are in substitution
for any and all other rights of termination or contract lapse arising
by operation of law in connection with Excusable Delays.
<PAGE> 27
ARTICLE 14 - NON-EXCUSABLE DELAY
14.1 If delivery of the Aircraft is delayed by causes not excused under
Article 13.1 (a "Non- Excusable Delay"), BRAD shall pay Buyer,
[CONFIDENTIAL PORTION DELETED] of Non-Excusable Delay in excess of a
grace period of [CONFIDENTIAL PORTION DELETED], to a [CONFIDENTIAL
PORTION DELETED] of [CONFIDENTIAL PORTION DELETED] for any such delayed
Aircraft.
14.2 [CONFIDENTIAL PORTION DELETED]
14.3 Any right Buyer might otherwise have to refuse to accept delivery of an
Aircraft when offered by BRAD for inspection and acceptance following a
Non-Excusable Delay [CONFIDENTIAL PORTION DELETED] will not have the
right to refuse to take delivery of any Aircraft because of a
Non-Excusable Delay unless and until the aggregate duration of the
Non-Excusable Delay for such Aircraft [CONFIDENTIAL PORTION DELETED].
If BRAD has not offered such Aircraft for inspection and acceptance
during the Non-Excusable Delay Period, Buyer may [CONFIDENTIAL PORTION
DELETED]. If, no such notice having been given, BRAD offers such
Aircraft for inspection and acceptance after the Non-Excusable Delay
Period and Buyer refuses to take delivery of such Aircraft because of
Non-Excusable Delay,
[CONFIDENTIAL PORTION DELETED]
the [CONFIDENTIAL PORTION DELETED] calculated under Article 14.1 to the
date of termination. In addition BRAD shall promptly repay to Buyer
all advance payments for such Aircraft
[CONFIDENTIAL PORTION DELETED]
.
<PAGE> 28
ARTICLE 15 - LOSS OR DAMAGE
15.1 In the event that prior to the Delivery Date of any of the Aircraft,
the Aircraft is lost, destroyed or damaged beyond repair due to any
cause, BRAD shall promptly notify Buyer in writing. Such notice shall
specify the earliest date reasonably possible, consistent with BRAD's
other contractual commitments and production schedule, by which BRAD
estimates it would be able to deliver a replacement for the lost,
destroyed or damaged Aircraft. This Agreement shall automatically
terminate as to such Aircraft unless Buyer gives BRAD written notice,
within thirty (30) days of BRAD's notice, that Buyer desires a
replacement for such Aircraft. If Buyer gives such notice to BRAD, the
parties shall execute an amendment to this Agreement which shall set
forth the Delivery Date for such replacement aircraft and corresponding
new replacement Aircraft Purchase Price; provided, however, that
nothing herein shall obligate BRAD to manufacture and deliver such
replacement aircraft if it would require the reactivation or
acceleration of its production line for the model of aircraft purchased
hereunder. The terms and conditions of this Agreement applicable to the
replaced Aircraft shall apply to the replacement aircraft.
15.2 In the event that one of the first seven Aircraft is lost or damaged,
as per this section, Buyer may nonetheless return the Dash 8 Series 300
aircraft leased from BRAD as per the scheduled delivery, and thus
advance in sequence the one-for one trade-in obligation.
<PAGE> 29
ARTICLE 16 - TERMINATION
16.1 This Agreement may be terminated, in whole or in part, with respect to
any or all of the Aircraft before the Delivery Date by BRAD or Buyer by
notice of termination to the other party upon the occurrence of any of
the following events:
(a) a party makes an assignment for the benefit of creditors or
admits in writing its inability to pay its debts or
generally does not pay its debts as they become due; or
(b) a receiver or trustee is appointed for a party or for
substantially all of such party's assets and, if appointed
without such party's consent, such appointment is not
discharged or stayed within thirty (30) calendar days
thereafter; or
(c) proceedings or action under any law relating to bankruptcy,
insolvency or the reorganization or relief of debtors are
instituted by or against a party, and, if contested by such
party, are not dismissed or stayed within thirty (30)
calendar days thereafter; or
(d)
[CONFIDENTIAL PORTION DELETED]
.
16.2 In addition, this Agreement may be terminated, in whole or in part,
before the Delivery Date with respect to any or all undelivered
Aircraft:
(a) as otherwise provided in this Agreement; or
(b) if Buyer is in default or breach of any material term or
condition of this Agreement and Buyer does not cure such
default or breach within forty-five (45) calendar days after
receipt of notice from BRAD specifying such default or
breach.
16.3 Buyer may terminate this Agreement, in whole or in part, before the
Delivery Date, with respect to any undelivered Aircraft, if BRAD is in
default or breach of any material term or condition of this Agreement
and such breach remains uncured for a period of forty-five (45)
calendar days following receipt of a notice from Buyer specifying the
nature of default or breach.
<PAGE> 30
16.4 In case of termination of this Agreement by BRAD pursuant to Articles
16.1 or 16.2:
(a) all rights (including property rights), if any, which Buyer may
have or may have had in or to this Agreement or any or all of
the undelivered Aircraft shall become null and void with
immediate effect;
(b) all rights (including property rights and the right to sell the
Aircraft to another party, if any) in and to any or all of the
undelivered Aircraft shall be vested with BRAD free and clear of
any ownership or title rights, if any, liens, charges or
encumbrances; and
(c) all amounts paid by Buyer shall be retained by BRAD and, with
respect to the applicable undelivered Aircraft, shall be applied
against the costs, expenses, losses and damages incurred by BRAD
as a result of Buyer's default and/or the termination of this
Agreement. Buyer hereby acknowledges and recognizes that BRAD
shall have all rights permitted by law to recover from Buyer
such costs, expenses, losses and damages and, in any event, such
costs, expenses, losses and damages will aggregate not less than
the amount retained by BRAD pursuant to this Article 16.4 (c).
16.5 Subject to Article 14.1, in the event of termination of this Agreement
by Buyer, Buyer's sole rights, remedies and recourses against BRAD and
BRAD's obligations to Buyer shall be limited to
[CONFIDENTIAL PORTION DELETED]
.
<PAGE> 31
ARTICLE 17 - NOTICES
17.1 Any notice, request, approval, permission, consent or other
communication ("Notice"), to be given or required under this Agreement
shall be provided in writing, by registered mail, facsimile, courier,
telegraphic or other electronic communication providing reasonable
proof of transmission, except that no notice shall be sent by mail if
disruption of postal service exists or is threatened either in the
country of origin or of destination, by the party giving the Notice and
shall be addressed as follows:
(a) Notice to BRAD shall be addressed to:
Bombardier Inc.
Bombardier Regional Aircraft Division
Garratt Boulevard
Downsview, Ontario
Canada
M3K 1Y5
Attention: Walter A. Galloway, Director,
Contracts
Telex: 06-22128
Facsimile: (416) 375-4533
(b) Notice to Buyer shall be addressed to:
Attention: Mr. Larry Risley, Chairman
Mesa Airlines, Inc.
2325 East 30th
Farmington, New Mexico
U.S.A. 87401
Facsimile: 505-326-4485
<PAGE> 32
17.2 Notice given in accordance with Article 17.1 shall be deemed
sufficiently given to and received by the addressees:
(a) if delivered by hand, on the day when the same shall have been
so delivered; or
(b) if mailed or sent by courier on the day indicated on the
corresponding acknowledgement of receipt; or
(c) if sent by telex or facsimile on the day indicated by the
acknowledgement or the answer back of the receiver in provable
form.
ARTICLE 18 - INDEMNITY AGAINST PATENT INFRINGEMENT
18.1 In the case of any actual or alleged infringement of any Canadian or
United States patent or, subject to the conditions and exceptions set
forth below, any patent issued under the laws of any other country in
which Buyer from time to time may lawfully operate the Aircraft ("Other
Patents"), by the Aircraft, or by any system, accessory, equipment or
part installed in such Aircraft at the time title to such Aircraft
passes to Buyer, BRAD shall indemnify, protect and hold harmless Buyer
from and against all claims, suits, actions, liabilities, damages and
costs resulting from the infringement, excluding any incidental or
consequential damages (which include without limitation loss of revenue
or loss of profit) and BRAD shall, at its option and expense:
(a) procure for Buyer the right under such patent to use such
system, accessory, equipment or part; or
(b) replace such system, accessory, equipment or part with one of
the similar nature and quality that is non-infringing; or
(c) modify such system, accessory, equipment or part to make same
non-infringing in a manner such as to keep it otherwise in
compliance with the requirements of this Agreement.
BRAD's obligation hereunder shall extend to Other Patents only if from
the time of design of the Aircraft, system, accessory, equipment or
part until the alleged infringement claims are resolved:
<PAGE> 33
(a) such other country and the country in which the Aircraft is
permanently registered have ratified and adhered to and are at
the time of the actual or alleged infringement contracting
parties to the Chicago Convention on International Civil
Aviation of December 7, 1944 and are fully entitled to all
benefits of Article 27 thereof; and
(b) such other country and the country of registration shall each
have been a party to the International Convention for the
Protection of Industrial Property (Paris Convention) or have
enacted patent laws which recognize and give adequate protection
to inventions made by the nationals of other countries which
have ratified, adhered to and are contracting parties to either
of the forgoing conventions.
18.2 The foregoing indemnity does not apply to BFE, or to avionics, engines
or any system, accessory, equipment or part that was not manufactured
to BRAD's detailed design or to any system, accessory, equipment or
part manufactured by a third party to BRAD's detailed design without
BRAD's authorization.
18.3 Buyer's remedy and BRAD's obligation and liability under this Article
are conditional upon (i) Buyer giving BRAD written notice within ten
(10) days after Buyer receives notice of a suit or action against Buyer
alleging infringement or within twenty (20) days after Buyer receives
any other written claim of infringement (ii) Buyer uses reasonable
efforts in full cooperation with BRAD to reduce or mitigate any such
expenses, damages, costs or royalties involved, and (iii) Buyer
furnishes promptly to BRAD all data, papers and records in its
possession or control necessary or useful to resist and defend against
such claim or suit. BRAD may at its option conduct negotiations with
any party claiming infringement and may intervene in any suit or
action. Whether or not BRAD intervenes, BRAD shall be entitled at any
stage of the proceedings to assume or control the defence. Buyer's
remedy and BRAD's obligation and liability are further conditional
judgment upon BRAD's prior approval of Buyer's payment or assumption of
any liabilities, expenses, damages, royalties or costs for which BRAD
may be held liable or responsible for.
18.4 THE INDEMNITY, OBLIGATIONS AND LIABILITIES OF BRAD AND REMEDIES OF
BUYER SET OUT IN THIS ARTICLE ARE EXCLUSIVE AND ACCEPTED BY BUYER
TO BE IN LIEU OF AND IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES,
RELEASES AND RENOUNCES, ALL OTHER INDEMNITIES, OBLIGATIONS AND
LIABILITIES OF BRAD AND OF ITS AFFILIATES AND ALL OTHER RIGHTS,
REMEDIES AND CLAIMS, INCLUDING CLAIMS FOR DAMAGES, DIRECT,
INCIDENTAL OR CONSEQUENTIAL, OF BUYER AGAINST BRAD AND ITS
AFFILIATES EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH
RESPECT TO ANY ACTUAL OR ALLEGED PATENT INFRINGEMENT BY THE
AIRCRAFT OR ANY INSTALLED SYSTEM, ACCESSORY, EQUIPMENT OR PART.
<PAGE> 34
ARTICLE 19 [CONFIDENTIAL PORTION DELETED]
19.1 [CONFIDENTIAL PORTION DELETED]
19.2 [CONFIDENTIAL PORTION DELETED]
19.3 BUYER AND BRAD AGREE THAT THIS AGREEMENT, HAS BEEN THE SUBJECT OF
DISCUSSION AND NEGOTIATION AND IS FULLY UNDERSTOOD BY THE PARTIES
HERETO AND THAT THE PRICE OF THE AIRCRAFT AND THE OTHER MUTUAL
AGREEMENTS OF THE PARTIES SET FORTH HEREIN WERE ARRIVED AT IN
CONSIDERATION OF THE PROVISIONS CONTAINED IN ARTICLE 19.2.
19.4 LETTER AGREEMENT MJR-009 EXCLUSIVELY SETS FORTH BRAD's POST DELIVERY
OBLIGATIONS WITH RESPECT TO ANY NON-CONFORMANCE OF THE AIRCRAFT WITH
THE SPECIFICATION OR ANY DEFECT IN THE AIRCRAFT.
EXCEPT AS SET FORTH IN SIDE LETTERS MJR-006, MJR-007, MJR-008 AND
MJR-009 THERE ARE NO UNDERSTANDINGS, REPRESENTATIONS, CONDITIONS OR
WARRANTIES, EXPRESS OR IMPLIED, BETWEEN THE PARTIES WITH RESPECT TO ANY
NON-CONFORMANCE OF THE AIRCRAFT WITH THE SPECIFICATION, OR ANY DEFECT
IN THE AIRCRAFT, OR ANY DEFECT IN ANY OTHER THING DELIVERED UNDER THIS
AGREEMENT.
19.5 [CONFIDENTIAL PORTION DELETED]
<PAGE> 35
ARTICLE 20 - ASSIGNMENT
20.1 Either party may assign, sell, transfer or dispose of (in whole or in
part) any of its rights and obligations hereunder to a wholly owned
subsidiary or affiliate provided that there is no increase to the
liability and/or responsibility of the non-assigning party and that the
assigning party remains jointly and severally liable with any assignee
for the performance of its obligation under this Agreement.
20.2 Except as provided in Article 20.1, Buyer shall not assign, sell,
transfer or dispose of (in whole or in part) any of its rights or
obligations hereunder without BRAD's prior written consent, such
consent not to be unreasonably withheld. In the event of such
assignment, sale, transfer or disposition Buyer shall remain jointly
and severally liable with any assignee for the performance of all and
any of Buyer's obligations under this Agreement and BRAD reserves the
right to amend one or more of the terms and conditions of this
Agreement.
20.3 Notwithstanding Article 20.2 above, Buyer may assign, after transfer of
title of the Aircraft, its rights under the Agreement to a third party
purchaser of any one of the Aircraft, provided said third party
acknowledges in writing to be bound by the applicable terms and
conditions of this Agreement, including but not limited to the
provisions and limitations as detailed Annex A, Customer Support
Services, Annex B, Warranty and Service Life Policy and of the
provisions and limitations in Limitation of Liability as defined in
Article 19 hereof and Indemnity Against Patent Infringement as defined
in Article 18 hereof and any other on-going obligations of Buyer, which
shall apply to it to the same extent as if said third party was Buyer
hereunder and provided that there is no increase to the liability
and/or responsibility of BRAD and provided Buyer shall remain jointly
and severally liable with the assignee for the performance of any and
all of Buyer's obligations under this Agreement.
20.4 BRAD may assign any of its rights to receive money hereunder without
the prior consent of Buyer.
20.5 Notwithstanding the other provisions of this Article 20, BRAD shall, at
Buyer's cost and expense, if so requested in writing by Buyer take any
action reasonably required for the purpose of causing any of the
Aircraft to be subjected (i) to, after the Delivery Date, an equipment
trust, conditional sale or lien, or (ii) to another arrangement for the
financing of the Aircraft by Buyer, providing, however, there shall be
no increase to the liability and/or responsibility of BRAD arising
through such financing and provided Buyer shall remain jointly and
severally liable with the assignee for the performance of any and all
of Buyer's obligations under this Agreement.
<PAGE> 36
ARTICLE 21 - SUCCESSORS
This Agreement shall inure to the benefit of and be binding upon each
of BRAD and Buyer and their respective successors.
<PAGE> 37
ARTICLE 22 - APPLICABLE LAWS
22.1 THIS AGREEMENT SHALL BE SUBJECT TO AND CONSTRUED IN ACCORDANCE WITH AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY THE DOMESTIC LAWS OF THE
STATE OF NEW YORK, U.S.A., EXCLUDING THE CHOICE OF LAW RULES, AND THE
PARTIES HAVE AGREED THAT THE APPLICATION OF THE UNITED NATIONS
CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS IS HEREBY
EXCLUDED.
22.2 BRAD's obligations under this Agreement shall be subject to and apply
only to the extent permitted by applicable laws, regulations,
directives and/or orders regarding export controls.
<PAGE> 38
ARTICLE 23 - CONFIDENTIAL NATURE OF AGREEMENT
23.1 This Agreement is confidential between the parties and shall not,
without the prior written consent of the other party, be disclosed by
either party in whole or in part to any other person or body except as
may be necessary for either party to carry out its obligations under
this Agreement and fulfill its obligations under the applicable
securities laws governing each party. The parties shall however only
disclose those parts of the agreement which are expressly required by
such securities laws..
23.2 Except as may be reasonably required for the normal operation,
maintenance, overhaul and repair of the Aircraft, Buyer shall hold
confidential all technical data and information supplied by or on
behalf of BRAD. Buyer shall not reproduce any technical data or
information or divulge the same to any third party without the prior
written consent of BRAD.
23.3 Either party may announce the signing of this Agreement by means of a
notice to the press provided that the content and date of the notice
has been agreed to by the other party.
<PAGE> 39
ARTICLE 24 - AGREEMENT
24.1 This Agreement and the matters referred to herein constitute the entire
Agreement between BRAD and Buyer and supersede and cancel all prior
representations, brochures, alleged warranties, statements,
negotiations, undertakings, letters, memorandum of Agreement,
acceptances, agreements, understandings, contracts and communications,
whether oral or written, between BRAD and Buyer or their respective
agents, with respect to or in connection with the subject matter of
this Agreement and no agreement or understanding varying the terms and
conditions hereof shall be binding on either BRAD or Buyer hereto
unless an amendment to this Agreement is issued and duly signed by
their respective authorized representatives pursuant to the provisions
of this Article hereof. All Appendices, Exhibits and Annexes referred
to herein and attached hereto are made part of this Agreement by
reference. In the event of any inconsistencies between this Agreement
and any of the Appendices, Exhibits and Annexes or other documents
referred to herein, the provisions of this Agreement shall prevail.
24.2 If any of the provisions of this Agreement are for any reason declared
by judgement of a court of competent jurisdiction to be unenforceable
or ineffective, those provisions shall be deemed severable from the
other provisions of this Agreement and the remainder of this Agreement
shall remain in full force and effect.
24.3 THE OBLIGATIONS AND LIABILITIES OF BRAD, INCLUDING THE WARRANTY AND
SERVICE LIFE POLICY ATTACHED [CONFIDENTIAL PORTION DELETED], HAVE BEEN
EXPRESSED, DISCUSSED, UNDERSTOOD AND AGREED TO BETWEEN BUYER AND BRAD
IN CONSIDERATION OF THE PURCHASE PRICE OF THE AIRCRAFT AND OTHER
PROVISIONS OF THIS AGREEMENT.
24.4 BRAD and Buyer confirm to each other they have each obtained the
required authorizations and fulfilled any conditions applicable to
enable each of them to enter into this Agreement.
<PAGE> 40
In witness whereof this Agreement was signed on the date written hereof:
For and on behalf of For an on behalf of
BUYER: BRAD.:
Per: ____________________ Per:______________________
Title: ___________________ Title:____________________
<PAGE> 41
APPENDIX I
DHC-8 AIRCRAFT
ECONOMIC ADJUSTMENT FORMULA
[CONFIDENTIAL PORTION DELETED]
<PAGE> 42
APPENDIX II
-----------
DELIVERY SCHEDULE
-----------------
First Aircraft February 1996
Second Aircraft March 1996
Third Aircraft March 1996
Fourth Aircraft April 1996
Fifth Aircraft April 1996
Sixth Aircraft May 1996
Seventh Aircraft May 1996
Eighth Aircraft June 1996
Ninth Aircraft June 1996
Tenth Aircraft July 1996
Eleventh Aircraft August 1996
Twelfth Aircraft August 1996
Thirteenth Aircraft September 1996
Fourteenth Aircraft September 1996
Fifteenth Aircraft October 1996
Sixteenth Aircraft October 1996
Seventeenth Aircraft November 1996
Eighteenth Aircraft November 1996
Nineteenth Aircraft December 1996
Twentieth Aircraft December 1996
Twenty-First Aircraft January 1997
Twenty-Second Aircraft January 1997
Twenty-Third Aircraft February 1997
Twenty-Fourth Aircraft February 1997
Twenty-Fifth Aircraft March 1997
<PAGE> 43
APPENDIX III
SPECIFICATION
DHC-8-100:
DETAIL SPECIFICATION
Number DS8-200 Issue 2
August 1994
<PAGE> 44
APPENDIX IV
BUYER SELECTED OPTIONAL FEATURES
PRICE IN FEB. 1, 1995
---------------------
NUMBER DESCRIPTION U.S. DOLLARS
- ------ ----------- ---------------------
803SO00073 Dash 8 Series 200 (Model 202)
825CH01152 Interior Configuration - United
Express (Mesa)
811CH00029 Exterior Paint Scheme United
Express (Mesa) [CONFIDENTIAL
821CH00029 Ground Air Conditioning RH Side
823CH00032 Selcal System (Frederickson
Jetcal 5 Compatible with VHF
Comm
823SO08041 VHF Comm Dual-Collins Proline
II (VHF 22) PORTION
824CH82066 Batteries On line with Ground
Power
824SO08070-1 Two 40 Amp\hour SAFT NICAD
Batteries ILO Standard
825CH01077 ELT (Pointer C-4000) Post Mod
8\2100 DELETED]
834CH00098 Audible Altitude Alert
834CH00375 Dual Collins Mode S & TCAS II
<PAGE> 45
NUMBER Description Price in Feb. 1, 1995
- ------ ----------- ---------------------
U.S. Dollars
---------------------
834CH00379 Replacement of EFIS with
Electro-Mechanical Instruments
834SO08042-1 VHF Nav. Dual Collins Proline II
(VIR 32) [CONFIDENTIAL
834SO08043-1 ADF Single Collins Proline II
(ADF 60)
834SO08045 DME No. 1 Collins Proline II
(DME 42)
834SO08048-1 DME No. 2 Collins Proline II
(DME 42)
835CH00011 Automatic Drop Down Oxygen PORTION
825S001076-1 Equipment\Furnishings SU for
Galley Series 200
825CH02001 Additional SU
TOTAL DELETED]
<PAGE> 46
APPENDIX V
ESTIMATED AIRCRAFT DELIVERY PRICE
Aircraft Purchase
-----------------
Aircraft Price
- -------- -----
First Aircraft
Second Aircraft
Third Aircraft
Fourth Aircraft [CONFIDENTIAL
Fifth Aircraft
Sixth Aircraft
Seventh Aircraft
Eighth Aircraft
Ninth Aircraft
Tenth Aircraft
Eleventh Aircraft PORTION
Twelfth Aircraft
Thirteenth Aircraft
Fourteenth Aircraft
Fifteenth Aircraft
Sixteenth Aircraft
Seventeenth Aircraft
Eighteenth Aircraft
Nineteenth Aircraft DELETED]
Twentieth Aircraft
Twenty-First Aircraft
Twenty-Second Aircraft
Twenty-Third Aircraft
Twenty-Fourth Aircraft
Twenty-Fifth Aircraft
<PAGE> 47
EXHIBIT I
CERTIFICATE OF ACCEPTANCE
The undersigned hereby acknowledges on behalf of Buyer acceptance of the
Aircraft bearing manufacturer's serial number fitted with
two (2) Pratt & Whitney of Canada, Ltd. PWC-120/123/ engines bearing serial
number and as being in accordance with
the terms and conditions of this Agreement signed on the day of ,
19 between Bombardier Regional Aircraft Division and Buyer.
Place: Date:
------------------- -------------------
SIGNED FOR AND ON BEHALF OF
[BUYER'S NAME] WITNESSED
Per: Per:
------------------- -------------------
Title: Title:
------------------- -------------------
<PAGE> 48
EXHIBIT II
BILL OF SALE
1. FOR VALUABLE CONSIDERATIONS, DE HAVILLAND INC., OWNER OF THE FULL LEGAL
AND BENEFICIAL TITLE OF THE AIRCRAFT DESCRIBED AS FOLLOWS:
ONE DE HAVILLAND DHC-8-200 AIRCRAFT BEARING:
MANUFACTURER'S SERIAL NO.: , WITH:
PWC-/120/123/ ENGINES SERIAL NOS.:
, AND
AUXILIARY POWER UNIT NO.:
DOES THIS DAY OF 19 HEREBY SELL, GRANT,
TRANSFER AND DELIVER ALL RIGHTS, TITLE AND INTEREST IN AND TO SUCH
AIRCRAFT UNTO: [BUYER's NAME].
BY VIRTUE OF THE EXECUTION OF THIS BILL OF SALE, DE HAVILLAND INC.
HEREBY DIVESTS ITSELF OF ALL ITS RIGHTS, INTERESTS AND/OR LIEN OF ANY
KIND IN THE AIRCRAFT, IN FAVOUR OF BUYER.
BUYER:
PLACE: TIME:
------------------- -----------------
For and on behalf of
DE HAVILLAND INC.:
Per:
-------------------
Title:
-------------------
<PAGE> 49
EXHIBIT III
CERTIFICATE OF RECEIPT OF AIRCRAFT
THE UNDERSIGNED HEREBY ACKNOWLEDGES TO HAVE RECEIVED FROM BOMBARDIER
REGIONAL AIRCRAFT DIVISION, AT THE DOWNSVIEW AIRPORT, ADJACENT TO BRAD'S PLANT
IN THE CITY OF DOWNSVIEW, PROVINCE OF ONTARIO, CANADA, ON THE DAY
OF , AT THE HOUR OF O'CLOCK, ONE (1) de HAVILLAND
DHC-8-/100/200/300/ AIRCRAFT, BEARING SERIAL NUMBER , INCLUDING
WITH THE AIRCRAFT TWO (2) PWC-/120/123/ ENGINES BEARING MANUFACTURER'S SERIAL
NUMBERS & AND OTHER MAJOR REPLACEABLE
ACCESSORIES ATTACHED TO THE AIRCRAFT AND ENGINES.
Signed for and on behalf of [Buyer's name]:
Per:
---------------------
Title:
-------------------
<PAGE> 50
EXHIBIT IV
CHANGE ORDER
(PRO FORMA)
<PAGE> 51
================================================================================
CONTRACT CHANGE ORDER
================================================================================
PURCHASER:
PURCHASE AGREEMENT NO.: AIRCRAFT TYPE:
C.C.O. NO.: DATED:
PAGES AFFECTED: PAGE of
-- --
REASON FOR CHANGE:
================================================================================
DESCRIPTION OF CHANGE:
PAGES TO BE SUBSTITUTED NEW/REVISED PAGES
CHANGES TO THE AFFECTED PAGES ARE AS FOLLOWS:
- --------------------------------------------------------------------------------
ALL OTHER TERMS AND CONDITIONS OF THE AGREEMENT WILL REMAIN UNCHANGED
- --------------------------------------------------------------------------------
FOR AND ON BEHALF OF: FOR AND ON BEHALF OF:
================================================================================
BRAD
-----------------------------------
Signed: Signed:
--------------------------- ----------------------------
Date: Date:
----------------------------- ------------------------------
================================================================================
<PAGE> 52
Date: March 24, 1995
Our Ref: B95-7701-MJR-001
Mesa Airlines, Inc.
2325 East 30th
Farmington, New Mexico
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-001 (RE: FUTURE TRADE-IN RIGHTS)
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. (Mesa) for the sale of Twenty-Five
(25) DHC-8-200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meanings as in the Agreement.
Future Trade-in Rights
Buyer will be entitled to trade-in any of its Aircraft against the acquisition
of any of BRAD's current products, including the de Havilland Dash-8 will be
entitled to trade-in any of its Aircraft against the acquisition of any of
BRAD's current products, including the de Havilland Dash-8 Series 400 aircraft
or Canadair CRJX aircraft, if either or both of such programs proceed. The
trade-in of Aircraft and the acquisition of any of BRAD's products shall be
subject to mutual agreement on terms and conditions prevailing at the time of
trade-in.
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
<PAGE> 53
Yours truly,
Bombardier Regional Aircraft Division
- -------------------------------
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this ...... day of March, 1995
Mesa Airlines, Inc.
By:
----------------------------------
Title:
-------------------------------
<PAGE> 54
March 24, 1995
Our Ref: B95-7701-MJR-002
Attention: Mr. Larry Risley
Chairman,
Mesa Airlines, Inc.
2325 East 30th
Farmington, New Mexico
U.S.A. 87401.
Gentlemen,
RE: LETTER AGREEMENT NO. B95-7701-MJR-002 (RE: OPTION AIRCRAFT)
In consideration of your agreement to purchase 25 DHC-8 Series 200 aircraft (the
"Firm Aircraft") under Purchase Agreement No. B-95-7701-PA-299 (the
"Agreement"), Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD"), is pleased to offer to Mesa Airlines, Inc.("Buyer") the
option to purchase Twenty Five (25) DHC-8 Series 200 aircraft (the "Option
Aircraft") on the following terms and conditions.
1.1 The Option Aircraft will be as described in Article 2 of the
Agreement.
1.2 The Option Aircraft shall be in two (2) blocks, the first of thirteen
(13) (the "First Option Aircraft Block") and the second of twelve (12)
(the "Second Option Aircraft Block") respectively.
1.3 BRAD will deliver the Option Aircraft to Buyer during the following
months:
<PAGE> 55
Page 2.
<TABLE>
<CAPTION>
FIRST OPTION BLOCK DELIVERY DATES
<S> <C>
First Option Aircraft
Second Option Aircraft
Third Option Aircraft [CONFIDENTIAL
Fourth Option Aircraft
Fifth Option Aircraft
Sixth Option Aircraft
Seventh Option Aircraft PORTION
Eighth Option Aircraft
Ninth Option Aircraft
Tenth Option Aircraft
Eleventh Option Aircraft
Twelfth Option Aircraft
Thirteenth Option Aircraft DELETED]
<CAPTION>
SECOND OPTION BLOCK DELIVERY DATE
<S> <C>
Fourteenth Option Aircraft
Fifteenth Option Aircraft
Sixteenth Option Aircraft [CONFIDENTIAL
Seventeenth Option Aircraft
Eighteenth Option Aircraft
Nineteenth Option Aircraft PORTION
Twentieth Option Aircraft
Twenty-First Option Aircraft
Twenty-Second Option Aircraft
Twenty-Third Option Aircraft
Twenty-Fourth Option Aircraft
Twenty-Fifth Option Aircraft DELETED]
</TABLE>
1.4.1 The base price in February 1, 1995 United States Dollars of
the Option Aircraft, is CONFIDENTIAL PORTION DELETED
---------------------------------------
1.4.2. The price of Buyer selected optional features as described at
Appendix IV of the Agreement is CONFIDENTIAL PORTION DELETED
---------------------------------------
1.4.3. These base prices are subject to escalation in accordance with the
Economic Adjustment Formula set out in Appendix I of the Agreement.
For Buyer's information, the estimated delivery prices of the Option
Aircraft are set forth below:
<PAGE> 56
Page 3.
<TABLE>
<CAPTION>
FIRST OPTION BLOCK ESTIMATED DELIVERY
PRICE
<S> <C>
First Option Aircraft
Second Option Aircraft
Third Option Aircraft [CONFIDENTIAL
Fourth Option Aircraft
Fifth Option Aircraft
Sixth Option Aircraft
Seventh Option Aircraft PORTION
Eighth Option Aircraft
Ninth Option Aircraft
Tenth Option Aircraft
Eleventh Option Aircraft
Twelfth Option Aircraft
Thirteenth Option Aircraft DELETED]
<CAPTION>
SECOND OPTION BLOCK ESTIMATED DELIVERY
PRICE
<S> <C>
Fourteenth Option Aircraft
Fifteenth Option Aircraft
Sixteenth Option Aircraft [CONFIDENTIAL
Seventeenth Option Aircraft
Eighteenth Option Aircraft
Nineteenth Option Aircraft
Twentieth Option Aircraft
Twenty-First Option Aircraft PORTION
Twenty-Second Option Aircraft
Twenty-Third Option Aircraft
Twenty-Fourth Option Aircraft
Twenty-Fifth Option Aircraft DELETED]
</TABLE>
1.5 The above prices exclude flyaway fuel, taxes and duties.
1.6 As consideration for this option, Buyer will pay to BRAD, upon exercise
of each Option Aircraft Block , the non-refundable sum of CONFIDENTIAL
PORTION DELETED for each Option Aircraft in such Option Aircraft Block,
such non-refundable sum to be treated as a deposit against the price of
the related Option Aircraft.
1.7 All dollar amounts in this Letter Agreement are in U.S. dollars.
<PAGE> 57
Page 4.
1.8 To exercise its option to purchase the First Option block, Buyer shall
notify BRAD in writing on or before the first day of the fifteenth
(15th) month prior to the month of scheduled delivery of the First
Option Aircraft. To exercise its option to purchase the Second Block of
Option Aircraft, Buyer shall also notify BRAD in writing on or before
the first day of the fifteenth (15th) month prior to the delivery of
the Fourteenth Option Aircraft.
1.9 Buyer and BRAD will negotiate a definitive agreement for the purchase
of each Option Aircraft block within thirty (30) days of notice of
exercise of the respective Option Aircraft block. The definitive
agreements for the Option Aircraft will be based on the terms of the
Agreement, excluding the provisions of any letter agreements forming
part of the Agreement, and will include additional provisions to be
mutually agreed upon. If the definitive agreements are not signed by
the end of the thirty (30) day period either party may, within ten (10)
days of the end of such period, cancel the option for such Option
Aircraft by written notice. Upon execution of such definitive
agreements, the Option Aircraft so exercised shall become firm and the
terms of payment per letter agreement B95-7701-MJR-004 shall become
applicable to such Aircraft.
1.10 If Buyer fails to take delivery of and pay for any Firm Aircraft, BRAD
may cancel this option and terminate any unperformed definitive
agreements for the purchase of the Option Aircraft.
If Buyer fails to exercise its option to purchase the First Option
Aircraft Block , then the option to purchase the Second Optiona
Aircraft Block is cancelled.
1.11 If Buyer does not exercise either option, if an option is canceled, or
if BRAD terminates a definitive agreement under 1.9 or 1.10 above, BRAD
will retain all payments received for both blocks of Option Aircraft.
1.12 The options in this Letter Agreement are not assignable to third
parties without the written consent of BRAD.
Yours truly,
BOMBARDIER INC.
- ------------------------
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO
this day of March, 1995
Mesa Airlines, Inc.
By:
---------------------
Title:
------------------
<PAGE> 58
Date: March 24, 1995
Our Ref: B95-7701-MJR-003
Mesa Airlines, Inc.
2325 East 30th,
Farmington New Mexico
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-003 ([CONFIDENTIAL PORTION DELETED])
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8- 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meanings as in the Agreement.
It is acknowledged that Buyer acquired a quantity of [CONFIDENTIAL PORTION
DELETED] with the purchase of [CONFIDENTIAL PORTION DELETED] and the assignment
of a lease of [CONFIDENTIAL PORTION DELETED] and the purchase of [CONFIDENTIAL
PORTION DELETED] and the assignment of a lease of [CONFIDENTIAL PORTION
DELETED].
BRAD agrees to [CONFIDENTIAL PORTION DELETED] Buyer [CONFIDENTIAL PORTION
DELETED] by Buyer as a result of its procurement and lease assignment as stated
above per the following conditions:
1) [CONFIDENTIAL PORTION DELETED] must have complete traceability and
certification documentation available.
2) [CONFIDENTIAL PORTION DELETED] must be certified with FAA repair tags.
3) Packaging should be in accordance with industry standards for the shipment
of [CONFIDENTIAL PORTION DELETED].
4) [CONFIDENTIAL PORTION DELETED]
5) [CONFIDENTIAL PORTION DELETED]
6) [CONFIDENTIAL PORTION DELETED]
7) Transportation will be [CONFIDENTIAL PORTION DELETED]. [CONFIDENTIAL
PORTION DELETED] will be responsible for transportation arrangements and
charges.
8a) Following an audit by BRAD of [CONFIDENTIAL PORTION DELETED] currently held
by Buyer, Buyer will provide a listing of [CONFIDENTIAL PORTION DELETED]
8b) Contemporaneously with the return of [CONFIDENTIAL PORTION DELETED], a
further audit of [CONFIDENTIAL PORTION DELETED] then held by Buyer will be
effected, and [CONFIDENTIAL PORTION DELETED] will supply a listing of
[CONFIDENTIAL PORTION DELETED] in hard copy and on diskette.
1
<PAGE> 59
9a) BRAD will review the list mentioned in 8) above and within [CONFIDENTIAL
PORTION DELETED] will provide [CONFIDENTIAL PORTION DELETED] in accordance
with the provisions of 1) through 7) above. Delivery by [CONFIDENTIAL
PORTION DELETED] and establishment of the [CONFIDENTIAL PORTION DELETED]
will occur promptly after [CONFIDENTIAL PORTION DELETED].
9b) Upon return of [CONFIDENTIAL PORTION DELETED], and upon commencing the
operation by Buyer of [CONFIDENTIAL PORTION DELETED], the terms and
conditions of Article 9a) above will also apply for the audit and
[CONFIDENTIAL PORTION DELETED] in possession of Buyer at such time.
10) Buyer and BRAD acknowledge that Buyer has [CONFIDENTIAL PORTION DELETED],
and a number, to be identified, of [CONFIDENTIAL PORTION DELETED] specific
to [CONFIDENTIAL PORTION DELETED]. BRAD will [CONFIDENTIAL PORTION
DELETED].
11) [CONFIDENTIAL PORTION DELETED] will be [CONFIDENTIAL PORTION DELETED] to be
determined and which will also be determined at a later date.
The first of [CONFIDENTIAL PORTION DELETED] to be issued as payment for
[CONFIDENTIAL PORTION DELETED] will be in the amount of [CONFIDENTIAL PORTION
DELETED] which will be used as the additional deposit per letter agreement
B95-7701-MJR-004, and the second being the remainder which may be used by Buyer
to purchase [CONFIDENTIAL PORTION DELETED] directly from BRAD.
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly
Bombardier Regional Aircraft Division
- ------------------------
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this ...... day of March, 1995
Mesa Airlines, Inc.
By:
-----------------------------------
Title:
-----------------------------------
2
<PAGE> 60
Date: March 24, 1995
Our Ref: B95-7701-MJR-004
Mesa Airlines, Inc.
2325 East 30th,
Farmington New Mexico
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-004 (RE: PAYMENT TERMS AND INITIAL
PAYMENT)
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8- 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meanings as in the Agreement.
The following provisions replace and supercede the existing provisions of
Article 5 in the above-mentioned Agreement with respect to Terms of payment and
Initial payment for the Aircraft.
1. Terms of payment
The terms of payment of the Aircraft are as follows:
a. Upon execution of the Agreement, Buyer shall make an initial
payment of [CONFIDENTIAL PORTION DELETED]. Such initial payment
shall be applied proportionately against the delivery of the last
[CONFIDENTIAL PORTION DELETED]; and
b. Upon agreement as to the amount of the [CONFIDENTIAL PORTION
DELETED] per Letter Agreement B95-7701-MJR-003, the first
[CONFIDENTIAL PORTION DELETED] in the amount of [CONFIDENTIAL
PORTION DELETED] will become an additional deposit and shall be
applied proportionally against delivery of the [CONFIDENTIAL
PORTION DELETED]; and
c. on delivery of each [CONFIDENTIAL PORTION DELETED] the balance of
the [CONFIDENTIAL PORTION DELETED] for such [CONFIDENTIAL PORTION
DELETED] less any applicable initial payment made in accordance
with a. and b.
2. Initial Payment
The initial payment per article 1a., above may be made [CONFIDENTIAL PORTION
DELETED]. It is understood that Buyer currently holds [CONFIDENTIAL PORTION
DELETED] as described in [CONFIDENTIAL PORTION DELETED],-and Buyer will
[CONFIDENTIAL PORTION DELETED] a sufficient amount of [CONFIDENTIAL PORTION
DELETED] as collateral required for a [CONFIDENTIAL PORTION DELETED] by a third
party.
It is understood that these [CONFIDENTIAL PORTION DELETED] are to be evaluated
by such third party, who will determine the amount of [CONFIDENTIAL PORTION
DELETED] required to constitute sufficient collateral for the [CONFIDENTIAL
PORTION DELETED] to BRAD [CONFIDENTIAL PORTION DELETED] to BRAD. Such
[CONFIDENTIAL PORTION DELETED] must be [CONFIDENTIAL PORTION DELETED], and must
not include any restrictions which may adversely affect the value of
[CONFIDENTIAL PORTION DELETED].
1
<PAGE> 61
Buyer will be responsible for and will indemnify BRAD in respect of all
interest, fees, costs and other expenses relating to [CONFIDENTIAL PORTION
DELETED].
It is further understood that this transaction can only be acceptable to BRAD if
such transaction will be [CONFIDENTIAL PORTION DELETED] by third parties
[CONFIDENTIAL PORTION DELETED] BRAD.
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly
Bombardier Regional Aircraft Inc.
- -------------------------
Paul H. Francoeur
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this day of March, 1995
--------
MESA AIRLINES, Inc.
By:
-----------------------------------
Title:
-----------------------------------
2
<PAGE> 62
March 24, 1995
Mesa Airlines, Inc.
2325 East 30th Street
Farmington, New Mexico 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
Re: Letter Agreement No. B95-7701-MJR-005
Reference is made to the Purchase Agreement No. B95-7701-PA-299 (the
"Agreement") between Bombardier, Inc., represented by its Bombardier Regional
Aircraft Division ("BRAD") and Mesa Airlines, Inc. ("Mesa" or the "Buyer") for
the sale of twenty-five (25) DHC- 8-200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by the Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters summarized below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
Lease financing of [CONFIDENTIAL PORTION DELETED] will be arranged by Mesa,
working in close coordination with and supported by [CONFIDENTIAL PORTION
DELETED] with [CONFIDENTIAL PORTION DELETED] to be underwritten by [CONFIDENTIAL
PORTION DELETED] as generally outlined below. Any information related to the
form and amount of any support which may be provided by [CONFIDENTIAL PORTION
DELETED] is to be treated as confidential and is not to be provided to any third
party without the express written consent of [CONFIDENTIAL PORTION DELETED] as
further set forth in [CONFIDENTIAL PORTION DELETED] confidentiality agreement.
It is [CONFIDENTIAL PORTION DELETED] responsibility to have such form executed
with any third party prior to disclosure of any such information and to provide
such form to [CONFIDENTIAL PORTION DELETED] for approval.
- - BRAD will make every effort to arrange for no more than [CONFIDENTIAL PORTION
DELETED] to close leases for the 25 aircraft. Closings may be multiple within
[CONFIDENTIAL PORTION DELETED]. If [CONFIDENTIAL PORTION DELETED] leases are not
in place as of each delivery date [CONFIDENTIAL PORTION DELETED] will be
provided by [CONFIDENTIAL PORTION DELETED].
- - [CONFIDENTIAL PORTION DELETED] shall provide in support of [CONFIDENTIAL
PORTION DELETED] arrangement of the leases a [CONFIDENTIAL PORTION DELETED] and
a [CONFIDENTIAL PORTION DELETED] (together the [CONFIDENTIAL PORTION DELETED]).
- - Both parties agree to make good faith efforts to allow [CONFIDENTIAL PORTION
DELETED] to achieve [CONFIDENTIAL PORTION DELETED] for this transaction. Any
benefits derived from [CONFIDENTIAL PORTION DELETED] in excess of what is
required to achieve the [CONFIDENTIAL PORTION DELETED] shall be for
[CONFIDENTIAL PORTION DELETED] account.
- - For purposes of determining the nature and degree of [CONFIDENTIAL PORTION
DELETED] to be provided by [CONFIDENTIAL PORTION DELETED], base-line economics
shall be established which provide the equivalent of an average [CONFIDENTIAL
PORTION DELETED] equal to [CONFIDENTIAL PORTION DELETED] under the Agreement,
assuming a [CONFIDENTIAL PORTION DELETED] and interest rates prevailing on
[CONFIDENTIAL PORTION DELETED] (subject to adjustment as described below) and
U.S. Federal tax laws in effect at [CONFIDENTIAL PORTION DELETED]. The
[CONFIDENTIAL PORTION DELETED] the continued existence of the bankruptcy
protection offered by Section 1110 of the U.S. Bankruptcy Code or its
substantial equivalent if amended. It is understood that [CONFIDENTIAL PORTION
DELETED] will not apply to each and every [CONFIDENTIAL PORTION DELETED]
individually, but shall be calculated on the total number of [CONFIDENTIAL
PORTION DELETED] in the agreement.
1
<PAGE> 63
- - The benefit of [CONFIDENTIAL PORTION DELETED] for other than level
[CONFIDENTIAL PORTION DELETED], including but not limited to (a) [CONFIDENTIAL
PORTION DELETED] interim periods up to [CONFIDENTIAL PORTION DELETED] months,
(b) [CONFIDENTIAL PORTION DELETED] not to exceed [CONFIDENTIAL PORTION DELETED]
months, (c) [CONFIDENTIAL PORTION DELETED] rent structures, (d) [CONFIDENTIAL
PORTION DELETED] structures, and (e) an extension in the [CONFIDENTIAL PORTION
DELETED] up to [CONFIDENTIAL PORTION DELETED] years may be utilized by
[CONFIDENTIAL PORTION DELETED] to achieve the [CONFIDENTIAL PORTION DELETED] and
(f) availability of state income tax benefits. To the extent that the
[CONFIDENTIAL PORTION DELETED] may be achieved without use of the above
benefits, [CONFIDENTIAL PORTION DELETED]. In the event that [CONFIDENTIAL
PORTION DELETED] are paid on a schedule which provides for payments on the basis
of [CONFIDENTIAL PORTION DELETED], and the stipulated [CONFIDENTIAL PORTION
DELETED] which may be [CONFIDENTIAL PORTION DELETED] in part by Bombardier shall
not contain [CONFIDENTIAL PORTION DELETED] nor, regardless of the [CONFIDENTIAL
PORTION DELETED] between monthly and semi-annually, shall the [CONFIDENTIAL
PORTION DELETED] amounts contain any other amounts not contained in the
[CONFIDENTIAL PORTION DELETED] schedules.
- - [CONFIDENTIAL PORTION DELETED] recognizes [CONFIDENTIAL PORTION DELETED]
desire to access [CONFIDENTIAL PORTION DELETED] and therefor [CONFIDENTIAL
PORTION DELETED] will use good faith efforts to obtain [CONFIDENTIAL PORTION
DELETED] for this transaction. Any fees for such [CONFIDENTIAL PORTION DELETED]
are for [CONFIDENTIAL PORTION DELETED] account. [CONFIDENTIAL PORTION DELETED]
will have the right to select [CONFIDENTIAL PORTION DELETED] if available. If
[CONFIDENTIAL PORTION DELETED], [CONFIDENTIAL PORTION DELETED] will have the
right to enter into one or more [CONFIDENTIAL PORTION DELETED], cost of which is
for [CONFIDENTIAL PORTION DELETED] account. [CONFIDENTIAL PORTION DELETED] costs
for [CONFIDENTIAL PORTION DELETED].
- - If [CONFIDENTIAL PORTION DELETED] determines, in consultation with
[CONFIDENTIAL PORTION DELETED], that the requisite [CONFIDENTIAL PORTION
DELETED] will not be achieved in the [CONFIDENTIAL PORTION DELETED] on the basis
of [CONFIDENTIAL PORTION DELETED] and [CONFIDENTIAL PORTION DELETED] will
provide or cause to be provided (but not limited to) any of the following as it
may determine: (a) Increased [CONFIDENTIAL PORTION DELETED]; (b) [CONFIDENTIAL
PORTION DELETED] agreements; (c) [CONFIDENTIAL PORTION DELETED] provided by
[CONFIDENTIAL PORTION DELETED] for [CONFIDENTIAL PORTION DELETED] under the
leases; (d) [CONFIDENTIAL PORTION DELETED] of the [CONFIDENTIAL PORTION DELETED]
payable by [CONFIDENTIAL PORTION DELETED] , (e) direct [CONFIDENTIAL PORTION
DELETED] provided or [CONFIDENTIAL PORTION DELETED] by [CONFIDENTIAL PORTION
DELETED], or any combination of the foregoing, as may be required to achieve
[CONFIDENTIAL PORTION DELETED].
- - If [CONFIDENTIAL PORTION DELETED] is unable to arrange [CONFIDENTIAL PORTION
DELETED] as described above with [CONFIDENTIAL PORTION DELETED] provided by
[CONFIDENTIAL PORTION DELETED], [CONFIDENTIAL PORTION DELETED] will become
responsible for arranging [CONFIDENTIAL PORTION DELETED] as described above. If
[CONFIDENTIAL PORTION DELETED], for whatever reason, is unable to arrange such
[CONFIDENTIAL PORTION DELETED], including [CONFIDENTIAL PORTION DELETED],
[CONFIDENTIAL PORTION DELETED] will have no obligation to accept the affected
[CONFIDENTIAL PORTION DELETED] and there will be no cost to [CONFIDENTIAL
PORTION DELETED] with regard to such non-acceptance.
- - [CONFIDENTIAL PORTION DELETED] will have the option to purchase [CONFIDENTIAL
PORTION DELETED] on the [CONFIDENTIAL PORTION DELETED] anniversary of the
relevant [CONFIDENTIAL PORTION DELETED] at the then-applicable [CONFIDENTIAL
PORTION DELETED] plus [CONFIDENTIAL PORTION DELETED] if any.
- - The [CONFIDENTIAL PORTION DELETED] will reflect the right, if practical, of
[CONFIDENTIAL PORTION DELETED] to use each [CONFIDENTIAL PORTION DELETED],
provided that, if required by the relevant [CONFIDENTIAL PORTION DELETED], for
it's own account, shall indemnify any loss of such [CONFIDENTIAL PORTION
DELETED] to the extent resulting from such usage and the consequent allocation
to [CONFIDENTIAL PORTION DELETED] of more than [CONFIDENTIAL PORTION DELETED] of
[CONFIDENTIAL PORTION DELETED] from the [CONFIDENTIAL PORTION DELETED]
transactions to which such [CONFIDENTIAL PORTION DELETED] is a party in any of
the [CONFIDENTIAL PORTION DELETED] years commencing with [CONFIDENTIAL PORTION
DELETED] that includes the relevant [CONFIDENTIAL PORTION DELETED], provided
that the resulting [CONFIDENTIAL PORTION DELETED] is not increased above the
[CONFIDENTIAL PORTION DELETED] as a result of such [CONFIDENTIAL PORTION
DELETED].
2
<PAGE> 64
- - The capital cost of the [CONFIDENTIAL PORTION DELETED] for purposes of
determining [CONFIDENTIAL PORTION DELETED] shall include transaction fees and
expenses in the amount of [CONFIDENTIAL PORTION DELETED] of [CONFIDENTIAL
PORTION DELETED], including counsel's fees for [CONFIDENTIAL PORTION DELETED]
normal for [CONFIDENTIAL PORTION DELETED] and any other direct transaction
costs, including the [CONFIDENTIAL PORTION DELETED] as described below. It is
expected that each of such fees and expenses [CONFIDENTIAL PORTION DELETED] and
[CONFIDENTIAL PORTION DELETED] and detailed billing of such services to be
provided to [CONFIDENTIAL PORTION DELETED]. Any expenses in excess of
[CONFIDENTIAL PORTION DELETED] of [CONFIDENTIAL PORTION DELETED] cost will be
paid by [CONFIDENTIAL PORTION DELETED].
- - Advisory fees of either party, if any, will be paid separately by each party.
These fees, if either party chooses to incur them, are not to be included in the
[CONFIDENTIAL PORTION DELETED].
- - An adjustment to the [CONFIDENTIAL PORTION DELETED] applicable to actual
[CONFIDENTIAL PORTION DELETED] will be determined as follows: An "Auditor", as
agreed to by [CONFIDENTIAL PORTION DELETED] and [CONFIDENTIAL PORTION DELETED],
will calculate the [CONFIDENTIAL PORTION DELETED] as previously described for
each [CONFIDENTIAL PORTION DELETED] (the "[CONFIDENTIAL PORTION DELETED]") such
that the [CONFIDENTIAL PORTION DELETED] for all scheduled [CONFIDENTIAL PORTION
DELETED] shall not exceed the average equivalent [CONFIDENTIAL PORTION DELETED]
of the [CONFIDENTIAL PORTION DELETED] and the [CONFIDENTIAL PORTION DELETED] and
[CONFIDENTIAL PORTION DELETED] for each [CONFIDENTIAL PORTION DELETED] remains
constant. This calculation will establish the [CONFIDENTIAL PORTION DELETED]
(utilizing the [CONFIDENTIAL PORTION DELETED]) for [CONFIDENTIAL PORTION
DELETED] (the "[CONFIDENTIAL PORTION DELETED]") based on a [CONFIDENTIAL PORTION
DELETED], a [CONFIDENTIAL PORTION DELETED], a [CONFIDENTIAL PORTION DELETED]
U.S. Federal income tax rate, and [CONFIDENTIAL PORTION DELETED] total
transaction expenses. The "[CONFIDENTIAL PORTION DELETED]" will [CONFIDENTIAL
PORTION DELETED] on the U.S. Treasury Note having [CONFIDENTIAL PORTION DELETED]
the average [CONFIDENTIAL PORTION DELETED], plus the [CONFIDENTIAL PORTION
DELETED] to be agreed upon.
Prior to [CONFIDENTIAL PORTION DELETED] closing date, adjustments to the
equivalent [CONFIDENTIAL PORTION DELETED] shall be made to reflect the
following:
1) The impact of the change in the [CONFIDENTIAL PORTION DELETED] will be
calculated and converted into an increase or decrease in the [CONFIDENTIAL
PORTION DELETED].
2) Changes in [CONFIDENTIAL PORTION DELETED] between the [CONFIDENTIAL PORTION
DELETED] and the time of the pricing of [CONFIDENTIAL PORTION DELETED] for each
[CONFIDENTIAL PORTION DELETED]. The [CONFIDENTIAL PORTION DELETED] shall state
the assumed [CONFIDENTIAL PORTION DELETED] on the basis that [CONFIDENTIAL
PORTION DELETED], the [CONFIDENTIAL PORTION DELETED] would be based on a
[CONFIDENTIAL PORTION DELETED] of [CONFIDENTIAL PORTION DELETED] and a guarantee
of [CONFIDENTIAL PORTION DELETED] (i.e. [CONFIDENTIAL PORTION DELETED] guarantee
of [CONFIDENTIAL PORTION DELETED]). Changes in the base [CONFIDENTIAL PORTION
DELETED] will be tied to the [CONFIDENTIAL PORTION DELETED] of the [CONFIDENTIAL
PORTION DELETED], using a [CONFIDENTIAL PORTION DELETED] U.S. Federal income tax
rate (and further shall give recognition to [CONFIDENTIAL PORTION DELETED] in
the [CONFIDENTIAL PORTION DELETED]). The [CONFIDENTIAL PORTION DELETED] are to
be expressed as a percentage of [CONFIDENTIAL PORTION DELETED], as would be
necessary to achieve the [CONFIDENTIAL PORTION DELETED] equivalent [CONFIDENTIAL
PORTION DELETED] factors.
All of the above changes shall be measured against the [CONFIDENTIAL PORTION
DELETED] as of [CONFIDENTIAL PORTION DELETED] and U.S. Federal income tax laws
in effect on [CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED] obligations under this letter and the
[CONFIDENTIAL PORTION DELETED] will be conditioned upon there having been no
material adverse change in [CONFIDENTIAL PORTION DELETED], defined for this
purpose to mean the inability of [CONFIDENTIAL PORTION DELETED] to meet its
[CONFIDENTIAL PORTION DELETED] (ratios to be determined).
3
<PAGE> 65
If the foregoing is acceptable to you, please so indicate below.
Yours truly,
BOMBARDIER REGIONAL AIRCRAFT DIVISION
- ----------------------------
Walter A. Galloway
Director of Contracts
Dash 8 Aircraft
Accepted and agreed to:
Mesa Airlines, Inc.
By:
-------------------------
Larry L. Risley
Chief Executive Officer
4
<PAGE> 66
Date: March 24, 1995
Our Ref: B95-7701-MJR-006
Mesa Airlines, Inc.
2325 East 30th
Farmington, New Mexico
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-006 (RE: SPARE PARTS SUPPORT PROGRAM)
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. (Mesa) for the sale of Twenty-Five
(25) DHC-8- 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meanings as in the Agreement.
FLEX PARTS
SPARE PARTS SUPPORT AGREEMENT
TABLE OF CONTENTS
- -----------------
ARTICLES
- --------
1 Definitions
2 Scope of the Plan
3 Aircraft Operations/Maintenance
4 Price
5 Payment Terms
6 Term of the Agreement
7 Facilities
8 Title - Risk of Loss
9 Excusable Delay
10 Warranty
11 Patent Infringement
12 [CONFIDENTIAL PORTION DELETED]
13 Notices
14 Laws
15 Taxes
16 Insurance
17 Confidentiality
18 Assignment
19 Liens
20 Waiver
Appendices
1
<PAGE> 67
ARTICLE 1
DEFINITIONS
The following words and expressions when used in the present letter agreement
(Spares Parts Support Agreement), shall have the meaning given to them below.
1.1
ABUSE
a) The Failure by the Buyer to perform the proper Maintenance, Repair, or
Modification of any component as required by any applicable manuals, Bulletins,
Publications and/or written instructions, including without limitation BRAD
Maintenance, repair and Overhaul manuals, written instructions, and any
appropriate Airworthiness Authorities requirements and/or Airworthiness
Directives; or
b) any use, operation, testing or storage of any Component not in accordance
with accepted aircraft operation, maintenance practice or applicable manuals,
bulletins, guidelines, specifications, publications and/or written instructions;
or
c) Any, neglect, misuse, degradation or wrongful act or omission, unauthorized
repair or modification adversely affecting any component; or
d) Any accident, impact or foreign object damage or unusual wear to any
component.
1.3
AIRCRAFT
The Aircraft as described in Article 2.1 of the Agreement.
1.4
ROTABLE
An item which can be economically repairable and can be restored to a servicable
condition. Normally these items are assemblies which include replaceable parts
but also include units without component parts which can be refurbished by
cleaning, refinishing, patching, etc.
1.5
EXPENDABLE
Items for which no authorized repair procedure exists, or for which the cost of
repair would not be economical or exceed the cost of replacement.
1.6
CONSUMABLE
Generally bulk-type materials such as lubricants, cements, compounds, paints,
chemicals, dyes, splices and patches called out in maintenance and repair
procedures for aircraft, engines, equipment and component end items.
1.7
DEHAVILLAND CORPORATION
DeHavilland Corporation, (DHC) a US Corporation and a Subsidiary of DeHavilland
Inc., a Delaware Corporation, having a place of business at Taylor, Michigan,
USA.and represented by its Bombardier Regional Aircraft Division (BRAD)
2
<PAGE> 68
1.8
INSURANCE SPARES
Items which are not expected to fail but which are stocked purely as a
precaution by the manufacturer or airline to preclude undue schedule
interruptions or economic hardship should the item require replacement. (e.g.
flaps, ailerons, elevator, doors etc.)
1.9
NO FAULT FOUND
The removal of any Component which is returned to the Program and/or to any
Vendor or Repair or Overhaul facility and which, after investigation by DHC
and/or the vendor, is found to be serviceable.
1.10
OVERHAUL
To make any component serviceable by disassembly, inspecting, replacing, or
repairing failed, damaged or worn parts of such a component including, where
necessary, by compliance with applicable Service Bulletins, if required for
certification, to achieve operating or design tolerances. An overhauled
component shall be certified to have zero time for purpose of designated service
life, unless otherwise specified.
1.11
PROGRAM
The Spare Parts Support Program also otherwise known as FlexParts, offered to
the Buyer for its Aircraft as set forth and according to the terms of the
present Spares Part Support Agreement.
1.12
REPAIR
To make any component serviceable by disassembly, inspecting, replacing, or
repairing failed or damaged parts of such a component including where necessary,
compliance with applicable service bulletins, if required for certification.
1.13
SERVICEABLE COMPONENT OR SERVICEABLE
Any component that is in a serviceable condition as defined by the limits,
tolerances or allowances set forth in any applicable manual, bulletins,
guidelines, specifications, publications and/or written instructions, and/or
that is in compliance with all appropriate Airworthiness Authorities
requirements and/or Airworthiness directives.
1.14
UNSERVICEABLE COMPONENT OR UNSERVICEABLE
Any component that is not in a serviceable condition as defined by the limits,
tolerances or allowances set forth in any applicable manual, bulletins,
guidelines, specifications, publications and/or written instructions, and/or
that is not in compliance with all appropriate Airworthiness Authorities
requirements and/or Airworthiness directives.
1.15
STRUCTURE OR STRUCTURAL PARTS
Any self-contained part or any combination of parts, sub-assemblies or units
which performs a function of carrying loads or supporting equipment or
maintaining aerodynamic configuration or control or diverting airflow.
ARTICLE 2
SCOPE OF THE PLAN
DHC will provide provisioning spare parts support at Buyer's main base of
operation and one line station based upon the following assumptions and
comprising the following inclusions and/or exclusions:
2.1 ASSUMPTIONS
- 25 Dash 8 Series 200 aircraft.
- Aircraft delivered at a rate of 2 per month.
3
<PAGE> 69
- Minimum Annual Utilization will be 2700 Flight Hours per year.
- Main Maintenance Base located at Grand Junction, Colorado, or such
other location in the United States as may be mutually agreed between
DHC and Buyer.
- Line Station located at Denver, Colorado.
2.2 THE PROGRAM INCLUDES THE FOLLOWING COVERAGE:
[CONFIDENTIAL PORTION DELETED] the Program spare parts inventory.
[CONFIDENTIAL PORTION DELETED].
2.3 THE PROGRAM DOES NOT PROVIDE COVERAGE OF THE FOLLOWING:
- [CONFIDENTIAL PORTION DELETED]
- [CONFIDENTIAL PORTION DELETED]
- [CONFIDENTIAL PORTION DELETED]
- [CONFIDENTIAL PORTION DELETED]
- [CONFIDENTIAL PORTION DELETED]
- [CONFIDENTIAL PORTION DELETED]
- [CONFIDENTIAL PORTION DELETED]
- [CONFIDENTIAL PORTION DELETED]
- [CONFIDENTIAL PORTION DELETED]
- [CONFIDENTIAL PORTION DELETED]
- Damages to the Program spare parts from foreign object damage, fuel, oil
and/or hydraulic system contamination, severe or unpredictable weather
conditions, Acts of God or any other similar causes, which are beyond the
reasonable control of and without fault or negligence of the Buyer while the
spare parts are under the care, custody and control of Buyer.
- Any damages to Program spare parts as a result of any Abuse by the Buyer
or any third party, while such spare parts are under the care, custody and
control of Buyer.
- Any costs incurred for any Program spare parts returned by the Buyer to
DHC that is subsequently determined to be [CONFIDENTIAL PORTION DELETED].
2.4 DISPOSITION OF REMOVED PARTS
[CONFIDENTIAL PORTION DELETED].
ARTICLE 3
AIRCRAFT OPERATIONS/MAINTENANCE
During the term of this Program, the Buyer shall operate and maintain its
Aircraft in accordance with the FAA approved Flight Manual, Operating Manual,
the applicable Maintenance and Repair Manuals, applicable Alert Service
Bulletins,
4
<PAGE> 70
and any other written instructions issued by BRAD and its Vendors as amended
from time to time. The Buyer shall also comply with all the applicable
requirements of appropriate Airworthiness Authorities, and/or with generally
accepted practices currently followed in the commercial aviation industry.
BRAD and Buyer shall review BRAD recommended Service Bulletins and mutually
agree which will be incorporated. The Buyer is responsible for any damages or
costs caused by [CONFIDENTIAL PORTION DELETED].
ARTICLE 4
PRICE
The Price for services provided under the Program will be [CONFIDENTIAL PORTION
DELETED] subject to a minimum charge of [CONFIDENTIAL PORTION DELETED] Flight
Hours ) per year.
[CONFIDENTIAL PORTION DELETED].
All amounts are quoted in United States Dollars and are fixed, firm and not
subject to escalation, for the term of this agreement.
ARTICLE 5
PAYMENT TERMS
Within [CONFIDENTIAL PORTION DELETED] calendar days after the end of the
calendar month, Buyer shall complete a monthly status report and submit payment
to DHC per the following schedule:
1) For aircraft delivered prior to the reporting month; payment to the
value of [CONFIDENTIAL PORTION DELETED] Flight Hours per aircraft.
2) For aircraft delivered during the reporting month; payment to the value
of [CONFIDENTIAL PORTION DELETED] Flight Hours, prorated to the number of days
in the month after the delivery date.
Within [CONFIDENTIAL PORTION DELETED] calendar days after the end of the
calendar year, the Buyer shall provide DHC a detailed reconciliation of
[CONFIDENTIAL PORTION DELETED] hours. The Buyer shall pay for each hour in
excess of the minimum Flight Hour charge.
To the extent that any particular Aircraft is out of service for more than
[CONFIDENTIAL PORTION DELETED] days due to damage arising from accident or
incident [CONFIDENTIAL PORTION DELETED].
If an Aircraft has been lost or damaged beyond economic repair then the average
for the purpose of minimum calculations will be computed based on a fleet
average including only the pro-rated portion of utilization of such lost or
damaged aircraft.
The program is based on a fleet of at [CONFIDENTIAL PORTION DELETED]. If the
fleet falls below [CONFIDENTIAL PORTION DELETED] aircraft as a result of loss or
damage beyond economic repair of Aircraft, BRAD shall advise Buyer of the
incremental effect on the price for the total services rendered under this
program and Buyer will agree to pay such increment.
The Buyer will maintain and make available to DHC, for auditing purposes, the
aircraft Log books and Historical Component records.
The Buyer shall [CONFIDENTIAL PORTION DELETED], from the date that any payment
becomes due, up to and including the day prior to receipt of payment,
[CONFIDENTIAL PORTION DELETED] from time to time, calculated and compounded
monthly. DHC's right to receive [CONFIDENTIAL PORTION DELETED] is in addition to
any other right or remedy DHC has at law as a result of [CONFIDENTIAL PORTION
DELETED].
5
<PAGE> 71
ARTICLE 6
TERM OF THE SPARES PARTS SUPPORT AGREEMENT
The Term of the Spares Part Support Agreement shall commence on the date of the
delivery of the first Aircraft and terminate [CONFIDENTIAL PORTION DELETED]
years after the date of delivery of the last Aircraft.
ARTICLE 7
FACILITIES
Buyer will provide to [CONFIDENTIAL PORTION DELETED], the use of warehouse space
at the Buyer's main base or at an off-site location, sufficient to safely store
the Program spare parts. The Stores will be separate from the Buyer's materials,
and shall be secure and lockable.
Buyer will provide to [CONFIDENTIAL PORTION DELETED], at the Buyer's main base,
[CONFIDENTIAL PORTION DELETED]. This office space shall be [CONFIDENTIAL PORTION
DELETED].
Buyer shall provide to [CONFIDENTIAL PORTION DELETED], access to Buyer's stores
system, with terminals if necessary.
Buyer shall provide [CONFIDENTIAL PORTION DELETED] as required.
Buyer shall provide access to a conveniently located photocopier at the Buyer
main base.
The Program facility shall be secured at all times. Buyer's personnel, suitably
approved by DHC, will have access per agreed upon procedures.
The Buyer shall obtain any necessary identification or access required for DHC's
Program personnel.
DHC will provide [CONFIDENTIAL PORTION DELETED] as required.
ARTICLE 8
TITLE - RISK OF LOSS
DHC will retain title to Program spare parts in the Program stores.
Title to and risk of loss or damage of Program spare parts shall pass to Buyer
upon issuance to Buyer from the Program stores.
Title to and risk of loss or damage of Program spare parts returned to DHC will
pass to DHC upon receipt of those parts into the Program stores.
ARTICLE 9
WARRANTY
[CONFIDENTIAL PORTION DELETED].
Article 5 of Letter Agreement B95-7701-MJR-009 (Disclaimer and Release) shall
apply to this Program.
ARTICLE 10
[CONFIDENTIAL PORTION DELETED]
6
<PAGE> 72
10.1 [CONFIDENTIAL PORTION DELETED]
10.2 [CONFIDENTIAL PORTION DELETED]
ARTICLE 11
NOTICES
11.1 Any notice, request, approval, permission, consent or other
communication ("Notice"), to be given or required under this Agreement
shall be provided in writing, by registered mail, facsimile, courier,
telegraphic or other electronic communication providing reasonable
proof of transmission, except that no notice shall be sent by mail if
disruption of postal service exists or is threatened either in the
country of origin or of destination, by the party giving the Notice and
shall be addressed as follows:
(a) Notice to BRAD shall be addressed to:
Bombardier Inc.
Bombardier Regional Aircraft Division
Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Attention: Walter A. Galloway, Manager, Contracts
Telex: 06-22128
Facsimile: (416) 375-4533
(b) Notice to Buyer shall be addressed to:
Attention: Mr. Larry Risley, Chairman
Mesa Airlines, Inc.
2325 East 30th
Farmington, New Mexico
U.S.A. 87401
Facsimile: 505-326-4485
11.2 Notice given in accordance with Article 11.1 shall be deemed
sufficiently given to and received by the addressees:
(a) if delivered by hand, on the day when the same shall have been so
delivered; or
(b) if mailed or sent by courier on the day indicated on the
corresponding acknowledgment of receipt; or
(c) if sent by telex or facsimile on the day indicated by the
acknowledgment or the answer back of the receiver in provable form.
ARTICLE 12
TAXES
The price of the Program does not include any sales, use, personal property,
excise, consumption, gross receipts, franchise, value added, luxury or other
taxes, fees, duties or assessments which may be levied, assessed or imposed by
7
<PAGE> 73
any governmental authority or agency on or as a result of any sales transaction,
to the extent imposed by law on Buyer or DHC, or any affiliate of DHC. Should
such tax, duty or assessment be applicable, the Program price will be adjusted
accordingly.
ARTICLE 13
INSURANCE
During the term of this agreement, Buyer shall;
a) [CONFIDENTIAL PORTION DELETED] issued to Buyer.
b) Procure and maintain, at Buyer's own cost and expense, insurance
covering the [CONFIDENTIAL PORTION DELETED] of the Program spares located in the
Buyer's facility, where DeHavilland Corporation shall be included as loss payee.
Buyer will provide a certificate of insurance evidencing such coverage.
[CONFIDENTIAL PORTION DELETED]. The insurance policy shall not be [CONFIDENTIAL
PORTION DELETED], having been given to DHC by Buyer.
ARTICLE 14
CONFIDENTIALITY
Buyer shall not disclose the signing nor the terms of this agreement without the
prior written consent of DHC.
ARTICLE 15
ASSIGNMENT
15.1 Either party may assign, sell, transfer or dispose of (in whole or in
part) any of its rights and obligations hereunder to a wholly owned
subsidiary or affiliate provided that there is no increase to the
liability and/or responsibility of the non-assigning party and that the
assigning party remains jointly and severally liable with any assignee
for the performance of Buyer's obligation under the present Spares
Parts Support Agreement.
15.2 Except as provided in Article 15.1, Buyer shall not assign, sell,
transfer or dispose of (in whole or in part) any of its rights or
obligations hereunder without BRAD's prior written consent. In the
event of such assignment, sale, transfer or disposition Buyer shall
remain jointly and severally liable with any assignee for the
performance of all and any of Buyer's obligations under this Agreement
and BRAD reserves the right to amend one or more of the terms and
conditions of this Agreement.
15.3 BRAD may assign any of its rights to receive money hereunder without
the prior consent of Buyer.
ARTICLE 16
LIENS
Buyer shall not directly or indirectly create, assume, incur or suffer to exist
any lien, charge, or encumbrance on or with respect to the Program spare parts,
DHC's title thereto or any interest of DHC under this agreement.
Buyer shall promptly, at its own expense, take such action as may be necessary
to promptly discharge any lien, charge or encumbrance except liens created
solely by, through or under DHC.
8
<PAGE> 74
ARTICLE 17
WAIVER
The failure of either DHC or Buyer to enforce at any time any of the provisions
of this agreement, or to require at any time performance by the other, of any of
its provisions, will not be construed as a present or future waiver of such
provisions, nor in any way affect the validity of this agreement or any part of
it, or the right of the other to enforce each and every such provision,
condition or requirement of this agreement does not constitute a waiver or any
future obligation to comply with such provision, condition or requirement and
will not be effective unless in writing and signed by duly authorized
representatives of both parties.
ARTICLE 18
[CONFIDENTIAL PORTION DELETED].
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly,
Bombardier Regional Aircraft Division
- -------------------------------
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this ______ day of March, 1995
Mesa Airlines, Inc.
By:
-----------------------------------
Title:
-----------------------------------
9
<PAGE> 75
APPENDIX A
Aircraft Covered (Delivery Schedule and Serial Number)
(to be determined)
10
<PAGE> 76
APPENDIX B
Monthly reporting - Invoice Form
11
<PAGE> 77
March 24, 1995
Our Ref: B95-7701-MJR-007
Mesa Airlines, Inc.,
2325 East 30th,
Farmington, New Mexico.
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen,
RE: LETTER AGREEMENT NO. B95-7701-MJR-007 (RE: DIRECT MAINTENANCE LABOUR COST
GUARANTEE)
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8 Series 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement not defined herein, shall have the
same meaning as in the Agreement.
Subject: Airframe Direct Maintenance Labour Cost Guarantee
1.0 Intent
1.1 The intent of the Airframe direct maintenance labour cost
guarantee is to achieve the full potential of the
maintainability of the Aircraft through the joint efforts of
BRAD and Buyer. To that end, BRAD agrees to provide credits
under the terms and conditions hereof and Buyer agrees to
provide certain data described below.
1.2 The "Airframe" shall mean the Aircraft excluding Power Plant
Parts, Buyer Furnished Equipment (BFE) and Ground Support
Equipment (GSE).
1.3 Rotable and repairable parts are subject to the provisions of
the Spare Parts Support Program described in Letter Agreement
B95-7701-MJR-006.
2.0 Airframe Direct Maintenance Labour Cost Guarantee
2.1 BRAD guarantees that for the fleet of Aircraft operated by
Buyer during the term of this Agreement, the cumulative average
Airframe direct maintenance labour cost per Flight hour shall
not exceed a constant [CONFIDENTIAL PORTION DELETED] average of
[CONFIDENTIAL PORTION DELETED] over the term of this guarantee
subject to the following terms and conditions:
2.1.1 The term of this Letter Agreement shall commence on
the first day of the month following delivery of the
first Aircraft and shall end [CONFIDENTIAL PORTION
DELETED] after delivery of the Twenty-Fifth Aircraft;
and
2.1.2 Appropriate [CONFIDENTIAL PORTION DELETED] shall be
made in [CONFIDENTIAL PORTION DELETED] per
[CONFIDENTIAL PORTION DELETED] for the following:
a) [CONFIDENTIAL PORTION DELETED] costs resulting from
[CONFIDENTIAL PORTION DELETED] written agreement, or
because recommended [CONFIDENTIAL PORTION DELETED]
which cause a reduction in [CONFIDENTIAL PORTION
DELETED] have not been
1
<PAGE> 78
incorporated, provided [CONFIDENTIAL PORTION DELETED]
has had sufficient time to incorporate said
[CONFIDENTIAL PORTION DELETED] consistent with
[CONFIDENTIAL PORTION DELETED]. [CONFIDENTIAL PORTION
DELETED] shall not make [CONFIDENTIAL PORTION
DELETED] has demonstrated that such [CONFIDENTIAL
PORTION DELETED]. In the event of a disagreement
between [CONFIDENTIAL PORTION DELETED] and
[CONFIDENTIAL PORTION DELETED] as to the
[CONFIDENTIAL PORTION DELETED] change proposed by
[CONFIDENTIAL PORTION DELETED], [CONFIDENTIAL PORTION
DELETED] will explain its [CONFIDENTIAL PORTION
DELETED] used to evaluate the implementation of such
[CONFIDENTIAL PORTION DELETED] change;
b) [CONFIDENTIAL PORTION DELETED] costs incurred to
[CONFIDENTIAL PORTION DELETED] in maintaining the
[CONFIDENTIAL PORTION DELETED], or for [CONFIDENTIAL
PORTION DELETED], which may be [CONFIDENTIAL PORTION
DELETED] by [CONFIDENTIAL PORTION DELETED] (except
for actions on [CONFIDENTIAL PORTION DELETED];
c) [CONFIDENTIAL PORTION DELETED] that [CONFIDENTIAL
PORTION DELETED] or [CONFIDENTIAL PORTION DELETED]
have made that [CONFIDENTIAL PORTION DELETED]; and
d) [CONFIDENTIAL PORTION DELETED] have not been
[CONFIDENTIAL PORTION DELETED] in accordance with
[CONFIDENTIAL PORTION DELETED]unless mutually agreed
to by Buyer and BRAD; and
2.1.3. The [CONFIDENTIAL PORTION DELETED] shall be broken down by
year for each of the years in the term of this guarantee. This
shall be accomplished three (3) months prior to the delivery
date of the first Aircraft and shall, over the term of the
Guarantee average the [CONFIDENTIAL PORTION DELETED].
2.2 Appropriate adjustment shall be made to cater to the "C"
Checks where such "C" checks are to be carved out and averaged
seperately and scheduled within [CONFIDENTIAL PORTION DELETED]
of the scheduled intervals. The "C" Checks [CONFIDENTIAL
PORTION DELETED] are part of the [CONFIDENTIAL PORTION
DELETED] in paragraph [CONFIDENTIAL PORTION DELETED].
3.0 Calculation of Cost
3.1 Airframe Direct Maintenance Labour ("ADML")
The ADML man-hours shall be defined as the annual man-hours in
Buyer's cost allocation system assigned to collect
[CONFIDENTIAL PORTION DELETED], without burden, expended in
direct [CONFIDENTIAL PORTION DELETED] including all
[CONFIDENTIAL PORTION DELETED] for all [CONFIDENTIAL PORTION
DELETED] as well as [CONFIDENTIAL PORTION DELETED].
Notwithstanding [CONFIDENTIAL PORTION DELETED] all elements of
[CONFIDENTIAL PORTION DELETED] such as [CONFIDENTIAL PORTION
DELETED] Shall be excluded from the calculation of
[CONFIDENTIAL PORTION DELETED]; and
3.2 Hourly Airframe Direct Maintenance Labour Cost ("ADMLC")
The following formula shall be used to calculate the annual
hourly ADMLC:
[CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED]
2
<PAGE> 79
[CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED]
4.0 Credit Calculation
4.1 The actual hourly Airframe Direct Maintenance Labour Cost
(ADMLC) shall be compared by BRAD against the ADMLCG on an
annual basis.
4.2 If the ADMLC exceeds the ADMLCG Buyer will be [CONFIDENTIAL
PORTION DELETED] calculated in accordance with the following
formula.
[CONFIDENTIAL PORTION DELETED]
4.3 If the ADMLC is less than the ADMLCG, [CONFIDENTIAL PORTION
DELETED] shall accrue a credit which shall be used as an
[CONFIDENTIAL PORTION DELETED] during the term of this
[CONFIDENTIAL PORTION DELETED] in accordance with the
following formula:
[CONFIDENTIAL PORTION DELETED]
ADMLC, ADMLCG and T shall have the same meaning as used in
Article 4.2 above.
5.0 [CONFIDENTIAL PORTION DELETED]Payment
5.1 At the end of each period of one year and at the end of the
term of this Letter Agreement, Buyer's compensation
[CONFIDENTIAL PORTION DELETED] under Article 4.2 above, and
[CONFIDENTIAL PORTION DELETED] in Article 4.3 above, shall be
compared by the following formula to determine if a
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED]
Qb and Qs shall have the same meanings as used in Article 4.2
and Article 4.3 above.
5.2 If the[CONFIDENTIAL PORTION DELETED] is positive,
[CONFIDENTIAL PORTION DELETED] shall [CONFIDENTIAL PORTION
DELETED], for the amount determined under the calculation for
the respective period, and up to a maximum [CONFIDENTIAL
PORTION DELETED] for the term of this Letter Agreement.
5.3 If the [CONFIDENTIAL PORTION DELETED] as determined under the
caluculation for the respective year period, then such
[CONFIDENTIAL PORTION DELETED] shall be accumulated and
applied to each successive [CONFIDENTIAL PORTION DELETED].
6.0 Every [CONFIDENTIAL PORTION DELETED], [CONFIDENTIAL PORTION DELETED]
shall meet to review the [CONFIDENTIAL PORTION DELETED] trend and if it is
determined that such trend is [CONFIDENTIAL PORTION DELETED], then [CONFIDENTIAL
PORTION DELETED] shall cooperate to identify and implement remedial actions to
correct the situation.
7.0 Audit
Upon five (5) business days prior written notification by BRAD
to Buyer and at BRAD's expense, BRAD shall have the right during normal
business hours to audit all charges reported under this Letter
Agreement, Buyer's applicable maintenance practices and procedures, and
applicable Aircraft records, where
3
<PAGE> 80
normally and customarily maintained, relative to maintenance, Service
Bulletin incorporation and modification of the Aircraft. Such audit
shall not interfere with the conduct of business by Buyer nor shall
Buyer be required to undertake or incur additional liability or
obligations with respect to the audit.
8.0 Reporting
8.1 BRAD shall provide a quarterly report to Buyer on the status
of the Airframe Direct Maintenance Labour Cost based on data
submitted by Buyer and approved by BRAD. Failure of
[CONFIDENTIAL PORTION DELETED] to provide the [CONFIDENTIAL
PORTION DELETED], in spite of [CONFIDENTIAL PORTION DELETED]
thereof, shall [CONFIDENTIAL PORTION DELETED].
8.2 The ADMLCG was based upon the assumptions outlined in the
Appendix to this Letter Agreement. Any deviation from the
assumptions outlined in the Appendix shall cause a
modification in the ADMCG by BRAD.
9.0 [CONFIDENTIAL PORTION DELETED]
9.1 BUYER AND BRAD STATE AND AGREE THAT THIS LETTER INCLUDING BUT
NOT LIMITED TO ARTICLE 8.1 ABOVE, HAS BEEN THE SUBJECT OF
DISCUSSION AND NEGOTIATION AND IS FULLY UNDERSTOOD BY THE
PARTIES HERETO AND THAT THE [CONFIDENTIAL PORTION DELETED] AND
THE OTHER MUTUAL AGREEMENTS OF THE PARTIES SET FORTH IN THE
AGREEMENT WERE ARRIVED AT IN CONSIDERATION OF THE PROVISIONS
CONTAINED IN THIS ARTICLE 8.2, ARTICLE 8.1 ABOVE AND THE OTHER
PROVISIONS OF THIS LETTER AGREEMENT.
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly
Bombardier Regional Aircraft Division
- -------------------------------
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this ...... day of March, 1995
Mesa Airlines, Inc.
By:
-----------------------------------
Title:
-----------------------------------
4
<PAGE> 81
APPENDIX "A"
GUARANTEE VALUE ASSUMPTIONS
The following is a listing of all assumptions used to determine the ADMLCG per
flight hour. It is understood by the parties that these assumptions may change,
in which case the parties with mutual agreement will adjust the ADMLCG.
1. All costs are based [CONFIDENTIAL PORTION DELETED].
2. All costs are based on the [CONFIDENTIAL PORTION DELETED].
3. All costs are [CONFIDENTIAL PORTION DELETED].
4. [CONFIDENTIAL PORTION DELETED] in-house [CONFIDENTIAL PORTION DELETED]
over the term of the ADMLCG.
5. Annual average [CONFIDENTIAL PORTION DELETED] is not less than
[CONFIDENTIAL PORTION DELETED] per year.
6. [CONFIDENTIAL PORTION DELETED] average [CONFIDENTIAL PORTION DELETED]
for the [CONFIDENTIAL PORTION DELETED] will be [CONFIDENTIAL PORTION
DELETED] per departure.
7. All costs are rounded to within the nearest whole U.S. dollar.
8. [CONFIDENTIAL PORTION DELETED] are covered by the [CONFIDENTIAL PORTION
DELETED].
9. All costs relating to [CONFIDENTIAL PORTION DELETED] from this
guarantee
10. [CONFIDENTIAL PORTION DELETED] and other indirect materials such as
[CONFIDENTIAL PORTION DELETED] from this guarantee.
5
<PAGE> 82
March 24, 1995
Our Ref: B95-7701-MJR-008
Mesa Airlines, Inc.
2325 East 30th
Farmington, New Mexico
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-008 (RE: AIRCRAFT SCHEDULE RELIABILITY
GUARANTEE)
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier, Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8-200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms herein and in the Agreement and not defined herein shall have the same
meanings as in the Agreement.
AIRCRAFT SCHEDULE RELIABILITY GUARANTEE
Subject to the terms and conditions set forth in this Guarantee BRAD hereby
guarantees that the Achieved Aircraft Schedule Reliability for the Covered
Aircraft during any Reporting Period shall be [CONFIDENTIAL PORTION DELETED.]
(A) SCOPE
(1) COVERED AIRCRAFT
The Aircraft Schedule Reliability Guarantee (hereinafter referred to as the
"Guarantee") shall cover and be in effect for the Aircraft delivered to
Buyer under this Agreement while operated on Buyer's routes during the
Guarantee Term (hereinafter referred to as "Covered Aircraft").
(2) GUARANTEE TERM
The term of the Guarantee is [CONFIDENTIAL PORTION DELETED]
commencing on the first day of the month next succeeding the
month in which Buyer's first Aircraft enters into revenue
service (hereinafter referred to as "Guarantee Term").
Unless earlier terminated or suspended as provided herein,
all provisions of this Guarantee and BRAD's obligation
hereunder, shall terminate on the last day of the Guarantee
Term.
(B) DEFINITIONS
(1) "Aircraft Schedule Reliability Target" shall mean the target
for the Covered Aircraft set forth in attachment A hereto.
(2) Each "Reporting Period" during the Guarantee Term shall be
the longer of (a) six (6) consecutive months or (b) the
number of full months required for all Covered Aircraft to
accumulate a minimum of 1,500 scheduled revenue departures.
The initial Reporting Period shall commence on the first
day of the Guarantee Term.
(3) A "Chargeable Aircraft Schedule Interruption" shall be
defined as an interruption, that results directly from
Verified Malfunction(s) of any Aircraft components,
equipment or parts,
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<PAGE> 83
excluding Engines and Engine related components specified
by the Engine manufacturer, installed on the Covered
Aircraft upon its delivery to Buyer, which results in a
cancellation, turn back, diverted landing or departure
delayed longer than fifteen (15) minutes.
(4) "Verified Malfunction(s)" shall mean failures, or
malfunctions of any component mentioned above during a
Reporting Period and where such failures or malfunctions
are the primary cause of an interruption and are
subsequently confirmed by inspection or shop test, if
applicable, in accordance with Buyer's FAA approved
maintenance programs.
[CONFIDENTIAL PORTION DELETED] to any reason listed below
shall not constitute a [CONFIDENTIAL PORTION DELETED]:
(a) [CONFIDENTIAL PORTION DELETED];
(b) Late return from [CONFIDENTIAL PORTION DELETED];
(c) Failure to [CONFIDENTIAL PORTION DELETED] in
accordance with applicable [CONFIDENTIAL PORTION
DELETED], including [CONFIDENTIAL PORTION
DELETED];
(d) Appropriate [CONFIDENTIAL PORTION DELETED], such
as but not limited to, [CONFIDENTIAL PORTION
DELETED];
(e) [CONFIDENTIAL PORTION DELETED] caused by
[CONFIDENTIAL PORTION DELETED] such as but not
limited to damage by [CONFIDENTIAL PORTION
DELETED];
(f) A [CONFIDENTIAL PORTION DELETED] caused by an
[CONFIDENTIAL PORTION DELETED];
(g) Failure to utilize [CONFIDENTIAL PORTION DELETED]
for the [CONFIDENTIAL PORTION DELETED] or
[CONFIDENTIAL PORTION DELETED] at the earliest
practical opportunity, consistent with
[CONFIDENTIAL PORTION DELETED], any item which,
as permitted by such [CONFIDENTIAL PORTION
DELETED];
(h) [CONFIDENTIAL PORTION DELETED] Equipment;
(i) (A) [CONFIDENTIAL PORTION DELETED] , except
when [CONFIDENTIAL PORTION DELETED];
(B) Normal [CONFIDENTIAL PORTION DELETED].
(j) Any other [CONFIDENTIAL PORTION DELETED]
which cannot fairly be attributed to
[CONFIDENTIAL PORTION DELETED] as
defined herein;
(k) Adverse effect of [CONFIDENTIAL PORTION
DELETED].
If the substitution of [CONFIDENTIAL PORTION DELETED] for
any [CONFIDENTIAL PORTION DELETED] allows the [CONFIDENTIAL
PORTION DELETED] for which such [CONFIDENTIAL PORTION
DELETED] was scheduled to proceed without a [CONFIDENTIAL
PORTION DELETED] , then no [CONFIDENTIAL PORTION DELETED]
shall be deemed to have occurred. When a [CONFIDENTIAL
PORTION DELETED] occurs as a result of a [CONFIDENTIAL
PORTION DELETED] shall be charged against the [CONFIDENTIAL
PORTION DELETED] for which it was [CONFIDENTIAL PORTION
DELETED] .
[CONFIDENTIAL PORTION DELETED].
With regard to [CONFIDENTIAL PORTION DELETED] which affects
more than [CONFIDENTIAL PORTION DELETED] shall count as
[CONFIDENTIAL PORTION DELETED] unless an additional
2
<PAGE> 84
[CONFIDENTIAL PORTION DELETED] which is separate and
distinct from and unrelated to the [CONFIDENTIAL PORTION
DELETED], for a subsequent [CONFIDENTIAL PORTION DELETED].
(5) "Scheduled Revenue Departure" with respect to a Covered
Aircraft, shall be any scheduled departure of such Covered
Aircraft for a scheduled revenue flight segment, and any
one-segment canceled revenue flights.
[CONFIDENTIAL PORTION DELETED]
(6) The "Achieved Aircraft Schedule Reliability" for a Covered
Aircraft shall be calculated and expressed as a percentage
by use of the following formula:
[CONFIDENTIAL PORTION DELETED]
Any rounding, as required under this Guarantee, in order to
compare the Achieved Aircraft Schedule Reliability with the
Aircraft Schedule Reliability Targets, shall be
accomplished as follows: if the first digit of the portion
to be dropped from the number to be rounded is five or
greater, the preceding digit shall be raised to the next
higher number.
(7) A "Deficiency" occurs when the Achieved Schedule
Reliability during any Reporting Period is less than the
Aircraft Scheduled Reliability Target for such Reporting
Period, all as may be adjusted pursuant to the terms of
this Guarantee.
(C) REMEDIAL ACTION
(1) If, for any Reporting Period during the Guarantee Term,
Buyer notifies BRAD that the Achieved Aircraft Schedule
Reliability is below the applicable Aircraft Schedule
Reliability Target and the contents of the applicable
reports mentioned in Section (D)(1) confirm the contents of
Buyer's notification, then BRAD shall:
(i) investigate circumstances and the possible causes
for excessive interruptions, and
(ii) upon [CONFIDENTIAL PORTION DELETED] request,
[CONFIDENTIAL PORTION DELETED] deems appropriate
for [CONFIDENTIAL PORTION DELETED].
(2) If, at the end of the next Reporting Period after which the
foregoing recommended remedial actions have been
accomplished it is Buyer's and BRAD's opinion based on
Buyer's notification that the Achieved Aircraft Schedule
Reliability is [CONFIDENTIAL PORTION DELETED] then BRAD
shall:
(i) initiate [CONFIDENTIAL PORTION DELETED] and, when
in [CONFIDENTIAL PORTION DELETED] is indicated as
the most appropriate [CONFIDENTIAL PORTION DELETED]
and [CONFIDENTIAL PORTION DELETED] practicable
means of [CONFIDENTIAL PORTION DELETED] and
(ii) if such [CONFIDENTIAL PORTION DELETED] being
offered by [CONFIDENTIAL PORTION DELETED], provide
[CONFIDENTIAL PORTION DELETED], at [CONFIDENTIAL
PORTION DELETED] and in quantities not
[CONFIDENTIAL PORTION DELETED] the quantity of
[CONFIDENTIAL PORTION DELETED] in the [CONFIDENTIAL
PORTION DELETED] for support of the [CONFIDENTIAL
PORTION DELETED].
(iii) Sections (C)(2)(i) and (C)(2)(ii) above shall not
apply to [CONFIDENTIAL PORTION DELETED] nor to
[CONFIDENTIAL PORTION DELETED]. However, if it
becomes apparent that failure to meet the
[CONFIDENTIAL PORTION DELETED] can be attributed
primarily to [CONFIDENTIAL PORTION DELETED] or by
the [CONFIDENTIAL PORTION DELETED], and if
[CONFIDENTIAL PORTION DELETED] would otherwise be
entitled to remedies under such (C)(2)(i) and
(C)(2)(ii) above, [CONFIDENTIAL PORTION DELETED]
will use
3
<PAGE> 85
its reasonable efforts to obtain the [CONFIDENTIAL
PORTION DELETED] cooperation for the purpose of
achieving the [CONFIDENTIAL PORTION DELETED].
(D) ADMINISTRATIVE REQUIREMENTS
(1) Buyer shall submit to BRAD within thirty (30) days after
the Reporting Period, the total number of Chargeable
Aircraft Schedule Interruptions and the total number of
Scheduled Revenue Departures during the preceding six (6)
months. Notwithstanding what is stipulated above, during
any Reporting Period when any Guarantee remedies are being
provided by BRAD to Buyer, Buyer shall submit to BRAD
monthly reports of Chargeable Aircraft Schedule
Interruptions.
Each report shall also include the average Achieved
Aircraft Schedule Reliability for all of the previous
Reporting Period for the relevant year of the Guarantee
Term, if any.
(2) Upon request, Buyer shall submit to BRAD reasonable proof
that any interruption claimed by Buyer to constitute a
Chargeable Aircraft Schedule Interruption does in fact
constitute a Chargeable Aircraft Schedule Interruption.
Buyer shall maintain and submit to BRAD such records, data
and reports as may reasonable be required to (i) determine
Achieved Aircraft Schedule Reliability, (ii) analyze the
problems encountered and the causes thereof, and (iii) when
required, develop appropriate remedial action.
(3) BRAD may require Buyer to furnish, from time to time, such
additional information as is reasonably necessary to
monitor Chargeable Aircraft Schedule Interruptions or
investigate any related schedule reliability problem.
(4) Buyer shall maintain complete records referred to above in
support of all reports required from Buyer under this
Guarantee and such records shall be retained by Buyer for a
minimum of one year after submittal of the report to which
they pertain. All such records and any other data in
Buyer's possession reasonably required for the proper
administration of this Guarantee shall, upon request, be
made available at Buyer's facilities for examination by
BRAD.
(5) Failure to [CONFIDENTIAL PORTION DELETED] after the
[CONFIDENTIAL PORTION DELETED] shall constitute an
acknowledgment by [CONFIDENTIAL PORTION DELETED] that there
was [CONFIDENTIAL PORTION DELETED] for such [CONFIDENTIAL
PORTION DELETED] be obligated to provide any [CONFIDENTIAL
PORTION DELETED] arising under this [CONFIDENTIAL PORTION
DELETED] for such [CONFIDENTIAL PORTION DELETED].
(6) All reports under this Guarantee shall be submitted by
Buyer to the attention of:
(E) COMPLIANCE AND VALIDITY
If at any time Buyer is deficient in forwarding the Achieved
Aircraft Schedule Reliability as defined in Section (D) in this
Guarantee on the due dated during or after two [CONFIDENTIAL
PORTION DELETED], and after [CONFIDENTIAL PORTION DELETED]
referring to this [CONFIDENTIAL PORTION DELETED], [CONFIDENTIAL
PORTION DELETED] after receipt of such notice, then [CONFIDENTIAL
PORTION DELETED] has the right to declare to have fulfilled the
conditions of the [CONFIDENTIAL PORTION DELETED] without any
further obligations of [CONFIDENTIAL PORTION DELETED].
(F) GENERAL CONDITIONS AND LIMITATIONS
(1) The Aircraft Schedule Reliability Targets defined in
Section (B)(1) herein and set forth in Attachment A hereto
are based on certain factors controlled by Buyer revenue
service operations such as annual utilization, average
stage length, average turnaround time, average thru-stop
time and certain other maintenance and operational factors
under Buyer's control. These factors are identified in
Attachment A hereto. If, for any Reporting Period, the
Covered Aircraft experience changes in any such factors,
the Aircraft Schedule Reliability Target for such Reporting
Period shall be adjusted:
4
<PAGE> 86
(i) to reflect changes in the schedule reliability
parameters set forth in Attachments A, if any such
parameter increases or decreases by more than
[CONFIDENTIAL PORTION DELETED]. Then the Aircraft
Schedule Reliability Target will be reviewed by
both parties. The intent of such review shall be
for the parties to agree upon a reasonable
adjustment to the targets to compensate for the
change in operations;
(ii) to reflect changes that cause "Other Flight
Profile Factors" to exceed the limits set forth in
Attachment A, by mutual agreement between BRAD and
Buyer.
(2) If BRAD or any Vendor issue no-charge service bulletins or
service bulletins with no-charge retrofit kits which, when
incorporated, will improve Aircraft Schedule Reliability,
Buyer shall implement such at the earliest reasonable time,
but in no event later than [CONFIDENTIAL PORTION DELETED]
period as may be established by mutual agreement between
BRAD and Buyer to be consistent with Buyer's FAA approved
maintenance program, such period commencing with the date
of Buyer's receipt of such service bulletins or sufficient
retrofit kits to support Buyer's reasonable installation
schedule for such kits. In the event of [CONFIDENTIAL
PORTION DELETED] relating to the parts or components
[CONFIDENTIAL PORTION DELETED] until such time as
[CONFIDENTIAL PORTION DELETED], unless [CONFIDENTIAL
PORTION DELETED] submits to [CONFIDENTIAL PORTION DELETED]
reasonable proof that [CONFIDENTIAL PORTION DELETED] is not
[CONFIDENTIAL PORTION DELETED] or that any such
[CONFIDENTIAL PORTION DELETED] did not result [CONFIDENTIAL
PORTION DELETED].
(3) BRAD shall have the right (after consultation with Buyer)
to inspect and review Buyer's maintenance facilities,
programs and procedures as they relate to this Guarantee.
If BRAD recommends in writing reasonable changes in Buyer's
maintenance programs and procedures which are economically
feasible and would, based on data submitted by BRAD to
Buyer, improve the Achieved Aircraft Schedule Reliability,
and Buyer does not effect such changes or delays effecting
such changes beyond the period specified in Section (F) (2)
above for effecting service bulletins, BRAD and Buyer shall
negotiate an equitable adjustment to the occurrences which
will thereafter constitute a Chargeable Aircraft Schedule
Interruption.
(4) At [CONFIDENTIAL PORTION DELETED] request, [CONFIDENTIAL
PORTION DELETED] shall irrevocable [CONFIDENTIAL PORTION
DELETED], any and all of [CONFIDENTIAL PORTION DELETED]
right and authorities against [CONFIDENTIAL PORTION
DELETED] may reasonably require in the fulfillment of its
obligations under [CONFIDENTIAL PORTION DELETED]. Those
rights and authorities against [CONFIDENTIAL PORTION
DELETED] at the end of the term of [CONFIDENTIAL PORTION
DELETED].
(5) [CONFIDENTIAL PORTION DELETED] [CONFIDENTIAL PORTION
DELETED] referenced in Letter Agreement [CONFIDENTIAL
PORTION DELETED] coincident with delivery of the
[CONFIDENTIAL PORTION DELETED] at a [CONFIDENTIAL PORTION
DELETED]. The term of this [CONFIDENTIAL PORTION DELETED]
will extend until such time as the [CONFIDENTIAL PORTION
DELETED] of the [CONFIDENTIAL PORTION DELETED], at which
time the [CONFIDENTIAL PORTION DELETED] and this
[CONFIDENTIAL PORTION DELETED] will terminate.
Buyer may make use of [CONFIDENTIAL PORTION DELETED] to replace
[CONFIDENTIAL PORTION DELETED] which constitute [CONFIDENTIAL PORTION DELETED].
Should [CONFIDENTIAL PORTION DELETED] elect to use [CONFIDENTIAL PORTION
DELETED] for any other purpose [CONFIDENTIAL PORTION DELETED] then [CONFIDENTIAL
PORTION DELETED] will [CONFIDENTIAL PORTION DELETED] per flight hour for each
such flight hour used.
All other terms and conditions of such lease will be substantially
in accordance with the term and conditions of the lease between [CONFIDENTIAL
PORTION DELETED] and [CONFIDENTIAL PORTION DELETED] relating to [CONFIDENTIAL
PORTION DELETED].
5
<PAGE> 87
(G) [CONFIDENTIAL PORTION DELETED]
THE [CONFIDENTIAL PORTION DELETED] PROVIDED IN THIS LETTER
AGREEMENT AND THE OBLIGATIONS AND LIABILITIES ON THE PART OF [CONFIDENTIAL
PORTION DELETED] UNDER THE [CONFIDENTIAL PORTION DELETED] ARE ACCEPTED BY
[CONFIDENTIAL PORTION DELETED] AND ARE EXCLUSIVE AND IN LIEU OF, AND
[CONFIDENTIAL PORTION DELETED] HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER
REMEDIES, WARRANTIES, GUARANTEES OR LIABILITIES, EXPRESS OR IMPLIED, WITH
RESPECT TO THIS [CONFIDENTIAL PORTION DELETED] CONCERNING EACH [CONFIDENTIAL
PORTION DELETED], ARISING IN FACT, CONTRACT, LAW, TORT, STRICT PRODUCT LIABILITY
OR OTHERWISE WISE INCLUDING, WITHOUT LIMITATION ANY OBLIGATION LIABILITY CLAIM
OR REMEDY WHETHER OR NOT ARISING FROM NEGLIGENCE (WHETHER ACTIVE, PASSIVE OR
IMPUTED) OF [CONFIDENTIAL PORTION DELETED] , ITS OFFICERS, EMPLOYEES, AGENTS OR
ASSIGNEE, OR WITH RESPECT TO ANY IMPLIED [CONFIDENTIAL PORTION DELETED] , ANY
IMPLIED CONDITION, ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OR TRADE, LOSS OF USE, REVENUE OR PROFIT OR FOR ANY
OTHER DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE LOSS OR DAMAGES.
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly
Bombardier Regional Aircraft Inc.
- -------------------------
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this_________ day of March,1995
MESA AIRLINES, Inc.
By:
-----------------------------------
Title:
-----------------------------------
6
<PAGE> 88
ATTACHMENT A
AIRCRAFT SCHEDULE RELIABILITY
AIRCRAFT SCHEDULE RELIABILITY TARGET
BRAD guarantees that the Aircraft Schedule Reliability with respect to avoidance
of chargeable Aircraft Schedule Interruptions shall at the end of the periods
indicated below meet the percentages specified below as Guarantee Value.
PERIOD GUARANTEE
VALUE %
[CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED]
ASSUMPTIONS
Average Flight Length [CONFIDENTIAL PORTION DELETED].
Aircraft Yearly Utilization [CONFIDENTIAL PORTION DELETED].
Average Turnaround Time is [CONFIDENTIAL PORTION DELETED].
Average Thru-stop is [CONFIDENTIAL PORTION DELETED].
7
<PAGE> 89
Date: March 24, 1995
Our Ref: B95-7701-MJR-009
Mesa Airlines, Inc.
2325 East 30th,
Farmington New Mexico
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-009 (RE: CUSTOMER SUPPORT AND WARRANTY
AND SERVICE LIFE POLICY)
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8- 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meanings as in the Agreement.
Customer Support Services and Warranty
The following Customer Support Services and Warranty are those services to which
reference is made in Article 3 of the Agreement.
Unless otherwise expressly provided in Exhibit E and Exhibit F, the expressions
used herein shall when defined in the Agreement have the same meaning as in the
Agreement.
CUSTOMER SUPPORT
ARTICLE 1 - TECHNICAL SUPPORT
1.1 FACTORY SERVICE
BRAD agrees to maintain or cause to be maintained the capability to
respond to Buyer's technical inquiries, to conduct investigations
concerning repetitive maintenance problems and to issue findings and
recommend action thereof. This service shall be provided for as long
[CONFIDENTIAL PORTION DELETED] of the Dash 8 aircraft remain in
commercial air transport service.
1.2 FIELD SERVICE REPRESENTATIVE
1.2.1 SERVICES
BRAD shall assign [CONFIDENTIAL PORTION DELETED] to advise and
instruct Buyer's personnel in the maintenance procedures for
the aircraft.
1.2.2 TERM
BRAD shall provide the Services at Buyer's main base of
operation or other location as may be mutually agreed. Such
assignment shall commence approximately one (1) month prior to
the Delivery Date of the first Aircraft (approx . Feb. 1996)
and [CONFIDENTIAL PORTION DELETED] (approx. Mar. 1997) The
Services may be extended on terms and conditions to be mutually
agreed upon.
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<PAGE> 90
1.2.3 TRAVEL
If requested by Buyer the FSR may at [CONFIDENTIAL PORTION
DELETED] travel to another location to provide technical advice
to Buyer.
1.2.4 OFFICE FACILITIES
Buyer shall furnish the FSR, at no charge to BRAD,
[CONFIDENTIAL PORTION DELETED] conveniently located
[CONFIDENTIAL PORTION DELETED] or other location as may be
mutually agreed.
1.2.5 ADDITIONAL EXPENSES
Buyer shall reimburse BRAD (net of any additional taxes on such
reimbursement) the amount of any and all taxes (except Canadian
taxes on the income of BRAD) and fees of whatever nature,
including any customs duties, withholding taxes or fees
together with any penalties or interest thereon, paid or
incurred by BRAD or the BRAD employee as a result of or in
connection with the rendering of the FSR Services.
1.2.6 WORK PERMITS AND CLEARANCES
Buyer shall arrange for all necessary work permits and airport
security clearances required for the BRAD employee to permit
timely accomplishment of the Services.
1.3 MAINTENANCE PLANNING SUPPORT (IN-SERVICE MAINTENANCE DATA)
Buyer agrees to provide to BRAD in-service maintenance data in order to
provide updates to BRAD's recommended maintenance program. Buyer and
BRAD shall agree on standards and frequency for communication of such
data.
1.4 INTERFACE PROBLEM
1.4.1 INTERFACE PROBLEM RESOLUTION
If Buyer experiences any technical problem in the operation of
the Aircraft or its systems which, after reasonable
investigation, is not readily identifiable by Buyer, but which
Buyer reasonably believes to be attributable to the design
characteristics of one or more components or systems of the
Aircraft (an "Interface Problem"), BRAD shall, if requested by
Buyer and without additional charge to Buyer, promptly conduct
an analysis of such Interface Problem to determine, its cause
or causes and to recommend corrective action. If BRAD
determines that the Interface Problem is attributable to the
design of BRAD parts, BRAD shall, if requested by Buyer,
correct the design to the extent of existing obligations of
BRAD under Exhibit F, Aircraft Warranty.
If BRAD determines that the Interface Problem is attributable
to the design of a Vendor Part, BRAD shall, if requested by
Buyer, reasonably assist Buyer in processing any warranty
claims Buyer may have against the Vendor of the part. BRAD
shall also take reasonable action with the Vendor to obtain a
correction of the Interface Problem.
If BRAD determines that the Interface Problem is attributable
jointly to the design of BRAD parts and Vendor parts, BRAD
shall, if requested by Buyer reasonably seek a cooperative
solution with the Vendor(s).
1.4.2 VENDOR INTERFACE PROBLEM BACKSTOP
For those Interface Problems which are determined to be
attributable to the design of a Vendor Part, excluding
Powerplant Parts, if the parties agree that a vendor is in
default regarding the resolution of an Interface Problem during
the applicable warranty obtained by BRAD from such vendor, BRAD
shall take reasonable action to correct the Interface Problem.
2
<PAGE> 91
1.5 VENDOR PRODUCT SUPPORT AGREEMENTS
BRAD has made and will continue to make reasonable efforts to establish
and maintain favorable agreements with Vendors with respect to their
providing product support goods and services. The vendor product
support agreements describe the goods and services, and provide the
terms and conditions to which Vendors must adhere. Generally these
agreements cover but are not limited to Spare Parts availability and
delivery, exchange and leasing programs, ground support equipment,
technical assistance, training, technical data and manuals, repair and
overhaul, and warranty.
In the event the parties agree that a vendor is in default of a
material obligation under any applicable product support agreement
obtained by BRAD from that vendor, BRAD shall take reasonable action to
meet the terms and conditions of that agreement except for vendor
warranty, the terms and conditions of EXHIBIT F, Article 2.2 shall
apply.
1.6 ADDITIONAL SERVICES
At Buyer's request BRAD shall provide a proposal to provide such
additional support services as the parties may agree upon, which may
include special investigations, maintenance and repair of the Aircraft.
ARTICLE 2 - SPARE PARTS, GSE, TOOLS AND TEST EQUIPMENT
2.0 SPARE PARTS SUPPORT PROGRAM
See Letter Agreement Ref. No.B95-7701-MJR-006 for details of the
Spare Parts Support Program (SPSP). The following, where applicable,
is supplementry to the SPSP.
2.1 DEFINITIONS
A) "BRAD PARTS":
Any spare parts, ground support equipment, tools and test equipment
which bear a de Havilland Cage Code number in the BRAD Provisioning
Files (as that expression is defined in ATA Specification 2000).
B) "POWER PLANT PARTS":
Any power plant or power plant part or assembly carrying the power
plant manufacturer's part number or any part furnished by the power
plant manufacturer for incorporation on the Aircraft.
C) "VENDOR PARTS":
Any parts or items of equipment which are not BRAD Parts or Power
Plant Parts.
D) "SPARE PARTS" OR "SPARE PARTS":
All materials, spare parts, assemblies, special tools and items of
equipment, including ground support equipment, ordered by Buyer
from BRAD. The term Spare Parts includes BRAD parts.
E) "ORDER":
Any order for Spare Parts issued by Buyer to BRAD.
2.1 TERM AND APPLICABILITY
The term of this Article shall become effective on the date hereof and
shall remain in full force and effect with respect to the purchase and
sale of Spare Parts so long as at least [CONFIDENTIAL PORTION DELETED]
of the Dash 8 aircraft remain in commercial air transport service. The
provisions of Articles 2.2, 2.6.5, 2.24, and 5.0 survive termination of
this Agreement.
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<PAGE> 92
2.2 ORDER TERMS
Terms and conditions hereof shall apply to all Spare Parts orders
placed by Buyer with BRAD in lieu of any terms and conditions in
Buyer's purchase orders.
2.3 PURCHASE AND SALE OF SPARE PARTS
2.3.1 AGREEMENT TO MANUFACTURE AND SELL
BRAD shall manufacture, or procure, and make available for sale
to Buyer suitable BRAD Spare Parts in quantities sufficient to
meet the reasonably anticipated needs of operators for normal
maintenance and normal spares inventory replacement for each
Aircraft. During the term of this Agreement BRAD shall also
maintain a shelf stock of certain BRAD Parts selected to ensure
reasonable re-order lead times and emergency support. BRAD may
maintain additional shelf stock of certain BRAD Parts at other
locations. BRAD shall maintain a reasonable quantity of BRAD
insurance parts. Insurance parts as used herein shall include,
but not be limited to, dispatch-essential parts such as major
flight control surfaces.
2.4 AGREEMENT TO PURCHASE BRAD PARTS
2.4.1 PURCHASE OF BRAD PARTS
In consideration of BRAD's obligation under 2.3.1, during the
term stated in 2.1., Buyer agrees to purchase BRAD Parts only
from [CONFIDENTIAL PORTION DELETED] or from [CONFIDENTIAL
PORTION DELETED] herein. Buyer may however purchase
[CONFIDENTIAL PORTION DELETED] or have them [CONFIDENTIAL
PORTION DELETED], under the following conditions:
a) When less than [CONFIDENTIAL PORTION DELETED] scheduled
commercial air transport service;
b) Any time [CONFIDENTIAL PORTION DELETED]are needed to
effect [CONFIDENTIAL PORTION DELETED], provided that such
[CONFIDENTIAL PORTION DELETED] allows [CONFIDENTIAL PORTION
DELETED] to obtain [CONFIDENTIAL PORTION DELETED] to
furnish them; or
c) If [CONFIDENTIAL PORTION DELETED] has notified
[CONFIDENTIAL PORTION DELETED] in use and if within a
reasonable period thereafter [CONFIDENTIAL PORTION
DELETED].
2.4.2 BUYER'S RIGHT TO PURCHASE, [CONFIDENTIAL PORTION DELETED]
Buyer's right to purchase, [CONFIDENTIAL PORTION DELETED] under
the preceeding Article shall not be construed as a
[CONFIDENTIAL PORTION DELETED] and shall not obligate
[CONFIDENTIAL PORTION DELETED] or other information nor to the
payment of any [CONFIDENTIAL PORTION DELETED] shall be relieved
of any obligation or liability with respect to [CONFIDENTIAL
PORTION DELETED] in connection with any such [CONFIDENTIAL
PORTION DELETED]
2.4.3 NOTICE TO [CONFIDENTIAL PORTION DELETED] of [CONFIDENTIAL
PORTION DELETED]
If [CONFIDENTIAL PORTION DELETED] shall immediately thereafter
advise [CONFIDENTIAL PORTION DELETED] and make available to
[CONFIDENTIAL PORTION DELETED] any such [CONFIDENTIAL PORTION
DELETED] If [CONFIDENTIAL PORTION DELETED] requests,
[CONFIDENTIAL PORTION DELETED] shall negotiate with
[CONFIDENTIAL PORTION DELETED] after such [CONFIDENTIAL PORTION
DELETED] for the granting to [CONFIDENTIAL PORTION DELETED]. If
no agreement is made for such [CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED] shall not be obligated to pay
any [CONFIDENTIAL PORTION DELETED] or [CONFIDENTIAL PORTION
DELETED] for this [CONFIDENTIAL PORTION DELETED] right.
4
<PAGE> 93
2.5 PURCHASE OF VENDOR PARTS AND POWER PLANT PARTS
BRAD may maintain a spares stock of selected Vendor Parts at its own
discretion to support provisioning and replenishment sales. BRAD agrees
to use reasonable efforts to require its Vendors to comply with the
terms and conditions of this Article 2 as they apply to Vendor Parts.
Vendor Parts shall be delivered per the Vendor's quoted lead time plus
BRAD's internal processing time.
2.6 SPARE PARTS PRICING
2.6.1 SPARE PARTS PRICE CATALOGUE
Prices for commonly used BRAD Parts shall be published in the
Spare Parts Price Catalogue which shall contain items stocked
by BRAD. BRAD shall hold the published prices firm for
catalogue stock class items for a period of [PORTION DELETED]
and shall provide at least [CONFIDENTIAL PORTION DELETED]
notice prior to changing the published price.
2.6.2 BRAD PRICES FOR VENDOR PARTS
If Buyer orders Vendor Parts from BRAD, the price will be the
current catalogue price or as quoted per Article 2.6.3 below.
2.6.3 QUOTATIONS
Price and delivery quotations for items not included in the
catalogue shall be provided at Buyer's request by BRAD. Price
quotations will be held firm for a period of [CONFIDENTIAL
PORTION DELETED] or as otherwise specified by BRAD. Responses
to quotation requests will be provided within ten (10) calendar
days.
2.6.4 PRICE APPLICABILITY
The purchase prices of BRAD Parts shall be the applicable
prices set forth in the Spare Parts Price Catalogue at time of
receipt by BRAD of Buyer's Order or as quoted by BRAD to Buyer
upon request. If Buyer requests accelerated delivery or special
handling for BRAD Spare Parts not included in the Price
Catalogue, BRAD may increase the price from the original
quotation to cover any additional costs to BRAD. Parts ordered
on [CONFIDENTIAL PORTION DELETED] will not be subject to this
[CONFIDENTIAL PORTION DELETED].
2.6.5 CURRENCY AND TAXES
All Spare Parts Price Catalogue and quotation prices shall be
in U.S. dollars and exclusive of transportation, taxes, duties
and licenses.
Buyer shall pay to BRAD upon demand the amount of any sales,
use, value-added, excise or similar taxes imposed by any
federal, provincial or local taxing authority within Canada,
and the amount of all taxes imposed by any taxing authority
outside Canada, required to be paid by BRAD as a result of any
sale, use, delivery, storage or transfer of any Spare Parts. If
BRAD has reason to believe that any such tax is applicable,
BRAD shall separately state the amount of such tax in its
invoice. If a claim is made against BRAD for any such tax, BRAD
shall promptly notify Buyer. According to current legislation,
Canadian taxes, duties and Goods and Services Tax are not
applicable to aircraft or aircraft parts sold and immediately
from Canada.
In addition, Buyer shall pay to BRAD on demand the amount of
any customs duties required to be paid by BRAD with respect to
the importation by Buyer of any BRAD Parts.
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<PAGE> 94
2.6.6 VENDOR PRICING
BRAD shall use reasonable efforts to require its major Vendors
to maintain any published price for their parts for a period of
at least [CONFIDENTIAL PORTION DELETED] with a [CONFIDENTIAL
PORTION DELETED] prior to changing a published price.
2.8 OBSOLETE SPARE PARTS
2.8.1 OBLIGATION TO SUBSTITUTE OBSOLETE SPARE PARTS
In the event that, prior to delivery of the first Aircraft, any
Spare Part purchased by Buyer from BRAD is rendered obsolete or
unusable due to the redesign of the Aircraft or of any
accessory, equipment or part thereto, (other than a redesign at
Buyer's request), BRAD shall deliver to Buyer new and usable
Spare Parts in substitution for such obsolete or unusable Spare
Parts upon their return to BRAD by Buyer. BRAD shall credit
Buyer's account with BRAD with the price paid by Buyer for any
such obsolete or unusable Spare Part and shall invoice Buyer
for the purchase price of any such substitute Spare Part
delivered to Buyer.
2.8.2 DELIVERY OF OBSOLETE SPARE PARTS AND SUBSTITUTES THEREFOR
Obsolete or unusable Spare Parts returned by Buyer pursuant to
this Item 2.8.1. shall be delivered to BRAD at its plant in
Ontario, or such other destination as BRAD may reasonably
designate. Spare Parts substituted for such returned obsolete
or unusable Spare Parts shall be delivered to Buyer from BRAD's
plant in Ontario, or such other BRAD shipping point as BRAD may
reasonably designate. BRAD shall pay the freight charges for
the shipment from Buyer to BRAD of any such obsolete or
unusable Spare Part and for the shipment from BRAD to Buyer of
any such substitute Spare Part.
2.9 PROCEDURE FOR ORDERING SPARE PARTS
Orders for Spare Parts may be placed by Buyer to BRAD by any method of
order placement (including but not limited to SITA, ARINC, telecopier,
letter, telex, facsimile, telephone or hard copy purchase order).
2.9.1 REQUIREMENTS
Orders shall include at a minimum order number, part number,
nomenclature, quantity, delivery schedule requested, shipping
instructions and BRAD's price, if available. Buyer agrees that
orders placed with BRAD shall conform to the requirements and
procedures contained in ATA Specification 2000, as applicable
to Buyer.
2.9.2 PROCESSING OF ORDERS
Upon acceptance of any Order, unless otherwise directed by
Buyer, BRAD shall, if the Spare Parts are in stock, proceed
immediately to prepare the Spare Parts for shipment to Buyer.
If BRAD does not have the Spare Parts in stock, BRAD shall
proceed immediately to acquire or manufacture the Spare Parts.
Purchase order status and actions related to the shipment of
Spare Parts shall be generally consistent with the provisions
of the World Airline Suppliers Guide and the applicable
portions of ATA Specification 2000, as applicable to Buyer.
2.9.3 CHANGES
BRAD reserves the right, without Buyer's consent, to make any
necessary corrections or changes in the design, part number and
nomenclature of Spare Parts covered by an Order, to substitute
Spare Parts and to adjust prices accordingly, provided that
interchangeability is not affected and the unit price is not
increased by [CONFIDENTIAL PORTION DELETED] whichever is less.
BRAD shall promptly give Buyer written notice of corrections,
changes, substitutions and consequent price adjustments.
Corrections, changes, substitutions and price adjustments which
affect interchangeability or exceed
6
<PAGE> 95
the price limitations set forth above may be made only with
Buyer's consent, which consent shall conclusively be deemed to
have been given unless Buyer gives BRAD written notice of
objection within 15 business days after receipt of BRAD's
notice. In case of any objection, the affected Spare Part will
be deemed to be deleted from Buyer's Order.
2.10 PACKING
All Spare Parts ordered shall receive standard commercial packing
suitable for export shipment via airfreight. Such standard packing will
generally be to ATA 300 standards as amended from time to time. All AOG
orders will be handled, processed, packed and shipped separately.
2.11 PACKING LIST
BRAD shall insert in each shipment a packing list/release note itemized
to show:
(i) the contents of the shipment,
(ii) the approved signature of BRAD's Transport Canada's authority
attesting to the airworthiness of the Spare Parts.
(iii) value of the shipment for customs clearance if required.
2.12 CONTAINER MARKS
Upon Buyer's request each container shall be marked with shipping marks
as specified on the Order. In addition BRAD shall, upon request,
include in the markings: gross weight and cubic measurements.
2.13 DELIVERY, TITLE AND RISK OF LOSS
2.13.1 DELIVERY POINT
Spare Parts shall be delivered to Buyer in one of the following
manners at BRAD's sole option:
i) Free Carrier (Incoterms) BRAD's plant in Ontario, Canada;
or
ii) Free Carrier (Incoterms) other BRAD depots or shipping
points; or
iii) Free Carrier (Incoterms) vendor's or subcontractor's
plant.
2.13.2 DELIVERY TIME
BRAD shall use reasonable efforts so that shipment of BRAD
Parts to Buyer be as follows:
a) AOG ORDERS
Ship AOG orders within [CONFIDENTIAL PORTION DELETED] of
receipt of order. [CONFIDENTIAL PORTION DELETED] shall be
required on AOG orders;
b) CRITICAL ORDERS (A1)
Ship critical orders within t[CONFIDENTIAL PORTION DELETED]
of order receipt;
c) EXPEDITE ORDERS (A2)
Ship expedite orders within [CONFIDENTIAL PORTION DELETED]
of order receipt;
d) INTENTIONALLY LEFT BLANK
7
<PAGE> 96
e) OTHER ORDERS
Shipment of stock items shall be approximately
[CONFIDENTIAL PORTION DELETED] after BRAD's receipt of
Buyer's order. Shipment of non-stock items shall be in
accordance with quoted lead times or lead times published
in the current Spare Parts Price Catalogue, procurement
data, or provisioning data.
2.14 COLLECT SHIPMENTS
Where collect shipments are not deemed practicable by BRAD, charges for
shipment, insurance, prepaid freight charges and all other costs paid
by BRAD shall be paid by Buyer promptly upon presentation to Buyer of
invoices covering the same.
2.15 FREIGHT FORWARDER
If Buyer elects to use the services of a freight forwarder for the
onward movement of Spare Parts, Buyer agrees to release BRAD from and
indemnify it for any liability for any fines or seizures of Spare Parts
imposed under any governmental Goods in Transit regulations. Any such
fines levied against BRAD will be invoiced to Buyer and any Spare Parts
seized under such regulations will be deemed to be received, inspected,
and accepted by Buyer at the time of seizure.
2.16 REIMBURSEMENT OF EXPENSES
If BRAD gives Buyer written notice that an Order is ready for shipment
and shipment is delayed more than thirty (30) days at Buyer's request
or without BRADS's fault or responsibility, Buyer shall promptly
reimburse BRAD upon demand for all costs and expenses, including but
not limited to reasonable amounts for storage, handling, insurance and
taxes, incurred by BRAD as a result of such delay.
2.17 TITLE AND RISK OF LOSS
Property and title to the Spare Parts will pass to Buyer upon payment
for the Spare Parts in full. Until payment in full for Spare Parts, (a)
title to them will not pass to Buyer, and (b) BRAD maintains a purchase
money security interest in them. Risk of loss of the Spare Parts will
pass to the Buyer upon delivery by BRAD. With respect to Spare Parts
rejected by Buyer pursuant to Article 2.18, risk of loss shall remain
with Buyer until such Spare Parts are re-delivered to BRAD.
BRAD agrees to notify Buyer when material is shipped and shall provide
carrier's reference information (i.e., waybill number).
2.18 INSPECTION AND ACCEPTANCE
All Spare Parts shall be subject to inspection by Buyer at destination.
Use of Spare Parts or failure of Buyer to give notice of rejection
within thirty (30) days after receipt shall constitute acceptance.
Acceptance shall be final and Buyer waives the right to revoke
acceptance for any reason, whether or not known to Buyer at the time of
acceptance. Buyer's remedies for defects discovered after acceptance
are exclusively provided for in Article 2.19 herein.
2.19 REJECTION
Any notice of rejection refered to in Article 2.18 shall specify the
reasons for rejection. If BRAD concurs with a rejection, BRAD shall, at
its option, correct, repair or replace the rejected Spare Parts. Buyer
shall, upon receipt of BRAD's written instructions and Material Return
Authorization number, return the rejected Spare Parts to BRAD at its
specified plant, or other destination as may be mutually agreeable. The
return of the rejected Spare Parts to BRAD and the return or delivery
of a corrected or repaired rejected Spare Part of any replacement for
any such Spare Part to Buyer shall be at BRAD's expense. Any corrected,
repaired or replacement Spare Parts shall be subject to the provisions
of this Agreement.
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<PAGE> 97
2.20 PAYMENT
Except as provided in Article 2.21 below, Payment terms shall be net
thirty (30) calendar days of invoice date for established open
accounts. Any overdue amount shall bear interest from the due date
until actual payment is received by BRAD at an annual rate of interest
equal to the U.S. prime interest rate as established from time to time
by the National Bank of Canada, plus [CONFIDENTIAL PORTION DELETED]
calculated and compounded monthly.
2.21 INTENTIONALLY LEFT BLANK
2.22 MODIFIED TERMS OF PAYMENT
BRAD reserves the right to alter the terms of payment:
i) at any time by giving Buyer thirty (30) days' prior written notice
of the new terms, and
ii) without prior notice if Buyer fails to pay when due an amount
Buyer owes under any agreement with BRAD.
2.23 REGULATIONS
Buyer shall comply with all applicable monetary and exchange control
regulations and shall obtain any necessary authority from the
governmental agencies administering such regulations to enable Buyer to
make payments at the time and place and in the manner specified herein.
2.24 WARRANTY
EXHIBIT"F" HERETO EXCLUSIVELY SETS FORTH BRAD'S WARRANTY OBLIGATIONS
WITH RESPECT TO SPARE PARTS. EXCEPT AS EXPRESSLY SET OUT IN EXHIBIT
"F", THERE ARE NO UNDERSTANDINGS, REPRESENTATIONS, CONDITIONS OR
WARRANTIES, EXPRESS OR IMPLIED, BETWEEN THE PARTIES WITH RESPECT TO ANY
DEFECT IN THE SPARE PARTS OR ANY OTHER THING DELIVERED UNDER THIS
AGREEMENT.
2.25 CANCELLATION OF ORDERS
If Buyer cancels an Order for [CONFIDENTIAL PORTION DELETED], but not
less than the following [CONFIDENTIAL PORTION DELETED] covered by the
Order:
a) if work accomplished on the Order has been limited to
[CONFIDENTIAL PORTION DELETED], or the part has been identified
as [CONFIDENTIAL PORTION DELETED] shall be made;
b) if production planning has been completed on the Order and shop
orders have been written, but no shop time or material charges
have been made against the Order, [CONFIDENTIAL PORTION
DELETED]
c) if shop time or material charges have been made against the
Order, [CONFIDENTIAL PORTION DELETED]; and
d) if the [CONFIDENTIAL PORTION DELETED] covered by the Order can
be [CONFIDENTIAL PORTION DELETED] without increasing
[CONFIDENTIAL PORTION DELETED] shall be made.
2.26 ADDITIONAL TERMS AND CONDITIONS
BRAD's sales order shall incorporate the terms and conditions stated
herein. Additional terms and conditions applicable at time of receipt
of each order from Buyer may be added providing such terms and
conditions do not conflict with the terms and conditions provided
herein. Such additional terms and conditions shall be provided to Buyer
at least ninety (90) calendar days prior to their effective date.
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<PAGE> 98
2.27 LEASE
BRAD shall select and make available certain parts for lease, subject
to availability and Buyer has the option to negotiate a lease agreement
with BRAD separate from this Agreement.
ARTICLE 3 - TRAINING
3.1 GENERAL TERMS
3.1.1 The objective of the training programs (the Programs), as
described herein, shall be to familiarize and assist Buyer's
personnel in the introduction, operation, and maintenance of
the aircraft.
BRAD shall offer to the Buyer the Programs in the English
language at a BRAD designated facility; the Programs shall be
completed prior to the Delivery Date of the last Aircraft
purchased herein.
3.1.2 Buyer shall be responsible for all travel and living expenses,
including local transportation, of Buyer's personnel incurred
in connection with the Programs.
3.1.3 The Programs shall be designed to reflect the model and/or
configuration of the Aircraft and may include differences
training to identify such configuration or model. Manuals and
training materials which are provided during the Programs
exclude revision service.
3.1.4 A Training Conference shall be held where possible no later
than twelve (12) months prior to the Scheduled Delivery Date of
the first Aircraft to the Buyer, or as may be otherwise agreed,
to establish the Programs' content and schedule.
3.2 FLIGHT CREW TRAINING
3.2.1 FLIGHT CREW GROUND TRAINING
At no additional charge, BRAD shall provide with each delivered
Aircraft,Buyer's approved transition training for [CONFIDENTIAL
PORTION DELETED] of Buyer's crews [CONFIDENTIAL PORTION
DELETED] who meet the minimum entry requirement. Each course
shall consist of classroom instruction which may include
Computer Based Training (CBT), and Cockpit Procedures Mockup.
BRAD shall furnish each of Buyer's pilots attending the course
one copy of the the Pilot Training Manual (not subject to
revision).
3.2.2 PILOT SIMULATOR TRAINING
BRAD shall provide training, at no additional cost to Buyer,
FAA approved flight simulator at FlightSafety Canada for each
of the crews trained under para 3.2.1.
3.2.3 COURSE TRAINING MATERIAL
BRAD, upon Buyer's request, shall present a proposal to provide
one set of the materials (without revision service) used to
conduct the above courses, as follows:
i) 35 mm slides;
ii) Full size colour instrument panel/overhead photo;
iii) Training Manuals;
iv) Half-size colour instrument panel posters;
v) Pre-flight walk-around video; and
vi) Course syllabus.
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<PAGE> 99
3.3 MAINTENANCE TRAINING
3.3.1 GENERAL
Buyer's personnel attending BRAD's maintenance training courses
shall receive a Maintenance Training Manual which is used
during the training. Maintenance Training shall consist of
classroom instruction supported by appropriate illustrations
and maintenance training aids construction, airframe,
electrical, avionics and powerplant systems as required by the
specific course. Maintenance Training shall include escorted
tours of aircraft production and flight line areas whenever
possible.
3.3.2 INITIAL MAINTENANCE COURSE
[CONFIDENTIAL PORTION DELETED] shall provide with each
[CONFIDENTIAL PORTION DELETED] qualified personnel. The course
consists of [CONFIDENTIAL PORTION DELETED] instruction
pertaining to the entire aircraft and its systems covering
[CONFIDENTIAL PORTION DELETED]. It includes instruction in the
[CONFIDENTIAL PORTION DELETED] in the flight simulator to
provide [CONFIDENTIAL PORTION DELETED].
Buyer may elect to use a portion of the [CONFIDENTIAL PORTION
DELETED], for the purposes of attending a [CONFIDENTIAL PORTION
DELETED] course.
3.3.4 COURSE TRAINING MATERIAL
BRAD upon Buyer's request shall present a proposal to provide
one set of the Maintenance Training Material Package prepared
by FlightSafety Canada. The package consists of:
a) 35mm slides;
b) one full size, colour instrument panel/overhead photo;
c) one set of Overhead Transparencies;
d) Training Manuals and Schematic Manuals;
e) Half-size colour instrument panel posters; and
f) one course syllabus.
3.3.5 VENDOR TRAINING
At Buyer's request , BRAD shall assist Buyer to obtain Vendor
maintenance training .
3.4 INTENTIONALLY LEFT BLANK
ARTICLE 4 - TECHNICAL DATA
4.1 TECHNICAL DATA
BRAD shall furnish to Buyer the Technical Data described in
Schedule A attached hereto (the "Technical Data"). The
Technical Data shall provide information on items manufactured
according to deHavilland's detailed design and in those units
of measures used in the Specification or as may otherwise be
required to reflect Aircraft instrumentation as may be mutually
agreed. The Technical Data and revision thereto shall be
prepared in the English language.
4.2 ATA SPECIFICATIONS
Unless otherwise noted in Schedule A, all Technical Data shall
be prepared generally be accordance with ATA Specification 100,
Revision 26.
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<PAGE> 100
4.3 SHIPMENT
All initial Technical Data provided hereunder shall be
delivered to the Buyer F.O.B. destination at the time indicated
in Schedule A.
4.4 REVISION SERVICE
A Revision Service shall be available for the applicable
Technical Data at no charge for six months following the
Delivery Date of the Buyer's last Aircraft and at a nominal
charge as long as the Buyer operates the Aircraft, but in no
event later than ten years after the delivery of the last of
that Aircraft type.
The applicability of Revision Service for the Technical Data
shall be as described in Table 1.
The revisions shall be delivered to the Buyer F.O.B.
destination.
4.5 PROPRIETARY TECHNICAL DATA
It is understood and the Buyer acknowledges that the Technical
Data provided herein are proprietary to BRAD and all rights to
copyright belong to BRAD and the Technical Data shall be kept
confidential by the Buyer. The Buyer agrees to use the
Technical Data solely to maintain, operate, overhaul or repair
the Aircraft or make installation or alteration thereto allowed
by BRAD.
Technical Data shall not be disclosed to third parties or used
by Buyer or furnished by Buyer for the design or manufacture of
any aircraft or Spare Parts including BRAD Parts or items of
equipment, except when manufacture or redesign is permitted
under the provisions of Section 2.4 hereof and then only to the
extent and for the purposes expressly permitted therein, and
provided further the recipient shall provide a non-disclosure
undertaking acceptable to BRAD.
4.6 VENDOR PARTS SERVICE BULLETINS
BRAD shall control Vendor Parts modification status by the
issuance of cover service bulletins for each Vendor service
bulletin.
SCHEDULE A
LIST OF TECHNICAL DATA
[CONFIDENTIAL PORTION DELETED]
TABLE 1
ARTICLE 5 - DISCLAIMER AND RELEASE
5.0 DISCLAIMER AND RELEASE
5.1 THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF BRAD AND THE
REMEDIES OF BUYER SET FORTH IN EXHIBIT "F" ARE EXCLUSIVE AND IN
SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, RELEASES AND
RENOUNCES, ALL OTHER WARRANTIES, CONDITIONS, OBLIGATIONS AND
LIABILITIES OF BRAD AND ALL RIGHTS, CLAIMS AND REMEDIES OF
BUYER AGAINST BRAD, EXPRESS OR IMPLIED, ARISING BY LAW OR
OTHERWISE, WITH RESPECT TO ANY DEFECT IN THE SPARE PARTS OR ANY
OTHER THING DELIVERED UNDER THIS ARTICLE, WHETHER THAT DEFECT
IS DISCOVERED BEFORE OR AFTER THE EXPIRY OF THE WARRANTY PERIOD
STATED IN EXHIBIT "F". THE WARRANTIES, CONDITIONS, OBLIGATIONS
AND LIABILITIES OF BRAD AND THE RIGHTS, CLAIMS AND REMEDIES OF
BUYER THAT ARE SUBSTITUTED, WAIVED, RELEASED AND RENOUNCED
INCLUDE, BUT ARE NOT LIMITED TO:
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<PAGE> 101
a) ANY [CONFIDENTIAL PORTION DELETED] CONDITION OF
[CONFIDENTIAL PORTION DELETED] OR [CONFIDENTIAL
PORTION DELETED];
b) ANY IMPLIED WARRANTY OR CONDITION [CONFIDENTIAL
PORTION DELETED];
c) ANY [CONFIDENTIAL PORTION DELETED], WHETHER OR NOT
ARISING FROM THE [CONFIDENTIAL PORTION DELETED] AND
d) ANY [CONFIDENTIAL PORTION DELETED], TO ANY
[CONFIDENTIAL PORTION DELETED], OR TO [CONFIDENTIAL
PORTION DELETED].
5.2 BRAD SHALL HAVE NO OBLIGATION OR LIABILITY (AT LAW OR IN
EQUITY) IN CONTRACT (INCLUDING, WITHOUT LIMITATION, WARRANTY),
IN TORT (WHETHER OR NOT ARISING FROM THE ACTIVE, PASSIVE OR
IMPUTED NEGLIGENCE OR STRICT PRODUCTS LIABILITY OF BRAD) OF
OTHERWISE, FOR ANY [CONFIDENTIAL PORTION DELETED], INCLUDING
WITHOUT LIMITATION LOSS OF USE, LOSS OF REVENUE OR LOSS OF
PROFIT, WITH RESPECT TO 1) [CONFIDENTIAL PORTION DELETED].
NOTHING IN THIS ARTICLE SHALL BE CONSTRUED TO ALTER OBLIGATIONS
EXPRESSLY ASSUMED BY BRAD IN OTHER PROVISIONS OF THIS ARTICLE,
INCLUDING WITHOUT LIMITATION THE PROVISIONS OF EXHIBIT"F".
5.3 THE BENEFIT OF THE WAIVER, RELEASE AND RENUNCIATION IN ARTICLE
5.0 AND OF THE [CONFIDENTIAL PORTION DELETED] IN ARTICLE 2.24
EXTENDS ALSO TO [CONFIDENTIAL PORTION DELETED], AND TO THE
OFFICERS, DIRECTORS, EMPLOYEES AND REPRESENTATIVES OF THE
[CONFIDENTIAL PORTION DELETED] ON WHOSE BEHALF AND FOR WHOSE
BENEFIT [CONFIDENTIAL PORTION DELETED] IS ACTING.
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<PAGE> 102
EXHIBIT F
WARRANTY AND SERVICE LIFE POLICY
The following warranty and service life policy are the warranty (hereinafter the
"Warranty") and service life policy (hereinafter the "SLP") to which reference
is made in Article 3.
Unless otherwise expressly provided in the Exhibit F the expressions used herein
shall when defined in the Agreement have the same meaning as in the Agreement.
ARTICLE 1 - WARRANTY
1.1 WARRANTY
1.1.1 [CONFIDENTIAL PORTION DELETED] warrants that, at the Delivery
Date
[CONFIDENTIAL PORTION DELETED]
1.1.2 The Warranty set forth in Article 1.1.1 c. and d. above shall
also be applicable to [CONFIDENTIAL PORTION DELETED].
1.1.3 [CONFIDENTIAL PORTION DELETED] further warrants that, at the
time of delivery, [CONFIDENTIAL PORTION DELETED].
1.2 WARRANTY PERIOD
1.2.1 The Warranty set forth in Article 1.1 shall remain in effect
for any defect covered by said Warranty becoming apparent
during the following periods (the "Warranty Period"):
[CONFIDENTIAL PORTION DELETED]
1.3 REPAIR, REPLACEMENT OR REWORK
As to each matter covered by this Warranty BRAD's sole obligation and
liability under this Warranty is expressly limited to, at BRAD's
election, correction by the repair, replacement or rework of the
defective part or item of Technical Data . The repaired, replaced or
reworked part or item of Technical Data which is the subject of the
Warranty claim shall then be warranted under the same terms and
conditions for the then unexpired portion of the Warranty Period.
In the case of a [CONFIDENTIAL PORTION DELETED] with the [CONFIDENTIAL
PORTION DELETED], [CONFIDENTIAL PORTION DELETED] shall correct that
[CONFIDENTIAL PORTION DELETED], except that BRAD will not be obligated
to correct any defect which has no material adverse effect on the
[CONFIDENTIAL PORTION DELETED].
1.4 CLAIMS INFORMATION
BRAD's obligations hereunder are subject to a Warranty claim to be
submitted in writing to BRAD's warranty administrator and which shall
include but not be limited to the following information:
a) the identity of the part or item involved, including the Part
number, serial number if applicable nomenclature and the quantity
claimed to be defective;
b) the manufacturers serial number of the Aircraft from which the part
was removed;
c) the date the claimed defect became apparent to Buyer;
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<PAGE> 103
d) the total flight hours (and cycles if applicable) accrued on the
part at the time the claimed defect became apparent to Buyer; and
e) a description of the claimed defect and the circumstances
pertaining thereto.
1.5 BRAD'S APPROVAL
Within ten (10) working days following receipt of Buyer's Warranty
claim for a defect accompanied by Buyer's request for permission to
correct a Defect, BRAD shall notify Buyer of its decision to the
request. Approval under this paragraph shall not constitute a
determination as to the existence of a defect as described in paragraph
1.1 above.
1.6 TIMELY CORRECTIONS
BRAD shall make the repair, replacement or rework, following receipt of
the defective part or item, with reasonable care and dispatch.
1.7 [CONFIDENTIAL PORTION DELETED]
For [CONFIDENTIAL PORTION DELETED] shall establish a reasonable
estimate for the [CONFIDENTIAL PORTION DELETED] for the [CONFIDENTIAL
PORTION DELETED] and, if the [CONFIDENTIAL PORTION DELETED] performed
by [CONFIDENTIAL PORTION DELETED] shall [CONFIDENTIAL PORTION DELETED]
or for [CONFIDENTIAL PORTION DELETED] whichever is less, for the
[CONFIDENTIAL PORTION DELETED] and to [CONFIDENTIAL PORTION DELETED].
Such [CONFIDENTIAL PORTION DELETED] shall be based upon [CONFIDENTIAL
PORTION DELETED], subject to annual review and adjustment of such
[CONFIDENTIAL PORTION DELETED] rate as mutually agreed; provided,
however, that this amount shall not exceed [CONFIDENTIAL PORTION
DELETED].
1.8 APPROVAL, AUDIT, TRANSPORTATION AND WAIVER
All Warranty claims shall be subject to audit and approval by BRAD.
BRAD will use reasonable efforts to advise in writing the disposition
of Buyer's Warranty claim within thirty (30) days following the receipt
of the claim, and of the defective BRAD Part if required to support the
claim.
1.9 LIMITATIONS
1.9.1 BRAD shall be relieved of and shall have no obligation or
liability under this Warranty if:
a) the [CONFIDENTIAL PORTION DELETED] were [CONFIDENTIAL
PORTION DELETED] with [CONFIDENTIAL PORTION DELETED],
unless [CONFIDENTIAL PORTION DELETED] furnishes reasonable
evidence acceptable to [CONFIDENTIAL PORTION DELETED] that
such [CONFIDENTIAL PORTION DELETED] or
b) the [CONFIDENTIAL PORTION DELETED] were [CONFIDENTIAL
PORTION DELETED] or [CONFIDENTIAL PORTION DELETED] in
Attachment A of Exhibit E and the manufacturer's
documentation furnished to [unless [CONFIDENTIAL PORTION
DELETED] furnishes reasonable evidence acceptable to
[CONFIDENTIAL PORTION DELETED] that such [CONFIDENTIAL
PORTION DELETED] or [CONFIDENTIAL PORTION DELETED] was not
a [CONFIDENTIAL PORTION DELETED]; or
c) the [CONFIDENTIAL PORTION DELETED] were [CONFIDENTIAL
PORTION DELETED] under normal [CONFIDENTIAL PORTION
DELETED], unless [CONFIDENTIAL PORTION DELETED] furnishes
reasonable evidence acceptable to [CONFIDENTIAL PORTION
DELETED] that such [CONFIDENTIAL PORTION DELETED] was not a
[CONFIDENTIAL PORTION DELETED]; or
d) [CONFIDENTIAL PORTION DELETED] does not
15
<PAGE> 104
1) report the [CONFIDENTIAL PORTION DELETED] in writing
to [CONFIDENTIAL PORTION DELETED] following such
[CONFIDENTIAL PORTION DELETED], and
2) retain the [CONFIDENTIAL PORTION DELETED] claimed to
be [CONFIDENTIAL PORTION DELETED] until advised by
[CONFIDENTIAL PORTION DELETED] in order for BRAD to
finalize its evaluation of the [CONFIDENTIAL PORTION
DELETED] or to otherwise dispose of such [CONFIDENTIAL
PORTION DELETED] or
e) [CONFIDENTIAL PORTION DELETED] does not submit reasonable
proof to [CONFIDENTIAL PORTION DELETED] within
[CONFIDENTIAL PORTION DELETED] after the [CONFIDENTIAL
PORTION DELETED] becomes apparent that the [CONFIDENTIAL
PORTION DELETED] is due to a matter covered within
[CONFIDENTIAL PORTION DELETED]; or
f) [CONFIDENTIAL PORTION DELETED] does not allow [CONFIDENTIAL
PORTION DELETED] reasonable opportunity to be present
during the [CONFIDENTIAL PORTION DELETED] and [CONFIDENTIAL
PORTION DELETED] of the [CONFIDENTIAL PORTION DELETED]
claimed to be [CONFIDENTIAL PORTION DELETED].
1.9.2 The above warranties do not apply to Buyer Furnished Equipment.
1.10 NORMAL USAGE
Normal wear and tear and the need for regular maintenance and overhaul
shall not constitute a defect or failure under this Warranty.
1.11 OVERHAUL OF WARRANTY PARTS
BRAD's liability for a BRAD Part which has a defect and is overhauled
by Buyer within the Warranty Period shall be limited only to that
portion of the labour and material replacement related to the defect.
1.12 NO FAULT FOUND
In the event that a BRAD Part returned under a Warranty claim is
subsequently established to be serviceable then BRAD shall be entitled
to charge and recover from Buyer any reasonable costs incurred by BRAD
in connection with such Warranty claim. Providing however, in the event
that repetitive in-service failure occurs on the particular BRAD Part
which is subsequently identified by BRAD on a repeated basis, to be "no
fault found" then BRAD and Buyer shall discuss and mutually agree a
course of further action to help identify the problem. In the event the
fault is ultimately confirmed to be a legitimate Warranty claim then
the above mentioned costs incurred by BRAD and charged to Buyer shall
be waived.
ARTICLE 2 - VENDOR WARRANTIES
2.1 WARRANTIES FROM VENDORS
The Warranty provisions of this Exhibit F apply to BRAD Parts only.
However, BRAD has made or shall make reasonable efforts to obtain
[CONFIDENTIAL PORTION DELETED]. Except as specifically provided under
this Article 2, [CONFIDENTIAL PORTION DELETED] and a matter as between
[CONFIDENTIAL PORTION DELETED] and [CONFIDENTIAL PORTION DELETED].
2.2 VENDOR WARRANTY BACKSTOP
For those [CONFIDENTIAL PORTION DELETED] installed on the Aircraft at
the Delivery Date or subsequently purchased through [CONFIDENTIAL
PORTION DELETED] in the event the parties agree that a [CONFIDENTIAL
PORTION DELETED] is in default in the performance of any material
obligation under any applicable warranty obtained by [CONFIDENTIAL
PORTION DELETED] pursuant to Article 2.1 above, the warranties and all
other terms and conditions of Article 1 shall become applicable as if
the [CONFIDENTIAL PORTION DELETED] had
16
<PAGE> 105
been a [CONFIDENTIAL PORTION DELETED] except that the warranty period
shall be the Warranty Period as set forth herein or by the
[CONFIDENTIAL PORTION DELETED], whichever is shorter and all
transportation costs associated with the [CONFIDENTIAL PORTION DELETED]
shall be borne by [CONFIDENTIAL PORTION DELETED].
ARTICLE 3 - SERVICE LIFE POLICY
3.1 APPLICABILITY
The Service Life Policy ("SLP") described in this Article 3 shall apply
if fleetwide and repetitive failures occur in any Covered Component
which is defined in Article 3.7 below.
3.2 TERM
3.2.1 Should such [CONFIDENTIAL PORTION DELETED] occur in any
[CONFIDENTIAL PORTION DELETED] following delivery of the
Aircraft containing such [CONFIDENTIAL PORTION DELETED] shall,
as promptly as practicable and at its option;
a) [CONFIDENTIAL PORTION DELETED] or
b) furnish a [CONFIDENTIAL PORTION DELETED].
3.3 PRICE
Any Covered Component which BRAD is required to furnish under this SLP
shall be provided for at a priced calculated in accordance with the
following formula:
P = [CONFIDENTIAL PORTION DELETED]
Where:
P = Price of Covered Component [CONFIDENTIAL PORTION DELETED];
C = [CONFIDENTIAL PORTION DELETED];
T = [CONFIDENTIAL PORTION DELETED]
3.4 CONDITIONS AND LIMITATIONS
3.4.1 The following general conditions and limitations shall apply to
the SLP:
a) the [CONFIDENTIAL PORTION DELETED] for the return, if
practicable, of any [CONFIDENTIAL PORTION DELETED]necessary
for [CONFIDENTIAL PORTION DELETED];
b) [CONFIDENTIAL PORTION DELETED] obligation under this SLP
are conditional upon the submission of [CONFIDENTIAL
PORTION DELETED];
c) [CONFIDENTIAL PORTION DELETED] shall report any
[CONFIDENTIAL PORTION DELETED] in writing to [CONFIDENTIAL
PORTION DELETED] after such failure becomes evident;
failure to give this required notice shall excuse BRAD from
all obligations with respect to such failure;
d) the provisions of Article 1.10 of the Warranty (except for
subparagraphs d. and e. thereof) are incorporated by this
reference and shall condition BRAD's obligations under this
SLP with respect to any Covered Component;
e) BRAD's obligations under this SLP shall not apply to
any [CONFIDENTIAL PORTION DELETED]; the provisions of this
subparagraph shall not apply in the event that Buyer
furnishes reasonable evidence acceptable to [CONFIDENTIAL
PORTION DELETED] that such failure was not caused by
[CONFIDENTIAL PORTION DELETED];
17
<PAGE> 106
f) this SLP shall not apply to a failure of a [CONFIDENTIAL
PORTION DELETED] if [CONFIDENTIAL PORTION DELETED] that
such [CONFIDENTIAL PORTION DELETED] may not reasonably be
expected to occur on a f[CONFIDENTIAL PORTION DELETED] and
g) this SLP shall not apply to a [CONFIDENTIAL PORTION
DELETED] where the f[CONFIDENTIAL PORTION DELETED].
3.5 COVERAGE
This SLP is neither a warranty, performance guarantee nor an agreement
to modify the Aircraft to conform to new developments in design and
manufacturing art. BRAD's obligation is only to provide correction
instructions to correct a Covered Component or furnish replacement at a
reduced price as provided in this SLP.
3.6 ASSIGNMENT
Buyer's rights under this SLP shall not be assigned, sold, leased,
transferred or otherwise alienated by contract, operation of law or
otherwise, without BRAD's prior written consent. Any unauthorized
assignment, sale, lease, transfer, or other alienation of Buyer's
rights under the SLP shall immediately void all of BRAD's obligations
under the SLP.
3.7 COVERED COMPONENT
Only those items or part thereof listed in Attachment A to this Exhibit
F shall be deemed to be a Covered Component, and subject to the
provisions of this SLP.
ARTICLE 4 - GENERAL
4.1 It is agreed that BRAD shall not be obligated to provide to Buyer any
remedy which is a duplicate of any other remedy which has been provided
to Buyer under any other part of this Exhibit F.
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly
Bombardier Regional Aircraft Division
- -------------------------------
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO this day of March, 1995
Mesa Airlines, Inc.
By:
-----------------------------------
Title:
-----------------------------------
18
<PAGE> 107
EXHIBIT F - ATTACHMENT 1
COVERED COMPONENTS
DASH-8
AIRFRAME COMPONENTS
1. WING
a) [CONFIDENTIAL PORTION DELETED]
b) [CONFIDENTIAL PORTION DELETED]
c) [CONFIDENTIAL PORTION DELETED]
d) [CONFIDENTIAL PORTION DELETED]
e) [CONFIDENTIAL PORTION DELETED]
f) [CONFIDENTIAL PORTION DELETED]
g) [CONFIDENTIAL PORTION DELETED]
h) [CONFIDENTIAL PORTION DELETED]
2. FUSELAGE
a) [CONFIDENTIAL PORTION DELETED]
b) [CONFIDENTIAL PORTION DELETED].
c) [CONFIDENTIAL PORTION DELETED]
d) [CONFIDENTIAL PORTION DELETED]
e) [CONFIDENTIAL PORTION DELETED]
f) [CONFIDENTIAL PORTION DELETED]
NOTE: [CONFIDENTIAL PORTION DELETED]
g) [CONFIDENTIAL PORTION DELETED]
3. VERTICAL STABILIZER [CONFIDENTIAL PORTION DELETED]
a) [CONFIDENTIAL PORTION DELETED]
b) [CONFIDENTIAL PORTION DELETED]
c) [CONFIDENTIAL PORTION DELETED]
d) [CONFIDENTIAL PORTION DELETED]
e) [CONFIDENTIAL PORTION DELETED]
f) [CONFIDENTIAL PORTION DELETED]
g) [CONFIDENTIAL PORTION DELETED]
4. HORIZONTAL STABILIZER
a) [CONFIDENTIAL PORTION DELETED]
b) [CONFIDENTIAL PORTION DELETED]
c) [CONFIDENTIAL PORTION DELETED]
d) [CONFIDENTIAL PORTION DELETED]
e) [CONFIDENTIAL PORTION DELETED]
LANDING GEAR COMPONENTS
1. MAIN GEAR
a) [CONFIDENTIAL PORTION DELETED]
b) [CONFIDENTIAL PORTION DELETED]
c) [CONFIDENTIAL PORTION DELETED]
d) [CONFIDENTIAL PORTION DELETED]
2. NOSE GEAR
a) [CONFIDENTIAL PORTION DELETED]
b) [CONFIDENTIAL PORTION DELETED]
c) [CONFIDENTIAL PORTION DELETED]
d) [CONFIDENTIAL PORTION DELETED]
(e) [CONFIDENTIAL PORTION DELETED]
19
<PAGE> 108
March 24, 1995
Our Ref: B95-7701-MJR-010
Mesa Airlines, Inc.
2325 East 30th
Farmington, New Mexico
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-010 (CONFIDENTIAL PORTION DELETED]
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier, Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8-200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms herein and in the Agreement and not defined herein shall have the same
meanings as in the Agreement.
It is acknowledged that [CONFIDENTIAL PORTION DELETED] has leased [CONFIDENTIAL
PORTION DELETED] from[CONFIDENTIAL PORTION DELETED]. [CONFIDENTIAL PORTION
DELETED] has indicated a desire to install [CONFIDENTIAL PORTION DELETED].
The price of [CONFIDENTIAL PORTION DELETED] is [CONFIDENTIAL PORTION DELETED]
and the price of [CONFIDENTIAL PORTION DELETED] is [CONFIDENTIAL PORTION
DELETED].
Upon firming of the Agreement, [CONFIDENTIAL PORTION DELETED] will [CONFIDENTIAL
PORTION DELETED] a [CONFIDENTIAL PORTION DELETED] for a total amount of
[CONFIDENTIAL PORTION DELETED] which may be used by [CONFIDENTIAL PORTION
DELETED] on or before [CONFIDENTIAL PORTION DELETED].
If [CONFIDENTIAL PORTION DELETED] elects not to [CONFIDENTIAL PORTION DELETED],
this [CONFIDENTIAL PORTION DELETED] may be [CONFIDENTIAL PORTION DELETED] the
[CONFIDENTIAL PORTION DELETED] or [CONFIDENTIAL PORTION DELETED] relating to
[CONFIDENTIAL PORTION DELETED].
If the [CONFIDENTIAL PORTION DELETED] is used to [CONFIDENTIAL PORTION DELETED]
or is used against the [CONFIDENTIAL PORTION DELETED] or for [CONFIDENTIAL
PORTION DELETED] relating to [CONFIDENTIAL PORTION DELETED], then the
[CONFIDENTIAL PORTION DELETED] as detailed in [CONFIDENTIAL PORTION DELETED]
will be [CONFIDENTIAL PORTION DELETED].
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly,
Bombardier Regional Aircraft Inc.
- -------------------------
Paul H. Francoeur
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this day of March, 1995
----------
MESA AIRLINES, Inc.
By:
-----------------------------------
Title:
-----------------------------------
1
<PAGE> 109
March 24, 1995
Mesa Airlines, Inc.,
2325 East 30th,
Farmington, New Mexico.
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen,
RE: LETTER AGREEMENT NO. B95-7701-MJR-011 (RE: [CONFIDENTIAL PORTION DELETED])
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8 Series 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement not defined herein, shall have the
same meaning as in the Agreement.
1. BRAD and Buyer acknowledge that [CONFIDENTIAL PORTION DELETED] currently
has on lease a number of [CONFIDENTIAL PORTION DELETED]. [CONFIDENTIAL PORTION
DELETED] in regards to [CONFIDENTIAL PORTION DELETED] these [CONFIDENTIAL
PORTION DELETED] which [CONFIDENTIAL PORTION DELETED] is currently [CONFIDENTIAL
PORTION DELETED], such [CONFIDENTIAL PORTION DELETED] to be chosen within
[CONFIDENTIAL PORTION DELETED] of the execution of the Agreement from
[CONFIDENTIAL PORTION DELETED].
2. [CONFIDENTIAL PORTION DELETED] shall [CONFIDENTIAL PORTION DELETED] in
regard to [CONFIDENTIAL PORTION DELETED] of the above-mentioned [CONFIDENTIAL
PORTION DELETED] upon execution of the Agreement and the [CONFIDENTIAL PORTION
DELETED] upon [CONFIDENTIAL PORTION DELETED] the delivery of [CONFIDENTIAL
PORTION DELETED]. Should [CONFIDENTIAL PORTION DELETED] wish to delay passage of
the [CONFIDENTIAL PORTION DELETED]to [CONFIDENTIAL PORTION DELETED] by reason of
retaining some or all of the [CONFIDENTIAL PORTION DELETED] in service, then
Buyer and BRAD will agree on an alternate schedule for [CONFIDENTIAL PORTION
DELETED].
3. [CONFIDENTIAL PORTION DELETED] in each case is subject to the following
return conditions:
-the [CONFIDENTIAL PORTION DELETED] to remain on [CONFIDENTIAL PORTION
DELETED] until a [CONFIDENTIAL PORTION DELETED] or [CONFIDENTIAL PORTION
DELETED]is located
-all records must be in accordance with FAR 91.417 and 121.380 or
equivalent as exists at the time of [CONFIDENTIAL PORTION DELETED].
-all [CONFIDENTIAL PORTION DELETED] must be supported by the
[CONFIDENTIAL PORTION DELETED]
-[CONFIDENTIAL PORTION DELETED] must meet all [CONFIDENTIAL PORTION
DELETED] requirements as these exist [CONFIDENTIAL PORTION DELETED].
-all [CONFIDENTIAL PORTION DELETED] will be completed
4. The [CONFIDENTIAL PORTION DELETED] is subject to [CONFIDENTIAL PORTION
DELETED] receiving all other documents for the completion of [CONFIDENTIAL
PORTION DELETED] including [CONFIDENTIAL PORTION DELETED] and [CONFIDENTIAL
PORTION DELETED] and that such [CONFIDENTIAL PORTION DELETED]. It is recognized
that [CONFIDENTIAL PORTION DELETED] some [CONFIDENTIAL PORTION DELETED] such as,
and not limited to, [CONFIDENTIAL PORTION DELETED].
1
<PAGE> 110
5. BRAD and Buyer acknowledge that [CONFIDENTIAL PORTION DELETED] is not a
[CONFIDENTIAL PORTION DELETED]. It is also acknowledged that most, if not all,
of the [CONFIDENTIAL PORTION DELETED] have requirements that [CONFIDENTIAL
PORTION DELETED]. If [CONFIDENTIAL PORTION DELETED] is unable to [CONFIDENTIAL
PORTION DELETED] or other significant [CONFIDENTIAL PORTION DELETED] with
[CONFIDENTIAL PORTION DELETED], then Buyer agrees to [CONFIDENTIAL PORTION
DELETED] with [CONFIDENTIAL PORTION DELETED] by [CONFIDENTIAL PORTION DELETED]
under the [CONFIDENTIAL PORTION DELETED] until such time as [CONFIDENTIAL
PORTION DELETED] is able to effect [CONFIDENTIAL PORTION DELETED] to a
[CONFIDENTIAL PORTION DELETED].
6. BRAD and Buyer also acknowledge that there may be additional issues
which may increase [CONFIDENTIAL PORTION DELETED] which are discovered during
[CONFIDENTIAL PORTION DELETED] those documents such as [CONFIDENTIAL PORTION
DELETED] which may [CONFIDENTIAL PORTION DELETED] not as yet [CONFIDENTIAL
PORTION DELETED]. In the event such issues arise:
(i) [CONFIDENTIAL PORTION DELETED] agrees to [CONFIDENTIAL
PORTION DELETED] to eliminate the effect of such issues on [CONFIDENTIAL PORTION
DELETED], or
(ii) If [CONFIDENTIAL PORTION DELETED] are unsuccessful at
[CONFIDENTIAL PORTION DELETED] and consequently [CONFIDENTIAL PORTION DELETED]
than [CONFIDENTIAL PORTION DELETED] are available to [CONFIDENTIAL PORTION
DELETED], then [CONFIDENTIAL PORTION DELETED] will [CONFIDENTIAL PORTION
DELETED] such other [CONFIDENTIAL PORTION DELETED] for those deemed not
acceptable.
7. [CONFIDENTIAL PORTION DELETED] agrees to store any [CONFIDENTIAL
PORTION DELETED] for which [CONFIDENTIAL PORTION DELETED] the [CONFIDENTIAL
PORTION DELETED] for [CONFIDENTIAL PORTION DELETED] following [CONFIDENTIAL
PORTION DELETED] of such [CONFIDENTIAL PORTION DELETED].
8. [CONFIDENTIAL PORTION DELETED] agrees that the above [CONFIDENTIAL
PORTION DELETED] will remain on [CONFIDENTIAL PORTION DELETED] until such time
as these [CONFIDENTIAL PORTION DELETED] are [CONFIDENTIAL PORTION DELETED] or
[CONFIDENTIAL PORTION DELETED] by [CONFIDENTIAL PORTION DELETED].
9. [CONFIDENTIAL PORTION DELETED] Schedule
Month, Year [CONFIDENTIAL PORTION DELETED]
TBA TBA
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly
Bombardier Regional Aircraft Division
- -------------------------------
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this day of March, 1995
---------
Mesa Airlines, Inc.
By:
-----------------------------------
Title:
-----------------------------------
2
<PAGE> 111
March 24, 1995
Mesa Airlines Inc.
2325 East 30th
Farmington, New Mexico.
U.S.A. 87401
Attention: Larry Risley, Chairman
Gentlemen,
RE: LETTER AGREEMENT NO. B95-7701-MJR-012 (RE: [CONFIDENTIAL PORTION DELETED])
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8 Series 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement not defined herein, shall have the
same meaning as in the Agreement.
Attached are the [CONFIDENTIAL PORTION DELETED] related to the [CONFIDENTIAL
PORTION DELETED] [CONFIDENTIAL PORTION DELETED]
ACCEPTED AND AGREED TO:
this day of March, 1995
----------
Mesa Airlines, Inc.
By:
-----------------------------------
Title:
-----------------------------------
<PAGE> 112
March 24, 1995
Mesa Airlines, Inc.,
2325 East 30th,
Farmington, New Mexico.
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen,
RE: LETTER AGREEMENT NO. B95-7701-MJR-013 ([CONFIDENTIAL PORTION DELETED])
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8 Series 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement not defined herein, shall have the
same meaning as in the Agreement.
[CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED] with its [CONFIDENTIAL PORTION DELETED] of
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED] will cooperate with [CONFIDENTIAL PORTION
DELETED] to assist in the disposition of such [CONFIDENTIAL PORTION DELETED]
within [CONFIDENTIAL PORTION DELETED] of execution of the Agreement.
In the event that any or all of the [CONFIDENTIAL PORTION DELETED] the end of
such [CONFIDENTIAL PORTION DELETED], [CONFIDENTIAL PORTION DELETED] will then
[CONFIDENTIAL PORTION DELETED] at the following prices:
a) [CONFIDENTIAL PORTION DELETED] based on the [CONFIDENTIAL PORTION
DELETED] of the [CONFIDENTIAL PORTION DELETED] if all of these [CONFIDENTIAL
PORTION DELETED] or;
b) between [CONFIDENTIAL PORTION DELETED] depending on the mix of
[CONFIDENTIAL PORTION DELETED].
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly
Bombardier Regional Aircraft Division
- -------------------------------
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this ...... day of March, 1995
Mesa Airlines, Inc.
By:
-----------------------------------
Title:
-----------------------------------
<PAGE> 113
March 24, 1995
Mesa Airlines, Inc.,
2325 East 30th,
Farmington, New Mexico.
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen,
RE: LETTER AGREEMENT NO. B95-7701-MJR-014 (RE: TRADE-IN OF DASH-8 SERIES 100
AIRCRAFT)
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8 Series 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement not defined herein, shall have the
same meaning as in the Agreement.
SERIES 100 TRADE IN AIRCRAFT
Quantity and Price
- -BRAD will take in [CONFIDENTIAL PORTION DELETED]
Other Conditions
[CONFIDENTIAL PORTION DELETED]
Payment and Delivery Schedule
[CONFIDENTIAL PORTION DELETED]
It is currently envisaged that these aircraft are to be available in March 1995.
<PAGE> 114
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly
Bombardier Regional Aircraft Division
_______________________________
Paul H. Francoeur
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this ...... day of March, 1995
Mesa Airlines, Inc.
By: ___________________________________
Title: ____________________________________
<PAGE> 115
March 24, 1995
Mesa Airlines, Inc.,
2325 East 30th,
Farmington, New Mexico.
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen,
RE: LETTER AGREEMENT NO. B95-7701-MJR-015 [CONFIDENTIAL PORTION DELETED]
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8 Series 200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement not defined herein, shall have the
same meaning as in the Agreement.
SERIES 300 TRADE-IN AIRCRAFT
Quantity and Price
BRAD will take in [CONFIDENTIAL PORTION DELETED]
Maintenance Reserves
[CONFIDENTIAL PORTION DELETED]
Return Conditions
[CONFIDENTIAL PORTION DELETED]
It is understood that these aircraft will meet the following return standards:
Other Conditions
[CONFIDENTIAL PORTION DELETED]
<PAGE> 116
The trade-in commitment is subject to BRAD receiving all other documents for
the completion of BRAD's due diligence of the lease of Serial Number 279,
[CONFIDENTIAL PORTION DELETED] and that such due diligence does not adversely
affect BRAD.
Payment and Delivery Schedule
[CONFIDENTIAL PORTION DELETED]
On-Going Support
[CONFIDENTIAL PORTION DELETED]
Return Schedule
[CONFIDENTIAL PORTION DELETED]
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly
Bombardier Regional Aircraft Division
_______________________________
Paul H. Francoeur
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this ...... day of March, 1995
Mesa Airlines, Inc.
By: ___________________________________
Title: ____________________________________
<PAGE> 117
March 24, 1995
Our Ref: B95-7701-MJR-016
Mesa Airlines, Inc.
2325 East 30th
Farmington, New Mexico
U.S.A. 87401
ATTENTION: MR. LARRY RISLEY
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-016
Reference is made to Purchase Agreement No.B95-7701-PA-299 (the "Agreement")
between Bombardier Inc. represented by its Bombardier Regional Aircraft Division
("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of Twenty-Five (25)
DHC-8-200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meanings as in the Agreement.
If Buyer has not obtained a commitment satisfactory to it for financing the
purchase of the Aircraft by March 31, 1995, which shall be set forth in Letter
Agreement No. [CONFIDENTIAL PORTION DELETED], [CONFIDENTIAL PORTION DELETED]
may, upon written notice given to [CONFIDENTIAL PORTION DELETED] within
[CONFIDENTIAL PORTION DELETED] of such date, [CONFIDENTIAL PORTION DELETED] The
[CONFIDENTIAL PORTION DELETED] in the amount of [CONFIDENTIAL PORTION DELETED]
as set forth in [CONFIDENTIAL PORTION DELETED] will become due and payable upon
the execution of [CONFIDENTIAL PORTION DELETED].
If the foregoing correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours truly,
Bombardier Inc.
- ---------------------------
Paul H. Francoeur
Vice-President, Contracts
ACCEPTED AND AGREED TO:
this 24th day of March, 1995
Mesa Airlines, Inc.
Title:
---------------------------------
Date:
---------------------------------
<PAGE> 118
Date: March 24, 1995
Our Ref: B95-7701-MJR-017
Mesa Airlines, Inc.
2325 East 30th,
Farmington New Mexico
U.S.A. 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-017
Reference is made to Purchase Agreement No. B95-7701-PA-299 (the "Agreement")
between Bombardier Inc., represented by its Bombardier Regional Aircraft
Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of twenty-five
(25) DHC-8-200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meanings as in the Agreement.
Recitals
Whereas the parties have entered into the Agreement include provisions relating
to pricing of the Aircraft, and whereas the parties wish to specifically enter
into an agreement [CONFIDENTIAL PORTION DELETED], as set out in the provisions
of [CONFIDENTIAL PORTION DELETED].
Whereas with respect to the matters referred to in the preceding paragraph, BRAD
and Mesa have entered into an agreement whereby Mesa [CONFIDENTIAL PORTION
DELETED] allowing [CONFIDENTIAL PORTION DELETED] as well as possible other
[CONFIDENTIAL PORTION DELETED] as set forth in [CONFIDENTIAL PORTION DELETED].
Whereas all [CONFIDENTIAL PORTION DELETED] for the benefit of [CONFIDENTIAL
PORTION DELETED] , and that these [CONFIDENTIAL PORTION DELETED] are
[CONFIDENTIAL PORTION DELETED] to the provisions set forth in this Agreement.
Any and all Data and any other information referred to in the preceding
paragraph and disclosed or provided by [CONFIDENTIAL PORTION DELETED] for the
purpose of obtaining [CONFIDENTIAL PORTION DELETED] provided for in the
Agreement or in Letter Agreement [CONFIDENTIAL PORTION DELETED] shall be
regarded and deemed as "Confidential or Proprietary Information" by
[CONFIDENTIAL PORTION DELETED] and shall not be used or disclosed unless
[CONFIDENTIAL PORTION DELETED] other than [CONFIDENTIAL PORTION DELETED] in the
Agreement or in [CONFIDENTIAL PORTION DELETED].
When such "Confidential or Proprietary Information" is disclosed for the purpose
of [CONFIDENTIAL PORTION DELETED], specific non-disclosures agreements must be
entered into and be binding upon Mesa and any Third Party to whom this
information may have been disclosed, such agreements to be executed
contemporaneously with the disclosure of said Information.
Without prejudice to the generality of the foregoing, all "Confidential
Information" shall;
(i) not be used by Mesa otherwise than as contemplated in the
Agreement or in [CONFIDENTIAL PORTION DELETED];
1
<PAGE> 119
(ii) be protected by Mesa with the same degree of care as Mesa uses
to protect its own Confidential or Proprietary Information
against public disclosure;
(iii) not be disclosed to any personnel of Mesa other than those for
who such knowledge is essential for the aforesaid purposes
(which personnel must be specified in writing by Mesa and
approved by BRAD in advance of disclosure to them) and such
disclosure shall be made only under conditions of strict
confidentiality
The obligation herein contained by Mesa and its personnel shall continue in full
force and effect whether or not any other agreement to perform work or services
is entered into between Mesa and BRAD or any of its affiliates.
Mesa agrees to have all its personnel and any other Third Parties, (namely any
financial advisors) to whom the Confidential or Proprietary Information is
disclosed execute undertakings of non-disclosure in favour of BRAD, containing
essentially all terms hereof, unless Mesa's personnel have already executed a
non-disclosure agreement in favour of Mesa and same is acceptable to BRAD.
Yours truly
Bombardier Regional Aircraft Inc.
- -------------------------
Walter A. Galloway
Director, Dash 8 Contracts
ACCEPTED AND AGREED TO:
this day of March,1995
MESA AIRLINES, Inc.
By:
-----------------------------------
Title:
-----------------------------------
2
<PAGE> 120
March 24, 1995
Mesa Airlines, Inc.
2325 East 30th Street
Farmington, New Mexico 87401
Attention: Mr. Larry Risley, Chairman
Gentlemen:
RE: LETTER AGREEMENT NO. B95-7701-MJR-018
Reference is made to the Purchase Agreement No. B95-7701-PA-299 (the
"Agreement") between Bombardier, Inc., represented by its Bombardier Regional
Aircraft Division ("BRAD") and Mesa Airlines, Inc. ("Buyer") for the sale of
twenty-five (25) DHC-8-200 aircraft (the "Aircraft").
This letter, when accepted and agreed to by Buyer contemporaneously with
execution of the Agreement, will become part of the Agreement and will evidence
our further agreement with respect to the matters summarized below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
Notwithstanding anything to the contrary found in the Agreement, [CONFIDENTIAL
PORTION DELETED] will provide to [CONFIDENTIAL PORTION DELETED]. [CONFIDENTIAL
PORTION DELETED] expense, these [CONFIDENTIAL PORTION DELETED].
If the foregoing is acceptable to you, please so indicate below.
Yours truly,
BOMBARDIER REGIONAL AIRCRAFT DIVISION
- -------------------------------
Paul H. Francoeur
Vice-President, Contracts
Accepted and agreed to:
Mesa Airlines, Inc.
By:
-----------------------------------
Wm. Stephen Jackson
Chief Financial Officer
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