<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
- --------------------------------------------- ----------
(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-
<PAGE> 2
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-
<PAGE> 3
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: 7/7/95 /s/ W. Stephen Jackson
--------------------------------------
W. Stephen Jackson
Chief Financial Officer, Treasurer and
Vice President of Finance
(Principal Accounting Officer)
-3-
<PAGE> 4
EXHIBIT INDEX
MESA AIR GROUP
COMMISSION FILE NO. 0-15495
FORM 10-Q/A
FOR THE QUARTER ENDED MARCH 31, 1995
<TABLE>
<CAPTION>
NO. DESCRIPTION
- --- -----------
<S> <C>
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
</TABLE>
<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
<TABLE>
<CAPTION>
ARTICLE
- -------
<S> <C>
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
</TABLE>
<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
<PAGE> 18
b. return the BFE to Buyer FOB BRAD's plant, or such other
place that BRAD may designate.
<PAGE> 19
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> 20
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> 21
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.
<PAGE> 22
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> 23
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> 24
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> 25
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
<PAGE> 26
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> 27
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> 28
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> 29
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> 30
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> 31
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> 32
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> 33
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> 34
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> 35
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> 36
(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
<PAGE> 37
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> 38
ARTICLE 19 [CONFIDENTIAL PORTION DELETED]
19.1 [CONFIDENTIAL PORTION DELETED]
19.2 [CONFIDENTIAL PORTION DELETED]
<PAGE> 39
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> 40
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> 41
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> 42
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> 43
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> 44
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> 45
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> 46
APPENDIX I
DHC-8 AIRCRAFT
ECONOMIC ADJUSTMENT FORMULA
[CONFIDENTIAL PORTION DELETED]
<PAGE> 47
APPENDIX II
-----------
DELIVERY SCHEDULE
-----------------
<TABLE>
<S> <C> <C>
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
</TABLE>
<PAGE> 48
APPENDIX III
SPECIFICATION
DHC-8-100:
DETAIL SPECIFICATION
Number DS8-200 Issue 2
August 1994
<PAGE> 49
APPENDIX IV
BUYER SELECTED OPTIONAL FEATURES
<TABLE>
<CAPTION>
NUMBER DESCRIPTION PRICE IN FEB. 1, 1995
- ------ ----------- ---------------------
U.S. DOLLARS
---------------------
<S> <C> <C>
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
</TABLE>
<PAGE> 50
<TABLE>
<CAPTION>
NUMBER Description Price in Feb. 1, 1995
- ------ ----------- ---------------------
U.S. Dollars
---------------------
<S> <C> <C>
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]
</TABLE>
<PAGE> 51
APPENDIX V
ESTIMATED AIRCRAFT DELIVERY PRICE
<TABLE>
<CAPTION>
Aircraft Purchase
-----------------
Aircraft Price
- -------- -----
<S> <C>
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
</TABLE>
<PAGE> 52
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> 53
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> 54
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> 55
EXHIBIT IV
CHANGE ORDER
(PRO FORMA)
<PAGE> 56
================================================================================
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:
================================================================================
<PAGE> 57
================================================================================
BRAD
-----------------------------------
Signed: Signed:
--------------------------- ----------------------------
Date: Date:
----------------------------- ------------------------------
================================================================================
<PAGE> 58
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> 59
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> 60
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> 61
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> 62
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> 63
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> 64
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.
- ------------------------
<PAGE> 65
Page 5.
Paul H. Francoeur,
Vice-President, Contracts
ACCEPTED AND AGREED TO
this day of March, 1995
Mesa Airlines, Inc.
By:
---------------------
Title:
------------------
<PAGE> 66
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 [Confidential Portion Deleted].
BRAD [Confidential Portion Deleted] as stated above per the following
conditions:
1) [CONFIDENTIAL PORTION DELETED].
2) [CONFIDENTIAL PORTION DELETED].
3) [CONFIDENTIAL PORTION DELETED].
4) [CONFIDENTIAL PORTION DELETED].
5) [CONFIDENTIAL PORTION DELETED].
<PAGE> 67
6) [CONFIDENTIAL PORTION DELETED].
7) [CONFIDENTIAL PORTION DELETED].
8a) [CONFIDENTIAL PORTION DELETED].
8b) [CONFIDENTIAL PORTION DELETED].
9a) [CONFIDENTIAL PORTION DELETED].
9b) [CONFIDENTIAL PORTION DELETED].
10) [CONFIDENTIAL PORTION DELETED].
11) [CONFIDENTIAL PORTION DELETED].
The first of the [CONFIDENTIAL PORTION DELETED] which will be used as the
additional deposit per letter agreement B95-7701-MJR-004, and the second
[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> 68
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.
<PAGE> 69
1. Terms of payment
The terms of payment of the Aircraft are as follows:
a. Upon execution of the Agreement, Buyer shall [CONFIDENTIAL
PORTION DELETED]. Such initial payment shall be applied
proportionately against the delivery [CONFIDENTIAL PORTION
DELETED]; and
b. [CONFIDENTIAL PORTION DELETED]
c. on delivery of each Aircraft the balance of the Aircraft
Purchase Price for such Aircraft less any applicable initial
payment made in accordance with a. and b.
2 Initial Payment
The initial payment per article 1a., above [CONFIDENTIAL PORTION DELETED].
It is understood that these [CONFIDENTIAL PORTION DELETED].
Buyer will be [CONFIDENTIAL PORTION DELETED].
It is further understood that this transaction can only be acceptable to BRAD if
such transaction 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:
-----------------------------
-2-
<PAGE> 70
March 29, 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 the Aircraft will be arranged by Mesa, working in close
coordination with [CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
BRAD's [CONFIDENTIAL PORTION DELETED] the Agreement will be conditioned upon
there having been no material adverse change in Mesa's financial condition,
defined for this purpose to mean the inability of Mesa to meet its current and
future obligations (ratios to be determined).
<PAGE> 71
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
-2-
<PAGE> 72
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.
<PAGE> 73
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
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
-2-
<PAGE> 74
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.
-3-
<PAGE> 75
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)
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.
-4-
<PAGE> 76
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.
- 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]
-5-
<PAGE> 77
- [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, 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].
-6-
<PAGE> 78
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.
-7-
<PAGE> 79
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].
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.
-8-
<PAGE> 80
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]
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:
-9-
<PAGE> 81
(a) Notice to BRAD shall be addressed to:
Bombardier Inc.
Bombardier Regional Aircraft Division
Garratt Boulevard
Downsview, Ontario
Canada
M3K1Y5
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
-10-
<PAGE> 82
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
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.
-11-
<PAGE> 83
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.
-12-
<PAGE> 84
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:
------------------------------
-13-
<PAGE> 85
APPENDIX A
Aircraft Covered (Delivery Schedule and Serial Number)
(to be determined)
-14-
<PAGE> 86
APPENDIX B
Monthly reporting - Invoice Form
-15-
<PAGE> 87
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).
<PAGE> 88
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] 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 [CONFIDENTIAL PORTION DELETED]:
a) [CONFIDENTIAL PORTION DELETED];
b) [CONFIDENTIAL PORTION DELETED];
c) [CONFIDENTIAL PORTION DELETED];
d) [CONFIDENTIAL PORTION DELETED].
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
separately and scheduled within [CONFIDENTIAL PORTION DELETED]
of the scheduled intervals. [CONFIDENTIAL PORTION DELETED].
-2-
<PAGE> 89
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] of the Aircraft including all
Direct Labour for all [CONFIDENTIAL PORTION DELETED] and
[CONFIDENTIAL PORTION DELETED] as well as routine servicing.
[CONFIDENTIAL PORTION DELETED].
3.2 Hourly Airframe Direct Maintenance Labour Cost ("ADMLC")
The following formula shall be used to calculate the annual
hourly ADMLC:
[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.
4.3 If the ADMLC is less than the ADMLCG, [CONFIDENTIAL PORTION
DELETED] during the term of this ADMLCG 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] calculated under Article 4.2
above, and BRAD's [CONFIDENTIAL PORTION DELETED] calculated in
Article 4.3 above, shall be compared by the following formula
to determine if [CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED]
5.2 [CONFIDENTIAL PORTION DELETED].
-3-
<PAGE> 90
5.3 [CONFIDENTIAL PORTION DELETED].
6.0 [CONFIDENTIAL PORTION DELETED].
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 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. [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 [CONFIDENTIAL PORTION DELETED]
-4-
<PAGE> 91
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:
-------------------------------
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.
[CONFIDENTIAL PORTION DELETED]
-5-
<PAGE> 92
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].
<PAGE> 93
(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,
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]
-2-
<PAGE> 94
(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.
(6) The "Achieved Aircraft Schedule Reliability" for a Covered
Aircraft shall be calculated and expressed as a percentage by
use of the following formula:
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) [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:
[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.
-3-
<PAGE> 95
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) [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 [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> 96
(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] 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. [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) [CONFIDENTIAL PORTION DELETED].
(5) [CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
(G) [CONFIDENTIAL PORTION DELETED]
-5-
<PAGE> 97
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> 98
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.
[CONFIDENTIAL PORTION DELETED]
ASSUMPTIONS
[CONFIDENTIAL PORTION DELETED]
-7-
<PAGE> 99
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.
<PAGE> 100
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] 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.
1.2.3 TRAVEL
If requested by Buyer the FSR may [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].
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.
-2-
<PAGE> 101
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.
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
-3-
<PAGE> 102
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.
-4-
<PAGE> 103
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.
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
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED]
2.4.2 [CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED].
-5-
<PAGE> 104
2.4.3 [CONFIDENTIAL PORTION DELETED]
[CONFIDENTIAL PORTION DELETED].
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. [CONFIDENTIAL PORTION DELETED].
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. [CONFIDENTIAL PORTION DELETED]. 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.
[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
-6-
<PAGE> 105
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.
2.6.6 VENDOR PRICING
[CONFIDENTIAL PORTION DELETED].
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.
-7-
<PAGE> 106
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
[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 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,
-8-
<PAGE> 107
(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
[CONFIDENTIAL PORTION DELETED]
b) CRITICAL ORDERS (A1)
[CONFIDENTIAL PORTION DELETED]
c) EXPEDITE ORDERS (A2)
[CONFIDENTIAL PORTION DELETED]
d) INTENTIONALLY LEFT BLANK
e) OTHER ORDERS
[CONFIDENTIAL PORTION DELETED]
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.
-9-
<PAGE> 108
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.
-10-
<PAGE> 109
2.20 PAYMENT
Except as provided in Article 2.21 below, Payment terms shall be net
thirty (30) calendar days of [CONFIDENTIAL PORTION DELETED]
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
[CONFIDENTIAL PORTION DELETED]
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
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.
-11-
<PAGE> 110
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;
-12-
<PAGE> 111
v) Pre-flight walk-around video; and
vi) Course syllabus.
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]
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
-13-
<PAGE> 112
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.
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.
-14-
<PAGE> 113
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.
-15-
<PAGE> 114
SCHEDULE A
LIST OF TECHNICAL DATA
ITEM COLUMN HEADING EXPLANATION OF CODES
[CONFIDENTIAL PORTION DELETED]
-16-
<PAGE> 115
TECHNICAL DATA
DASH 8 MANUALS
[CONFIDENTIAL PORTION DELETED]
-17-
<PAGE> 116
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:
[CONFIDENTIAL PORTION DELETED].
5.2 [CONFIDENTIAL PORTION DELETED].
5.3 [CONFIDENTIAL PORTION DELETED].
-18-
<PAGE> 117
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.
[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, [CONFIDENTIAL PORTION DELETED]. 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.
[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;
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.
-19-
<PAGE> 118
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].
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:
[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
-20-
<PAGE> 119
"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.
[CONFIDENTIAL PORTION DELETED].
2.2 VENDOR WARRANTY BACKSTOP
[CONFIDENTIAL PORTION DELETED].
-21-
<PAGE> 120
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
[CONFIDENTIAL PORTION DELETED]
3.3 PRICE
[CONFIDENTIAL PORTION DELETED]
3.4 CONDITIONS AND LIMITATIONS
3.4.1 The following general conditions and limitations shall apply
to the SLP:
[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 AttachmentA to this
Exhibit F shall be deemed to be a Covered Component, and subject to
the provisions of this SLP.
-22-
<PAGE> 121
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:
------------------------------
-23-
<PAGE> 122
EXHIBIT F - ATTACHMENT 1 COVERED
COMPONENTS
DASH-8
AIRFRAME COMPONENTS
[CONFIDENTIAL PORTION DELETED]
-24-
<PAGE> 123
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.
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
<PAGE> 124
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:
-----------------------------------
<PAGE> 125
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 Buyer currently has on lease a number
of [CONFIDENTIAL PORTION DELETED].
2. [CONFIDENTIAL PORTION DELETED].
3. [CONFIDENTIAL PORTION DELETED].
4. [CONFIDENTIAL PORTION DELETED].
5. [CONFIDENTIAL PORTION DELETED].
6. [CONFIDENTIAL PORTION DELETED].
<PAGE> 126
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
7. [CONFIDENTIAL PORTION DELETED].
8. [CONFIDENTIAL PORTION DELETED].
9. [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> 127
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: PERFORMANCE GUARANTEES)
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 performance guarantees related to the Aircraft.
[CONFIDENTIAL PORTION DELETED].
<PAGE> 128
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 (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.
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
Yours truly
Bombardier Regional Aircraft Division
_______________________________
Paul H. Francoeur,
Vice-President, Contracts
<PAGE> 129
ACCEPTED AND AGREED TO:
this ...... day of March, 1995
Mesa Airlines, Inc.
By: ___________________________________
Title: ____________________________________
<PAGE> 130
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> 131
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> 132
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> 133
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> 134
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, [CONFIDENTIAL PORTION DELETED].
The Deposit [CONFIDENTIAL PORTION DELETED].
<PAGE> 135
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: __________________________________
-2-
<PAGE> 136
Date: March 30, 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 [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 will have access to
[CONFIDENTIAL PORTION DELETED].
[CONFIDENTIAL PORTION DELETED].
Any and all Data and any other information (CONFIDENTIAL PORTION DELETED)
MJR-005 shall be regarded and deemed as "Confidential or Proprietary
Information" by BRAD, and
<PAGE> 137
shall not be used or disclosed unless for purposes other than achieving the
objective set out in the Agreement or in Letter Agreement MJR-005.
When such "Confidential or Proprietary Information" is disclosed [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 [CONFIDENTIAL PORTION DELETED];
(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
<PAGE> 138
Director, Dash 8 Contracts
ACCEPTED AND AGREED TO:
this day of March,1995
MESA AIRLINES, Inc.
By: ___________________________________
Title: ___________________________________
<PAGE> 139
March 29, 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].
<PAGE> 140
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
-2-
