<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from________ to________
Commission file number 0-18653
COMAIR HOLDINGS, INC.
---------------------
Incorporated under the laws of Kentucky 31-1243613
(I.R.S. Employer ID No.)
P.O. Box 75021
Cincinnati, Ohio 45275
(606) 767-2550
Indicate by a check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) or 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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at February 13, 1998
----- --------------------------------
Common stock, no par value 66,790,118
PAGE 1
<PAGE> 2
COMAIR HOLDINGS, INC.
INDEX
PAGE NOS.
PART I. Financial Information -
Consolidated Balance Sheets as of December 31, 1997
and March 31, 1997 . . . . . . . . . . . . . . . . . . . . . . .3-4
Consolidated Statements of Income -
Three months ended December 31, 1997 and 1996 . . . . . . . . . 5
Consolidated Statements of Income -
Nine months ended December 31, 1997 and 1996 . . . . . . . . . . 6
Consolidated Statements of Cash Flows -
Nine months ended December 31, 1997 and 1996 . . . . . . . . . . 7
Notes to Consolidated Financial Statements . . . . . . . . . . . 8-10
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . .11-17
PART II. Other Information -
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . 18
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 18
SIGNATURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
PAGE 2
<PAGE> 3
PART I. FINANCIAL INFORMATION
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
AS OF DECEMBER 31, 1997 AND MARCH 31, 1997(UNAUDITED)
-----------------------------------------------------
<TABLE>
<CAPTION>
ASSETS DECEMBER 31, 1997 MARCH 31, 1997
- ------ ----------------- --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $157,570,050 $122,604,792
Marketable securities
available-for-sale 62,427,165 54,111,024
Interest bearing deposits 30,000,000 --
------------ ------------
$249,997,215 $176,715,816
Accounts receivable 5,652,181 20,289,523
Inventory of expendable parts 19,874,582 18,229,847
Future tax benefits 12,225,719 11,056,864
Prepaid expenses 5,233,820 14,458,955
------------ ------------
Total current assets $292,983,517 $240,751,005
------------ ------------
Property and equipment, at cost:
Flight equipment $404,790,173 $394,323,083
Maintenance, operations and
office facilities 10,292,723 10,292,723
Other property and equipment 45,872,103 42,490,273
------------ ------------
$460,954,999 $447,106,079
Less accumulated depreciation and
amortization 112,678,737 116,100,656
Less reserve for engine overhauls and
purchase incentives 14,963,099 12,633,839
------------ ------------
$333,313,163 $318,371,584
Construction in progress 365,500 14,580
Advance payments and deposits
for aircraft 25,140,936 21,086,563
------------ ------------
Net property and equipment $358,819,599 $339,472,727
Other assets and deferred costs $ 10,178,634 $ 8,362,213
------------ ------------
Total assets $661,981,750 $588,585,945
============ ============
</TABLE>
PAGE 3
<PAGE> 4
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
AS OF DECEMBER 31, 1997 AND MARCH 31, 1997 (UNAUDITED)
------------------------------------------------------
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY DECEMBER 31,1997 MARCH 31,1997
- ------------------------------------ ---------------- -------------
<S> <C> <C>
Current liabilities:
Current installments of long-term
obligations $ 13,328,769 $ 12,909,768
Accounts payable 44,884,270 47,933,952
Interline payable and deferred revenue 5,644,389 5,579,663
Accrued lease expense 26,634,499 22,015,215
Accrued wages 7,284,380 6,427,279
Accrued expenses 14,709,338 13,785,587
Accrued taxes 14,138,111 12,412,131
------------ ------------
Total current liabilities $126,623,756 $121,063,595
Long-term obligations $116,316,138 $127,747,861
------------ ------------
Deferred income taxes $ 62,111,105 $ 52,389,105
------------ ------------
Other liabilities and deferred credits $ 8,934,808 $ 7,086,055
------------ ------------
Shareholders' equity:
Common stock, no par value,
100,000,000 shares authorized,
67,114,518 and 44,532,815 issued
and outstanding, respectively $ 53,610,270 $ 52,302,390
Preferred stock, no par value,
1,000,000 shares authorized, none
issued or outstanding -- --
Net unrealized gain(loss) on marketable
securities available-for-sale 380,590 (25,543)
Retained earnings 294,005,083 228,022,482
------------ ------------
Total shareholders' equity $347,995,943 $280,299,329
------------ ------------
Total liabilities and shareholders' equity $661,981,750 $588,585,945
============ ============
</TABLE>
PAGE 4
<PAGE> 5
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
FOR THE THREE MONTHS ENDED DECEMBER 31, 1997 AND 1996 (UNAUDITED)
-----------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATING REVENUES:
Passenger $156,134,284 $131,402,135
Cargo and other 1,207,746 1,098,378
Non-airline operations 5,815,565 5,771,839
------------ ------------
Total operating revenues $163,157,595 $138,272,352
------------ ------------
OPERATING EXPENSES:
Salaries and related costs $ 29,247,502 $ 24,565,779
Aircraft fuel 13,997,363 15,560,054
Maintenance materials and repairs 13,833,458 10,715,724
Aircraft rent 18,852,642 18,875,681
Other rent and landing fees 5,160,380 4,092,731
Passenger commissions 12,988,318 11,066,969
Other operating expenses 20,212,238 19,570,618
Depreciation and amortization 7,374,812 6,335,852
Non-airline direct costs 3,568,399 3,396,649
------------ ------------
Total operating expenses $125,235,112 $114,180,057
------------ ------------
Operating income $ 37,922,483 $ 24,092,295
------------ ------------
NONOPERATING INCOME (EXPENSE):
Investment income $ 3,106,304 $ 2,242,815
Interest expense (1,865,391) (1,392,566)
------------ ------------
Total nonoperating income, net $ 1,240,913 $ 850,249
------------ ------------
Income before income taxes $ 39,163,396 $ 24,942,544
Income taxes 14,887,000 9,478,000
------------ ------------
Net income $ 24,276,396 $ 15,464,544
============ ============
Weighted average number
of shares outstanding - Basic (NOTE 3) 67,058,025 66,706,975
============ ============
Net income per share - Basic (NOTE 3) $ .36 $ .23
============ ============
Weighted average number
of shares outstanding - Diluted (NOTE 3) 67,799,598 67,301,344
============ ============
Net income per share - Diluted (NOTE 3) $ .36 $ .23
============ ============
Dividends paid per share $ 0.040 $ 0.040
============ ============
</TABLE>
PAGE 5
<PAGE> 6
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996 (UNAUDITED)
----------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
OPERATING REVENUES:
Passenger $464,089,664 $394,998,529
Cargo and other 3,638,719 3,584,542
Non-airline operations 17,341,692 16,238,633
------------ ------------
Total operating revenues $485,070,075 $414,821,704
------------ ------------
OPERATING EXPENSES:
Salaries and related costs $ 84,781,850 $ 72,892,128
Aircraft fuel 41,478,221 40,789,235
Maintenance materials and repairs 38,973,347 30,876,939
Aircraft rent 55,677,329 53,055,345
Other rent and landing fees 15,944,558 13,561,190
Passenger commissions 37,475,489 33,504,577
Other operating expenses 60,007,573 54,363,228
Depreciation and amortization 22,146,925 18,213,644
Non-airline direct costs 11,337,271 10,101,301
------------ ------------
Total operating expenses $367,822,563 $327,357,587
------------ ------------
Operating income $117,247,512 $ 87,464,117
------------ ------------
NONOPERATING INCOME (EXPENSE):
Investment income $ 8,028,851 $ 6,241,873
Interest expense (5,887,683) (3,428,664)
------------ ------------
Total nonoperating income, net $ 2,141,168 $ 2,813,209
------------ ------------
Income before income taxes $119,388,680 $ 90,277,326
Income taxes 45,363,000 34,283,000
------------ ------------
Net income $ 74,025,680 $ 55,994,326
============ ============
Weighted average number
of shares outstanding - Basic (NOTE 3) 66,888,663 66,679,430
============ ============
Net income per share - Basic (NOTE 3) $ 1.11 $ 0.84
============ ============
Weighted average number
of shares outstanding - Diluted (NOTE 3) 67,749,074 67,298,240
============ ============
Net income per share - Diluted (NOTE 3) $ 1.10 $ 0.83
============ ============
Dividends paid per share $ 0.120 $ 0.103
============ ============
</TABLE>
PAGE 6
<PAGE> 7
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE NINE MONTHS ENDED DECEMBER 31, 1997 AND 1996 (UNAUDITED)
----------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
------------- -------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 74,025,680 $ 55,994,326
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 22,146,925 18,213,644
Amortization and accrual of overhaul expenses 9,594,699 8,423,754
Deferred income tax provision 8,553,145 10,363,488
Other, net (1,105,842) (1,097,402)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable 14,637,342 8,234,350
Decrease (increase) in inventory of
expendable parts (1,644,735) (3,510,505)
Decrease (increase) in other current assets 9,225,135 2,639,671
Increase (decrease) in accounts payable (3,049,682) 3,179,125
Increase (decrease) in other current
liabilities 8,190,842 5,268,032
------------- -------------
Net cash provided by operating activities $ 140,573,509 $ 107,708,483
------------- -------------
Cash Flows From Investing Activities:
Additions to property and equipment $ (45,381,121) $(131,000,218)
Advance payments and deposits (4,000,000) --
Interest bearing deposits (30,000,000) (30,000,000)
Purchases and maturities of marketable
securities, net (8,630,490) (18,202,749)
Proceeds from sale of available-for-sale
marketable securities 720,483 3,178,531
Other, net (569,201) (87,387)
------------- -------------
Net cash used in investing activities $ (87,860,329) $(176,111,823)
------------- -------------
Cash Flows From Financing Activities:
Issuance of common stock $ 2,294,130 $ 487,963
Repurchase of common stock (986,250) --
Payments of cash dividends and
repurchase of fractional shares (8,043,080) (6,846,612)
Proceeds from long-term obligations -- 69,912,500
Repayments of long-term obligations (11,012,722) (6,787,452)
------------- -------------
Net cash (used in) provided by
financing activities $ (17,747,922) $ 56,766,399
------------- -------------
Net increase(decrease)in cash and cash
equivalents $ 34,965,258 $ (11,636,941)
------------- -------------
Cash and cash equivalents at
beginning of period $ 122,604,792 $ 111,601,283
------------- -------------
Cash and cash equivalents at end of period $ 157,570,050 $ 99,964,342
============= =============
Cash paid during the period for interest $ 7,623,782 $ 3,534,311
============= =============
Cash paid during the period for income taxes $ 35,421,563 $ 30,236,241
============= =============
</TABLE>
PAGE 7
<PAGE> 8
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. These statements reflect all adjustments which are, in
the opinion of management, necessary for a fair presentation of the results for
the interim periods presented. Certain information in footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles has been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the following
disclosures are adequate to make the information presented not misleading. It is
suggested that these consolidated financial statements be read in conjunction
with the financial statements and the notes thereto included in the Company's
latest annual report on Form 10-K.
NOTE 1: The accounts of Comair Holdings, Inc. and its wholly-owned
subsidiaries (the Company) have been consolidated in the accompanying
financial statements. Upon consolidation, all material intercompany
accounts, transactions and profits have been eliminated. The Company
considers the transportation of passengers and freight in scheduled
airline service by its major subsidiary, COMAIR, Inc., to be its
predominant industry segment. The Company's stock is traded in the
Nasdaq/National Market System under the symbol COMR.
NOTE 2: Results of operations for the interim periods are not necessarily
indicative of results to be expected for the year.
NOTE 3: In the third quarter of fiscal 1998, the Company adopted Financial
Accounting Standards Board Statement No. 128 (SFAS No. 128), "Earnings
Per Share", which replaces the presentation of primary earnings per
share with a presentation of basic earnings per share. It also requires
dual presentation of basic and diluted earnings per share on the face of
the income statement for all entities with complex capital structures
and requires a reconciliation of both the numerator and denominator of
the basic earnings per share computation for the same components in the
diluted earnings per share computation. The following tables show the
amounts used in computing earnings per share and the effect on income
and the weighted average number of shares for the quarters and nine
months ending December 31, 1997 and 1996 of dilutive potential common
stock.
PAGE 8
<PAGE> 9
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
<CAPTION>
QUARTER ENDED
------------------------------------------------------------------------------
Dec. 31, 1997 Dec. 31, 1996
------------------------------------ -------------------------------------
Per Per
Income Shares Share Income Shares Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- ------ ----------- ------------- ------
in thousands except per share amounts
- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE
Net income available to
common stockholders $ 24,276 67,058 $ .36 $ 15,465 66,707 $ .23
========== ==========
EFFECT OF DILUTIVE SECURITIES
Stock Options -- 726 -- 565
---------- ---------- ---------- ----------
DILUTED EARNINGS PER SHARE
Net income available to
common stockholders and
assumed conversions $ 24,276 67,784 $ .36 $ 15,465 67,272 $ .23
========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------------------------------------------------------------
Dec. 31, 1997 Dec. 31, 1996
------------------------------------- -------------------------------------
Per Per
Income Shares Share Income Shares Share
(Numerator) (Denominator) Amount (Numerator) (Denominator) Amount
----------- ------------- ------ ----------- ------------- ------
in thousands except per share amounts
- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE
Net income available to
common stockholders $ 74,026 66,889 $ 1.11 $ 55,994 66,679 $ .84
========== ==========
EFFECT OF DILUTIVE SECURITIES
Stock Options -- 678 -- 619
---------- ---------- ---------- ----------
DILUTED EARNINGS PER SHARE
Net income available to
common stockholders and
assumed conversions $ 74,026 67,567 $ 1.10 $ 55,994 67,298 $ .83
========== ========== ========== ========== ========== ==========
</TABLE>
PAGE 9
<PAGE> 10
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
NOTE 4: In July 1997, the Financial Accounting Standards Board issued
Statement No. 130 (SFAS No. 130), "Reporting Comprehensive Income",
which requires that comprehensive income and the associated income tax
expense or benefit be reported in a financial statement with the same
prominence as other financial statements with an aggregate amount of
comprehensive income reported in that same financial statement. SFAS No.
130 permits a statement of financial position, a statement of changes in
shareholders' equity, or notes to the financial statements to be used to
meet this requirement. "Other Comprehensive Income" refers to revenues,
expenses, gains and losses that under GAAP are included in comprehensive
income but bypass net income. The Company will adopt SFAS No. 130 in the
first quarter of fiscal 1999. The Company anticipates the impact of this
adoption to be immaterial.
NOTE 5: In July 1997, the Financial Accounting Standards Board issued
Statement No. 131 (SFAS No. 131), "Disclosures About Segments of an
Enterprise and Related Information" which requires disclosures for each
segment in which the chief operating decision maker organizes these
segments within a company for making operating decisions and assessing
performance. Reportable segments are based on products and services,
geography, legal structure, management structure and any manner in which
management disaggregates a company. The Company will adopt SFAS No. 131
in the first quarter of fiscal 1999. The Company anticipates the impact
of this adoption to be immaterial.
NOTE 6: On October 23, 1997, the Board of Directors of Comair Holdings, Inc.
approved a 3-for-2 split in the stock of Comair Holdings, Inc., pursuant
to which shareholders of record received one share of newly issued stock
for each two shares of stock currently held. The common stock split was
payable on November 13, 1997 to shareholders of record at the close of
business on November 3, 1997. The share and per share financial
information contained in the accompanying financial statements does give
effect to the stock split. The cash dividend of $.06 per share, declared
by the Board of Directors of Comair Holdings, Inc. on October 14, 1997,
for shareholders of record on November 3, 1997, payable on November 13,
1997, was paid on a pre-split basis.
PAGE 10
<PAGE> 11
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
COMAIR, Inc. (COMAIR) is the principal subsidiary of Comair Holdings,
Inc. (with its subsidiaries, the Company), accounting for 96% of the third
quarter operating revenues and expenses. Although the following discussion and
analysis entails various aspects of the Company's financial performance, many of
the factors that affect year to year comparisons relate solely to COMAIR.
Inflation and changing prices have not had a material effect on
COMAIR's operations because revenues and expenses generally reflect current
price levels. COMAIR's market area, strong financial position and strong cost
control efforts have helped lessen the effect on the Company of price
competition and resulting low fares when compared to many others in the airline
industry. However, changes in the pricing strategies and increased competition
from other airlines could impact COMAIR's ability to recoup future cost
increases through higher fares.
COMAIR operates as a "Delta Connection" carrier under a ten-year
marketing agreement with Delta Air Lines, Inc. dated and effective in October of
1989. The agreement may be terminated by either party on not less than one
hundred eighty (180) days' advance written notice. Delta owns approximately 21%
of the Company's outstanding common stock, leases reservation equipment and
terminal facilities to COMAIR, and provides certain services to COMAIR including
reservations and passenger and aircraft handling services. Approximately 43% of
COMAIR'S passengers in the third quarter of fiscal 1998 connected to Delta. The
Company has historically benefited from its relationship with Delta. However,
the Company's results of operations and financial condition could be adversely
impacted by Delta's decisions regarding routes and other operational matters, as
well as, any material interruption or modifications in this arrangement.
For the third quarter of fiscal 1998, the Company reported record
operating revenues. Operating revenues for the third quarter increased to $163.2
million, up 18% from the $138.3 million reported in the third quarter of fiscal
1997.
PAGE 11
<PAGE> 12
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Operating income, net income and net income per share for the third
quarter of fiscal 1998 all increased when compared with the results reported in
the third quarter of fiscal 1997. Operating income for the quarter rose 57% to
$37.9 million from $24.1 million. Net income increased 57% to $24.3 million from
$15.5 million, while diluted earnings per share increased 57% to $.36 per share
from $.23 per share.
The increase in earnings is largely the result of increased passenger
enplanements which has translated into higher load factors. Passenger
enplanements and revenue passenger miles (RPMs)in the third quarter grew 19%
over last year's third quarter levels while quarterly load factors exceeded last
year by approximately six percentage points. This traffic growth clearly
indicates our continuing success at our Cincinnati hub, which is approximately
80% of our total operations. The combination of Cincinnati's geographic
location, our world class facilities and the passenger appeal of the Canadair
Jets have made Cincinnati one of the nation's preeminent connecting hubs.
Capacity, available seat miles (ASMs), grew 8% as we continue to
replace turboprop aircraft with new 50-passenger Canadair Jet aircraft.
Currently, approximately 80% of COMAIR'S capacity is generated by the jet
aircraft.
CAPACITY AND TRAFFIC ANALYSIS
<TABLE>
<CAPTION>
QUARTER ENDED NINE MONTHS ENDED
12/31/97 12/31/96 12/31/97 12/31/96
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Passengers 1,385,683 1,163,257 4,169,946 3,560,151
ASMs (000s) 752,686 699,865 2,254,309 2,057,890
RPMs (000s) 461,333 388,475 1,391,496 1,173,891
Load factor 61.3% 55.5% 61.7% 57.0%
Breakeven load factor 47.7% 46.2% 47.4% 45.1%
Yield (cents) 33.8 33.8 33.4 33.6
Cost per ASM (cents) 16.1 15.7 15.7 15.3
</TABLE>
PAGE 12
<PAGE> 13
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
The following tables show the expense categories for COMAIR for the third
quarter and nine months ended of the last two fiscal years.
EXPENSE CATEGORIES
<TABLE>
<CAPTION>
QTR Ended Cents QTR Ended Cents
12/31/97 per ASM 12/31/96 per ASM
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Salaries and Related Costs $ 29,247,502 3.9 $ 24,565,779 3.5
Aircraft Fuel 13,997,363 1.9 15,560,054 2.2
Maintenance Materials
and Repairs 13,837,976 1.8 10,715,524 1.5
Aircraft Rent 18,852,642 2.5 18,875,681 2.7
Other Rent and Landing
Fees 5,160,380 0.7 4,092,731 0.6
Passenger Commissions 12,988,318 1.7 11,066,969 1.6
Other Operating Expenses 20,167,998 2.7 19,510,617 2.8
Depreciation and
Amortization 6,568,053 0.9 5,441,336 0.8
------------ ---- ------------ ----
$120,820,232 16.1 $109,828,691 15.7
============ ==== ============ ====
</TABLE>
<TABLE>
<CAPTION>
9 Mo. Ended Cents 9 Mo. Ended Cents
12/31/97 per ASM 12/31/96 per ASM
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Salaries and Related Costs $ 84,809,899 3.8 $ 72,892,129 3.5
Aircraft Fuel 41,478,221 1.8 40,789,235 2.0
Maintenance Materials
and Repairs 38,980,074 1.7 30,876,740 1.5
Aircraft Rent 55,677,329 2.5 53,055,344 2.6
Other Rent and Landing
Fees 15,944,558 0.7 13,561,190 0.7
Passenger Commissions 37,475,489 1.6 33,504,577 1.6
Other Operating Expenses 59,867,285 2.7 54,168,494 2.6
Depreciation and
Amortization 19,630,536 0.9 15,727,785 0.8
------------ ---- ------------ ----
$353,863,391 15.7 $314,575,494 15.3
============ ==== ============ ====
</TABLE>
PAGE 13
<PAGE> 14
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Salaries and related costs have risen in total and on a unit cost basis
from the third quarter of last year. The increase resulted from the additional
personnel hired to enhance operating effectiveness and service the growing
passenger base and additional jet equipment acquired over the past year.
Expenses relating to incentive compensation plans were also higher as a result
of higher pretax earnings.
Aircraft fuel price per gallon for the third quarter of fiscal 1998 was
approximately seventeen cents lower than in the third quarter of last year.
Total aircraft fuel cost and cost per ASM decreased as lower fuel prices more
than offset the 11% increase in fuel consumption from our additional Canadair
Jet aircraft. Any sudden and significant increase in fuel prices caused by an
outbreak in hostilities in the Middle East or other factors could have an
adverse effect on earnings unless and until the Company could compensate for
such increase by raising fares.
Maintenance material and repair costs increased in total and on a unit
cost basis. The increase is attributed to higher maintenance costs due to
warranty periods expiring on certain jet aircraft and an increase in the volume
of scheduled and unscheduled inspections being performed on the Canadair Jets.
Aircraft rent expense remained virtually the same as the expense in the
third quarter of fiscal 1997 related to certain turboprop aircraft, which have
since been returned to their lessors, and the costs associated with the
accelerated return of those aircraft approximately offset the additional expense
generated by the nine Canadair Jets financed with operating leases since the
third quarter of fiscal 1997. Aircraft rent unit cost decreased as a result of
the additional capacity generated by the six Canadair Jet aircraft acquired
through debt financing and working capital since October 1996.
Other rent and landing fees increased in total and on a unit cost basis
as COMAIR continues to add the larger Canadair Jets.
Travel agency and credit card commissions increased in total and on a
unit cost basis due to higher unit revenues (revenue per ASM) in this quarter
than in the third quarter of fiscal 1997.
Other operating expenses increased in total due to higher passenger
related costs associated with the growth in passenger enplanements. The
additional capacity generated by the jet equipment caused these costs to
decreased on a unit cost basis.
PAGE 14
<PAGE> 15
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Depreciation and amortization increased in total and on a unit cost
basis. The increase is due to the purchase of six Canadair Jets since October
1996 along with additional support equipment related to the Canadair Jet fleet.
Investment income in the third quarter of fiscal 1998 was higher than
third quarter of fiscal 1997 due to higher average cash balances available for
investment coupled with higher interest rates on our investments.
The Company's effective tax rate, which includes federal, state and
local taxes, approximated the statutory rate in the third quarter of fiscal
1998.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
In the first nine months of fiscal 1998, the Company generated cash from
operating activities of $140.6 million. During the first quarter, the Company
invested $30.0 million in a short-term interest bearing deposit with an aircraft
manufacturer. This deposit, with associated accrued interest, can be called and
returned to COMAIR within thirty (30) days of written notice by COMAIR or
immediately if the manufacturer's credit rating falls below certain thresholds.
During the first nine months, the Company had property and equipment additions
of $45.4 million, predominantly for aircraft and related support equipment.
These additions were financed with working capital. The Company repaid long-term
obligations of $11.0 million and paid cash dividends of $8.0 million. Total
working capital increased to $166.4 million from $119.7 million at March 31,
1997, while the current ratio increased to 2.31 from 1.99. The Company's
long-term debt to equity position was 25% debt, 75% equity at December 31, 1997,
as compared to 31% debt, 69% equity at March 31, 1997.
In fiscal 1995, the Board of Directors authorized the Company to
repurchase up to 13.8 million shares of common stock from time to time as market
conditions dictate. As of March 31, 1997, the Company had purchased 6.8 million
shares of this authorization at a cost of $37.2 million. The Company has
repurchased an additional 435,000 shares at a cost of approximately $11.6
million through February 12, 1998.
COMAIR has taken delivery of seven new generation, 50-passenger Canadair
Jet aircraft during the first nine months of fiscal 1998 bringing the total
Canadair Jet fleet to 55. For 20 of these aircraft, the manufacturer agreed to
arrange the lease financing, including the right to return the aircraft after
seven years with no cost to COMAIR other than normal and customary return
provisions related to the condition of the aircraft.
PAGE 15
<PAGE> 16
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Ten aircraft were financed with debt, one was acquired with working capital,
while the other 24 aircraft were financed through operating leases with terms of
up to 16.5 years.
As of December 31, 1997, COMAIR had scheduled delivery positions for 25
Canadair Jets to be delivered through fiscal 2000, all of which are firm orders.
The aggregate cost of these aircraft, including support equipment and estimated
escalation, will be approximately $486 million. COMAIR also has options for 45
additional jet aircraft, valued at approximately $875 million, including support
equipment and estimated escalation, which could be available for delivery in
fiscal 2000 through fiscal 2002. Some of the options can be converted to
Canadair's 70-seat aircraft.
COMAIR expects to finance the aircraft described above through a
combination of working capital and lease, equity and debt financing, utilizing
manufacturers' assistance and government guarantees to the extent available.
COMAIR believes that financing will be available at acceptable rates. If COMAIR
is unable to obtain acceptable financing terms, it could be required to modify
its expansion plans.
On January 9, 1997, Flight 3272 crashed near Detroit, Michigan. There
were no survivors among the 29 passengers and crew members aboard the turboprop
aircraft. The Company is cooperating fully with the National Transportation
Safety Board and all other federal, state and local regulatory and investigatory
agencies in connection with the crash. In May 1997, the NTSB released the
factual data obtained to date related to Flight 3272. The findings to date are
inconclusive. Several lawsuits have been filed against the Company seeking
damages attributable to the deaths of those on Flight 3272, and additional
lawsuits are expected. The Company maintains substantial insurance coverage for
such claims and, at this time, believes that the claims, expenses and litigation
related to this accident will not have a material adverse effect on the
Company's financial condition, cash flows or results of operations.
The Company has begun to implement a Year 2000 compliance program
designed to ensure that the Company's computer systems and applications will
properly manage dates beyond 1999. The Company believes the costs of modifying
non-compliant computer systems and applications and the implementation of
software enhancements are primarily internal staff costs. The Company intends to
redeploy existing information technology resources and, thus, does not expect to
incur significant incremental costs to implement its Year 2000 program. However,
there can be no assurance that the systems of other parties, upon which the
Company also relies will be modified on a timely basis. The Company's business,
financial condition, or results of operations could be materially adversely
affected by the failure of its systems and applications or those operated by
other parties to properly operate or manage dates beyond 1999.
PAGE 16
<PAGE> 17
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
In fiscal 1998, additional capital for repayment of long-term
obligations, planned dividend payments and other capital expenditures are
expected to be provided by operations.
The Company has a $5 million bank line of credit at prime. The line of
credit has not been used since 1985.
Several of the statements contained in this report are "forward-looking
statements" as that term is defined in federal securities laws. The actual
results could vary materially from those described in those statements. Factors
that could cause actual results to vary are described in detail in our reports
to the Securities and Exchange Commission including Exhibit 99 to our form 10-K
for the period ending March 31, 1997 and are also discussed in the second and
third paragraphs under "Results of Operations."
PAGE 17
<PAGE> 18
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 30, 1996 the Registrant filed a Complaint for declaratory and
injunctive relief entitled COMAIR, INC. v. NATIONAL MEDIATION BOARD and
INTERNATIONAL BROTHERHOOD OF TEAMSTERS in the United States District Court for
the District of Columbia challenging a decision of the National Mediation Board
reopening Case No. R-6433. This matter involves the demand of the International
Brotherhood of Teamsters to represent Comair, Inc. flight attendants and a
finding by the National Mediation Board that a majority of the employees of the
flight attendant craft had not cast ballots in favor of representation.
Subsequently, the National Mediation Board reopened the case, counted additional
ballots and changed its ruling by certifying the International Brotherhood of
Teamsters as collective bargaining representative for the flight attendants of
Comair, Inc. The outcome of the litigation will determine whether the flight
attendants of Comair, Inc. are represented by the International Brotherhood of
Teamsters unless a new election is ordered.
There are no other material legal proceedings pending involving the
Company, any of its subsidiaries or their property, except proceedings arising
in the ordinary course of business. The Company believes that all such
proceedings are adequately insured.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit List
------------
Exhibit No. Description of Document
----------- -----------------------
10.12 Bombardier Regional Aircraft Division Purchase
Agreement between Bombardier Inc. and Comair, Inc.
dated November 24, 1997*
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter for which
this report is filed
* Portions of this exhibit have been omitted pursuant to a request for
confidential treatment.
PAGE 18
<PAGE> 19
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
SIGNATURE
- ---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COMAIR HOLDINGS, INC.
February 17, 1998 BY: /S/ Randy D. Rademacher
---------------------------
Randy D. Rademacher
Senior Vice President Finance
Chief Financial Officer
PAGE 19
<PAGE> 1
Exhibit 10.12
BOMBARDIER REGIONAL AIRCRAFT DIVISION
PURCHASE AGREEMENT
BETWEEN
BOMBARDIER INC.
BOMBARDIER REGIONAL AIRCRAFT DIVISION
AND
COMAIR INC.
RELATING TO THE PURCHASE OF THIRTY (30) BOMBARDIER REGIONAL JET
AIRCRAFT AND RELATED AIRLINE SERVICES
<PAGE> 2
TABLE OF CONTENTS
ARTICLE DESCRIPTION
- ------- -----------
1.0 DEFINITION AND INTERPRETATION
2.0 SUBJECT MATTER OF SALE
3.0 CERTIFICATION
4.0 PRICE
5.0 PAYMENT
6.0 BUYER'S REPRESENTATIVES AT PLACE OF
MANUFACTURE
7.0 CHANGES
8.0 BUYER FURNISHED EQUIPMENT & INFORMATION
9.0 DELIVERY PROGRAM
10.0 EXCUSABLE DELAY
11.0 ACCEPTANCE PROCEDURE
12.0 TITLE AND RISK
13.0 CUSTOMER SUPPORT SERVICES AND WARRANTY
14.0 TAXES, DUTIES AND LICENSES
15.0 LOSS OF OR DAMAGE TO AIRCRAFT
16.0 INDEMNITY AGAINST PATENT INFRINGEMENT
17.0 LIMITATION OF LIABILITY
18.0 TERMINATION
19.0 ASSIGNMENT
20.0 NOTICES
21.0 CONFIDENTIAL NATURE OF AGREEMENT
22.0 SUCCESSORS
23.0 APPLICABLE LAWS
24.0 AGREEMENT
i
<PAGE> 3
LIST OF EXHIBITS
EXHIBIT DESCRIPTION
- ------- -----------
A SPECIFICATION
B INTENTIONALLY DELETED
C PRICE AND PAYMENT SCHEDULE
D DELIVERY SCHEDULE
E CERTIFICATE OF ACCEPTANCE
F BILL OF SALE
G CHANGE ORDER
H AIRLINES SERVICES
I LEFT INTENTIONALLY BLANK
J WARRANTY AND SERVICE LIFE POLICY
K CORPORATE GUARANTEE
ii
<PAGE> 4
This agreement is made on the 24 day of November, 1997.
BETWEEN
BOMBARDIER INC., a Canadian corporation represented by its BOMBARDIER
REGIONAL AIRCRAFT DIVISION with offices located at 123 Garratt Boulevard,
Downsview, Ontario, Canada, M3K 1Y5.
("BRAD")
AND
COMAIR, INC., an Ohio corporation with offices located at the
Cincinnati/Northern Kentucky International Airport, Cincinnati, Ohio,
U.S.A., 45275
("Buyer")
WHEREAS Buyer and BRAD have negotiated the terms of Sales Letter 0401F
dated May 28, 1997 which forms the subject matter of this Agreement; and
WHEREAS Buyer desires to purchase from BRAD thirty (30) Aircraft (as later
defined) and to obtain the relevant data, documents and support services
according to this Agreement (as later defined), and BRAD desires to
manufacture and sell such Aircraft and to provide the data and documents
and support services to Buyer.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
Buyer and BRAD agree as follows:
-1-
<PAGE> 5
1.0 DEFINITIONS AND INTERPRETATIONS
1.1 Unless otherwise expressly provided herein, the following
words and expressions shall mean:
"Acceptance Period" shall have the meaning given to it
at Article 11.1.
"Acceptance Date" shall have the meaning given to it
at Article 11.7.
"Agreement" this Purchase Agreement No. 0392 together
with its Exhibits, Annexes and Letters of
Agreement 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.
"Aircraft" the BRAD Regional Jet Aircraft Model
CL-600-2B19 purchased by Buyer hereunder
as described in the Specification.
"Base Price" shall have the meaning given to it
at Article 1.1 of Exhibit C.
"BFE" Buyer Furnished Equipment, being equipment
to be purchased and furnished by Buyer
pursuant to Article 8.
"Delivery Date" the date on which Buyer takes
delivery of the Aircraft pursuant to
Article 11.9.
-2-
<PAGE> 6
"DOT" means Transport Canada, the Canadian
Department of Transport or any succeeding
department or agency then responsible for
the duties of Transport Canada.
"Excusable Delay" any delay due directly to or
indirectly to any cause whatsoever, beyond
BRAD's reasonable control or without
negligence of BRAD, such as, but not
limited to:
1) force majeure or act of God;
2) act of the enemy, war, civil
commotion, insurrection, riot or
embargo;
3) fire, explosion, earthquake,
lightning, flood, drought, windstorm
or other action of the elements, or
other catastrophe or accident;
4) epidemic or quarantine restrictions;
5) any legislation, act, order,
directive or regulation of any
governmental or other duly
constituted authority;
6) strike, lockout, walkout, slowdown,
or other labour trouble;
7) lack or shortage or delay in delivery
of supplies, materials, accessories,
equipment, tools or parts;
-3-
<PAGE> 7
8) delay or failure of carriers,
subcontractors or suppliers for any
reasons whatsoever; and
9) delay in obtaining any type approval
or any airworthiness 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, requiring any
modification in the Aircraft in order
to obtain the type approval,
airworthiness certificate or
equivalent, or by reason of any
change or addition requested by a
governmental agency to the compliance
program of BRAD for the certification
of the Aircraft or any part thereof
as same shall have been approved by
DOT or change to the interpretation
thereof.
"FAA" the United States Federal Aviation
Administration or any succeeding
department or agency then responsible for
the duties of FAA.
-4-
<PAGE> 8
<TABLE>
<S> <C> <C>
"FAR" the United States Federal Aviation
Regulations.
"FTP's" shall have the meaning given to it at
Article 11.2.
"Notice" shall have the meaning given to it at
Article 20.1.
"Permitted Change" a change to the Specification made
pursuant to Article 7.2.
"Purchase Price" shall have the meaning given to it
at Article 1.3. of Exhibit C.
"Readiness Date" shall have the meaning given to it
at Article 11.1.
"Regulatory Change" shall have the meaning given to it
at Article 7.3.
"Scheduled Delivery" shall have the meaning given
Date" to it at Article 9.1.
"Specification" The BRAD Specification No. RAD-601R-103
Issue C dated June 12, 1997 as described
in Exhibit A attached hereto and as may be
further amended pursuant to the provisions
of this Agreement.
"Total Loss Aircraft" shall have the meaning
given to it at Article 15.
</TABLE>
-5-
<PAGE> 9
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.
-6-
<PAGE> 10
2.0 SUBJECT MATTER OF SALE
BRAD shall manufacture, sell and deliver to Buyer, and Buyer shall
purchase from BRAD, pay for and take delivery of thirty (30) Aircraft
and related services subject to the terms and conditions of this
Agreement.
-7-
<PAGE> 11
3.0 CERTIFICATION
3.1 Prior to the Acceptance Date, BRAD shall obtain a DOT Type
Approval (Transport Category), validated by a U.S. Type
Certificate issued in accordance with Part 21 of the FAR for
the BRAD Regional Jet CL-600-2B19 type aircraft.
3.2 On or before the Delivery Date, BRAD shall provide to Buyer a
DOT Certificate of Airworthiness (Transport Category) for
export, bearing a statement of compliance with the Type
Certificate which will enable Buyer, with the assistance of
BRAD, to obtain an F.A.A. Certificate of Airworthiness. BRAD
shall not be obligated to obtain any other certificates or
approvals as part of this Agreement.
-8-
<PAGE> 12
4.0 PRICE
The unit base price for each of the Aircraft purchased pursuant to
Article 2 hereof shall be as per Article 1.1 of Exhibit C attached
hereto.
-9-
<PAGE> 13
5.0 PAYMENT
Payment shall be as per Article 2 of Exhibit C attached hereto.
-10-
<PAGE> 14
6.0 BUYER'S REPRESENTATIVES AT PLACE OF MANUFACTURE
6.1 From time to time, commencing with the date of this Agreement
and ending [ * ] months after 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 visit
thereafter.
6.2 BRAD's 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 such BRAD facilities where the work is being
carried out provided there shall be no disruption in BRAD's
performance.
6.3 BRAD shall advise Buyer's representative of BRAD's rules and
regulations applicable at BRAD's facilities and Buyer's
representative shall conform to such rules and regulations
6.4 Communication between Buyer's representative and BRAD shall be
solely through BRAD's Contract Department or its designate.
*Material designated by an asterisk has been omitted pursuant
to a request for confidential treatment. Such material has
been filed separately with the Commission.
-11-
<PAGE> 15
6.5 EACH PARTY HERETO HEREBY RELEASES AND AGREES TO DEFEND,
INDEMNIFY AND HOLD HARMLESS THE OTHER PARTY, ITS ASSIGNEES,
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES AND CONTRACTORS FROM
AND AGAINST ALL LIABILITIES, DAMAGES, LOSSES, COSTS AND
EXPENSES RESULTING FROM INJURIES TO OR DEATH OF OR LOSS OF OR
DAMAGE TO PROPERTY OF ANY PARTY WHILE AT BRAD OR BRAD'S MAIN
SUBCONTRACTOR'S FACILITIES AND/OR DURING TRAINING, INSPECTION,
FLIGHT TEST OR ACCEPTANCE OF THE AIRCRAFT, WHETHER OR NOT
CAUSED BY THE NEGLIGENCE OF THE INDEMNIFYING PARTY, ITS
ASSIGNEES, OFFICERS, DIRECTORS, AGENTS, EMPLOYEES AND
CONTRACTORS.
-12-
<PAGE> 16
7.0 CHANGES
7.1 Other than a Permitted Change as detailed in Article 7.2, or a
Regulatory Change as detailed in Article 7.3, any change to
this Agreement as may be mutually agreed upon by the parties
hereto, shall be made using a change order ("Change Order").
Each Change Order shall be prepared substantially in the
format attached as Exhibit G hereto. Such Change Order shall
identify, to the extent reasonably practical:
a. the effect of the proposed change on the Scheduled
Delivery Date;
b. the price and payment terms applicable to the Change
Order; and
c. details of 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.
7.2 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 by 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
-13-
<PAGE> 17
2) to prevent delays in manufacture or delivery; or
3) to meet the requirements of Article 3, other than
for a Regulatory Change to which the provisions
of Article 7.3 shall apply,
provided that such substitution, change or modification as
detailed at a. or b. above shall not affect the Base Price or
materially affect the Scheduled Delivery Date or performance
characteristics of the Aircraft. Any change made in accordance
with the provisions of this Article 7.2 shall be deemed to be
a "Permitted Change" and the cost thereof shall be borne by
BRAD. The changes in this Article 7.2 will not adversely
affect interchangeability and replaceability. Any envisaged
change to be made under Article 7.2 b. above which involves a
line replacement unit ("LRU") and/or a rotable component will
require Buyer's consent. BRAD shall provide Buyer with written
notification of such changes as soon as reasonably practical
and Buyer shall respond within thirty (30) days thereof. Lack
of response by Buyer within this period shall be considered as
an approval to the notified change.
7.3 If any change, addition or modification to the Aircraft is
required because of any law or governmental regulation or
interpretation thereof by any governmental agency which is
effective after the date of this Agreement, but before the
Delivery Date, which is applicable to all aircraft in general
or to all aircraft of the same category as the Aircraft (a
"Regulatory Change"), such Regulatory Change shall be
incorporated in the Aircraft before the Delivery Date of such
Aircraft or at such other time after the Delivery Date as the
parties may agree upon. BRAD shall advise Buyer of such
Regulatory Change and Buyer shall pay BRAD a reasonable price
for such Regulatory Change.
-14-
<PAGE> 18
7.4 If the Scheduled Delivery Date of the Aircraft is delayed as a
result of any cause to which reference is made in this
Article, such delay shall be an Excusable Delay.
-15-
<PAGE> 19
8.0 BUYER FURNISHED EQUIPMENT ("BFE") AND INFORMATION
8.1 During the manufacture of the Aircraft, Buyer shall provide to
BRAD on or before the date required by BRAD, all information
needed to manufacture Buyer's Aircraft as BRAD may reasonably
request including, without limitation, the selection of
furnishings, internal and external colour schemes. BRAD shall
advise Buyer of the date when such information is required and
Buyer shall comply with the date so specified.
8.2 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 sixty (60) 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 7.1 to cover those BFE items accepted
by BRAD pursuant to Article 8.2.
8.3 The BFE accepted by BRAD pursuant to Article 8.2 shall be
incorporated in the manufacturing process of the Aircraft
subject to the following conditions:
a. 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;
-16-
<PAGE> 20
b. The BFE shall meet:
1) the standards of quality of BRAD, and
2) the requirements of the applicable airworthiness
certification agency;
c. 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 any required corrective actions
to be taken;
d. BRAD shall only be responsible for the fitment and
testing of the BFE in the Aircraft (with the exception
of any BFE that may be installed by Buyer on the
Aircraft after delivery of same to Buyer which shall
remain the responsibility of Buyer) using reasonable
care and good manufacturing practices, in accordance
with Buyer's written detailed description of the
dimensions and weight of such BFE. Buyer shall also
furnish information necessary for its proper storage,
fitment, servicing, maintenance, operation and
availability of test equipment or special tools;
e. BRAD SHALL HAVE NO LIABILITY OR OTHER OBLIGATIONS AND
IS HEREBY RELIEVED OF ANY LIABILITY, WARRANTY OR OTHER
OBLIGATION WITH RESPECT TO THE BFE AND BUYER HEREBY
WAIVES ALL EXPRESS OR IMPLIED WARRANTIES INCLUDING
THOSE OF MERCHANTABILITY AND FITNESS OR OTHERWISE AND
ALL OTHER LIABILITY (STRICT OR OTHERWISE) ON THE PART
OF BRAD, BE IT IN FACT, LAW OR IN CONTRACT, OR
OTHERWISE INCLUDING WITHOUT LIMITATION PRODUCT
LIABILITY, TORT OR NEGLIGENCE, IN CONNECTION WITH THE
BFE OR ITS DESIGN SUITABILITY FOR USE OR OPERATION.
-17-
<PAGE> 21
8.4 If at any time between receipt of the BFE by BRAD and the
Delivery Date, it is mutually agreed that an item of BFE
supplied does not meet the standards and requirements of
Article 8.3 or its fitment, integration and testing in the
Aircraft or Aircraft systems create unreasonable delays in the
manufacturing or certification process, then such BFE may be
removed and replaced by other BFE or by BRAD's equipment. Any
costs associated with the removal, refitment, replacement,
testing and/or certification shall be borne by Buyer.
8.5 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 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 Article 8.1 and/or 8.3;
BRAD agrees to discuss with Buyer and, where appropriate,
agree with Buyer on the steps to be taken to minimize, cure,
eliminate or work around the delay, but any delay incurred
shall be the responsibility of Buyer and Buyer shall pay to
BRAD any costs and expenses reasonably incurred by BRAD due to
such delay.
-18-
<PAGE> 22
8.6 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 or misconduct.
8.7 If this Agreement is terminated in whole or in part in
accordance with the provisions thereof BRAD may elect to, by
written notice to Buyer, either:
a. purchase the BFE ordered by Buyer and/or received by
BRAD at the invoice price paid by Buyer; or
b. return the BFE to Buyer FOB BRAD's plant, or such other
place that BRAD may designate.
-19-
<PAGE> 23
9.0 DELIVERY PROGRAM
9.1
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
9.2 Intentionally deleted.
9.3
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION
9.4
9.5 Intentionally deleted.
-20-
<PAGE> 24
10.0 EXCUSABLE DELAY
10.1 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 delay which is an Excusable Delay, BRAD
shall not be responsible for any such delay 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 effects thereof persist.
10.2 In the event that the delivery of one or more of the
Aircraft is delayed or is reasonably anticipated by BRAD
to be delayed by reason of Excusable Delay for more than
[ * ] months beyond the Scheduled Delivery Date of such
Aircraft, Buyer may terminate this Agreement in so far as
it applies to the Aircraft affected by Excusable Delay.
BRAD may terminate this Agreement in so far as it applies
to the Aircraft affected by Excusable Delay in the event
that the delivery of one or more of the Aircraft is
delayed or is reasonably anticipated by BRAD to be delayed
by reason of Excusable Delay for more than [ * ] months
beyond the Scheduled Delivery Date. Termination shall be
effected by giving notice in writing to the other party of
such termination:
a) within [ * ]calendar days immediately following
such delay period of [ * ] months in the case of
Buyer and [ * ] months in the case of BRAD; or
b) within [ * ] calendar days following the date of
notification by BRAD of the anticipated delay of
more than [ * ] months in the case of Buyer and
[ * ] months in the case of BRAD.
*Material has been omitted pursuant to a request for
confidential treatment. Such material has been filed
separately with the Commission.
-21-
<PAGE> 25
In the event of such termination by Buyer, BRAD's sole
liability and responsibility shall be limited to the
obligation to return to Buyer all amounts paid by Buyer to
BRAD with respect to the Aircraft affected less any other
amount overdue by Buyer to BRAD.
*CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION*
10.3 Intentionally deleted.
10.4 Economic adjustment shall not apply to delays not covered
under Excusable Delay.
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<PAGE> 26
11.0 ACCEPTANCE PROCEDURE
11.1 BRAD shall give Buyer not less than fifteen (15) working
days prior notice of the date on which an Aircraft will be
ready for Buyer's inspection and/or flight test and
acceptance (the "Readiness Date"). Buyer shall then have
up to five (5) consecutive working days commencing on the
Readiness Date in which to complete said inspection and
flight test (such five (5) working day period being the
"Acceptance Period").
11.2 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 flight
test. During the flight test BRAD shall retain control
over the Aircraft, but will execute such demonstration
manoeuvres reasonably requested by Buyer and which are
within the flight envelope of the Aircraft and covered by
BRAD's ground functional and flight test procedures (the
"FTP's"). Such flight test shall be carried out for up to
two (2) hours or for such additional duration as both
parties may reasonably require. Buyer has the right to
perform system checks in accordance with the operating
limitations contained in the approved manuals of the
aircraft.
11.3 Buyer shall identify to BRAD prior to their arrival the
names of Buyer's representatives who will participate in
the foregoing inspection and/or flight test and
acceptance.
11.4 Intentionally deleted.
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<PAGE> 27
11.5 If no Aircraft defect or discrepancy is revealed during
the inspection and/or the flight test referred to in
Article 11.1 and 11.2 above, Buyer shall accept the
Aircraft, on or before the last day of the Acceptance
Period in accordance with the provisions of Article 11.7.
11.6 If any material defect or discrepancy in the Aircraft is
revealed by Buyer's inspection and/or the flight test, the
defect or discrepancy shall be corrected by BRAD, at no
cost to Buyer, before the acceptance of the Aircraft by
Buyer which acceptance may occur during or after the
Acceptance Period depending on the nature of the defect or
discrepancy and of the time required for correction. If
such correction reasonably requires an additional flight
test, such flight test shall be carried out for up to two
(2) hours or for such duration as both parties may
reasonably require to demonstrate that the defect or
discrepancy is cured. Immediately thereafter Buyer shall
accept the Aircraft in accordance with the provisions of
Article 11.7.
11.7 Acceptance of the Aircraft shall be evidenced by Buyer's
designated representative signing a Certificate of
Acceptance for the Aircraft in the form of Exhibit E
attached hereto. The date of signature of the Certificate
of Acceptance shall be the "Acceptance Date".
11.8 Buyer shall provide BRAD, prior to the Delivery Date of
each Aircraft, suitable evidence of the authority of
designated persons to sign, on behalf of Buyer, the
Certificate of Acceptance in respect of the Aircraft
together with specimen signatures of the persons so
authorized.
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<PAGE> 28
11.9 On or before the Acceptance Date, Buyer or its designee
shall pay the balance of the Purchase Price in accordance
with Article 2 of Exhibit C and, concurrently with receipt
thereof, BRAD shall deliver the Aircraft to Buyer and
Buyer shall take delivery thereof at BRAD's plant in the
Province of Quebec. The date on which BRAD delivers and
Buyer takes delivery of the Aircraft shall be the
"Delivery Date" as evidenced by the execution of a BRAD
Bill of Sale and an FAA Bill of Sale as referred to in
Article 12.2 hereof.
11.10 Execution of the Certificate of Acceptance by or on behalf
of Buyer shall be evidence that Buyer is deemed to have
examined the Aircraft and found it to be in accordance
with the provisions of this Agreement.
11.11 Provided that BRAD has met all of its obligations under
Article 11.6, should Buyer not accept, pay for and/or take
delivery of any one of the Aircraft within ten (10)
calendar days after the Acceptance Period of such
Aircraft, Buyer shall be deemed to be in default of the
terms of this Agreement and without prejudice to any other
rights or recourse BRAD may have, including termination as
specified in Article 18.2, the unpaid balance of the
Purchase Price and any overdue amount shall immediately
become due and payable; and Buyer shall promptly, upon
demand, reimburse BRAD for all costs and expenses
reasonably incurred by BRAD as a result of Buyer's failure
to accept, and/or pay for and/or take delivery of the
Aircraft, including but not limited to reasonable amounts
for storage, insurance, taxes, preservation or protection
of the Aircraft.
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12.0 TITLE AND RISK
12.1 The risk of loss of or damage to each Aircraft shall pass
to Buyer, together with title to such Aircraft, at the
Delivery Date of such Aircraft.
12.2 Upon transfer of title of the Aircraft to Buyer pursuant
to the provisions of Article 12.1, BRAD shall execute and
give to Buyer a FAA Bill of Sale and a warranty Bill of
Sale in the form of Exhibit F attached hereto.
12.3 At the time title to the Aircraft transfers to Buyer on
the Delivery Date pursuant to the provision of Article
12.1 the Aircraft shall be free and clear of the liens,
claims, charges and encumbrances of every kind whatsoever
except for those liens, charges or encumbrances created by
or claimed through Buyer.
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<PAGE> 30
13.0 CUSTOMER SUPPORT SERVICES AND WARRANTY
13.1 BRAD shall provide to Buyer the Customer Support Services
pursuant to the provisions of Exhibit H attached hereto.
13.2 BRAD shall provide to Buyer the Warranty and the Service
Life Policy described in Exhibit J attached hereto which
shall be the exclusive warranty applicable to the
Aircraft.
13.3 Unless expressly stated otherwise, the services referred
to in Articles 13.1 and 13.2 above, are incidental to the
sale of the Aircraft and are included in the Purchase
Price.
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<PAGE> 31
14.0 TAXES, DUTIES AND LICENSES
14.1 The Purchase Price does not include any taxes, fees or
duties including, but not limited to, sales, use, value
added (including the Goods and Services Tax), personal
property, gross receipts, franchise, excise taxes,
assessments or duties, which are or may be imposed by law
upon BRAD, any affiliate of BRAD, or 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 for under or in connection with this Agreement.
Providing that Buyer is purchasing the Aircraft for direct
export from Canada upon delivery and does not divert the
Aircraft for use in Canada, BRAD represents that according
to the law in force at the time of execution of this
Agreement, there are no Canadian taxes payable with
respect to the Aircraft which Buyer would become obligated
to pay pursuant to this Article 14.
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<PAGE> 32
14.2 Any tax, fee, duty, or assessment referred to in Article
14.1 above shall be paid by Buyer. BRAD shall notify Buyer
of any tax, fee, duty or assessment referred to in Article
14.1 above including interest and penalties, that any
taxing authority or jurisdiction is seeking to collect
from BRAD, and Buyer agrees to promptly, but in any event
no later than ten (10) working days after receiving such
notice, pay same directly to the taxing authority or
jurisdiction, or to reimburse BRAD for said tax, duty or
assessment, including interest and penalties, or to
contest same and assume the defense against imposition
thereof at its sole cost and expense (which may require
the payment of such tax or duty during the contestation
process) and to hold BRAD harmless from any such
imposition. If Buyer does not make timely payment directly
to the taxing authority or jurisdiction, or proceed with
contestation and timely defense, BRAD may pay the asserted
tax, duty or assessment, including interest and penalties,
and Buyer shall, within thirty (30) calendar days
thereafter, reimburse BRAD for any such payment and all
reasonable costs and expenses of BRAD (including
reasonable attorney's fees).
14.3 Upon request, either party shall execute and deliver any
documents that either party 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, duties or assessments referred to in Article
14.1 above.
14.4 The obtaining of any import licenses or authorities
required to import the Aircraft into any country outside
Canada shall be the responsibility of Buyer. BRAD shall,
to the extent permitted by law, obtain a Canadian export
license, if required to enable Buyer to export the
Aircraft from Canada subject to the prevailing export
control regulations pertaining at the Delivery Date.
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<PAGE> 33
15.0 LOSS OF OR DAMAGE TO AIRCRAFT
If prior to the Delivery Date an Aircraft is lost, destroyed or in
BRAD's judgment damaged beyond repair (the "Total Loss Aircraft"),
BRAD shall promptly, but not later than sixty (60) days thereafter,
notify Buyer of the earliest date that a replacement aircraft, which
will reflect the Specification and which will be generally the same
configuration or specification as the Total Loss Aircraft can
reasonably be delivered, consistent with BRAD's other contractual
commitments and production capabilities. Unless Buyer notifies BRAD
within thirty (30) calendar days after notice of the replacement
aircraft's scheduled delivery that Buyer desires such replacement
aircraft, this Agreement may be terminated as to the Total Loss
Aircraft. In the event of such termination, BRAD's sole liability and
responsibility shall be limited to the obligation to return to Buyer
the amounts paid by Buyer to BRAD with respect to the Total Loss
Aircraft less any amount overdue by Buyer to BRAD under this
Agreement. If Buyer timely notifies BRAD that it wants such
replacement aircraft, the parties shall amend this Agreement
accordingly. Notwithstanding the foregoing, nothing herein shall
obligate BRAD to offer to deliver a replacement aircraft to Buyer if
no aircraft are available or the production line is terminated.
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<PAGE> 34
16.0 INDEMNITY AGAINST PATENT INFRINGEMENT
16.1 Subject to the provisions hereinafter set out in this
Article 16, BRAD agrees to indemnify, protect, and save
harmless Buyer against any liability, losses, damages or
expenses excluding any incidental or consequential damages
and excluding any liability, losses, damages and expenses
or loss of profits in respect of or resulting from any
loss of use of the Aircraft (but including cost of
replacing the infringement on account of which use of the
Aircraft by Buyer is prevented as more fully provided for
in Article 16.2 below) resulting from any infringement or
alleged infringement of:
a. any Canadian or United States patent; and
b. any patent issued under the laws of any country
other than Canada or the United States in which
Buyer from time to time may lawfully operate the
Aircraft, provided that from time of design of the
Aircraft, accessory, equipment or part and until
infringement claims are resolved, such country and
the country in which the Aircraft is or are
permanently registered by Buyer have ratified and
adhered to and are at the time of any such actual
or alleged infringement contracting parties to the
Chicago Convention on International Civil Aviation
of December 7, 1944 including, without limitation,
Article 27 thereof and the International Convention
for the Protection of Industrial Property or have
enacted patent laws which recognize and give
adequate protection to inventions made by the
nationals of other countries which have ratified,
adhered to and are contracting parties to either of
the foregoing conventions.
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<PAGE> 35
The foregoing undertaking by BRAD to indemnify, protect
and save harmless Buyer shall not apply in respect of BFE.
16.2 Subject to the provisions set out in this Article 16, if
any feature, part, accessory or equipment of the Aircraft
becomes the subject of any claim, suit of proceeding for
infringement of a patent as provided for in Article 16.1
above, or in the event of an adjudication that such
feature, part, accessory or equipment of the Aircraft
infringes patent as provided for in Article 16.1 above, or
if the use, lease or sale of such feature, part, accessory
or equipment of the Aircraft is enjoined, BRAD may, within
a reasonable period of time, at its option and expense:
a. procure for Buyer the right under such patent to
use such feature, part, accessory or equipment of
the Aircraft; or
b. obtain for Buyer permission from the appropriate
court or tribunal to use the Aircraft; or
c. replace, with Buyer's consent, such feature, part,
accessory or equipment of the Aircraft with one of
a similar nature and quality that is
non-infringing; or
d. modify such feature, part, accessory or equipment
of the Aircraft to make same non-infringing in a
manner such as to keep it otherwise in compliance
with the requirements of this Agreement.
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<PAGE> 36
16.3 BRAD shall not be liable with respect to any actual or
alleged patent infringement to which this Article would
apply unless:
a. in the event of a suit alleging infringement where
legal delay to reply is obligatory, Buyer gives
BRAD written notice of such suit within twenty (20)
calendar days after Buyer receives notice of such
suit, or in the event of a written claim alleging
infringement where no legal delay to reply is
obligatory, Buyer gives BRAD written notice of such
claim within reasonable period of time after Buyer
receives such written claim;
b. Buyer uses reasonable efforts, in full cooperation
with BRAD, to reduce or mitigate any such expenses,
damages costs and royalties involved;
c. Buyer furnishes promptly to BRAD all data, papers
and records within its possession and any other
information or material within Buyer's knowledge or
control, necessary or useful to resist and defend
against such claim or suit; and
d. Buyer refrains from making any payment and from
assuming any obligations, liabilities, expenses,
damages, costs and royalties for which BRAD may be
held liable, without prior written approval of BRAD
(which shall not be unreasonably withheld) or
otherwise acting in a manner prejudicial to such
suit or claim.
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<PAGE> 37
16.4 BRAD shall have the option at any time and or from time to
time to conduct negotiations in its own name, or in the
name of Buyer, and to enter into a settlement or
settlements with the party or parties involved in the
infringement or alleged infringement and to intervene in
any suit or claim. Should BRAD intervene in any such suit
or claim, it shall be entitled at any stage of
negotiations or proceedings to assume, conduct or control
the defence thereof. If BRAD assumes such defence and
Buyer, in its interest, elects to participate therein, it
shall do so at its sole cost and expense.
16.5 THE INDEMNITIES, OBLIGATIONS AND LIABILITIES ON THE PART
OF BRAD IN THIS ARTICLE ARE UNDERTAKEN BY BRAD AND
ACCEPTED BY BUYER IN LIEU OF ANY AND ALL OTHER
INDEMNITIES, OBLIGATIONS AND LIABILITIES EXPRESS OR
IMPLIED, ARISING IN FACT, CONTRACT, LAW OR OTHERWISE, TO
WHICH BRAD MIGHT OTHERWISE BE LIABLE IN RESPECT OF ANY
PATENT INFRINGEMENT OR ALLEGED PATENT INFRINGEMENT BY THE
AIRCRAFT OR PART THEREOF, OR UNDER ANY PATENT RIGHT OR
RIGHT TO PATENT, AND SUCH INDEMNITIES, OBLIGATIONS AND
LIABILITIES SHALL NOT BE EXTENDED, ALTERED OR VARIED
EXCEPT IN WRITING SIGNED BY BRAD AND BUYER UNDER THE HAND
OF THEIR RESPECTIVE DULY AUTHORIZED REPRESENTATIVE.
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<PAGE> 38
17.0 LIMITATION OF LIABILITY
BRAD SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL
AND/OR PUNITIVE DAMAGES OF ANY KIND OR NATURE UNDER ANY
CIRCUMSTANCES, NOR FOR ANY LOSSES OR DAMAGES FOR OR ARISING OUT OF
ANY LACK OR LOSS OF USE OF ANY AIRCRAFT, ANY EQUIPMENT, ANY SPARE
PARTS, GROUND SUPPORT EQUIPMENT OR TECHNICAL PUBLICATIONS PROVIDED
HEREUNDER.
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<PAGE> 39
18.0 TERMINATION
18.1 This Agreement may be terminated in whole or in part
before the Delivery Date by either party 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
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
sixty (60) 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 sixty (60) calendar days
thereafter; or
d. any writ of attachment or execution or any similar
process is issued or levied against a party or any
significant part of its property and is not
released, stayed, bonded or vacated within sixty
(60) calendar days after its issue or levy.
18.2 In addition, BRAD may terminate this Agreement in whole or
in part before the Delivery Date with respect to any
undelivered Aircraft by notice of termination to Buyer:
a. if Buyer is in default as provided in Article 11.11
hereof; or
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<PAGE> 40
b. if Buyer is in default or breach of any material
term or condition of this Agreement (including any
payment obligation other than that of the Purchase
Price) and Buyer does not cure such default or
breach within sixty (60) calendar days after
receipt of notice from BRAD specifying such default
or breach.
18.3 In addition, 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 sixty (60) calendar
days following receipt of a notice from Buyer specifying
the nature of default or breach.
18.4 In case of termination of this Agreement by BRAD pursuant
to Articles 18.1 and 18.2:
a.
*CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION*
b.
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<PAGE> 41
c.
*CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION*
18.5 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, and
only to, the return by BRAD of those amounts paid by Buyer
to BRAD hereunder on account of the undelivered Aircraft
plus interest at an annual rate equal to { * }
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<PAGE> 42
19.0 ASSIGNMENT
19.1 Either party may assign, sell, transfer or dispose of (in
whole or in part) any of its rights and obligations
hereunder as follows:
i) In the case of Buyer only to a corporation which is
affiliated to Buyer and directly or indirectly
wholly-owned by Comair Holdings, Inc.;
ii) In the case of BRAD to a wholly-owned subsidiary;
provided that in either case 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 this Agreement.
19.2 Except as provided in Article 19.1 above, 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.
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<PAGE> 43
19.3 Notwithstanding Article 19.2 above, and other than for the
purposes of Article 19.5 below, after transfer of title of
an Aircraft Buyer may, with BRAD's prior written consent
and subject to BRAD's right to amend one or more of the
terms and conditions of this Agreement, resell such
Aircraft to a third party purchaser, provided said third
party agrees in writing with BRAD that BRAD's sole and
exclusive obligations and liabilities to said third party
shall be those set forth in the basic Airframe warranties
and Service Life Policy warranties, as applicable, that
BRAD may provide from time to time to other customers and
also provided that there is no increase to the liability
and/or responsibility of BRAD.
19.4 BRAD may assign any of its rights to receive money
hereunder without the prior consent of Buyer.
19.5 Notwithstanding the other provisions of this Article 19,
either party shall, at the other parties cost and expense,
if requested in writing by the other party, take any
action reasonably required, including without limitation
giving prior written consent to an assignment, for the
purpose of causing any of the Aircraft to be subjected, on
or after the Delivery Date, to a trust, lease, conditional
sale, lien or other arrangement for the financing of the
Aircraft, providing, however, there shall be no increase
to the liability and/or responsibility of the other party
arising through such financing.
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<PAGE> 44
20.0 NOTICES
20.1 Any notice, request, approval, permission, consent or
other communication ("Notice"), to be given or required
under this Agreement shall be provided in writing by 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
123 Garratt Boulevard
Downsview, Ontario
Canada M3K 1Y5
Attention: Director of Contracts, The America's
Facsimile: (416) 375-4533
b. Notice to Buyer shall be addressed to:
Notice by mail:
Comair, Inc.
P.O. Box 75021
Cincinnati, Ohio
U.S.A., 45275
Attention: Chief Financial Officer
Facsimile: (606) 767-2278
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<PAGE> 45
Notice by courier:
Comair, Inc.
2258 Tower Drive
Erlanger, Kentucky
U.S.A., 41018
Attention: Chief Financial Officer
Facsimile: (606) 767-2278
20.2 Notice given in accordance with Article 20.1 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 couriered, 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.
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<PAGE> 46
21.0 CONFIDENTIAL NATURE OF AGREEMENT
21.1 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 insofar as may be
necessary for either party to carry out its obligations
under this Agreement or by law or as required by financial
institutions involved with financing of the Aircraft. If
one party is required by legal proceedings or a court
order to disclose this Agreement in whole or in part, such
party shall promptly notify the other party in order to
allow it, if it deems it necessary, to intervene in or
contest such legal proceedings or make representations to
the court. Without limiting the foregoing, Buyer agrees to
request confidential treatment to the maximum extent
possible for any material that must be filed with the
Securities and Exchange Commission with respect to any
contractual clauses and conditions relating to price,
delivery positions, price escalation and financing. Buyer
agrees to discuss and review with BRAD such material
before release to any third party.
21.2 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.
21.3 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.
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<PAGE> 47
22.0 SUCCESSORS
This Agreement shall inure to the benefit of and be binding upon each
of BRAD and Buyer and their respective successors.
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<PAGE> 48
23.0 APPLICABLE LAWS
THIS AGREEMENT SHALL BE SUBJECT TO, CONSTRUED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY THE LAWS OF THE STATE
OF NEW YORK.
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<PAGE> 49
24.0 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, memorandums 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 Article 7 hereof. In the
event of any inconsistencies within the Agreement between
this Purchase Agreement and any of the Exhibits, Annexes
or Letters of Agreement referred to herein, the provisions
of this Purchase Agreement shall prevail except that when
there is any inconsistency between this Agreement and any
Letter of Agreement with respect to the subject matter
covered by the terms contained therein, then such Letter
Agreement shall prevail.
24.2 If any of the provisions of this Agreement are for any
reason declared by judgment of a court of competent
jurisdiction to be unenforceable or ineffective, those
provisions shall be deemed severable from the other
provisions of this Agreement and the remainder of this
Agreement shall remain in full force and effect.
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<PAGE> 50
24.3 THE OBLIGATIONS AND LIABILITIES OF BRAD, INCLUDING THE
WARRANTY AND SERVICE LIFE POLICY CONTAINED IN EXHIBIT J
ATTACHED AND THE LIMITATION OF LIABILITY CONTAINED IN
ARTICLE 17 OF THIS AGREEMENT, 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 Each party on a reasonable effort basis agrees, if asked
by the other party, to review and discuss the terms and
conditions of this Agreement to determine if modification
is required as contemplated under Article 7.1 herein.
24.5 BRAD and Buyer confirm to each other that they have each
obtained the required authorizations and fulfilled any
conditions applicable to enable each of them to enter
into this Agreement.
In witness thereof this Agreement was signed on the date written on
page 4:
For and on behalf of For an on behalf of
BUYER: BOMBARDIER INC.:
Per: /s/ Randy D. Rademacher Per: /s/ John W. Murphy
Title: SVP Finance Title: Director of Contracts
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<PAGE> 51
EXHIBIT A
SPECIFICATION
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION
-A1-
<PAGE> 52
EXHIBIT B
INTENTIONALLY DELETED
-B1-
<PAGE> 53
EXHIBIT C
PRICE AND PAYMENT SCHEDULE
1.0 PRICE
1.1
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION
1.2
1.3
1.4 Intentionally deleted.
-C1-
<PAGE> 54
2.0 PAYMENT
2.1
2.2
2.3
2.4
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION
2.5
-C2-
<PAGE> 55
2.6
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION
-C3-
<PAGE> 56
ANNEX TO EXHIBIT C-1
BUYER SELECTED OPTIONAL FEATURES
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION
-C4-
<PAGE> 57
EXHIBIT D
DELIVERY SCHEDULE
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION
-D1-
<PAGE> 58
EXHIBIT E
CERTIFICATE OF ACCEPTANCE
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION
-E1-
<PAGE> 59
EXHIBIT F
WARRANTY BILL OF SALE
1. FOR VALUABLE CONSIDERATIONS, BOMBARDIER INC., BOMBARDIER REGIONAL AIRCRAFT
DIVISION, OWNER OF THE FULL LEGAL AND BENEFICIAL TITLE OF THE AIRCRAFT
DESCRIBED AS FOLLOWS:
ONE CANADAIR REGIONAL JET MODEL CL-600-2B19 AIRCRAFT BEARING:
MANUFACTURER's SERIAL NO.: ,
WITH: -----------------
TWO CF34-3A1 ENGINES SERIAL NOS.: AND
-----------------
.
-----------------
TOGETHER WITH ALL AVIONICS, APPLIANCES, INSTRUMENTS,
APPURTENANCES, ACCESSORIES, FURNISHINGS AND/OR OTHER EQUIPMENT OR
PROPERTY INCORPORATED IN OR INSTALLED ON OR ATTACHED TO SAID
AIRCRAFT AND ENGINES (HEREINAFTER COLLECTIVELY REFERRED TO AS THE
"AIRCRAFT").
DOES THIS DAY OF 19___, HEREBY CONVEY, SELL, GRANT, TRANSFER,
BARGAIN AND DELIVER AND SENT OVER TO BUYER AND UNTO ITS SUCCESSORS AND
ASSIGNS FOREVER ALL OF CANADAIR'S RIGHTS, TITLE AND INTEREST IN AND TO
THE AIRCRAFT.
2. BRAD REPRESENTS AND WARRANTS TO BUYER:
(i) THAT BRAD HAS GOOD AND MARKETABLE TITLE TO THE AIRCRAFT AND THE
GOOD AND LAWFUL RIGHT TO THE AIRCRAFT AND THE GOOD AND LAWFUL
RIGHT TO SELL THE SAME; AND
(ii) THAT GOOD AND MARKETABLE TITLE TO THE AIRCRAFT IS HEREBY DULY
VESTED IN BUYER FREE AND CLEAR OF ALL CLAIMS, LIENS, ENCUMBRANCES
AND RIGHTS OF OTHERS OF ANY NATURE. CANADAIR HEREBY COVENANTS AND
AGREES TO DEFEND SUCH TITLE FOREVER AGAINST ALL CLAIMS AND DEMANDS
WHATSOEVER.
THIS FULL WARRANTY BILL OF SALE IS GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK, UNITED STATES OF AMERICA.
IN WITNESS WHEREOF, CANADAIR AND BUYER HAVE CAUSED THIS INSTRUMENT TO BE
EXECUTED AND DELIVERED BY ITS DULY AUTHORIZED OFFICERS.
BUYER BOMBARDIER INC.
- ----------------- -----------------
TITLE TITLE
DATE DATE
-F1-
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EXHIBIT G
CHANGE ORDER
-G1-
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- --------------------------------------------------------------------------------
CONTRACT CHANGE ORDER
- --------------------------------------------------------------------------------
PURCHASER:
- --------------------------------------------------------------------------------
PURCHASE AGREEMENT NO.: AIRCRAFT TYPE:
C.C.O. NO.: DATED:
PAGES AFFECTED:
- --------------------------------------------------------------------------------
THIS AGREED CHANGE WAS THE SUBJECT OF DISCUSSION AND WAS ACCEPTED BY BOTH
BRAD AND COMAIR, INC.
1.0 TITLE OF CHANGE
2.0 DESCRIPTION OF CHANGES
3.0 REASON FOR CHANGE
4.0 OTHER MATTERS
4.1 OTHER
4.1.1 This Contract Change Order No. ____ (the "Change
Order") and the matters referred to herein constitute
the entire agreement between BRAD and Comair and
supersede and cancel all prior representations,
brochures, alleged warranties, statements,
negotiations, undertakings, letters, memorandums of
agreement, acceptances, agreements, understandings,
contracts and communications, whether oral or
written, between BRAD and Comair or their respective
agents, with respect to or in connection with the
subject matter of this Change Order.
4.1.2 All other terms and conditions of the Agreement
remain unchanged.
- --------------------------------------------------------------------------------
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5.0 DELETE THE NON-APPLICABLE ARTICLES
5.1 DELETE THE NON-APPLICABLE ARTICLES
5.1.1 THE CHANGE DESCRIBED IN THIS CHANGE NOTICE IS
INTRODUCED UNDER THE PROVISIONS OF ARTICLE 7.1 -
AGREED CHANGE:
5.1.2 BOTH BUYER AND BRAD AGREE TO THE ABOVE CHANGE UNDER
ARTICLE 7 OF THE AGREEMENT WITH THE EFFECTS AS SHOWN.
6.0 OTHER MATTERS
ALL OTHER TERMS AND CONDITIONS OF THE AGREEMENT WILL REMAIN UNCHANGED
- --------------------------------------------------------------------------------
FOR AND ON BEHALF OF: FOR AND BEHALF OF:
BOMBARDIER INC. COMAIR, INC.
--------------------------- -------------------------
Bombardier Regional Aircraft Comair, Inc.
Division
Date: ____________________ Date: __________________
- --------------------------------------------------------------------------------
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EXHIBIT H
AIRLINE SERVICES
----------------
-H1-
<PAGE> 64
EXHIBIT H
TABLE OF CONTENTS
ARTICLE 1 - TECHNICAL SUPPORT
- -----------------------------
1.1 Factory Service
1.2 Field Service Representative
1.2.1 Period
1.2.2 Responsibility
1.2.3 Travel
1.2.4 Office Facilities
1.3 Maintenance Planning Support
1.3.1 Scheduled Maintenance Task Cards
1.3.2 In-Service Maintenance Data
1.4 Additional Services
ARTICLE 2 - SPARE PARTS, GSE, TOOLS AND TEST EQUIPMENT
- ------------------------------------------------------
2.1 Definition
2.2 Applicability
2.3 Term
2.4 Buyer's Purchase Orders
2.5 Communications
2.6 Prices and Delivery
2.7 Shipment
2.8 Packing
2.9 Documents
2.10 Payment
-H2-
<PAGE> 65
2.11 Purchase of Canadair Parts
2.11.1 Purchase of Canadair Parts from Other Sources
2.11.2 Purchase of Canadair Parts from Other Approved Sources
2.11.3 Buyer's Right to Purchase, Redesign or Manufacture Parts
2.11.4 Notice to Canadair of Redesigned Parts
2.12 Vendor Parts
2.12.1 Terms and Conditions
2.12.2 Vendor Backstop
2.13 Provisioning
2.13.1 Preprovisioning/Provisioning Conference
2.13.2 Initial Provisioning Documents
2.13.3 Repurchase of Canadair Parts and Vendor Parts
2.13.4 Initial Provisioning Orders
2.14 General
2.14.1 Quotations
2.14.2 Lease of Canadair Parts and Vendor Parts
2.14.3 Canadair Parts Data Specifications
2.14.4 Warranty
2.14.5 Additional Terms and Conditions
-H3-
<PAGE> 66
ARTICLE 3 - TECHNICAL DATA
- --------------------------
3.1 Technical Data Provided
3.2 ATA Specifications
3.3 Shipment
3.4 Revision Service
3.5 Proprietary Technical Data
3.6 Vendor Parts Service Bulletins
3.7 Drawings
3.8 Warranty
3.9 Technical Assistance
ARTICLE 4 - TRAINING
- --------------------
4.1 General Terms
4.1.1 Description
4.1.2 Location
4.1.3 Expenses
4.1.4 Course Standard and Training Manual
4.1.5 Training Conferences
4.1.6 Timing
4.2 Pilot Simulator Training
4.3 Maintenance Training
4.3.1 Requirements
4.3.2 Intentionally deleted
4.3.3 Vendor Training
4.3.4 Training Aids and Materials
4.3.5 Specialist Training
4.3.6 Recurrent Training
4.4 General Familiarization Course
-H4-
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ARTICLE 5 - HOLD HARMLESS AND INSURANCE
- ---------------------------------------
5.1 Hold Harmless
5.2 Insurance
5.3 Disclaimer
5.4 Acknowledgement
ARTICLE 6 - GENERAL CONDITIONS
- ------------------------------
6.1 Definitions
6.2 Price
6.3 Assignment
6.4 Provision of Information
6.5 Vendor Support
ANNEX A
- -------
List of Technical Data
-H5-
<PAGE> 68
EXHIBIT H
---------
AIRLINE SERVICES
----------------
The following Airline Support Services are those services to which reference is
made in Article 13 of the Agreement to which this Exhibit is attached.
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 as
{ * } of the CL-600-2B19 aircraft remain in commercial air transport
service.
1.2 Field Service Representative
----------------------------
1.2.1 Period
BRAD shall assign { * }field service representatives
("FSR") to Buyer's main base of operation in Cincinnati
and Florida or other location as may be mutually agreed.
Such assignment shall be until delivery of the last
Aircraft. The FSR assignment may be extended on terms and
conditions to be mutually agreed upon.
*Material designated by an asterisk on pages H6, H8-10,
H12-21, H23-27, H29 and HA1-HA4 has been omitted
pursuant to a request for confidential treatment.
Such material has been filed separately with the
Commission.
-H6-
<PAGE> 69
1.2.2 Responsibility
--------------
The FSRs shall be licensed mechanics by the FAA or
equivalent. The FSR's responsibility shall be to provide
technical advice to Buyer for the line maintenance and
operation of the Aircraft systems and troubleshooting
during scheduled and unscheduled maintenance through
Buyer's designated personnel. The FSRs shall provide on
the job training to Buyer's personnel as requested at the
line maintenance level.
1.2.3 Travel
------
If requested by Buyer the FSR may, at Buyer's expense,
travel to another location to provide technical advice to
Buyer. Buyer's expenses will include travel, lodging and
incidental expenses incurred by the FSR.
1.2.4 Office Facilities
-----------------
Buyer shall furnish the FSR, for business purposes only,
at no charge to BRAD, suitable and exclusive office
facilities and related equipment including desk, file
cabinet and access to telephone conveniently located at
Buyer's main base of operation or other location as may be
mutually agreed.
1.3 Maintenance Planning Support
----------------------------
1.3.1 Scheduled Maintenance Task Cards
--------------------------------
At Buyer's request, BRAD shall provide a proposal for task
cards produced to Buyer's format.
-H7-
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1.3.2 In-Service Maintenance Data
---------------------------
Buyer agrees to provide BRAD in-service maintenance data
in order to provide updates to BRAD's recommended
maintenance program. Buyer's Reliability Control Program
Report as provided to the FAA shall be acceptable to BRAD
for this purpose.
1.4 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
- ------------------------------------------------------
2.1 Definition
----------
2.1.1 In this Article 2, the following words and expressions
shall have the following meaning:
a. "BRAD Parts":
spare parts, ground support equipment, tools and
test equipment which bear a BRAD Part Number and/or
an in-house Cage Number in the BRAD provisioning
file as that expression is defined in { * }.
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 engine manufacturer
for incorporation on the Aircraft.
c. "Vendor Parts":
any parts or items of equipment which are not BRAD
Parts or Power Plant Parts.
-H8-
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2.2 Applicability
-------------
The terms and conditions hereof shall apply to all orders for BRAD
Parts, Power Plant Parts and Vendor Parts placed by Buyer with BRAD in
lieu of any terms and conditions in Buyer's purchase orders. Buyer's
purchase order terms and conditions that do not conflict with this
Agreement shall apply.
2.3 Term
----
As long as at least { * } aircraft of the CL-600-2B19 type aircraft
purchased hereunder are operated in commercial air transport service,
BRAD shall maintain, or cause to be maintained, a reasonable stock of
BRAD Parts.
2.4 Buyer's Purchase Orders
-----------------------
Buyer agrees that orders placed with BRAD shall conform to the
requirements and procedures contained in { * }, as applicable to Buyer.
2.5 Communications
--------------
Buyer may place orders with BRAD for BRAD Parts, Power Plant Parts and
Vendor Parts by any method of order placement (including but not
limited to SITA, ARINC, telecopier, telex, facsimile, telephone or
other telecommunication system or hard copy purchase order). Purchase
order status and actions related to shipment of BRAD Parts shall be
generally consistent with the provisions of the World Airline Suppliers
Guide and the applicable portions of { * }as applicable to Buyer.
-H9-
<PAGE> 72
2.6 Prices and Delivery
-------------------
Prices for commonly used BRAD Parts shall be published in the Spare
Parts Price Catalogue which shall be developed taking into account { *
}. { * }. Prices for non-listed BRAD Parts shall be as quoted from time
to time by BRAD on request from Buyer. BRAD shall use reasonable
efforts as indicated in Article 2.12 below to require its major Vendors
to maintain any published price for their Power Plant Parts and Vendor
Parts { * } { * }
2.7 Shipment
--------
2.7.1 BRAD Parts, Power Plant Parts and Vendor Parts ordered
from BRAD shall be delivered F.O.B. BRAD's designated
facilities.
2.7.2 BRAD shall use reasonable efforts so that shipment of BRAD
Parts to Buyer be as follows:
a. AOG Orders
----------
Ship AOG orders within four (4) hours of receipt of
order. Buyer's affected Aircraft factory production
number shall be required on AOG orders;
-H10-
<PAGE> 73
b. Critical Orders
---------------
Ship critical orders within twenty-four (24) hours
of order receipt;
c. Expedite Orders
---------------
Ship expedite orders within seven (7) calendar days
of order receipt;
d. Initial Provisioning Orders
---------------------------
Prior to the Delivery Date of the first Aircraft or
as may be mutually agreed; and
e. Other Orders
------------
Shall be shipped approximately thirty (30) calendar
days after BRAD's receipt of Buyer's order.
Shipment of non-stock BRAD Parts shall be in
accordance with quoted leadtimes or leadtimes
published in the current Spare Parts Price
Catalogue, procurement data or provisioning data.
Vendor Parts shall be delivered per the Vendor's
quoted leadtime plus BRAD's internal processing
time.
2.7.3 In the event that BRAD Parts are not in stock to support
shipment of AOG and Critical Orders within leadtimes
stated in Article 2.7.2 a. and b., BRAD shall remove such
BRAD Parts from production aircraft and provide Buyer a
firm shipping schedule within four (4) hours for AOG and
twenty-four (24) hours for Critical after receipt of
Buyer's order. In the event the BRAD Part is no longer in
production, the BRAD Part would then be manufactured on a
Critical Order priority basis.
-H11-
<PAGE> 74
2.7.4 { * }
2.8 Packing
-------
All prices shall include packing in accordance with ATA Specification
300 Category II. All AOG orders shall be handled, processed, packed and
shipped separately.
2.9 Documents
---------
BRAD shall include packing sheets with all shipping containers. BRAD
shall also include with the container a copy of the invoice for customs
clearance. BRAD agrees to notify Buyer when the material is shipped and
shall provide carrier's reference information (waybill number).
2.10 Payment
-------
Payment terms shall be net thirty (30) calendar days of invoice date
for established open accounts. Any overdue amount shall bear interest
from the due date until actual payment is received by BRAD at an annual
rate of interest equal to { * }. Buyer will notify BRAD if the invoice
has been received late and an agreement will be reached between the
parties, after due consideration of the circumstances, as to the
extension of the discount. { * }.
-H12-
<PAGE> 75
2.11 Purchase of BRAD Parts
----------------------
2.11.1 Purchase of BRAD Parts from Other Sources
-----------------------------------------
In consideration of BRAD's obligations to maintain a
reasonable stock of BRAD Parts for as long as at least
{ * } aircraft of the CL-600-2B19 type aircraft purchased
hereunder are operated in commercial air transport
service, Buyer agrees to purchase BRAD Parts only from
BRAD or from airlines operating the same type aircraft
purchased herein. Buyer may however purchase BRAD Parts
from any source whatsoever, redesign BRAD Parts, or have
them redesigned, manufacture BRAD Parts, or have them
manufactured, under the following conditions:
a. When { * } aircraft of the type purchased hereunder
are operated in scheduled commercial air transport
service; or
b. Any time BRAD fails to fulfill its obligations
hereunder; or
c. Any time BRAD Parts are needed to effect emergency
repairs on the Aircraft, provided that such
purchase, redesign or manufacture by or from
sources other than BRAD allows Buyer to obtain BRAD
Parts in less time than BRAD requires to furnish
them; or
d. If Buyer has notified BRAD in writing that any BRAD
Parts are defective or unsatisfactory in use and
if, within a reasonable period thereafter, BRAD has
not provided a satisfactory resolution or made
redesigned BRAD Parts available.
e. If the Agreement is terminated by Buyer as per
Article 18.3 thereof.
-H13-
<PAGE> 76
2.11.2 Purchase of BRAD Parts from Other Approved Sources
--------------------------------------------------
Buyer may obtain BRAD Parts from any source provided that
such source is approved by BRAD or the FAA and provided
that such BRAD Parts are for Buyer's use only.
2.11.3 Buyer's Right to Purchase, Redesign or Manufacture
--------------------------------------------------
Buyer's right to purchase, redesign or to have redesigned
or manufacture or to have manufactured BRAD Parts under
the preceding Article 2.11.1 shall not be construed as a
granting of a license by BRAD and shall not obligate BRAD
to disclose Technical Data or other information nor to the
payment of any license fee or royalty or create any
obligation whatsoever to BRAD, and BRAD shall be relieved
of any obligation or liability with respect to patent
infringement in connection with any such redesigned part.
2.11.4 Notice to BRAD of Redesigned Parts
----------------------------------
{ * }
-H14-
<PAGE> 77
2.12 Vendor Parts
------------
2.12.1 Terms and Conditions
--------------------
Notwithstanding the provisions outlined in 2.12.2 herein,
BRAD shall not be obligated to maintain a stock of Vendor
Parts. 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.
2.12.2 { * }
-H15-
<PAGE> 78
2.13 Provisioning
------------
2.13.1 Preprovisioning/Provisioning Conference
---------------------------------------
Preprovisioning and provisioning conferences shall be
convened on dates to be mutually agreed to between Buyer
and BRAD in order to:
a. acquaint Buyer with BRAD's provisioning system and
available data;
b. plan the provisioning program; and
c. assist Buyer in the BRAD Parts and Vendor Parts
selection process.
2.13.2 Initial Provisioning Documentation
----------------------------------
Initial provisioning documentation for BRAD Parts and
Vendor Parts shall be provided by BRAD as follows:
a. BRAD shall provide, as applicable to Buyer, no
later than { * } months prior to the Scheduled
Delivery Date of the first Aircraft or as may be
mutually agreed, the initial issue of provisioning
files as required by the following:
1) ATA Specification { * }, as may be amended
by BRAD)
-H16-
<PAGE> 79
Revisions to provisioning data shall be issued by
BRAD { * } following the Delivery Date of the last
Aircraft or as may be mutually agreed.
b. For provisioning under Article 2.13.2 a. 2) above,
BRAD shall provide, as required by Buyer, all data
files defined in Chapter 1 of ATA Specification
{ * }.
c. The Illustrated Parts Catalogue designed to support
provisioning shall be issued concurrently with
provisioning data files and revised at { * }
calendar day intervals.
2.13.3 Repurchase of BRAD Parts and Vendor Parts
-----------------------------------------
BRAD shall repurchase from Buyer sixty { * } after the
beginning of revenue service of Buyer's first Aircraft of
the thirty (30) Aircraft purchased under this Agreement,
any surplus BRAD Parts and Vendor Parts ("Repurchased
Parts") recommended by BRAD and purchased by Buyer from
BRAD as part of the initial provisioning order. Initial
provisioning order(s) shall include the order or orders
placed on BRAD by Buyer prior to the Delivery Date of the
first Aircraft.
BRAD's obligation and liability shall be limited to the
following conditions:
a. the Repurchased Parts must be from Buyer's initial
provisioning order, based on BRAD's minimum
recommendations;
-H17-
<PAGE> 80
b. the Repurchased Parts which have been installed on
an Aircraft or other aircraft or are not in the
same condition including ATA Specification { * }
standard of packing and crating as when first
delivered to Buyer shall not qualify;
c. transportation charges for the return of the
Repurchased Parts to BRAD's designated facility
shall be for the account of BRAD. Buyer agrees to
use reasonable efforts to ship the Repurchase Parts
via COMAT on Buyer airline closest destination to
BRAD's designated facility.
d. Buyer to provide BRAD with a minimum of sixty { * }
months stated above of its intention to return such
Repurchased Parts. Such notice shall identify the
quantity and part number of each of the Repurchased
Parts.
Upon receipt by BRAD of the Repurchased Parts in
accordance with the above, BRAD shall issue to Buyer
{ * }. Such { * }
2.13.4 Initial Provisioning Orders
---------------------------
BRAD Parts and Vendor Parts purchased from BRAD by the Buyer
for initial provisioning requirements that BRAD is unable to
deliver as agreed in Article 2.7.2 d. and which affect the
Aircraft operation shall be provided to the Buyer on an AOG or
Critical basis as the case may be.
-H18-
<PAGE> 81
2.14 General
-------
2.14.1 Quotations
----------
Price and delivery quotations for non-listed BRAD Parts
and Vendor Parts shall be held firm for { * }days.
2.14.2 Lease of BRAD Parts
-------------------
BRAD shall develop and introduce a program prior to the
Delivery Date of the first Aircraft to lease certain BRAD
Parts which are selected by BRAD to be insurance parts as
referred to in Article 2.7.3 above.
2.14.3 BRAD Parts Data Specifications
------------------------------
BRAD shall generally comply with ATA Specification { * }
or later revisions as BRAD may adopt from time to time.
2.14.4 Warranty
--------
BRAD Parts and Vendor Parts purchased or furnished under
this Agreement shall be covered by the applicable warranty
provisions and the terms and conditions set forth in
Article 1 and Article 2 of Exhibit J.
-H19-
<PAGE> 82
2.14.5 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.
ARTICLE 3 - TECHNICAL DATA
- --------------------------
3.1 Technical Data Provided
-----------------------
BRAD shall furnish to Buyer the technical data described in Annex A
attached hereto ("Technical Data"). The Technical Data shall provide
information on items manufactured according to BRAD'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 revisions thereto shall be
prepared in the English language.
3.2 ATA Specifications
------------------
Unless otherwise noted in Annex A, all Technical Data shall be prepared
generally in accordance with { * }
3.3 Shipment
--------
All Technical Data provided hereunder shall be delivered to Buyer
F.O.B. BRAD's designated facilities and at the time indicated in Annex
A.
-H20-
<PAGE> 83
3.4 Revision Service
----------------
A revision service shall be provided for the Technical Data for a
period of { * } after delivery of the last Aircraft to Buyer. The
applicability of revision service for the Technical Data shall be as
described in Note 5 of Annex A.
3.5 Proprietary Technical Data
--------------------------
It is understood and Buyer acknowledges that the Technical Data
provided herein is proprietary to BRAD and all rights to copyright
belong to BRAD and shall be kept confidential by Buyer. Buyer agrees to
use the Technical Data solely as allowed by the Agreement. 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 as
allowed by the Agreement or if the Agreement is terminated by Buyer as
per Article 18.3 thereof.
3.6 Vendor Parts Service Bulletins
------------------------------
BRAD shall control Vendor Parts modification status by issuance of
cover service bulletins for each Vendor Service Bulletin. BRAD may give
Buyer advance notice of approval for Vendor Service Bulletins prior to
formal publication of the cover service bulletins.
3.7 Drawings
--------
BRAD shall provide to Buyer top level aircraft drawings. Any other
drawings requests shall be reviewed on a case-by-case basis with the
BRAD Field Service Representative.
3.8 Warranty
--------
The warranty to BRAD's Technical Data provided hereunder is set forth
in Article 1 of Exhibit J.
-H21-
<PAGE> 84
3.9 Technical Assistance
--------------------
At Buyer's request, BRAD shall provide drawings and technical
assistance with regard to retrofit installations on existing Aircraft
that result from Airworthiness Directives and Service Bulletins.
ARTICLE 4 - TRAINING
- --------------------
4.1 General Terms
-------------
4.1.1 Description
-----------
The objective of the following training programs
("Programs") is to familiarize, train 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.
4.1.2 Location
--------
The Programs shall be conducted at a BRAD designated
facility. At Buyer's request the Programs may be conducted
at Buyer's facility in which case Buyer shall be
responsible for all costs associated with such request.
4.1.3 Expenses
--------
Buyer shall be responsible for all travel and living
expenses of Buyer's personnel incurred in connection with
the Programs.
4.1.4 Course Standard and Training Manual
-----------------------------------
The Programs shall be designed to reflect the configuration of
the Aircraft and may include difference training to identify
such configuration. Manuals which are provided during the
Programs exclude revision service.
-H22-
<PAGE> 85
4.1.5 Training Conferences
--------------------
The Programs shall include flight crew and maintenance
training conferences held no later than twelve (12) months
prior to the Scheduled Delivery Date of the first Aircraft
to Buyer to establish the Programs' schedules and
contents.
4.1.6 Timing
------
The Programs shall be completed prior to the Delivery Date
of the last Aircraft purchased herein.
4.2 Pilot Simulator Training
------------------------
4.2.1 BRAD will provide access to the { * }
4.2.2 In the event the required number of training slots are not
available on the { * } for training of Comair flight crew
as a result of the simulator being fully utilized or
inoperative due to maintenance downtime, BRAD will use
reasonable efforts, to secure time { * }. BRAD shall
provide a schedule of training slots available to Comair
in 1998 and 1999 at the Montreal training centre. Comair
and BRAD shall then agree { * } in advance of Comair's
desired training dates on the training slots to be
reserved for Comair.
-H23-
<PAGE> 86
4.3 Maintenance Training
--------------------
4.3.1 Requirements and Student Course Allocation
BRAD shall provide training for a combination of { * }
maintenance technicians or { * } avionics technicians, or
any other combination thereof per Aircraft. As may be
mutually agreed upon, Buyer may reallocate students among
the courses. The Maintenance Training shall be designed to
meet the requirements of the DOT for an Aircraft
Maintenance Engineer Licence (AME-M or AME-E) or FAA
equivalent. The training is also designed for maintenance
instructors, supervisory personnel and senior aircraft
maintenance engineers (AME-M or AME-E) or mechanics.
Buyer's personnel attending BRAD's training courses shall
receive corresponding paper copies of appropriate training
material including { * } of the Maintenance Training
Manual used during the training. Individual courses
defined in this Maintenance Training shall be based on
BRAD's standard course syllabus.
Additionally, BRAD shall provide { * } of simulator time
on the Flight Training Device { * } per Aircraft.
-H24-
<PAGE> 87
4.3.2 Course Descriptions
-------------------
a. Airframe and Power Plant Systems Maintenance Course
---------------------------------------------------
This course shall emphasize detailed systems
description, operations and routine line
maintenance practices including ground run-up
procedures. The course material shall be
principally mechanical with electrical information
for overall systems comprehension. This course
shall be designed for maintenance instructors,
supervisory personnel, aircraft maintenance
engineers (AME-M) and inspectors. The course
duration shall be a maximum of { * } working days;
b. Electrical and Avionics Systems Maintenance Course
--------------------------------------------------
This course shall emphasize detailed system
description, operation and routine line maintenance
practices. The course material shall be principally
electrical and avionics and includes mechanical
information for overall systems comprehension. This
course shall be designed for electrical and
avionics instructors, supervisory personnel,
aircraft maintenance engineers (AME-E avionics) and
inspectors. The course duration shall be a maximum
of { * } working days;
-H25-
<PAGE> 88
c. Line Maintenance Airframe and Power Plant Systems
-------------------------------------------------
Course
------
This course shall emphasize routine line
maintenance practices related to turnaround,
through-flight and overnight tasks. The course
shall contain mechanical and electrical information
for overall systems comprehension and shall be
designed for line maintenance technicians. The
course duration shall be a maximum of { * } working
days;
d. Line Maintenance Electrical and Avionics Systems
------------------------------------------------
This course shall emphasize routine line
maintenance practices related to turnaround,
through-flight and overnight tasks. The course
shall contain electrical and avionics information
and shall be designed for line maintenance
technicians. The course duration shall be a maximum
of { * } working days; and
e. Ground Handling Course
----------------------
This course shall provide ramp service personnel
with training to be able to tow and park Aircraft
and perform routine ramp servicing tasks. Such
training shall be conducted in class and by
demonstration on Buyer's Aircraft after Delivery
Date. The course duration shall be a maximum of
{ * } working days.
4.3.3 Vendor Training
---------------
If requested by Buyer, BRAD shall assist Buyer to obtain
at Buyer's cost and expense Vendor maintenance training
for overhaul of major components.
-H26-
<PAGE> 89
4.3.4 Training Aids and Materials
---------------------------
BRAD shall provide to Buyer a list of training aids and
materials used to conduct BRAD's standard training as
detailed above. Revision for such training aids shall be
through delivery of the last Aircraft purchased herein,
{ * }.
4.3.5 Specialist Courses
------------------
At Buyer's request, BRAD shall make a proposal for
specialist courses which may be derived from BRAD's
standard courses.
4.3.6 Recurrent Training
------------------
At Buyer's request and expense, BRAD shall provide to
Buyer DOT or FAA approved training for maintenance
recurrent training designed for Buyer's maintenance
personnel which will have received the training as
identified in Article 4.3.2 hereof. The recurrent training
will be provided through delivery of the last Firm
Aircraft purchased herein, { * }.
4.4 General Familiarization Course
------------------------------
4.4.1 At Buyer's request and expense, BRAD shall assist in
arranging a General Familiarization course. The course
shall generally describe the Aircraft, its maintenance and
support requirements. This course is designed for Buyer's
facilities planning, parts provisioning and aircraft
management personnel. The course duration shall be for a
maximum of { * } working days.
-H27-
<PAGE> 90
ARTICLE 5 - HOLD HARMLESS AND INSURANCE
- ---------------------------------------
5.1 HOLD HARMLESS
-------------
5.1.1 NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY,
THE BUYER AGREES TO RELEASE, INDEMNIFY AND HOLD HARMLESS BRAD, ITS
SUBSIDIARIES, AFFILIATES, CAE ELECTRONICS LTD. AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS ("THE INDEMNIFIED
PARTIES') FROM AND AGAINST ALL LOSS, COST, DAMAGE, EXPENSE, OR
LIABILITY WHATSOEVER BY REASON OF PERSONAL INJURY (INCLUDING DEATH),
OTHER THAN INJURY OR DEATH TO AN INDEMNIFIED PARTY, OR LOSS OF OR
DAMAGE TO PROPERTY (INCLUDING LOSS OF OR DAMAGE TO THE AIRCRAFT),
OTHER THAN PROPERTY OF AN INDEMNIFIED PARTY, SUSTAINED BY ANY
PERSON(S), (INCLUDING BUT NOT LIMITED TO ANY OF BUYER'S DIRECTORS,
OFFICERS, EMPLOYEES AND AGENTS), DIRECTLY OR INDIRECTLY DUE TO OR
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE PERFORMANCE BY THE
INDEMNIFIED PARTIES OF SERVICES (BUT EXCLUDING MAINTENANCE PERFORMED)
PURSUANT TO SECTIONS 1.1, 1.2, 1.3, AND 4.3 OF THIS EXHIBIT H AND
WHETHER OR NOT DUE TO THE ACTUAL OR IMPUTED NEGLIGENCE OF THE
INDEMNIFIED PARTIES. THIS INDEMNITY SHALL NOT APPLY TO LEGAL
LIABILITY TO PERSONS OR PARTIES ARISING OUT OF AN ACCIDENT CAUSED BY
A DEFECT IN THE DESIGN OR MANUFACTURE OF THE AIRCRAFT.
5.1.2 BRAD HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD
HARMLESS BUYER, ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS FROM AND
AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, COSTS AND EXPENSES
FOR INJURY TO OR DEATH OF ANY DIRECTORS, OFFICERS, AGENTS AND
EMPLOYEES OF BRAD, ITS SUBSIDIARIES OR AFFILIATES ARISING DIRECTLY OR
INDIRECTLY OUT OF OR IN CONNECTION WITH ANY SERVICES PROVIDED UNDER
SECTIONS 1 AND 4 OF THIS EXHIBIT H.
-H28-
<PAGE> 91
5.2 Insurance
At all times during flight training with BRAD pilots in the Aircraft
after delivery, Buyer shall secure and maintain in effect, at its own
expense, a liability insurance policy covering public liability,
passenger, crew, property and cargo damage in amounts not less than
{ * } for any single occurrence. The Buyer's liability policy shall
name BRAD (and its affiliates) as additional insured.
In addition, with respect to Buyer's hull insurance policy, Buyer
shall cause the hull insurance carrier to waive all rights of
subrogation against BRAD.
5.3 DISCLAIMER
THE OBLIGATIONS, DUTIES AND LIABILITIES ON THE PART OF BRAD UNDER
THIS EXHIBIT H ARE EXCLUSIVE AND IN LIEU OF AND ARE ACCEPTED BY BUYER
AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER CONDITIONS,
REPRESENTATIONS, WARRANTIES, OBLIGATIONS, DUTIES AND LIABILITIES ON
THE PART OF BRAD EXPRESS OR IMPLIED REGARDING CUSTOMER SUPPORT
SERVICES ARISING BY LAW IN CONTRACT IN TORT OR OTHERWISE BY REASON OF
THE SERVICES, SPARE PARTS, GSE, TOOLS, TEST EQUIPMENT, TECHNICAL DATA
OR TRAINING DELIVERED OR RENDERED HEREUNDER.
5.4 ACKNOWLEDGEMENT
BUYER AND BRAD STATE AND AGREE THAT THIS EXHIBIT H, INCLUDING BUT NOT
LIMITED TO THIS ARTICLE 5, 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 IN THIS EXHIBIT H AND THE AGREEMENT WERE ARRIVED AT
IN CONSIDERATION OF THE PROVISIONS CONTAINED IN THIS ARTICLE 5.
-H29-
<PAGE> 92
ARTICLE 6 - GENERAL
- -------------------
6.1 Definitions
-----------
Unles otherwise expressly defined herein, the terms used in this Exhibit
shall have the same meaning as given to them in the Agreement.
6.2 Price
-----
The Airlines Services described in this Exhibit are provided by BRAD in
consideration of the purchase and payment by Buyer for the Aircraft
described in the Agreement and unless otherwise expressly provided herein
the prices of the Customer Support Services are included in the Base Price
described in Article 4 of the Agreement.
6.3 Assignment
----------
The terms and conditions of this Exhibit H are personal to Buyer and are
subject to the provisions of Article 129 of the Agreement.
6.4 Provision of Information
------------------------
Buyer agrees that the quality and reliability of BRAD's services provided
hereunder is dependent upon the quality and reliability of the relevant
data and information provided by Buyer regarding the operation,
maintenance and performance of the Aircraft.
6.5 Vendor Support
--------------
The Customer Support Services described in this Exhibit exclude Vendor
Parts, but BRAD has made or shall make reasonable efforts to obtain from
Vendors services in support of Vendor Parts, all as set forth herein.
-H30-
<PAGE> 93
EXHIBIT H
ANNEX A
LIST OF TECHNICAL DATA
----------------------
ITEM
1 DOC DOCUMENT
Title of Technical Data provided.
2 CONFIG CONFIGURATION
G = Contains data common to all
aircraft of the same type (Generic).
O.S.C.
3 MEDIUM Buyer selects one of the following media
specified in the table:
1 = Print two sides
2 = Microfilm
3 = Print on side
4 = Laminated Cardboard
5 = { * }
4 REVISION Y = Periodic revision service applies
N = Revision service not applicable
S = Revised as required by BRAD
5 QUANTITY
(Number) = Quantity per the Agreement
(Number) PER = Quantity per Aircraft
6 DELIVERY
ADT = At time of the Delivery Date of
the first Aircraft.
PTD = Prior to the Delivery Date of
each or the first Aircraft
(as applicable).
STA = Subject to availability
-HA1-
<PAGE> 94
7 ATA Y = Document is per ATA
Specification 100, Revision 26.
N = Document is to BRAD's existing
commercial practices. With the
delivery of the first Aircraft,
BRAD will provide to Buyer at no
additional charge on set of the
technical manuals listed below:
{ * }
-HA2-
<PAGE> 95
NOTE 1 : REVISION SERVICE
A. Revision services shall only be available for { * } following the
Delivery Date of Buyer's first Aircraft. Subsequent revision
service shall be provided dependent upon incorporation of
BRAD issued Service Bulletins.
B. Revisions to the Technical Data to reflect the Aircraft at
Delivery Date shall be provided to Buyer within [ * ] following the
Delivery Date of each of the Aircraft, respectively.
C. Provided the revision service is being supplied under the terms of
this Agreement or by subsequent purchase order, BRAD shall
incorporate in the applicable documents all applicable BRAD
originated Service Bulletins in a regular revision following formal
notification by Buyer that such Service Bulletins shall be
accomplished on the Buyer's Aircraft. The manuals shall then
contain both original and revised configuration until Buyer advises
BRAD in writing that one configuration is no longer required.
D. [ * ]
E. The [ * ] shall include a [ * ] per copy at no additional charge to
Buyer.
NOTE 2 : SERVICE BULLETINS
Aperture cards of the service drawing(s)
will be provided in lieu of drawings when
practical.
NOTE 3 : MAINTENANCE PROGRAM DOCUMENT
This manual provides the basis for Buyer's initial maintenance
program.
-HA3-
<PAGE> 96
NOTE 4 : AIRCRAFT CHARACTERISTICS FOR AIRPORT PLANNING
This manual contains data on Aircraft ground maneuver
and handling.
NOTE 5 : ON-BOARD WIRING DIAGRAM BOOK
This book contains wiring diagrams for interim
reference until the Wiring Diagram Manual is revised to
reflect the Aircraft at the Delivery Date.
NOTE 6 : PASSENGER INFORMATION CARDS
BRAD will provide [ * ] reproductible electronic
master for the preparation of passenger information
cards. For an additional cost, subject to negotiation,
BRAD will provide full colour laminated passenger
information cards in quantities required.
-HA4-
<PAGE> 97
EXHIBIT J
WARRANTY AND SERVICE LIFE POLICY
--------------------------------
-J1-
<PAGE> 98
EXHIBIT J
WARRANTY AND SERVICE LIFE POLICY
ARTICLE 1 - CANADAIR WARRANTY
- -----------------------------
1.1 Warranty
1.2 Warranty Period
1.3 Repair, Replacement or Rework
1.4 Claims Information
1.5 BRAD's Approval
1.6 Timely Corrections
1.7 Labour Reimbursement
1.8 Field Repair Team
1.9 Approval, Audit, Transportation and Waiver
1.10 Limitations
1.11 Normal Usage
1.12 Overhaul of Warranty Parts
1.13 No Fault Found
ARTICLE 2 - VENDOR WARRANTIES
- -----------------------------
2.1 Warranties from Vendors
2.2 Vendor Backstop
2.3 BRAD's Interface Commitment
ARTICLE 3 - SERVICE LIFE POLICY
- -------------------------------
3.1 Applicability
3.2 Term
3.3 Price
3.4 Conditions and Limitations
3.5 Coverage
3.6 Assignment
3.7 Covered Component
ARTICLE 4 - GENERAL
- -------------------
ANNEX A - Covered Components
-J2-
<PAGE> 99
EXHIBIT J
WARRANTY AND SERVICE LIFE POLICY
This Exhibit J contains the terms and conditions applicable to the warranty (the
"Warranty") and service life policy (the "SLP") to which reference is made in
Article 13 of the Agreement to which this Exhibit is attached.
ARTICLE 1 - WARRANTY
- --------------------
1.1 Warranty
--------
1.1.1 Subject to Article 2 hereof, BRAD warrants that, at the
Delivery Date:
a. the Aircraft shall conform to the Specification,
except that any matter stated in the Specification
as type characteristics, estimates or
approximations is excluded from this Warranty; and
b. the Aircraft shall be free from defects caused by
the failure of BRAD to install a Vendor Part or
Power Plant Part in accordance with the reasonable
instructions of the Vendor or the Power Plant
manufacturer;
c. the BRAD Parts shall be free from defects in
material or workmanship; and
d. the BRAD Parts shall be free from defects in the
design, having regard to the state of the art as of
the date of such design.
1.1.2 The Warranty set forth in Article 1.1.1 c and d. above
shall also be applicable to BRAD Parts purchased as spare
parts.
-J3-
<PAGE> 100
1.1.3 BRAD further warrants that, at the time of delivery of the
Technical Data delivered by BRAD, the Technical Data
pursuant to the provisions of the Customer Support
Services (Exhibit H) shall be free from errors.
1.2 Warranty Period
---------------
The Warranty set forth in Article 1.1 shall remain in effect
for any defect covered by said Warranty (a "Defect")
becoming apparent during the following periods (the
"Warranty Period"):
a. for failure to conform to the Specification and in
the installation referred to in subarticle 1.1.1 a.
and 1.1.1 b [ * ] from the Delivery Date;
b. for those Defects in material or workmanship and
spare parts referred to in subarticles 1.1.1 c and
1.1.2, [ * ] from the Delivery Date;
c. for those Defects in design referred to in
subarticles 1.1.1 d., [ * ] from the Delivery Date;
and
d. for those errors referred to in subarticle 1.1.3,
[ * ] from the date of delivery of the applicable
Technical Data.
*Material designated by asterisk on pages J4-J6,
J10-J12 and J17.
-J4-
<PAGE> 101
1.3 Repair, Replacement or Rework
-----------------------------
As to each matter covered by this Warranty, BRAD's sole obligation and
liability under this Warranty is expressly limited to, at BRAD's
election, correction by the repair, replacement or rework of any
defective BRAD Part or item of Technical Data having given due
consideration to any previous repair, replacement or rework BRAD might
have already undertaken on behalf of Buyer. The repaired, replaced or
reworked BRAD 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 or
[ * ], whichever is greater.
1.4 Claims Information
------------------
1.4.1 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 BRAD Part involved, including
the BRAD Part number, nomenclature and the quantity
claimed to be defective;
b. the identity of the Aircraft from which the BRAD
Part was removed;
c. the date the claimed Defect in the BRAD Part became
apparent to Buyer;
d. the total flight hours (and cycles if applicable)
accrued on the BRAD Part at the time the claimed
Defect became apparent to Buyer; and
e. a description of the claimed Defect and the
circumstances pertaining thereto.
-J5-
<PAGE> 102
Buyer shall not be denied the benefits of the warranty if,
in the event Buyer has failed to provide the above
information, Buyer corrects its failure within a mutually
acceptable period.
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 above.
1.6 Timely Corrections
------------------
BRAD shall make the repair, replacement or rework, following receipt of
the defective BRAD Part, with reasonable care and dispatch. If during
this corrective action an AOG or Critical requirement is identified,
BRAD will provide a loan part to the Buyer.
1.7 Labour Reimbursement
--------------------
For correction of Defects, BRAD shall establish a reasonable
estimate for the labour hours required for the repair,
replacement or rework of the defective BRAD Part. Buyer and
BRAD shall mutually agree on reasonable estimates. If the
repair, replacement or rework is performed by Buyer, BRAD
shall reimburse Buyer for BRAD estimated hours or for Buyer's
actual labour hours, whichever is less, for the repair,
replacement or rework of the defective BRAD Part. Such
reimbursement shall be based [ * ] subject to annual review
and adjustment of such labour rate as mutually agreed;
provided, however, that this amount shall not exceed [ * ] of
the BRAD selling labour rate of [ * ] expressed in [ * ]
dollars, [ * ] in accordance with the formula attached as
Exhibit B.
-J6-
<PAGE> 103
1.8 Field Repair Team
-----------------
BRAD, if requested by Buyer, will dispatch a field repair team to
assist Buyer to evaluate the corrective action or repair required to an
Aircraft or BRAD Part found to be defective.
1.9 Approval, Audit, Transportation and Waiver
------------------------------------------
Further to BRAD's approval pursuant to Article 1.5 herein, 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 (subject to the provisions of
Article 1.10.1) following the receipt of the claim and (if requested)
return of the defective BRAD Part to BRAD's designated facility. BRAD
shall notify Buyer of BRAD's disposition of each claim. The
transportation cost for the return (if necessary) and the replacement
of the defective BRAD Part shall be borne by BRAD. Buyer agrees to use
reasonable efforts to ship the defective BRAD Part via COMAT on Buyer
airline closest destination to BRAD's designated facility.
1.10 Limitations
-----------
1.10.1 BRAD shall be relieved of and shall have no obligation or
liability under this Warranty if:
a. the Aircraft was operated with any products or
parts not specifically approved by BRAD, unless
Buyer furnishes reasonable evidence acceptable to
BRAD that such products or parts were not a cause
of the Defect; or
-J7-
<PAGE> 104
b. the Aircraft was not operated or maintained in
accordance with the Technical Data listed in
Article 3 of Exhibit H and the manufacturer's
documentation furnished to Buyer (including Alert
Service Bulletins and Airworthiness Directives and
any Service Bulletins incorporated by Buyer) unless
Buyer furnishes reasonable evidence acceptable to
BRAD that such operation or maintenance was not a
cause of the Defect; or
c. the Aircraft was not operated under normal
commercial air transport service, unless Buyer
furnishes reasonable evidence acceptable to BRAD
that such operation was not a cause of the Defect;
or
d. Buyer does not
1) report the Defect in writing to BRAD's
Warranty administrator within thirty (30)
calendar days following such Defect becoming
apparent, and
2) retain the BRAD Part claimed to be defective
until advised by BRAD to return such BRAD
Part to BRAD's designated facility in order
for BRAD to finalize its evaluation of the
Warranty claim or to otherwise dispose of
such BRAD Part; or
e. Buyer does not submit reasonable proof to BRAD
within sixty (60) calendar days after the Defect
becomes apparent that the Defect is due to a matter
covered within this Warranty; or
f. Buyer does not allow BRAD reasonable opportunity to
be present during the disassembly and inspection of
the BRAD Part claimed to be defective.
-J8-
<PAGE> 105
1.11 Normal Usage
------------
Normal wear and tear and the need for maintenance and overhaul as
defined in the initial Maintenance Review Board shall not constitute a
Defect or failure under this Warranty.
1.12 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.
1.13 No Fault Found
--------------
In the event that a BRAD Part returned under a Warranty claim is
subsequently established to be serviceable, then BRAD shall be entitled
to charge and recover from Buyer any reasonable costs incurred by BRAD
in connection with such Warranty claim. Providing however, in the event
that repetitive in-service failure occurs on the particular BRAD Part
which is subsequently identified by BRAD on a repeated basis to be 'no
fault found', then BRAD and Buyer shall discuss and mutually agree on 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 if not yet paid, or reimbursed if paid.
-J9-
<PAGE> 106
ARTICLE 2 - VENDOR WARRANTIES FROM OTHER MANUFACTURERS
- ------------------------------------------------------
2.1 Warranties from Vendors
-----------------------
The Warranty provisions of this Exhibit do not apply to Vendor Parts.
However, BRAD has made or shall make reasonable efforts to obtain
favorable warranties from Vendors, with respect to Vendor Parts. Except
as specifically provided under this Article 2, BRAD shall have no
liability or responsibility for any such Vendor Parts and the
warranties to those Vendor Parts shall be the responsibility of the
Vendor and a matter between Buyer and Vendor.
2.2
*CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION*
-J10-
<PAGE> 107
2.3 BRAD's Interface Commitment
---------------------------
In the event of a dispute in the application of a Vendor Part warranty,
at Buyer's request to BRAD's Warranty administrator, BRAD shall,
without charge, conduct an investigation and analysis of any such
dispute resulting from a technical interface problem to determine, if
possible, the cause of the interface problem and then recommend
feasible corrective action. Buyer shall furnish to BRAD all data and
information in Buyer's possession relevant to the interface problem and
shall cooperate with BRAD in the conduct of its investigation and such
tests as may be required. BRAD, at the conclusion of its investigation,
shall advise Buyer in writing of BRAD's opinion as to the cause of the
problem and BRAD's recommended corrective action.
ARTICLE 3 - SERVICE LIFE POLICY
- -------------------------------
3.1 Applicability
-------------
The Service Life Policy ("SLP") described in this Article 3 shall apply
to failures which occur in any Covered Component which is defined in
Article 3.7 below.
3.2 Term
----
3.2.1 *CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION*
-J11-
<PAGE> 108
3.3 Price
*CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION*
-J12-
<PAGE> 109
3.4 Conditions and Limitations
--------------------------
3.4.1 The following general conditions and limitations shall
apply to this SLP:
a. the transportation cost for the return, if
practicable, of any failed Covered Component
necessary for failure investigation or redesigning
studies shall be borne by BRAD. Buyer agrees to use
reasonable efforts to ship the Covered Component
via COMAT on Buyer airline destination closest to
BRAD's designated facility;
b. BRAD's obligations under this SLP are conditional
upon the submission of reasonable proof acceptable
to BRAD that the failure is covered hereby;
c. Buyer shall report any failure of a Covered
Component in writing to BRAD's Warranty
administrator within two (2) months after such
failure becomes evident, whether or not such
failure can reasonably be expected to occur in any
other Model CL-600-2B19 aircraft;
d. the provisions of Article 1.10 of the Warranty
(except for subparagraphs d. and e. thereof) are
incorporated by this reference and shall condition
BRAD's obligations under this SLP with respect to
any Covered Component;
-J13-
<PAGE> 110
e. BRAD's obligations under this SLP shall not apply
to any Aircraft which has not been correctly
modified in accordance with the specifications or
instructions contained in the relevant Service
Bulletins which are furnished to Buyer prior to
receipt by BRAD from Buyer of any notice of an
occurrence which constitutes, or which at a later
date is shown to constitute, a failure in a Covered
Component. The provisions of this subparagraph
shall not apply in the event that Buyer furnishes
reasonable evidence acceptable to BRAD that such
failure was not caused by Buyer's failure to so
modify the Aircraft;
f. this SLP shall not apply to a Covered Component
where the failure results from an accident, abuse,
misuse, degradation, negligence or wrongful act or
omission, unauthorized repair or modification
adversely affecting a Covered Component, impact or
foreign object damage to any Covered Component.
3.5 Coverage
--------
This SLP is neither a warranty, performance guarantee nor an agreement
to modify the Aircraft to conform to new developments in design and
manufacturing art. 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
----------
The terms and conditions of this Exhibit J are personal to Buyer and
are subject to the provisions of Article 19 of the Agreement.
-J14-
<PAGE> 111
3.7 Covered Component
-----------------
Only those items or part thereof listed in Annex A to this Exhibit J
shall be deemed to be a Covered Component, and subject to the
provisions of this SLP.
ARTICLE 4 - GENERAL
- -------------------
4.1 It is agreed that BRAD shall not be obligated to provide to Buyer any
remedy which is a duplicate of any other remedy which has been provided
to Buyer under any other part of this Exhibit.
4.2 THE WARRANTY AND SERVICE LIFE POLICY PROVIDED IN THIS EXHIBIT J AND THE
OBLIGATIONS AND LIABILITIES ON THE PART OF BRAD UNDER THE AFORESAID
WARRANTY AND SERVICE LIFE POLICY ARE ACCEPTED BY BUYER TO BE EXCLUSIVE
AND IN LIEU OF, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES TO ALL
OTHER REMEDIES, WARRANTIES, GUARANTEES, OBLIGATIONS, REPRESENTATIONS OR
LIABILITIES, EXPRESS OR IMPLIED, WITH RESPECT TO EACH AIRCRAFT, OR PART
THEREOF, PRODUCT, DOCUMENT AND SERVICE DELIVERED OR PROVIDED UNDER THIS
EXHIBIT OR THE AGREEMENT, ARISING IN FACT, CONTRACT, LAW, TORT
(INCLUDING ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE) STRICT PRODUCT
LIABILITY OR OTHERWISE INCLUDING, WITHOUT LIMITATION,
A. ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS OR ANY
IMPLIED CONDITION;
B. ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE
OF DEALING OR USAGE OF TRADE;
C. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT
WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BRAD (WHETHER
ACTIVE, PASSIVE OR IMPUTED), BY REASON OF THE DESIGN,
MANUFACTURE, SALE, REPAIR, LEASE OR USE OF THE AIRCRAFT OR
PRODUCT AND SERVICES DELIVERED HEREUNDER; AND
D. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR
DAMAGE TO ANY AIRCRAFT, ANY BRAD PARTS, ANY VENDOR PARTS, ANY
SPARE PARTS OR ANY TECHNICAL DATA.
-J15-
<PAGE> 112
4.3 BRAD SHALL HAVE NO OBLIGATION OR LIABILITY, WHETHER ARISING IN CONTRACT
(INCLUDING WARRANTY), TORT (INCLUDING ACTIVE, PASSIVE OR IMPUTED
NEGLIGENCE), STRICT PRODUCT LIABILITY OR OTHERWISE, FOR LOSS OF USE,
REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL, CONSEQUENTIAL OR
PUNITIVE LOSSES OR DAMAGES WITH RESPECT TO ANY AIRCRAFT, ANY BRAD
PARTS, ANY VENDOR PARTS, ANY SPARE PARTS OR ANY TECHNICAL DATA.
4.4 BUYER AND BRAD STATE AND AGREE THAT THIS EXHIBIT J, INCLUDING BUT NOT
LIMITED TO ARTICLE 4.2 AND 4.3 ABOVE, HAVE BEEN THE SUBJECT OF
DISCUSSION AND NEGOTIATION AND ARE FULLY UNDERSTOOD BY THE PARTIES
HERETO AND THAT THE PRICE OF THE AIRCRAFT AND THE OTHER MUTUAL
AGREEMENTS OF THE PARTIES SET FORTH IN THIS EXHIBIT AND IN THE
AGREEMENT WERE ARRIVED AT IN CONSIDERATION OF THE PROVISIONS CONTAINED
IN THIS ARTICLE 4.
-J16-
<PAGE> 113
EXHIBIT J
ANNEX A
COVERED COMPONENTS
*CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION*
-J17-
<PAGE> 114
EXHIBIT K
We, Bombardier Inc. (represented by our Bombardier Regional Aircraft Division
(BRAD)) hereby acknowledge that, as per the Agreement between Buyer and BRAD,
some payments more specifically referred to in Exhibit C, Article 2 thereof, are
to be made in [ * ] to Aircraft deliveries.
*CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION*
K-1
<PAGE> 115
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 01 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
Subject: Financing - Aircraft 1 to 30 Inclusive
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION
4.0 This Letter Agreement constitutes an integral part of the Agreement and
is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President Finance
-J18-
<PAGE> 116
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 02 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
4.0 The provisions of this Letter Agreement are personal to Buyer and shall
not be assigned or otherwise disposed of by Buyer without the prior
written consent of BRAD.
5.0 This Letter Agreement constitutes an integral part of the Agreement and
subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 117
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 03 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
2.0 This Letter Agreement constitutes an integral part of the Agreement and
is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 118
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 04 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
2.0 This Letter Agreement constitutes an integral part of the Agreement and
is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 119
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 05 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
3.0 This Letter Agreement constitutes an integral part of the Agreement and
is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 120
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 06 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
SUBJECT: OPTION AIRCRAFT
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
6.0 This Letter Agreement constitutes an integral part of the Agreement and
is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contract
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 121
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 07 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
5.0 The provisions of this Letter Agreement are personal to Buyer and shall
not be assigned or otherwise disposed of by Buyer without the prior
written consent of BRAD.
6.0 This Letter Agreement constitutes an integral part of the Agreement and
subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 122
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 08 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
2.0 This Letter Agreement constitutes an integral part of the Agreement and
is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 123
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 09 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
2.0 This Letter Agreement constitutes an integral part of the Agreement and
is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 124
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 10 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
3.0 This Letter Agreement constitutes an integral part of the Agreement and
is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 125
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 11 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
5.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 126
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 12 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
2.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 127
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 13 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 128
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 14 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
6.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 129
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 15 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
SUBJECT: TAXES & DUTIES
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
3.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
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 very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 130
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 16 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
6.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
If the foregone correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 131
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 17 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
7.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
If the foregone correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 132
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 18 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
2.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
If the foregone correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 133
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 19 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
4.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
If the foregone correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 134
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 20 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
4.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
If the foregone correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 135
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 21 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILES
SEPARATELY WITH THE COMMISSION
4.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
If the foregone correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 136
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 22 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
5.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
If the foregone correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
<PAGE> 137
November 17, 1997
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 23 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BRAD") AND COMAIR, INC. ("BUYER") RELATING TO THE PURCHASE OF
THIRTY (30) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION
2.0 This Letter of Agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
When there is any inconsistency between this Letter Agreement and the Agreement
with respect to the subject matter covered by the terms contained herein, then
this Letter Agreement shall prevail.
If the foregone correctly sets forth your understanding of our agreement with
respect to the above matters, please indicate your acceptance and agreement
below.
Yours very truly,
BOMBARDIER INC.
/s/ John Murphy
- ---------------
John Murphy
Director, Contracts
Bombardier Regional Aircraft Division
Acknowledged and Accepted:
this 24th day of November, 1997
COMAIR, INC.
/s/ Randy Rademacher
- --------------------
Randy Rademacher
Senior Vice President, Finance
-K1-
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<NAME> COMAIR HOLDINGS, INC.
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