<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 September 30, 1998
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 November 11, 1998
----- --------------------------------
Common stock, no par value 65,270,777
Page 1
<PAGE> 2
COMAIR HOLDINGS, INC.
INDEX
PAGE NOS.
PART I. Financial Information -
Consolidated Balance Sheets as of September 30, 1998 and March 31, 1998 ...3-4
Consolidated Statements of Income -
Three months ended September 30, 1998 and 1997 ........................ 5
Consolidated Statements of Income -
Six months ended September 30, 1998 and 1997 .......................... 6
Consolidated Statements of Cash Flows -
Six months ended September 30, 1998 and 1997 .......................... 7
Consolidated Statement of Shareholders' Equity
Six months ended September 30, 1998 ................................... 8
Notes to Consolidated Financial Statements ................................9-11
Management's Discussion and Analysis of Financial
Condition and Results of Operations .................................12-18
PART II. Other Information -
Item 1. Legal Proceedings ................................................. 18
Item 4. Submission of Matters to a Vote of Security Holders .............18-19
Item 5. Other Events ...................................................... 19
Item 6. Exhibits and Reports on Form 8-K. ...............................19-20
SIGNATURE ...................................................................21
Page 2
<PAGE> 3
PART I. FINANCIAL INFORMATION
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
AS OF SEPTEMBER 30, 1998 AND MARCH 31, 1998(UNAUDITED)
------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS SEPT 30, 1998 MARCH 31, 1998
- ------ ------------- --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $178,595,334 $156,214,247
Marketable securities
available-for-sale 71,528,263 61,423,198
Interest bearing deposits 30,000,000 30,000,000
------------ ------------
$280,123,597 $247,637,445
Accounts receivable 18,131,908 12,624,127
Inventory of expendable parts 19,778,569 19,478,981
Future tax benefits 14,108,532 13,436,538
Prepaid expenses 9,188,208 15,132,842
------------ ------------
Total current assets $341,330,814 $308,309,933
------------ ------------
Property and equipment, at cost:
Flight equipment $401,647,692 $403,487,347
Maintenance, operations and
office facilities 10,292,723 10,292,723
Other property and equipment 49,813,372 47,777,606
------------ ------------
$461,753,787 $461,557,676
Less accumulated depreciation and
amortization 128,128,140 117,685,617
Less reserve for engine overhauls and
purchase incentives 16,755,089 16,582,458
------------ ------------
$316,870,558 $327,289,601
Construction in progress 1,037,817 147,776
Advance payments and deposits
for aircraft 24,181,262 24,187,396
------------ ------------
Net property and equipment $342,089,637 $351,624,773
------------ ------------
Other assets and deferred costs $ 11,787,486 $ 9,802,095
------------ ------------
Total assets $695,207,937 $669,736,801
============ ============
</TABLE>
Page 3
<PAGE> 4
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
AS OF SEPTEMBER 30, 1998 AND MARCH 31, 1998 (UNAUDITED)
-------------------------------------------------------
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY SEPT 30,1998 MARCH 31,1998
- ------------------------------------ ------------ -------------
<S> <C> <C>
Current liabilities:
Current installments of long-term
obligations $ 13,729,817 $ 13,435,345
Accounts payable 36,898,724 39,158,243
Interline payable and deferred revenue 5,417,495 6,322,647
Accrued lease expense 22,059,487 22,732,440
Accrued wages 9,947,034 6,953,710
Accrued expenses 16,834,367 15,604,000
Accrued taxes 9,823,465 15,645,510
------------ ------------
Total current liabilities $114,710,389 $119,851,895
Long-term obligations $107,372,575 $114,312,516
------------ ------------
Deferred income taxes $ 72,078,560 $ 63,598,648
------------ ------------
Other liabilities and deferred credits $ 12,045,495 $ 10,127,901
------------ ------------
Shareholders' equity:
Common stock, no par value,
100,000,000 shares authorized,
65,425,714 and 66,658,127 issued
and outstanding, respectively $ 5,552,955 $ 42,072,045
Preferred stock, no par value,
1,000,000 shares authorized, none
issued or outstanding - -
Net unrealized gain on marketable
securities available-for-sale 341,458 263,576
Retained earnings 383,106,505 319,510,220
------------ ------------
Total shareholders' equity $389,000,918 $361,845,841
------------ ------------
Total liabilities and shareholders' equity $695,207,937 $669,736,801
============ ============
</TABLE>
Page 4
<PAGE> 5
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
------------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
OPERATING REVENUES:
Passenger $ 185,722,038 $ 155,871,181
Cargo and other 1,402,339 1,319,642
Non-airline operations 7,887,814 5,679,915
------------- -------------
Total operating revenues $ 195,012,191 $ 162,870,738
------------- -------------
OPERATING EXPENSES:
Salaries and related costs $ 35,986,559 $ 28,788,245
Aircraft fuel 13,071,390 13,775,404
Maintenance materials and repairs 15,509,865 13,567,773
Aircraft rent 20,752,254 18,717,067
Other rent and landing fees 6,765,228 5,220,117
Passenger commissions 13,282,111 12,276,812
Other operating expenses 23,803,186 19,839,737
Depreciation and amortization 7,405,544 7,557,841
Non-airline direct costs 5,522,300 3,907,337
------------- -------------
Total operating expenses $ 142,098,437 $ 123,650,333
------------- -------------
Operating income $ 52,913,754 $ 39,220,405
------------- -------------
NONOPERATING INCOME (EXPENSE):
Investment income $ 3,991,829 $ 2,605,139
Interest expense (1,804,484)
-------------
(2,229,019)
Total nonoperating income, net $ 2,187,345 $ 376,120
------------- -------------
Income before income taxes $ 55,101,099 $ 39,596,525
Income taxes 20,510,000 15,051,000
------------- -------------
Net income $ 34,591,099 $ 24,545,525
============= =============
Weighted average number
of shares outstanding - Basic (Note 3) 66,177,341 66,809,227
============= =============
Net income per share - Basic (Note 3) $ .52 $ .37
============= =============
Weighted average number
of shares outstanding - Diluted (Note 3) 67,118,360 67,481,241
============= =============
Net income per share - Diluted (Note 3) $ .52 $ .36
============= =============
Dividends paid per share $ 0.040 $ 0.040
============= =============
</TABLE>
Page 5
<PAGE> 6
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
---------------------------------
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
----------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
------------- -------------
<S> <C> <C>
OPERATING REVENUES:
Passenger $ 363,812,073 $ 307,955,380
Cargo and other 2,682,180 2,430,973
Non-airline operations 16,430,131 11,526,127
------------- -------------
Total operating revenues $ 382,924,384 $ 321,912,480
------------- -------------
OPERATING EXPENSES:
Salaries and related costs $ 68,991,271 $ 55,534,348
Aircraft fuel 25,666,735 27,480,858
Maintenance materials and repairs 29,246,948 25,139,889
Aircraft rent 40,742,529 36,824,688
Other rent and landing fees 12,747,786 10,784,178
Passenger commissions 26,326,372 24,487,171
Other operating expenses 46,365,877 39,792,083
Depreciation and amortization 14,920,500 14,772,113
Non-airline direct costs 11,121,921 7,768,872
------------- -------------
Total operating expenses $ 276,129,939 $ 242,584,200
------------- -------------
Operating income $ 106,794,445 $ 79,328,280
------------- -------------
NONOPERATING INCOME (EXPENSE):
Investment income $ 7,346,296 $ 4,922,546
Interest expense (3,644,016) (4,022,292)
------------- -------------
Total nonoperating income, net $ 3,702,280 $ 900,254
------------- -------------
Income before income taxes $ 110,496,725 $ 80,228,534
Income taxes 41,571,000 30,476,000
------------- -------------
Net income $ 68,925,725 $ 49,752,534
============= =============
Weighted average number
of shares outstanding - Basic (Note 3) 66,385,581 66,803,520
============= =============
Net income per share - Basic (Note 3) $ 1.04 $ .74
============= =============
Weighted average number
of shares outstanding - Diluted (Note 3) 67,284,301 68,735,791
============= =============
Net income per share - Diluted (Note 3) $ 1.02 $ .72
============= =============
Dividends paid per share $ 0.080 $ 0.080
============= =============
</TABLE>
Page 6
<PAGE> 7
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997 (UNAUDITED)
----------------------------------------------------------------
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 68,925,725 $ 49,749,284
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 14,920,500 14,772,114
Amortization and accrual of overhaul expenses 6,819,101 6,958,086
Deferred income tax provision 7,807,919 5,242,070
Other, net 531,032 (691,758)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable (5,507,781) 6,383,227
Decrease (increase) in inventory of
expendable parts (299,588) 363,140
Decrease (increase) in other current assets 5,944,634 4,983,620
Increase (decrease) in accounts payable (2,259,519) (6,461,736)
Increase (decrease) in other current
liabilities (3,176,459) 10,436,151
------------- -------------
Net cash provided by operating activities $ 93,705,564 $ 91,734,198
------------- -------------
Cash Flows From Investing Activities:
Additions to property and equipment $ (12,392,505) $ (23,027,141)
Interest bearing investments - (30,000,000)
Purchases and maturities of marketable
securities, net (20,396,746) (10,091,609)
Proceeds from sale of marketable securities 10,369,563 10,354,574
Deferred costs (73,530) (614,356)
Other, net (337,260) (1,078,744)
------------- -------------
Net cash used in investing activities $ (22,830,478) $ (54,457,276)
------------- -------------
Cash Flows From Financing Activities:
Issuance of common stock $ 261,526 $ 709,440
Repurchase of common stock (36,780,616) (986,250)
Payments of cash dividends and
repurchase of fractional shares (5,329,440) (5,343,822)
Repayments of long-term obligations (6,645,469) (6,584,697)
------------- -------------
Net cash used in financing activities $ (48,493,999) $ (12,205,329)
------------- -------------
Net increase in cash and cash
equivalents $ 22,381,087 $ 25,071,593
------------- -------------
Cash and cash equivalents at
beginning of period $ 156,214,247 $ 122,604,792
------------- -------------
Cash and cash equivalents at end of period $ 178,595,334 $ 147,676,385
============= =============
Cash paid during the period for interest $ 4,132,512 $ 4,348,002
============= =============
Cash paid during the period for income taxes $ 42,093,867 $ 19,220,418
============= =============
</TABLE>
Page 7
<PAGE> 8
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
--------------------------------------
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
----------------------------------------------
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998
-------------------------------------------
<TABLE>
<CAPTION>
Number of Accumulated
Shares Other
Issued and Comprehensive Common Comprehensive Retained
Outstanding Income Stock Income(Loss) Earnings Total
---------- ----------- ------------ --------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, March 31, 1998 66,658,127 - $ 42,072,045 $ 263,576 $ 319,510,220 $ 361,845,841
---------- ----------- ------------ --------- ------------- -------------
Repurchase of common shares (1,270,000) - (36,780,616) - - (36,780,616)
Exercise of stock options
($6.74- $15.805 per share) 37,587 - 261,526 - - 261,526
Dividends ($.040 per share) - - - (5,329,440) (5,329,440)
Comprehensive Income:
Net Income $68,925,725 - 68,925,725 68,925,725
-----------
Other Comprehensive Income,
net of tax:
Net unrealized gain on
marketable securities
available-for-sale - 77,882 - 77,882 - 77,882
------
Comprehensive Income - $69,003,607 - -
---------- ----------- ------------ --------- ------------- -------------
Balance, September 30, 1998 65,425,714 $ 5,552,955 $ 341,458 $ 383,106,505 $ 389,000,918
========== ============ ========= ============= =============
</TABLE>
Page 8
<PAGE> 9
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
table shows the amounts used in computing earnings per share and the
effect on income and the weighted average number of shares for the
three and six months ending September 30, 1998 and 1997 of dilutive
potential common stock.
Page 9
<PAGE> 10
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
<TABLE>
<CAPTION>
2nd Quarter 2nd Quarter Year-to-Date Year-to-Date
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Numerator:
Net Income $34,591,099 $24,545,525 $68,925,725 $49,752,534
----------- ----------- ----------- -----------
Denominator:
For Earnings Per Share - Basic:
Weighted Average Shares
Outstanding - Basic 66,177,341 66,809,227 66,385,581 66,803,520
Effect of Dilutive Securities:
Stock Options 941,019 672,014 898,720 477,002
For Earnings Per Share - Diluted:
Weighted Average Shares
Outstanding - Diluted 67,118,360 67,481,241 67,284,301 67,280,522
----------- ----------- ----------- -----------
Earnings Per Share - Basic $ .52 $ .37 $ 1.04 $ .74
----------- ----------- ----------- -----------
Earnings Per Share - Diluted $ .52 $ .36 $ 1.02 $ .74
----------- ----------- ----------- -----------
</TABLE>
NOTE 4: In the first quarter of fiscal 1998, the Company adopted Financial
Accounting Standards Board 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 has chosen to disclose comprehensive income, which
encompasses net income and unrealized gains or losses of marketable
securities available for sale, in the Consolidated Statement of
Shareholders' Equity. Prior years have been restated to conform to SFAS
No. 130 requirements.
Total comprehensive income for the six month period ending September
30, 1997 is as follows.
<TABLE>
<S> <C>
Net Income $49,749,284
Other comprehensive income, net of tax:
Net unrealized gain on marketable
securities available-for-sale 287,594
Comprehensive income $50,036,878
</TABLE>
Page 10
<PAGE> 11
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
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 has adopted SFAS
No. 131 in fiscal 1999 and will comply with the disclosure requirements
in its fiscal 1999 annual report and all interim and annual reports
thereafter. Because this statement only impacts how financial
information is disclosed in interim and annual reports, the adoption
will have no impact on the Company's financial condition or results of
operations.
Page 11
<PAGE> 12
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 95% of the first
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 adverse effect on
COMAIR's operations because revenues and expenses generally reflect current
price levels. COMAIR's market area, strong financial position and focus on
continuously improving operating performance 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 47% of
COMAIR's passengers in the second quarter of fiscal 1999 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 second quarter of fiscal 1999, the Company reported record
second quarter operating revenues, operating income, net income and passenger
enplanements. Operating revenues for the second quarter increased to $195.0
million, up 20% from the $162.9 million reported in the second quarter of fiscal
1998.
Operating income, net income and net income per diluted share for the
second quarter of fiscal 1999 all increased when compared with the results
reported in the second quarter of fiscal 1998. Operating income for the quarter
rose 35% to $52.9 million from $39.2 million. Net income increased 41% to $34.6
million from $24.5 million, while diluted earnings per share increased 44% to
$.52 per share from $.36 per share.
The increase in earnings is largely the result of increased passenger
enplanements which has translated into higher load factors. Passenger
enplanements grew 18% over last year's second quarter levels while load factors
exceeded last year's by approximately 3 percentage points. The growth in
passengers and load factors is clear evidence of our continuing success
throughout our system as we continue to upgrade turboprops to jets and add new
jet service, particularly in our Cincinnati hub where more than 80% of COMAIR's
operations exist. COMAIR did receive additional passengers from the Northwest
and Air Canada strikes, however, this benefit was offset somewhat by the
hurricane which affected a portion of our route structure during the last week
of September.
Page 12
<PAGE> 13
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Revenue passenger miles (RPMs) grew 19%. Capacity, available seat miles
(ASMs), grew 13% as we continue to replace turboprop aircraft and add new jet
service. During the second quarter we replaced one turboprop with jet equipment
and added new jet service to Houston, Texas and Green Bay, Wisconsin from
Cincinnati. Currently, more than 85% of COMAIR's capacity is generated by jet
aircraft.
CAPACITY AND TRAFFIC ANALYSIS
<TABLE>
<CAPTION>
QUARTER ENDED
9/30/98 9/30/97
------- -------
<S> <C> <C>
Passengers 1,654,670 1,397,144
ASMs (000s) 856,522 754,966
RPMs (000s) 562,618 471,169
Load factor 65.7% 62.4%
Breakeven load factor 48.2% 48.1%
Yield (cents) 33.0 33.1
Cost per ASM (cents) 15.8 15.7
</TABLE>
The following tables show the expense categories for COMAIR for the second
quarter of the last two fiscal years.
EXPENSE CATEGORIES
<TABLE>
<CAPTION>
QTR Ended Cents QTR Ended Cents
9/30/98 per ASM 9/30/97 Per ASM
------- ------- ------- -------
<S> <C> <C> <C> <C>
Salaries and Related Costs $ 35,986,559 4.2 $ 28,788,245 3.8
Aircraft Fuel 13,071,390 1.5 13,775,404 1.8
Maintenance Materials
and Repairs 15,509,865 1.8 13,567,773 1.8
Aircraft Rent 20,752,254 2.4 18,717,067 2.5
Other Rent and Landing
Fees 6,765,228 0.8 5,220,117 0.7
Passenger Commissions 13,282,111 1.6 12,276,812 1.6
Other Operating Expenses 23,739,125 2.8 19,781,614 2.6
Depreciation and
Amortization 6,413,741 0.7 6,631,421 0.9
------------ ------ ------------ ------
$135,520,273 15.8 $118,758,453 15.7
============ ====== ============ ======
</TABLE>
Page 13
<PAGE> 14
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
EXPENSE CATEGORIES
<TABLE>
<CAPTION>
6 Mo. Ended Cents 6 Mo. Ended Cents
9/30/98 per ASM 9/30/97 Per ASM
------- ------- ------- -------
Per ASM
<S> <C> <C> <C> <C>
Salaries and Related Costs $ 68,991,271 4.2 $ 55,534,348 3.7
Aircraft Fuel 25,666,735 1.5 27,480,858 1.8
Maintenance Materials
and Repairs 29,246,948 1.8 25,139,889 1.7
Aircraft Rent 40,742,529 2.4 36,824,687 2.5
Other Rent and Landing
Fees 12,747,786 0.8 10,784,178 0.7
Passenger Commissions 26,326,372 1.6 24,487,171 1.6
Other Operating Expenses 46,245,991 2.8 39,698,542 2.6
Depreciation and
Amortization 12,992,836 0.8 13,062,483 0.9
------------ ------ ------------ ------
$262,960,468 15.9 $233,012,156 15.5
============ ====== ============ ======
</TABLE>
Salaries and related costs have risen from the second quarter of last year.
This increase has two main components. The Company hired additional personnel to
enhance operating effectiveness and service the growing passenger base. The
average number of employees increased 20% over last year's second quarter
levels. Finally, in the first quarter of fiscal 1999, the Company implemented a
wage increase that impacted approximately 60% of the workforce in order to keep
us proactive in our efforts to attract and retain the best people in our
industry and to recognize the service of our employees.
Aircraft fuel expense decreased in total and on a unit cost basis. Aircraft
fuel price per gallon, including taxes and into-plane fees, for the second
quarter of fiscal 1999 decreased 20% to 56.4 cents from 70.2 cents a year ago.
The benefit from the lower fuel prices was partially offset by an 18% increase
in consumption.
Maintenance material and repair costs remained the same as last year on a
unit cost basis. Total spending for maintenance increased as we incurred higher
maintenance costs due to warranty periods expiring on certain jet aircraft and
higher costs of scheduled repairs on certain components.
Aircraft rent expense increased in total but decreased on a unit cost
basis. The decrease in unit cost was generated by a year over year increase in
aircraft utilization. Aircraft utilization was aided by the addition of new
daily jet service to Houston, Texas and Green Bay, Wisconsin and weekend service
to Nassau, Bahamas from Cincinnati during the second quarter. Aircraft rent
expense for the Canadair Jets was also lower as a result of lower interest
rates. Since October 1997, COMAIR has acquired fourteen Canadair Jets through
operating leases.
Page 14
<PAGE> 15
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Other rent and landing fees increased in total and on a unit cost basis
due to higher facilities rental and landing fees resulting from the addition of
the larger Canadair Jets.
Travel agency and credit card commissions have increased as a result of
a 19% increase in passenger revenues. This increase was offset in part by a
change in COMAIR's commission structure beginning in September 1997 which
reduced commissions from 10% to 8% on tickets purchased in the U.S. and Canada.
Although unit revenues (revenue per available seat mile) were higher in the
second quarter of fiscal 1999, commission cost per available seat mile (ASM)
remained the same as result of this new commission structure which lowered the
weighted average domestic commission rates. Commissions as a percentage of
passenger revenues were 7.2% this quarter and 7.9% last year.
Other operating expenses (the principle components of which include
passenger reservation fees, aircraft and passenger handling, crew training, crew
accommodations and per diem expense, property taxes, advertising expenses and
insurance expense) increased in total and on a unit cost basis. The increase was
due primarily to higher passenger reservation fees associated with the increase
in passenger enplanements.
Depreciation and amortization decreased on a unit cost basis. The
decrease in unit cost is due to the additional capacity generated by the
fourteen Canadair Jets acquired through operating leases since October 1997.
Investment income in the second quarter of fiscal 1999 was higher than
second quarter of fiscal 1998 due to higher average cash balances available for
investment.
The Company's effective tax rate, which includes federal, state and
local taxes, approximated the statutory rate in the second quarter of fiscal
1999 and 1998.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
In the first six months of fiscal 1999, the Company generated cash
from operating activities of $93.7 million. Total working capital increased to
$226.6 million from $188.5 million at March 31, 1998, while the current ratio
increased to 2.98 from 2.57. The Company repaid long-term obligations of $6.6
million and paid cash dividends of $5.3 million. The Company's long-term debt to
equity position was 22% debt, 78% equity at September 30, 1998, as compared to
24% debt, 76% equity at March 31, 1998. During the first six months, the Company
had net property and equipment additions of $12.4 million. These additions were
financed with working capital. In fiscal 1999, additional capital for repayment
of long-term obligations, planned dividend payments and other capital
expenditures are expected to be provided by operations.
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 September 30, 1998, the Company had repurchased 8.6
million shares of this authorization at a cost of $88.6 million. During the
first six months of fiscal 1999 the Company has repurchased 1.3 million shares
at a approximate cost of $36.8 million. The Company has repurchased an
additional 160,000 shares at a cost of approximately $5.0 million from October 1
to November 11, 1998.
Page 15
<PAGE> 16
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
COMAIR has taken delivery of eight new generation, 50-passenger
Canadair Jet aircraft during the first six months of fiscal 1999 bringing the
total Canadair Jet fleet to 67. 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. Ten
aircraft were financed with debt, one was acquired with working capital, while
the other 36 aircraft were financed through operating leases with terms of up to
16.5 years.
As of September 30, 1998, COMAIR had scheduled delivery positions for
13 Canadair Jets to be delivered through fiscal 2000, all of which are from our
previous firm order of 80 aircraft. The aggregate cost of these aircraft,
including support equipment and estimated escalation, is expected to be
approximately $236 million. On October 1, 1998, COMAIR signed a 10-year
agreement with Bombardier Aerospace of Canada to acquire 50 additional jets
including 20 of their new 70-passenger jets and 30, 50-passenger jets. This firm
order of 50 jets, including estimated escalation costs and related support
equipment, is valued at more than $1 billion. COMAIR will receive its 80th jet
in August 1999 and will continue to accept delivery of at least one 50-passenger
aircraft each month through February of 2001. COMAIR will take delivery of its
first 70-passenger jet at the end of calendar 2001. In addition to this firm
order, COMAIR has options for 115 additional aircraft, valued at $2.8 billion,
including support equipment and estimated escalation, which could be available
for delivery in 2001 through 2007.
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.
The Company depends on many internal and external information
technology systems that were not originally designed to process dates beyond
1999. The Company has developed a Year 2000 Readiness Program (Program) to
ensure that its systems will function properly in the Year 2000 and thereafter.
The Company expects this Program to be completed in September 1999. With the
assistance of an experienced outside consultant, specializing in the aviation
technology field, we have formulated a plan to address all of the Company's
information technology requirements that could be impacted by any potential Year
2000 issues. Our Program has been initially focused on our internal information
technology. This includes software applications, hardware and infrastructure
which are essential for flight scheduling; aircraft maintenance; revenue
management; finance systems, which includes revenue accounting; internal
communication systems and facility management.
While our initial focus has been on internal information technology
systems, the Program also encompasses non-Information Technology equipment,
aircraft and flight support systems, our suppliers and facilities. We have also
been involved in industry efforts led by the Air Transport Association (ATA) and
the Regional Airline Association (RAA) in addressing Year 2000 issues concerning
third party relationships that include the Federal Aviation Administration
(FAA), the U.S. Department of Transportation (DOT), and airport authorities.
The Company has taken a phased approach to this Program that includes:
Identification & Awareness, Assessment, Remediation and Testing. Based on this
approach, the Identification & Awareness and Assessment phases of all the
Company's critical internal information technology systems, non-information
technology
Page 16
<PAGE> 17
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
equipment, aircraft and flight support systems, are complete. These systems
specifically include, but are not limited to, those that are critical and
essential for the Company to continue operations without interruption. The
Company is continuing to work through the remaining phases and expects the
Remediation phase to be substantially complete by April 1999, and the Testing
phase to be completed by September 1999.
The Company estimates that the overall cost of the Year 2000 readiness
activities will approximate $3 million. This cost includes hardware and software
upgrades, consultant fees, and internal staffing salaries for our employees
involved in the Program. The total amount expended on the Program through
September 30, 1998, was approximately $700,000.
As indicated, the Company has also assessed Year 2000 issues concerning
its relationships with third parties. We continue to identify those vendors and
suppliers that we define as critical to our business, and have initiated formal
communications with those that provide goods and services that are essential to
our operations. These third parties include the suppliers of infrastructure
critical to the airline industry, such as the air traffic control and related
systems of the FAA, DOT and local airport authorities. Other critical third
parties on which the Company's relies include other airlines, the suppliers of
aircraft fuel, utilities, communications services and other airline reservation
systems. The progress of each of their Year 2000 Programs is being monitored
based on information provided to us by them. The failure of third parties to
remediate their respective systems could have a material effect on the Company's
financial condition, cash flows and results of operations.
The Company is revising its current business interruption contingency
plans to address internal and external issues related to the Year 2000 problem
to the extent practicable. Revisions to these plans are expected to be completed
by September 1999. These plans, which are intended to enable the Company to
operate to the extent possible, include carrying additional inventories for fuel
and flight essential components; performing certain processes manually;
repairing existing systems; changing suppliers; and reducing or suspending
operations. The Company believes that since the Year 2000 issues are so
widespread in nature, the contingency plans will require further modifications
as additional information becomes available regarding results of the Company's
Remediation & Testing phase and the status of third party Year 2000 readiness.
The Company is currently of the opinion that its material processes and
systems, to the extent within its control, will be in compliance with Year 2000
requirements in the time frame mentioned. However, there can be no assurance
that the Company's internal systems or equipment or those of third parties on
which the Company relies will be Year 2000 compliant in a timely manner or the
Company's or third parties' contingency plans will mitigate the effects of any
noncompliance. The failure of the systems or equipment of the Company or third
parties (which the Company believes is the most reasonably likely worst case
scenario) could result in the reduction or suspension of the Company's
operations and could have a material adverse effect on the Company's financial
condition, cash flows and results of operations.
Numerous lawsuits, as described in the Registrant's Form 10-K dated
March 31, 1998, regarding the crash of Flight 3272 in January 1997 near Detroit,
Michigan have been filed. A substantial number of claims have been settled. The
Company maintains sufficient insurance coverage for any remaining 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.
Page 17
<PAGE> 18
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
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 and are also
discussed in the second and third paragraphs under "Results of Operations."
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On August 30, 1996, COMAIR filed suit challenging a decision of the
National Mediation Board. This matter involves the demand of the International
Brotherhood of Teamsters to represent COMAIR 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 a
collective bargaining representative for the flight attendants of COMAIR. On
September 23, 1998, the court ruled in favor of the National Mediation Board's
certification of the International Brotherhood of Teamsters as a collective
bargaining representative for the flight attendants of COMAIR. At this time,
COMAIR is evaluating the possibility of appealing this decision.
There are no other material legal proceedings pending adverse to 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 either adequately insured or will not have a material adverse
effect on the Company's financial condition, results of operations or cash
flows.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. AT THE COMPANY'S
ANNUAL MEETING OF SHAREHOLDERS HELD ON AUGUST 11, 1998, THE FOLLOWING ACTIONS
WERE TAKEN BY SHAREHOLDERS:
4.1 All persons nominated as Class A Directors were elected with the votes for
each person being:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Shares Against
Name Shares For or Withheld
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert H. Castellini 59,127,267 483,664
- --------------------------------------------------------------------------------------------------------
Christopher J. Murphy III 59,147,111 463,820
- --------------------------------------------------------------------------------------------------------
Gerald L. Wolken 59,132,503 478,428
- --------------------------------------------------------------------------------------------------------
</TABLE>
4.2 Amendment to the Company's Articles of Incorporation to increase the
authorized number of shares of Common Stock to 200 million was approved by the
following vote:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Shares For Shares Against Shares Abstained Broker Non-Votes
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
56,069,048 3,382,056 159,827 0
- --------------------------------------------------------------------------------------------------------
</TABLE>
Page 18
<PAGE> 19
ITEM 1. LEGAL PROCEEDINGS (CONTINUED)
4.3 Amendments to the 1990 Stock Option Plan were approved by the
following vote:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Shares For Shares Against Shares Abstained Broker Non-Votes
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
51,021,978 1,084,455 405,153 7,099,345
- --------------------------------------------------------------------------------------------------------
</TABLE>
4.4 The selection of Arthur Andersen LLP as independent public
accountants for fiscal year 1999 was ratified by the following vote:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Shares For Shares Against Shares Abstained Broker Non-Votes
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
59,078,455 101,368 160,810 0
- --------------------------------------------------------------------------------------------------------
</TABLE>
ITEM 5. OTHER EVENTS
The form of Proxy for the Company's Annual Meeting of Shareholders
grants authority to designated proxies named on the proxy card to vote in their
discretion on any matters that come before the meeting except those set forth in
the Company's Proxy Statement and except for matters as to which adequate notice
is received. In order for a notice to be deemed adequate for the 1999 Annual
Shareholder's Meeting, it must be received prior to May 10, 1999.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 10.13 - Amendment to Bombardier Regional Aircraft
Division Purchase Agreement between Bombardier Inc. and
Comair, Inc. dated November 24, 1997
(b) Exhibit 10.14 - Bombardier Aerospace, Regional Aircraft
Purchase Agreement between Bombardier Inc. and Comair, Inc.
dated September 30, 1998
(c) Exhibit 99 - Forward looking statements
---------------------------------------
(d) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter for which
this report is filed
Page 19
<PAGE> 20
ITEM 1. LEGAL PROCEEDINGS (CONTINUED)
EXHIBIT 99
SAFE HARBOR
The Private Securities Litigation Reform Act of 1995 provides a safe
harbor from civil litigation in many instances for forward-looking statements.
Such statements must be accompanied by meaningful cautionary statements that
identify important factors that could cause actual results to differ materially
from those that might be projected. This exhibit to the Registrant's Form 10-K
is being filed in order to adhere to the provisions of this Act by providing the
following cautionary statements:
Risk Factors Affecting Comair Holdings, Inc.
- --------------------------------------------
The Company's business operations and strategy are subject to a number
of uncertainties and risks which could cause the actual results to differ
materially from projected results. It is not possible to list all of the many
factors and events that could cause the actual results to differ materially from
the projected results. Such factors may include, but are not limited to:
competitive factors such as the airline pricing environment, the capacity
decisions of other airlines, and the presence of low-cost, low-fare carriers;
the willingness of customers to travel; general economic conditions; changes in
jet fuel prices; availability of aircraft; unplanned increases in financing or
other costs; and actions by the United States and foreign governments.
Page 20
<PAGE> 21
COMAIR HOLDINGS, INC. AND SUBSIDIARIES
SIGNATURE
- ---------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to this report to be signed on its
behalf by the undersigned thereunto duly authorized.
COMAIR HOLDINGS, INC.
November 13, 1998 BY: /s/ Randy D. Rademacher
------------------------------
Randy D. Rademacher
Senior Vice President Finance
Chief Financial Officer
Page 21
<PAGE> 1
Exhibit 10.13
FIRST AMENDMENT TO PURCHASE AGREEMENT No. P.A. - 0392
-----------------------------------------------------
THIS FIRST AMENDMENT TO PURCHASE AGREEMENT No. P.A. - 0392 (the "First
Amendment") is made and entered into effective as of the 30th day of September,
1998 by and between BOMBARDIER INC., ("Bombardier") a Canadian corporation
through Bombardier Aerospace Regional Aircraft (formerly Bombardier Regional
Aircraft Division) having an office at 123 Garratt Boulevard, Downsview,
Ontario, Canada and COMAIR, INC., ("Buyer") an Ohio corporation with offices
located at the Cincinnati/Northern Kentucky International Airport, Cincinnati,
Ohio, U.S.A., 45275.
WHEREAS, Bombardier and Buyer are parties to that certain Purchase Agreement No.
P.A. - 0392 dated November 24, 1997 (the "Agreement" ) and pursuant to Section
24.1 thereof, desire to amend the Agreement as herein provided;
WHEREAS, the parties desire to provide for the exercise by Buyer of the purchase
of certain Option Aircraft and Additional Option Aircraft granted Buyer under
the Agreement as hereinafter provided.
NOW THEREFORE, for good and valuable consideration, the adequacy and receipt of
which is hereby acknowledge by the parties, Buyer and Bombardier agree to amend
the Agreement as follows:
1. The second WHEREAS Recital paragraph contained on page 1 of the
Agreement is hereby amended to substitute "sixty (60)" for "thirty
(30)" therein.
2. The definition of "Agreement" contained in Article 1.1 is amended and
restated in its entirety to read as follows:
"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 including
without limitation the First Amendment to this Purchase Agreement
P.A.-0392;"
3. Article 2.0 of the Agreement is amended to substitute "sixty (60)" for
"thirty (30)" therein.
4. Exhibit C of the Agreement is hereby amended as follows:
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
-1-
<PAGE> 2
in Annex to Exhibit C-2, add CR 34-352 GPS - Dual Collins GPS-2000 with
respect only to Aircraft No. 31 through No. 60, inclusive.
5. Exhibit D of the Agreement is hereby amended and restated in its
entirety so as to read as provided in Appendix I attached hereto and
made a part hereof.
6. [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
7. With respect to each and every Letter Agreement attached and
incorporated in the Agreement (including Letter Agreement Number's
0392-01 through to 0392-24 and 30), the initial paragraph of each such
Letter Agreement is amended to substitute "sixty (60)" for "thirty
(30)" therein.
8. Letter Agreement No. 0392-05 of the Agreement is hereby amended as
follows:
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
9. Letter Agreement No. 0392-06 of the Agreement is hereby amended as
follows:
in paragraph 1.0, substitute "sixty (60)" for "thirty (30)" therein;
paragraph 1.2 is hereby deleted and replaced in its entirety with
"Bombardier hereby offers to Buyer the option to purchase forty-five
(45) CRJ-100ER option aircraft the ("Option Aircraft") [*]
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
10. Letter Agreement No. 0392-25 is hereby added to the Agreement.
11. Letter Agreement No. 0392-26 is hereby added to the Agreement.
12. Letter Agreement No. 0392-27 is hereby added to the Agreement.
13. Letter Agreement No. 0392-28 is hereby added to the Agreement.
14. Letter Agreement No. 0392-29 is hereby added to the Agreement.
15. Letter Agreement No. 0392-31 is hereby added to the Agreement.
16. Letter Agreement No. 0392-22 of the Agreement is hereby amended to [*].
-2-
<PAGE> 3
Except as specifically provided herein, the Agreement together with all
Exhibits, Annexes, Appendices and Letter Agreements attached shall continue in
full force and effect.
In witness whereof this First Amendment Agreement was signed on the date written
hereof:
For and on behalf of For an on behalf of
Comair, Inc.: Bombardier Inc.:
By: /s/ Randy Rademacher By: /s/ Robert Gillespie
--------------------- ----------------------------
Randy Rademacher Robert Gillespie
Its: Senior Vice President Finance & CFO Its: President
Bombardier Aerospace,
Regional Aircraft
By: /s/ John Giraudy
---------------------------
John Giraudy
Its: Sr. Vice President, Sales
Bombardier Aerospace,
Regional Aircraft
-3-
<PAGE> 4
Appendix I to the
-----------------
First Amendment to
------------------
PA -0392
--------
EXHIBIT D
DELIVERY SCHEDULE
The Aircraft shall be offered to Buyer for acceptance pursuant to the provisions
of Article 9 in accordance with the following schedule:
AIRCRAFT SCHEDULED DELIVERY MONTH/YEAR
No. 1 [*]
No. 2 [*]
No. 3 [*]
No. 4 [*]
No. 5 [*]
No. 6 [*]
No. 7 [*]
No. 8 [*]
No. 9 [*]
No. 10 [*]
No. 11 [*]
No. 12 [*]
No. 13 [*]
No. 14 [*]
No. 15 [*]
No. 16 [*]
No. 17 [*]
No. 18 [*]
No. 19 [*]
No. 20 [*]
No. 21 [*]
No. 22 [*]
No. 23 [*]
No. 24 [*]
No. 25 [*]
No. 26 [*]
No. 27 [*]
No. 28 [*]
No. 29 [*]
No. 30 [*]
-4-
<PAGE> 5
No. 31 [*]
No. 32 [*]
No. 33 [*]
No. 34 [*]
No. 35 [*]
No. 36 [*]
No. 37 [*]
No. 38 [*]
No. 39 [*]
No. 40 [*]
No. 41 [*]
No. 42 [*]
No. 43 [*]
No. 44 [*]
No. 45 [*]
No. 46 [*]
No. 47 [*]
No. 48 [*]
No. 49 [*]
No. 50 [*]
No. 51 [*]
No. 52 [*]
No. 53 [*]
No. 54 [*]
No. 55 [*]
No. 56 [*]
No. 57 [*]
No. 58 [*]
No. 59 [*]
No. 60 [*]
-5-
<PAGE> 6
Appendix II to the
------------------
First Amendment to PA-0392
--------------------------
ATTACHMENT A to Letter Agreement No. 05 to Purchase Agreement -0392
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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-6-
<PAGE> 7
Appendix III to the
-------------------
First Amendment to PA-0392
--------------------------
Option Aircraft Delivery Schedule
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
-7-
<PAGE> 8
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 25 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF SIXTY (60) 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/ Gail M. Greenwood
Gail M. Greenwood
Contracts Manager
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted:
this 30th day of September, 1998
COMAIR, INC.
/s/ Randy Rademacher
- ------------------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 25 -1-
to P.A. No. 0392
---------------------------
Initials
Buyer Bombardier
---------------------------
<PAGE> 9
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 26 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF SIXTY (60) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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/ Gail M. Greenwood
Gail M. Greenwood
Contracts Manager
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted:
this 30th day of September, 1998
COMAIR, INC.
/s/ Randy Rademacher
- --------------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 26 -1-
to P.A. No. 0392
---------------------------
Initials
Buyer Bombardier
---------------------------
<PAGE> 10
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 27 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF SIXTY (60) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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/ Gail M. Greenwood
Gail M. Greenwood
Contracts Manager
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted:
this 30th day of September, 1998
COMAIR, INC.
/s/ Randy Rademacher
- --------------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 28 -1-
to P.A. No. 0392
---------------------------
Initials
Buyer Bombardier
---------------------------
<PAGE> 11
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 28 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF SIXTY (60) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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.
LA No. 28 -1-
to P.A. No. 0392
---------------------------
Initials
Buyer Bombardier
---------------------------
<PAGE> 12
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/ Gail M. Greenwood
Gail M. Greenwood
Contracts Manager
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted:
this 30th day of September, 1998
COMAIR, INC.
/s/ Randy Rademacher
- --------------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 28 -2
to P.A. No. 0392
---------------------------
Initials
Buyer Bombardier
---------------------------
<PAGE> 13
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 29 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF SIXTY (60) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
3.0 In the event of the termination of the Agreement, this Letter Agreement
shall become automatically null and void with respect to undelivered
Aircraft.
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 Bombardier.
5.0 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.
LA No. 29 -1-
to P.A. No. 0392
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<PAGE> 14
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/ Gail M. Greenwood
Gail M. Greenwood
Contracts Manager
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted:
this 30th day of September, 1998
COMAIR, INC.
/s/ Randy Rademacher
- --------------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 29 -2-
to P.A. No. 0392
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<PAGE> 15
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 31 TO PURCHASE AGREEMENT NO. 0392 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF SIXTY (60) CANADAIR REGIONAL JET AIRCRAFT (THE "AIRCRAFT").
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
LA No. 31 -1-
to P.A. No. 0392
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<PAGE> 16
3.0 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 Bombardier.
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/ Gail M. Greenwood
Gail M. Greenwood
Contracts Manager
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted:
this 30th day of September, 1998
COMAIR, INC.
/s/ Randy Rademacher
- --------------------------
Randy Rademacher
Senior Vice President, Finance & CFO
* MATERIAL DESIGNATED BY AN ASTERISK IS CONSIDERED CONFIDENTIAL AND HAS BEEN
OMITTED PURSUANT TO RULE 24B-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. SUCH
MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
LA No. 31 -2-
to P.A. No. 0392
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<PAGE> 1
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Exhibit 10.14
BOMBARDIER AEROSPACE, REGIONAL AIRCRAFT
PURCHASE AGREEMENT
BETWEEN
BOMBARDIER INC.
BOMBARDIER REGIONAL AIRCRAFT DIVISION
AND
COMAIR INC.
RELATING TO THE PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET
SERIES 700 AIRCRAFT AND RELATED AIRLINE SERVICES
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P.A. No. 0431 ------------------------
<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
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P.A. No. 0431 -i- ------------------------
<PAGE> 3
LIST OF EXHIBITS
EXHIBIT DESCRIPTION
A SPECIFICATION
B ECONOMIC ADJUSTMENT FORMULA
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 [*]
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P.A. No. 0431 -ii- ------------------------
<PAGE> 4
This agreement is made on the 30th day of September, 1998.
BETWEEN
BOMBARDIER INC., a Canadian corporation represented by BOMBARDIER
AEROSPACE, REGIONAL AIRCRAFT with offices located at 123 Garratt Boulevard,
Downsview, Ontario, Canada, M3K 1Y5.
("Bombardier")
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 desires to purchase from Bombardier twenty (20) Aircraft (as
later defined) and to obtain the relevant data, documents and support
services according to this Agreement (as later defined), and Bombardier
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 Bombardier agree as follows:
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P.A. No. 0431 ------------------------
<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. 0431
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 Canadair Regional Jet Aircraft
Model CL-600-2C10 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.
"Buyer Selected Optional shall have the meaning given
Features" to it in Article 2.0.
"Delivery Date" the date on which Buyer takes
delivery of the Aircraft pursuant
to Article 11.9.
"DOT" means Transport Canada, the
Canadian Department of Transport or
any succeeding department or agency
then responsible for the duties of
Transport Canada.
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P.A. No. 0431 ------------------------
<PAGE> 6
"Economic Adjustment shall have the meaning given
Formula" to it in Article 1.2 of
Exhibit C.
"Excusable Delay" any delay due directly to or
indirectly to any cause whatsoever,
beyond Bombardier's reasonable
control or without negligence of
Bombardier, 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;
8) delay or failure of carriers,
subcontractors or suppliers for any
reasons whatsoever; and
9) delay in obtaining any type
approval or type certificate or any
airworthiness certificate or any
equivalent approval or
certification, by reason of any law
or governmental order, directive or
regulation or
P.A. No. 0431
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<PAGE> 7
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,
type certificate, airworthiness
certificate or equivalent, or by
reason of any change or addition
requested by a governmental agency
to the compliance program of
Bombardier 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.
"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
in Article 1.2 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.
P.A. No. 0431
-4-
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<PAGE> 8
"Scheduled Delivery shall have the meaning given
Date" to it at Article 9.1.
"Specification" Specification No. RAD-670-100 Issue
B dated September 4th, 1998 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.
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.
P.A. No. 0431
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<PAGE> 9
2.0 SUBJECT MATTER OF SALE
Bombardier shall manufacture, sell and deliver to Buyer, and Buyer
shall purchase from Bombardier, pay for and take delivery of twenty
(20) Aircraft manufactured pursuant to the Specification, as
supplemented to reflect the incorporation of the Buyer selected
optional features ("Buyer Selected Optional Features") set forth in the
Annex to Exhibit C (individually or collectively the "Aircraft") and
related services subject to the terms and conditions of this Agreement.
P.A. No. 0431
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<PAGE> 10
3.0 CERTIFICATION
3.1 Prior to the Acceptance Date, Bombardier 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 Canadair Regional Jet CL-600-2C10 aircraft.
3.2 On or before the Delivery Date, Bombardier 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
Bombardier, to obtain an F.A.A. Certificate of Airworthiness.
Bombardier shall not be obligated to obtain any other
certificates or approvals as part of this Agreement.
P.A. No. 0431
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<PAGE> 11
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.
P.A. No. 0431
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<PAGE> 12
5.0 PAYMENT
Payment shall be as per Article 2 of Exhibit C attached hereto.
P.A. No. 0431
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<PAGE> 13
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, Bombardier shall furnish,
without charge, office space at Bombardier's facility for one
(1) representative of Buyer. Buyer shall be responsible for
all expenses of its representative and shall notify Bombardier
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 Bombardier'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 Bombardier facilities where the work is being
carried out provided there shall be no disruption in
Bombardier's performance.
6.3 Bombardier shall advise Buyer's representative of Bombardier's
rules and regulations applicable at Bombardier's facilities
and Buyer's representative shall conform to such rules and
regulations
6.4 Communication between Buyer's representative and Bombardier
shall be solely through Bombardier's Contract Department or
its designate.
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 BOMBARDIER OR
BOMBARDIER'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.
P.A. No. 0431
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<PAGE> 14
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.
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION.]
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. Bombardier shall advise Buyer of such
Regulatory Change and Buyer shall pay Bombardier a reasonable
price for such Regulatory Change.
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.
P.A. No. 0431
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<PAGE> 15
8.0 BUYER FURNISHED EQUIPMENT ("BFE") AND INFORMATION
8.1 During the manufacture of the Aircraft, Buyer shall provide to
Bombardier on or before the date required by Bombardier, all
information needed to manufacture Buyer's Aircraft as
Bombardier may reasonably request including, without
limitation, the selection of furnishings, internal and
external colour schemes. Bombardier 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
Bombardier 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 Bombardier may reasonably
require.
Within sixty (60) calendar days thereafter, Bombardier shall
advise Buyer of its acceptance or rejection of the BFE and of
the dates by which each item of BFE is required by Bombardier.
If required, the parties hereto shall execute a Change Order
in accordance with Article 7.1 to cover those BFE items
accepted by Bombardier pursuant to Article 8.2.
8.3 The BFE accepted by Bombardier 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. Bombardier's plant or
such other place as Bombardier may designate, no later
than the date agreed upon between Buyer and Bombardier,
free and clear of any taxes, duties, licenses, charges,
liens or other similar claims;
b. The BFE shall meet:
1) the standards of quality of Bombardier, and
2) the requirements of the applicable airworthiness
certification agency;
P.A. No. 0431
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<PAGE> 16
c. The BFE shall be delivered to Bombardier in good
condition and ready for immediate incorporation into
the Aircraft. Bombardier 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. Bombardier 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. BOMBARDIER 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 BOMBARDIER, 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.
8.4 If at any time between receipt of the BFE by Bombardier 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 Bombardier'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;
P.A. No. 0431
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<PAGE> 17
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;
Bombardier 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 Bombardier any costs and expenses reasonably
incurred by Bombardier due to such delay.
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 Bombardier's gross negligence or
misconduct.
8.7 If this Agreement is terminated in whole or in part in
accordance with the provisions thereof Bombardier may elect
to, by written notice to Buyer, either:
a. purchase the BFE ordered by Buyer and/or received by
Bombardier at the invoice price paid by Buyer; or
b. return the BFE to Buyer FOB Bombardier's plant, or such
other place that Bombardier may designate.
P.A. No. 0431
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<PAGE> 18
9.0 DELIVERY PROGRAM
9.1 The Aircraft shall be offered for acceptance to Buyer at
Bombardier's plant in Dorval, the Province of Quebec,
Canada, during the quarters set forth in the Delivery
Schedule attached hereto as Exhibit D (the "Scheduled
Delivery Dates").
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION.]
P.A. No. 0431
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<PAGE> 19
10.0 EXCUSABLE DELAY
10.1 In the event of a delay on the part of Bombardier 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,
Bombardier 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
Bombardier 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. Bombardier 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
Bombardier 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 Bombardier; or
P.A. No. 0431
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<PAGE> 20
b) within [*] calendar days following the date of
notification by Bombardier of the anticipated delay
of more than [*] months in the case of Buyer and
[*] months in the case of Bombardier.
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
P.A. No. 0431
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<PAGE> 21
11.0 ACCEPTANCE PROCEDURE
11.1 Bombardier shall give Buyer not less than [*] 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 [*] consecutive working days commencing on the
Readiness Date in which to complete said inspection and
flight test (such [*] working day period being the
"Acceptance Period").
11.2 Up to [*] representatives of Buyer may participate in
Buyer's inspection of the Aircraft and [*] representatives
of Buyer may participate in the flight test. During the
flight test Bombardier 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
Bombardier's or, if available and agreeable to Bombardier,
Buyer's ground functional and flight test procedures (the
"FTP's"). Such flight test shall be carried out for up to
[*] 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 Bombardier 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 Bombardier shall provide to Buyer a copy of Bombardier's
FTP's at least [*] prior to the Scheduled Delivery Date of
the first Aircraft to be delivered. Such FTP's shall
govern Buyer's inspection and/or flight test of the
Aircraft.
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 Bombardier, at
no cost to Buyer, before the acceptance of the Aircraft by
Buyer which
P.A. No. 0431
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<PAGE> 22
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 [*] 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 Bombardier, 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.
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, Bombardier shall deliver the Aircraft to Buyer
and Buyer shall take delivery thereof at Bombardier's
plant in the Province of Quebec. The date on which
Bombardier delivers and Buyer takes delivery of the
Aircraft shall be the "Delivery Date" as evidenced by the
execution of a Bombardier 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 Bombardier 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 [*]
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
Bombardier may have, including termination as specified in
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<PAGE> 23
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
Bombardier for all costs and expenses reasonably incurred
by Bombardier 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, Bombardier 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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13.0 CUSTOMER SUPPORT SERVICES AND WARRANTY
13.1 Bombardier shall provide to Buyer the Customer Support
Services pursuant to the provisions of Exhibit H attached
hereto.
13.2 Bombardier 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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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 Bombardier, any affiliate of Bombardier, or Buyer or
the Aircraft whether or not there is an obligation for
Bombardier 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, Bombardier 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.
14.2 Any tax, fee, duty, or assessment referred to in Article
14.1 above shall be paid by Buyer. Bombardier 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 Bombardier, 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 Bombardier 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 Bombardier 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, Bombardier may pay the
asserted tax, duty or assessment, including interest and
penalties, and Buyer shall, within thirty (30) calendar
days thereafter, reimburse Bombardier for any such payment
and all reasonable costs and expenses of Bombardier
(including reasonable attorney's fees).
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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 licences or authorities
required to import the Aircraft into any country outside
Canada shall be the responsibility of Buyer. Bombardier
shall, to the extent permitted by law, obtain a Canadian
export licence, 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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15.0 LOSS OF OR DAMAGE TO AIRCRAFT
If prior to the Delivery Date an Aircraft is lost, destroyed or in
Bombardier's judgment damaged beyond repair (the "Total Loss
Aircraft"), Bombardier shall promptly, but not later than [*]
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 Bombardier's
other contractual commitments and production capabilities. Unless
Buyer notifies Bombardier within [*] after notice of the replacement
aircraft's scheduled delivery that Buyer desires such replacement
aircraft, this Agreement will be terminated as to the Total Loss
Aircraft. In the event of such termination, Bombardier's sole
liability and responsibility shall be limited to the obligation to
return to Buyer the amounts paid by Buyer to Bombardier with respect
to the Total Loss Aircraft less any amount overdue by Buyer to
Bombardier under this Agreement. If Buyer timely notifies Bombardier
that it wants such replacement aircraft, the parties shall amend this
Agreement accordingly. Notwithstanding the foregoing, nothing herein
shall obligate Bombardier to offer to deliver a replacement aircraft
to Buyer if no aircraft are available or the production line is
terminated.
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16.0 INDEMNITY AGAINST PATENT INFRINGEMENT
16.1 Subject to the provisions hereinafter set out in this
Article 16, Bombardier 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.
The foregoing undertaking by Bombardier 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,
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accessory or equipment of the Aircraft is enjoined,
Bombardier 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.
16.3 Bombardier 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
Bombardier written notice of such suit within ten
(10) 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 Bombardier 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 Bombardier, to reduce or mitigate any such
expenses, damages costs and royalties involved;
c. Buyer furnishes promptly to Bombardier 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,
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damages, costs and royalties for which Bombardier
may be held liable, without prior written approval
of Bombardier (which shall not be unreasonably
withheld) or otherwise acting in a manner
prejudicial to such suit or claim.
16.4 Bombardier 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 Bombardier 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 Bombardier 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 BOMBARDIER IN THIS ARTICLE ARE UNDERTAKEN BY BOMBARDIER
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 BOMBARDIER 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 BOMBARDIER AND BUYER UNDER THE
HAND OF THEIR RESPECTIVE DULY AUTHORIZED REPRESENTATIVE.
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17.0 LIMITATION OF LIABILITY
BOMBARDIER 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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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 [*]
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 [*] 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 [*]
after its issue or levy.
18.2 In addition, Bombardier 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
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 [*] days after receipt of notice from
Bombardier 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 Bombardier is in default or
breach of any material term or condition of this Agreement
and such breach remains
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uncured for a period of [*] 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 Bombardier
pursuant to Articles 18.1 and 18.2:
a. all rights (including property rights), if any,
which Buyer may have or may have had in or to this
Agreement or the undelivered Aircraft shall become
null and void with immediate effect;
b. all rights (including property rights and the right
to sell the Aircraft to another party, if any) in
and to the undelivered Aircraft shall be vested
with Bombardier free and clear of any ownership or
title rights, if any, liens, charges or
encumbrances; and
c. all amounts paid by Buyer shall be retained by
Bombardier and shall be applied against the
costs, expenses, losses and damages incurred by
Bombardier as a result of Buyer's default
and/or the termination of this Agreement. Buyer
hereby acknowledges and recognizes that
Bombardier shall have all rights permitted by
law to recover from Buyer such costs, expenses,
losses and damages and, in any event, such
costs, expenses, losses and damages will
aggregate not less than the amount retained by
Bombardier pursuant to this Article 18.4 c.,
provided however that nothing herein contained
shall entitle Bombardier to obtain any
duplication of payment.
18.5 In the event of termination of this Agreement
by Buyer, Buyer's sole rights, remedies and
recourses against Bombardier and Bombardier's
obligations to Buyer shall be limited to, and
only to, the return by Bombardier of those
amounts paid by Buyer to Bombardier hereunder
on account of the undelivered Aircraft [*].
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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 [*]
ii) In the case of Bombardier to [*]
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 the
assignee's obligations 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
Bombardier'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 Bombardier reserves the right to
amend one or more of the terms and conditions of this
Agreement.
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 Bombardier's prior written
consent and subject to Bombardier'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 Bombardier that
Bombardier'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 Bombardier may provide
from time to time to other customers and also provided
that there is no increase to the liability and/or
responsibility of Bombardier.
19.4 Bombardier 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
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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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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 Bombardier shall be addressed to:
Bombardier Inc.
Bombardier Aerospace, Regional Aircraft
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
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 acknowledgement of receipt;
or
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c. if sent by telex or facsimile on the day indicated
by the acknowledgement or the answer back of the
receiver in provable form.
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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 Bombardier 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 Bombardier.
Buyer shall not reproduce any technical data or
information or divulge the same to any third party without
the prior written consent of Bombardier.
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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22.0 SUCCESSORS
This Agreement shall inure to the benefit of and be binding upon each
of Bombardier and Buyer and their respective successors.
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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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24.0 AGREEMENT
24.1 This Agreement and the matters referred to herein
constitute the entire agreement between Bombardier 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
Bombardier 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
Bombardier 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.
24.3 THE OBLIGATIONS AND LIABILITIES OF BOMBARDIER, 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 BOMBARDIER 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
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if modification is required as contemplated
under Article 7.1 herein.
24.5 Bombardier 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: COMAIR, INC. BOMBARDIER INC.:
Per:/s/ DAVID A. SIEBENBURGEN Per: /s/ ROBERT GILLESPIE
Title: President Title: President
Bombardier Aerospace,
Regional Aircraft
Per: /S/JOHN GIRAUDY
Title: Sr. Vice President, Sales
Bombardier Aerospace,
Regional Aircraft
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EXHIBIT A
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
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EXHIBIT B
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
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EXHIBIT C
PRICE AND PAYMENT SCHEDULE
1.0 PRICE
1.1 (a) The base price for each of the Aircraft
(excluding the Buyer Selected Optional Features) [*].
(b) The base price of the Buyer Selected Optional
Features is[*].
The Aircraft base price shall be the base price for
the Aircraft as stated in paragraph (a), plus the
base price of the Buyer Selected Optional Features as
stated in paragraph (b) ("Base Price").
1.2 The price of the Aircraft shall be the Base Price adjusted for
changes made pursuant to Article 7 and any Regulatory Changes
pursuant to Article 7.3, and further adjusted to the Delivery
Date to reflect economic fluctuations during the period from
[*]. Such adjustments shall be based on the economic
adjustment formula attached as Exhibit B ("Economic Adjustment
Formula") but when adjusted, [*].
1.3 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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2.0 PAYMENT
2.1 Payment is as follows:
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.]
2.2 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
2.3 All amounts indicated in this Agreement are expressed in and
all payments shall be made in United States of America
currency, by wire transfer (unless another method acceptable
to Bombardier is subsequently notified in writing by
Bombardier) for credit to Bombardier's account in the
following manner:
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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ANNEX TO EXHIBIT C
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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EXHIBIT D
DELIVERY SCHEDULE
The Aircraft shall be offered to Buyer for acceptance pursuant to the provisions
of Article 9 in accordance with the following schedule:
AIRCRAFT SCHEDULED DELIVERY MONTH/YEAR
No. 1 [*]
No. 2 [*]
No. 3 [*]
No. 4 [*]
No. 5 [*]
No. 6 [*]
No. 7 [*]
No. 8 [*]
No. 9 [*]
No. 10 [*]
No. 11 [*]
No. 12 [*]
No. 13 [*]
No. 14 [*]
No. 15 [*]
No. 16 [*]
No. 17 [*]
No. 18 [*]
No. 19 [*]
No. 20 [*]
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EXHIBIT E
CERTIFICATE OF ACCEPTANCE
The undersigned hereby acknowledges on behalf of Buyer acceptance of
the Aircraft bearing manufacturer's serial number ____________________
fitted with two General Electric CF34-8C1 turbofan engines bearing
serial number _____________________ and __________________ under the
Agreement between Bombardier Inc., Bombardier Aerospace, Regional
Aircraft and Buyer.
Place: Date:
----------------------- ------------------
Signed for and on behalf of
Buyer: Witnessed:
-------------------------------
Per: Per:
-------------------------------- -----------------------
Title: Title:
-------------------------------- ------------------
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EXHIBIT F
WARRANTY BILL OF SALE
1. FOR VALUABLE CONSIDERATIONS, BOMBARDIER INC., OWNER OF THE FULL LEGAL AND
BENEFICIAL TITLE OF THE AIRCRAFT DESCRIBED AS FOLLOWS:
ONE CANADAIR REGIONAL JET MODEL CL-600-2C10 AIRCRAFT BEARING:
MANUFACTURER's SERIAL NO.: __________________.
WITH:
TWO CF34-8C1 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 BOMBARDIER INC.'S RIGHTS, TITLE AND
INTEREST IN AND TO THE AIRCRAFT.
2. BOMBARDIER INC. REPRESENTS AND WARRANTS TO BUYER:
(i) THAT BOMBARDIER INC. 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 EXCEPT FOR THOSE CLAIMS, LIENS
OR ENCUMBRANCES OR RIGHTS OF OTHER CREATED BY CLAIMS THROUGH
BUYER. BOMBARDIER INC. 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, Bombardier INC. AND BUYER HAVE CAUSED THIS INSTRUMENT TO BE
EXECUTED AND DELIVERED BY ITS DULY AUTHORIZED OFFICERS.
BUYER BOMBARDIER INC.
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- ----------------- -----------------
TITLE TITLE
DATE DATE
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EXHIBIT G
CHANGE ORDER
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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
BOMBARDIER 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 Bombardier 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 Bombardier 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 BOMBARDIER 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 Aerospace Comair, Inc.
Regional Aircraft
Date: ____________________ Date: __________________
- ------------------------------------------------------------------------------
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EXHIBIT H
AIRLINE SERVICES
----------------
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<PAGE> 57
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
1.2.5 Right to Stop Work
1.2.6 Work Permits and Clearances
[*]
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 Procedure for Ordering Spare Parts
2.5.1 Communications
2.5.2 Changes
2.6 Prices and Delivery
2.7 Shipment
2.8 Packing
2.9 Documents
2.10 Payment
2.10.1 Payment Terms
2.10.2 Payment for Provisioning Items
2.10.3 Modified Terms of Payment
2.11 Purchase of Bombardier Parts
[*]
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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 Documentation
[*]
2.14 General
2.14.1 Quotations
2.14.2 Lease of Bombardier Parts
2.14.3 Warranty
2.14.4 Additional Terms and Conditions
[*]
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ARTICLE 3 - TECHNICAL DATA
- --------------------------
3.1 Technical Data Provided
3.2 [*]
3.3 Shipment
3.4 [*]
3.5 Proprietary Technical Data
3.6 Vendor Parts Service Bulletins
3.7 [*]
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 [*]
4.3 [*]
[*]
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
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6.2 Price
6.3 Assignment
6.4 Provision of Information
6.5 Vendor Support
ANNEX A
List of Technical Data
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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
Bombardier 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-600-2C10 aircraft remain in commercial air transport
service.
1.2 FIELD SERVICE REPRESENTATIVE
1.2.1 PERIOD
Bombardier shall provide field service representation
("FSR") at Buyer's main base of operation in Cincinnati
and Florida or other location as may be mutually agreed.
Such assignment shall be for a term of [*]. The FSR(s)
will be knowledgeable in respect of both the CRJ 100 and
the CRJ 700. The FSR assignment may be extended on terms
and conditions to be mutually agreed upon.
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.
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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 Bombardier, 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.
1.2.5 RIGHT TO STOP WORK
Bombardier shall promptly advise Buyer and shall not be
required to commence or continue the FSR Services at
Buyer's work site when:
a.) there is a labour dispute or work stoppage in
progress at Buyer's facilities;
b.) there exist war, risk of war or warlike
operations, riots or insurrections;
c.) there exist conditions that are dangerous to
the safety or health of the FSR or other
Bombardier employee; or
d.) the Government of the country where Buyer's
facilities are located or where Buyer desires
the FSR to travel refuses the Bombardier
employee permission to enter said country or
Buyer's base of operations.
1.2.6 WORK PERMITS AND CLEARANCES
Buyer shall arrange for all necessary work permits and
airport security clearances required for the FSR or other
Bombardier employee to permit timely accomplishment of the
FSR services.
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1.3 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
1.4 ADDITIONAL SERVICES
At Buyer's request, Bombardier 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.
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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. "Bombardier Parts":
spare parts, ground support equipment, tools and
test equipment which bear a Bombardier Part Number
and/or an in-house Cage Number in the Bombardier
provisioning file as that expression is defined in
ATA Specification 200.
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
Bombardier Parts or Power Plant Parts.
d. "Spare Parts":
all materials, spare parts, assemblies, special
tools and items of equipment, including ground
support equipment, ordered for the Aircraft by
Buyer from Bombardier. The term Spare Parts
includes Bombardier Parts, Power Plant Parts and
Vendor Parts.
e. "Order":
any order for Spare Parts issued by Buyer to
Bombardier.
2.2 APPLICABILITY
The terms and conditions hereof shall apply to all orders for
Bombardier Parts, Power Plant Parts and Vendor Parts placed by Buyer
with Bombardier 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.
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2.3 TERM
As long as at least [*] are operated in commercial air transport
service, Bombardier shall maintain, or cause to be maintained, a
reasonable stock of Bombardier Parts.
2.4 BUYER'S PURCHASE ORDERS
Buyer agrees that orders placed with Bombardier shall conform to the
requirements and procedures contained in [*] as applicable to Buyer.
2.5 PROCEDURE FOR ORDERING SPARE PARTS
2.5.1 COMMUNICATIONS
Buyer may place orders with Bombardier for Bombardier 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).
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE COMMISSION.]
2.7 SHIPMENT
2.7.1 Bombardier Parts, Power Plant Parts and Vendor Parts
ordered from Bombardier shall be delivered [*]
Bombardier's designated facilities.
2.7.2 Bombardier shall use reasonable efforts so that shipment
of Bombardier Parts to Buyer be as follows:
a. AOG ORDERS
Ship AOG orders within [*] of receipt of order.
Buyer's affected Aircraft factory production number
shall be required on AOG orders;
b. CRITICAL ORDERS
Ship critical orders within [*] of order receipt;
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c. EXPEDITE ORDERS
Ship expedite orders within [*] of order receipt;
d. INITIAL PROVISIONING ORDERS
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
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2.8 PACKING
All prices shall include packing in accordance with [*]. All AOG orders
shall be handled, processed, packed and shipped separately.
2.9 DOCUMENTS
Bombardier shall include packing sheets with all shipping containers.
Bombardier shall also include with the container a copy of the invoice
for customs clearance. Bombardier agrees to notify Buyer when the
material is shipped and shall provide carrier's reference information
(waybill number).
2.10 PAYMENT
2.10.1 PAYMENT TERMS
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
2.10.2 PAYMENT FOR INITIAL PROVISIONING ITEMS
Payment for Initial Provisioning Items (as later defined
in Article 2.13.1.c) shall be made by Buyer as follows:
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
2.10.3 MODIFIED TERMS OF PAYMENT
Bombardier reserves the right to alter the standard terms
of payment at any time by giving Buyer [*] prior written
notice of the new terms.
2.11 PURCHASE OF BOMBARDIER PARTS
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
2.12 VENDOR PARTS
2.12.1 TERMS AND CONDITIONS
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
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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 Bombardier in order to:
a. acquaint Buyer with Bombardier's provisioning
system and available data;
b. plan the provisioning program; and
c. assist Buyer in the selection of Spare Parts
recommended by Bombardier for initial provisioning
of Spare Parts to be purchased from Bombardier or
vendors (the "Initial Provisioning Items").
2.13.2 INITIAL PROVISIONING DOCUMENTATION
Initial provisioning documentation for Bombardier Parts
and Vendor Parts shall be provided by Bombardier as
follows:
a) Bombardier shall provide, as applicable to Buyer, [*]
or as may be mutually agreed, the initial issue of
provisioning files as required by [*] (as may be
amended by Bombardier);
b) Bombardier shall provide, as required by Buyer, [*]
c) the Illustrated Parts Catalogue designed to support
provisioning shall be issued concurrently with
provisioning data files and revised [*]
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
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2.14 GENERAL
2.14.1 QUOTATIONS
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
2.14.3 WARRANTY
Bombardier 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.
2.14.4 ADDITIONAL TERMS AND CONDITIONS
Bombardier'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 [*] days prior to their effective date.
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
ARTICLE 3 - TECHNICAL DATA
3.1 TECHNICAL DATA PROVIDED
Bombardier 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 Bombardier'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.
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3.2 [*]
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 [*]
Bombardier's designated facilities and at the time indicated in Annex
A.
3.4 [*]
3.5 PROPRIETARY TECHNICAL DATA
It is understood and Buyer acknowledges that the Technical Data
provided herein is proprietary to Bombardier and all rights to
copyright belong to Bombardier 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 Bombardier 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
Bombardier shall control Vendor Parts modification status by issuance
of cover service bulletins for each Vendor Service Bulletin. Bombardier
may give Buyer advance notice of approval for Vendor Service Bulletins
prior to formal publication of the cover service bulletins.
3.7 [*]
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3.8 WARRANTY
The warranty to Bombardier's Technical Data provided hereunder is set
forth in Article 1 of Exhibit J.
3.9 [*]
ARTICLE 4 - TRAINING
- --------------------
4.1 GENERAL TERMS
4.1.1 DESCRIPTION
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION.]
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ANNEX A TO EXHIBIT H
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
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EXHIBIT J
WARRANTY AND SERVICE LIFE POLICY
--------------------------------
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EXHIBIT J
WARRANTY AND SERVICE LIFE POLICY
ARTICLE 1 - CANADAIR WARRANTY
- -----------------------------
1.1 Warranty
[*]
ARTICLE 2 - [*]-
- ----------------
ARTICLE 3 - SERVICE LIFE POLICY
- --------------------------------
[*]
ARTICLE 4 - GENERAL-
- ---------------------
ANNEX A - Covered Components
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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
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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EXHIBIT J
ANNEX A
COVERED COMPONENTS
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EXHIBIT J
ANNEX A
COVERED COMPONENTS
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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EXHIBIT K
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
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<PAGE> 79
P.A. 0431 Index of Letter Agreements
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
<PAGE> 80
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 01 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
Subject: OPTION AIRCRAFT
In consideration of Buyer having entered into the above referenced Agreement,
Bombardier agrees to reserve an additional [*] Canadair Regional Jet Series 700
Aircraft (the "Option Aircraft") for the benefit of Buyer under the following
general conditions:
1.0 The base price for each of the Option Aircraft (excluding the Buyer
Selected Optional Features) [*] (Incoterms 1990) Bombardier's
facilities in Dorval, Quebec, is [*]. The base price of the Buyer
Selected Optional Features as listed in the Annex to Exhibit C of the
Agreement is [*]. The Option Aircraft base price shall be the base
price for the Option Aircraft plus the base price of the Buyer Selected
Optional Features (the "Base Price").
LA No. 01 to P.A. 0431 -1-
Comair Inc.
<PAGE> 81
2.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
3.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
4.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
5.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
6.0 Every time Buyer exercises its right to purchase the Option Aircraft
hereunder, the payment terms set out in Article 2.1 (iii) to Exhibit C of
the Agreement shall apply mutatis mutandis.
7.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
8.0 The Option Aircraft shall be manufactured to the same Specification as the
Aircraft.
9.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
10.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
11.0 A default under the Agreement which leads to a termination shall constitute
a default and a termination under this Letter Agreement.
12.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
This Letter Agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA No. 01 to P.A. 0431 -2-
Comair Inc.
<PAGE> 82
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.
Yours very truly,
BOMBARDIER INC.
/s/ Robert Gillespie
- --------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 01 to P.A. 0431 -3-
Comair Inc.
<PAGE> 83
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO.02 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
This Letter Agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA No. 02 to P.A. 0431 -1-
Comair Inc.
<PAGE> 84
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.
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 02 to P.A. 0431 -2-
Comair Inc.
<PAGE> 85
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO.03 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
This Letter Agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA No. 03 to P.A. 0431 -1-
Comair Inc.
<PAGE> 86
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.
Yours very truly, BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 03 to P.A. 0431 -2-
Comair Inc.
<PAGE> 87
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
Letter Agreement No. 04 to Purchase Agreement No. 0431 (the "Agreement") between
Bombardier Inc. ("Bombardier") and Comair, Inc ("Buyer") relating to the
purchase of twenty (20) Canadair Regional Jet Series 700 aircraft (the
"Aircraft")
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
This Letter Agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA No. 04 to P.A. 0431 -1-
Comair Inc.
<PAGE> 88
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.
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 04 to P.A. 0431 -2-
Comair Inc.
<PAGE> 89
OPTION 1
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
LA No. 04 to P.A. 0431 -3-
Comair Inc.
<PAGE> 90
OPTION 2
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
LA No. 04 to P.A. 0431 -4-
Comair Inc.
<PAGE> 91
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO.05 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
This Letter Agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA No. 05 to P.A. 0431 -1-
Comair Inc.
<PAGE> 92
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.
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 05 to P.A. 0431 -2-
Comair Inc.
<PAGE> 93
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 06 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
This Letter Agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA No. 06 to P.A. 0431 -1-
Comair Inc.
<PAGE> 94
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.
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 06 to P.A. 0431 -2-
Comair Inc.
<PAGE> 95
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 07 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
This Letter Agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA No. 07 to P.A. 0431 -1-
Comair Inc.
<PAGE> 96
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.
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 07 to P.A. 0431 -2-
Comair Inc.
<PAGE> 97
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 08 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
1.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
2.0 [CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
3.0 In the event of the termination of the Agreement, this Letter Agreement
shall become automatically null and void.
4.0 The provisions of this Letter Agreement are personal to Buyer and shall not
be assigned, transferred or otherwise disposed of by Buyer without the
prior written consent of Bombardier.
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.
LA No. 08 to P.A. 0431 -1-
Comair Inc.
<PAGE> 98
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 08 to P.A. 0431 -2-
Comair Inc.
<PAGE> 99
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. Box 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 09 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
This Letter Agreement constitutes an integral part of the Agreement and
subject to the terms and conditions contained therein.
LA No. 09 to P. A. 0431 -1-
Comair Inc.
<PAGE> 100
Should there be any inconsistency between this Letter Agreement and the
Agreement with respect to the subject matter covered by the terms hereof, then
this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER Inc.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 09 to P.A. 0431 -2-
Comair Inc.
<PAGE> 101
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 10 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT").
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
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.
LA No. 10 to P.A. No. 0431 -1-
Comair Inc.
<PAGE> 102
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/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted:
this 30th day of September, 1998
COMAIR, INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 10 to P.A. No. 0431 -2-
Comair Inc.
<PAGE> 103
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. Box 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 11 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
LA No. 11 to P.A. 0431 -1-
Comair Inc.
<PAGE> 104
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 Bombardier.
This Letter Agreement constitutes an integral part of the Agreement and
subject to the terms and conditions contained therein.
Should there be any inconsistency between this Letter Agreement and the
Agreement with respect to the subject matter covered by the terms hereof, then
this Letter Agreement shall prevail.
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 11 to P.A. 0431 -2-
Comair Inc.
<PAGE> 105
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 12 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
This Letter Agreement is personal to Buyer and shall be kept confidential by
Buyer and shall not be assigned under any conditions to any other party.
LA No. 12 to P.A. No. 0431 -1-
Comair Inc.
<PAGE> 106
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.
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 12 to P.A. No. 0431 -2-
Comair Inc.
<PAGE> 107
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 13 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
This Letter Agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA No. 13 to P.A. 0431 -1-
Comair Inc.
<PAGE> 108
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
Bombardier.
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.
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 13 to P.A. 0431 -2-
Comair Inc.
<PAGE> 109
APPENDIX A
ADMCG VALUE ASSUMPTIONS
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
LA No. 13 to P.A. 0431 -3-
Comair Inc.
<PAGE> 110
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 14 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT")
BUYER AND CANADAIR STATE AND AGREE THAT THIS LETTER AGREEMENT INCLUDING
BUT NOT LIMITED TO SUBARTICLE 6.1 ABOVE, 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 THE AGREEMENT WERE ARRIVED AT IN
CONSIDERATION OF THE PROVISIONS CONTAINED IN THE SUBARTICLE 6.2,
SUBARTICLE 6.1 ABOVE AND THE OTHER PROVISIONS OF THIS LETTER AGREEMENT.
This Letter Agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA No. 14 to P.A. 0431 -1-
Comair Inc.
<PAGE> 111
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.
Yours very truly,
BOMBARDIER INC.
/s/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 14 to P.A. 0431 -2-
Comair Inc.
<PAGE> 112
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 15 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT").
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.]
LA No. 15 to P.A. No. 0431 -1-
Comair Inc.
<PAGE> 113
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/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 15 to P.A. No. 0431 -2-
Comair Inc.
<PAGE> 114
September 30, 1998
Comair, Inc.
Greater Cincinnati International Airport
P.O. 75021
Cincinnati, Ohio
USA, 45275
Dear Sirs,
LETTER AGREEMENT NO. 16 TO PURCHASE AGREEMENT NO. 0431 (THE "AGREEMENT") BETWEEN
BOMBARDIER INC. ("BOMBARDIER") AND COMAIR, INC. ("BUYER") RELATING TO THE
PURCHASE OF TWENTY (20) CANADAIR REGIONAL JET SERIES 700 AIRCRAFT (THE
"AIRCRAFT").
[CONFIDENTIAL INFORMATION APPEARING HERE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.]
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.
LA No. 16 to P.A. No. 0431 -1-
Comair Inc.
<PAGE> 115
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/Robert Gillespie
- -------------------
Robert Gillespie
President
Bombardier Aerospace, Regional Aircraft
/s/John Giraudy
- ---------------
John Giraudy
Sr. Vice President, Sales
Bombardier Aerospace, Regional Aircraft
Acknowledged and Accepted
this 30th day of September 1998
COMAIR INC.
/s/Randy Rademacher
- -------------------
Randy Rademacher
Senior Vice President, Finance & CFO
LA No. 16 to P.A. No. 0431 -2-
Comair Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000835344
<NAME> COMAIR HOLDINGS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 178,595,334
<SECURITIES> 71,528,263
<RECEIVABLES> 18,131,908
<ALLOWANCES> 0
<INVENTORY> 19,778,569
<CURRENT-ASSETS> 341,330,814
<PP&E> 461,753,787
<DEPRECIATION> 128,128,140
<TOTAL-ASSETS> 695,207,937
<CURRENT-LIABILITIES> 114,710,389
<BONDS> 107,372,575
0
0
<COMMON> 5,552,955
<OTHER-SE> 383,447,963
<TOTAL-LIABILITY-AND-EQUITY> 695,207,937
<SALES> 0
<TOTAL-REVENUES> 195,012,191
<CGS> 0
<TOTAL-COSTS> 142,098,437
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,804,484
<INCOME-PRETAX> 55,101,099
<INCOME-TAX> 20,510,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 34,591,099
<EPS-PRIMARY> .52
<EPS-DILUTED> .52
</TABLE>
