SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-K/A
AMENDMENT NUMBER 2
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1996
Commission file number 0-21976
ATLANTIC COAST AIRLINES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3621051
(State of incorporation) (IRS Employer Identification No.)
515-A Shaw Road, Dulles, Virginia 20166
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 925-6000
Securities registered pursuant to Section 12(b) of the Act:
Common Stock par value $ .02 NASDAQ National Market
(Title of Class) (Name of each exchange on which registered)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities 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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ______
The aggregate market value of voting stock held by nonaffiliates of the
registrant as of March 11, 1997 was approximately $112,810,113
As of March 11, 1997 there were 8,519,578 shares of Common Stock of
the registrant issued and 8,507,078 shares of Common Stock were
outstanding.
Documents Incorporated by Reference
Certain portions of the documents listed below have been incorporated by
reference into the indicated part of this Form 10-K.
Document Incorporated Part of Form 10-K
Proxy Statement for 1996 Annual Meeting of Shareholders Part III, Items
10-13
Introductory Statement
The following is being filed to amend the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 to add to the Form 10-K the
attached Exhibit 10.40.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ATLANTIC COAST AIRLINES, INC.
April 1, 1997 By: /S/ Paul H. Tate
Paul H. Tate
Senior Vice President and
Chief Financial Officer
April 1, 1997 By: /S/ Kerry B. Skeen
Kerry B. Skeen
President and Chief
Executive Officer
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST.
BOMBARDIER REGIONAL AIRCRAFT DIVISION
PURCHASE AGREEMENT
RJ-0350
BETWEEN
BOMBARDIER INC.
AND
ATLANTIC COAST AIRLINES
Relating to the Purchase of
Twelve (12) Canadair Regional Jet aircraft
Including related Customer Support Services
TABLE OF CONTENTS
ARTICLE
1 INTERPRETATION
2 SUBJECT MATTER OF SALE
3 CUSTOMER SUPPORT SERVICES AND WARRANTY
4 PRICE
5 PAYMENT
6 DELIVERY PROGRAM
7 BUYER INFORMATION
8 CERTIFICATION/FOR EXPORT/
9 ACCEPTANCE PROCEDURE
10 TITLE AND RISK
11 CHANGES
12 BUYER'S REPRESENTATIVES AT MANUFACTURE SITE
13 EXCUSABLE DELAY
14 NON-EXCUSABLE DELAY
15 LOSS OR DAMAGE
16 TERMINATION
17 NOTICES
18 INDEMNITY AGAINST PATENT INFRINGEMENT
19 LIMITATION OF LIABILITY
20 ASSIGNMENT
21 SUCCESSORS
22 APPLICABLE LAWS
23 CONFIDENTIAL NATURE OF AGREEMENT
24 AGREEMENT
25 DISPUTES
APPENDIX
I ECONOMIC ADJUSTMENT FORMULA
II DELIVERY SCHEDULE
III SPECIFICATION
IV BUYER SELECTED OPTIONAL FEATURES
EXHIBIT
I CERTIFICATE OF ACCEPTANCE
II BILL OF SALE
III CERTIFICATE OF RECEIPT OF AIRCRAFT
IV CHANGE ORDER
ANNEX A CUSTOMER SUPPORT SERVICES
ANNEX B WARRANTY AND SERVICE LIFE POLICY
LETTER AGREEMENTS
B96-7701-RJTL-RJ0350-001 Credit Memorandum
B96-7701-RJTL-RJ0350-002 Conditions Precedent
B96-7701-RJTL-RJ0350-003 Option Aircraft
B96-7701-RJTL-RJ0350-004 Options
B96-7701-RJTL-RJ0350-005 FIPP
B96-7701-RJTL-RJ0350-006 Operational Restrictions
B96-7701-RJTL-RJ0350-007 Financing
B96-7701-RJTL-RJ0350-008 Schedule Completion Rate
B96-7701-RJTL-RJ0350-009 Airframe Direct Maintenance Cost
B96-7701-RJTL-RJ0350-010 Additional Customer Support
B96-7701-RJTL-RJ0350-011 Spares
B96-7701-RJTL-RJ0350-012 Marketing Support
B96-7701-RJTL-RJ0350-013 Spares Credit
B96-7701-RJTL-RJ0350-014 Taxes, Duties and Licenses
B96-7701-RJTL-RJ0350-015 Airworthiness Directives
B96-7701-RJTL-RJ0350-016 Reconciliation
This Agreement is made on the 8th day of January 1997.
BY AND BETWEEN: BOMBARDIER INC., a Canadian Corporation represented by
its BOMBARDIER REGIONAL AIRCRAFT DIVISION ("BRAD")
having an office at 123 Garratt Boulevard, Downsview,
Ontario, Canada.
AND: ATLANTIC COAST AIRLINES, a California Company, having
offices at 1 Export Drive, Sterling , Virginia 20164,
U.S.A.
("Buyer")
WHEREAS Bombardier Inc. through its Canadair Manufacturing
Division, is engaged in the manufacture of the
Canadair Regional Jet aircraft products; and
BRAD has been created for the purpose of providing
marketing, sales and customer support services for the
Canadair Regional Jet aircraft and related products;
WHEREAS Buyer desires to purchase twelve (12) Aircraft (as
later defined) and related data, documents, and
services under this Agreement (as later defined), and
BRAD desires to arrange the sale of such Aircraft,
data, documents and services to Buyer,
WHEREAS Atlantic Coast Airlines Inc., a Delaware Corporation,
the parent of Buyer, is prepared to provide a
guarantee of Buyer's obligations hereunder, in a form
acceptable to the parties and the financiers.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
Buyer and BRAD agree as follows:
ARTICLE 1. INTERPRETATION
1.1 The recitals above have been inserted for convenience only and do not
form part of the agreement.
1.2 The headings in this agreement are included for convenience only and
shall not be used in the construction and interpretation of this
agreement.
1.3 In this agreement, unless otherwise expressly provided, the singular
includes the plural and vice-versa.
1.4 In this agreement the following expressions shall, unless otherwise
expressly provided, mean:
(a) "Acceptance Period" shall have the meaning attributed to it in
Article 9.3;
(b) "Acceptance Date" shall have the meaning attributed to it in
Article 9.7.(a);
(c) "Agreement" means this Agreement, including its Exhibits,
Annexes, Appendices and Letter Agreements, if any, attached
hereto (each of which is incorporated in the Agreement by this
reference), as they may be amended pursuant to the provisions
of the Agreement;
(d) "Aircraft" shall have the meaning attributed to it in Article
2.1;
(e) "Aircraft Purchase Price" shall have the meaning attributed to
it in Article 4.2;
(f) "Base Price" shall have the meaning attributed to it in Article
4.1;
(g) "Bill of Sale" shall have the meaning attributed to it in
Article 9.7 (c);
(h) "BFE" shall have the meaning attributed to it in Article 11.1;
(h.1) "Bombardier Group" shall have the meaning attributed to it in
Article 24.3;
(h.2) *
(i) "Buyer Selected Optional Features" shall have the meaning
attributed to it in Article 2.1;
(j) "Delivery Date" shall have the meaning attributed to it in
Article 9.7.(c);
(k) "Economic Adjustment Formula" shall have the meaning attributed
to it in Article 4.2;
(l) "Excusable Delay" shall have the meaning attributed to it in
Article 13.1;
(m) "FAA" shall have the meaning attributed to it in Article 8.1;
(m.1) "Grace Period" shall have the meaning attributed to it in
Article 14.1;
(n) "Non-Excusable Delay" shall have the meaning attributed to it
in Article 14.1;
(o) "Notice" shall have the meaning attributed to it in Article
17.1;
( p) "Other Patents" shall have the meaning attributed to it in
Article 18.1;
( q) "Permitted Change" shall have the meaning attributed to it in
Article 11.2;
( r) "Readiness Date" shall have the meaning attributed to it in
Article 9.1;
( s) "Regulatory Change" shall have the meaning attributed to it in
Article 8.4;
( t) "Scheduled Delivery Dates" shall have the meaning attributed to
it in Article 6;
( u) "Specification" shall have the meaning attributed to it in
Article 2.1;
( v) "Taxes" shall have the meaning attributed to it in Article
4.3.;
( w) "TC" shall have the meaning attributed to it in Article 8.1;
( x) "Net Aircraft Purchase Price" shall have the meaning attributed
to it in
Article 5.3.;
( y) *
( z) "Deposit" shall have the meaning attributed to it in Article
5.2.1.;
(z.1) "Technical Data" shall have the meaning attributed to it in
Annex A Article 4.1;
(z.2) "Total Deposit)" shall have the meaning attributed to it in
Article 5.2.1.b); and
1.5 All dollar amounts in this Agreement are in United States Dollars.
ARTICLE 2 - SUBJECT MATTER OF SALE
2.1 Subject to the provisions of this Agreement, BRAD will sell and Buyer
will purchase twelve (12) Canadair Regional Jet aircraft model CL600-
2B19 Version 200ER, manufactured pursuant to specification Number
RAD-601R-146 Issue NC dated November 18, 1996, attached hereto as
Appendix III, as that specification may be modified from time to time
in accordance with this Agreement (the "Specification"), as
supplemented to reflect the incorporation of the Buyer selected
optional features ("Buyer Selected Optional Features") set forth in
Appendix IV hereto (collectively the "Aircraft").
ARTICLE 3 - CUSTOMER SUPPORT SERVICES AND WARRANTY
3.1 BRAD shall provide to Buyer the customer support services pursuant to
the provisions of Annex A attached hereto.
3.2 BRAD shall provide to Buyer the warranty and the service life policy
described in Annex B attached hereto.
3.3 Unless expressly stated otherwise, the services referred to in 3.1
and 3.2 above are incidental to the sale of the Aircraft and are
included in the Aircraft Purchase Price.
ARTICLE 4 - PRICE
4.1 (a) The base price for each of the Aircraft (excluding the Buyer
Selected Optional Features) Ex Works (Incoterms 1990) BRAD's
offices or premises in Montreal, Province of Quebec, Canada,
is *
expressed in July 1, 1995
dollars.
(b) The base price of the Buyer Selected Optional Features is *
expressed in July 1, 1995 dollars.
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").
4.2 The price of the Aircraft (the "Aircraft Purchase Price") shall be
the Base Price adjusted to the date of delivery to reflect economic
fluctuations during the period from July 1, 1995 to the respective
delivery date of the Aircraft. Such adjustments shall be based on
the formula as found in Appendix I ("Economic Adjustment Formula").
*
*
*
*
4.3 Upon the occurrence of events as described in this paragraph 4.3,
there will be adjustments as follows:
4.3.1 In the event that BRAD and Buyer agree to any changes in the
Specification or selected optional features, or should changes
in the Specification or selected optional features be made
pursuant to Article 11.1 or as a result of any Regulatory
Changes pursuant to Article 8.4 which are chargeable to Buyer
pursuant to Article 8.5, or in the event that BRAD and Buyer
agree to any
*
4.3.2 *
4.3.3 The Credit Memorandum adjustment shall be in accordance with
the terms of Letter Agreement No. 1.
4.3.4 *
above, but with Buyer and BRAD splitting 50/50 the economic
fluctuation during the delay period, as described in Article
13.2.(b) hereof.
4.3.5 In the event of a Non-Excusable Delay, the provisions of
Article 14.2 shall apply.
4.4 The Aircraft Purchase Price does not include any taxes, fees or
duties including, but not limited to, sales, use, value added
(including the Canadian Goods and Services Tax), personal property,
gross receipts, franchise, excise taxes, assessments or duties
("Taxes") which are or may be imposed by law upon BRAD, any affiliate
of BRAD, Buyer or the Aircraft whether or not there is an obligation
for BRAD to collect same from Buyer, by any taxing authority or
jurisdiction occasioned by, relating to or as a result of the
execution of this Agreement or the sale, lease, delivery, storage,
use or other consumption of any Aircraft, BFE or any other matter,
good or service provided under or in connection with this Agreement.
4.5 If any Taxes (other than income taxes charged on the income of
Bombardier Group) are imposed upon Buyer or become due or are to be
collected from Bombardier Group by any taxing authority resulting
from, relating to or in connection with the execution of this
Agreement, the sale, lease, delivery, storage, use or other
consumption of any Aircraft, BFE or any other matter, goods or
services provided for under this Agreement, BRAD shall notify Buyer
and Buyer shall promptly, but no later than ten (10) working days
after receiving such notice, pay such Taxes directly to the taxing
authority, or reimburse BRAD for such Taxes, as the case may be,
including interest and penalties. Buyer shall only reimburse BRAD
for interest and penalties if BRAD notifies Buyer in writing of the
imposition of these Taxes within ten (10) working days of the member
of Bombardier Group receiving written notification of such Taxes.
4.6 Upon BRAD's request, Buyer shall execute and deliver to BRAD any
documents that BRAD deems necessary or desirable in connection with
any exemption from or reduction of or the contestation of or the
defense against any imposition of Taxes.
4.7 Upon Buyer's request, BRAD shall execute and deliver to Buyer any
documents that Buyer deems necessary or desirable in connection with
any exemption from or reduction of or the contestation of or the
defense against any imposition of Taxes.
ARTICLE 5 - PAYMENT
5.1 Intentionally left blank.
5.2 Deposit
5.2.1 The deposit for the Aircraft (the "Deposit") will be paid as follows:
a) *
b) *
*
5.3 Payment Terms
*
5.4 Subject to the provisions of Article 9.9 hereof, should Buyer fail to
make any of the aforementioned Deposit payments on or before the
stipulated date and Buyer does not correct the default within a
period of thirty (30) days thereafter, this Agreement shall
automatically terminate and BRAD shall have no further obligation to
Buyer under this Agreement, including the obligation to proceed
further with the manufacture of the Aircraft on behalf of Buyer or
the sale and/or delivery of the Aircraft to Buyer. BRAD shall have
the option (but not the obligation) of waiving such termination
should Buyer make arrangements satisfactory to BRAD for such payment
and all future payments within ten (10) calendar days of Buyer's
default.
5.5 Buyer shall pay BRAD daily interest on late payments, from the date
that any payment becomes due up to and including the day prior to
receipt of payment, at a rate of two per cent (2 %) per annum over
the U.S. prime rate charged by the Chase Manhattan Bank, New York
Branch, or its successor,, from time to time, calculated and
compounded monthly. BRAD's right to receive such interest is in
addition to any other right or remedy BRAD has at law as a result of
Buyer's failure to make payments when due.
5.6 If under any terms of the Agreement BRAD is obligated to return the
Deposit or make other payments if applicable to Buyer, with or
without interest as provided for herein, BRAD shall do so within five
(5) working days , and if BRAD fails to do so, BRAD shall pay Buyer
daily interest on late payments from the date any payment becomes due
up to and including the day prior to receipt of payment, at a rate of
two per cent
(2 %) per annum over the U.S. prime rate charged from time to time by
the Chase Manhattan Bank, New York Branch, or its successor,
calculated and compounded monthly. The five (5) days grace period
mentioned above shall not apply to return of Deposits coincident with
the return of the last six (6) Aircraft.
5.7 Buyer shall make all payments due under this Agreement in immediately
available funds by deposit on or before the due date to BRAD's
account in the following manner:
*
BRAD shall make all payments due under this Agreement in immediately
available funds by deposit on or before the due date to Buyer's
account as specified below:
*
5.8 All other amounts due with respect to each Aircraft shall be paid on
or prior to the Delivery Date of the respective Aircraft.
5.9 All payments provided for under this Agreement to either party shall
be made so as to be received in immediately available funds on or
before the dates stipulated herein. Neither party shall incur
interest charges for any delay which occurs after provision of a
proof of transfer from that party's bank.
5.10 BRAD, or its affiliate to whom the Aircraft may have been sold, shall
remain the exclusive owner of the Aircraft, free and clear of all
rights, liens, charges or encumbrances created by or through Buyer,
until such time as all payments referred to in this Article 5 have
been made.
ARTICLE 6 - DELIVERY PROGRAM
6.1 The Aircraft shall be offered for inspection and acceptance to Buyer
at BRAD's facility in Montreal, Quebec during the months set forth in
Appendix II attached hereto (the "Scheduled Delivery Dates").
ARTICLE 7 - BUYER INFORMATION
7.1 During the manufacture of the Aircraft, Buyer shall provide to BRAD
on or before the date required by BRAD, all information as BRAD may
reasonably request to manufacture the Aircraft including, without
limitation, the selection of furnishings, internal and external
colour schemes.
On or before January 31, 1997, Buyer will:
(a) provide BRAD with an external paint scheme agreed on by the
parties; and
(b) select interior colours (from BRAD's standard colours).
Failure of Buyer to substantially comply with these requirements may
result in a reasonable increase in price, as applicable, a delay in
delivery of the Aircraft, or both.
ARTICLE 8 - CERTIFICATION FOR EXPORT
8.1 BRAD has obtained and will continue to have on each Delivery Date
from Transport Canada ("TC"), a valid TC Type Approval (Transport
Category) and from the Federal Aviation Administration of the United
States ("FAA") an FAA Type Certificate for the type of aircraft
purchased under this Agreement.
8.2 BRAD shall provide to Buyer a TC Certificate of Airworthiness
(Transport Category) for export, on or before the Delivery Date with
respect to each Aircraft.
8.3 The obtaining of any import license or authority required to import
or operate the Aircraft into any country outside of Canada shall be
the responsibility of Buyer. BRAD will, assist Buyer in obtaining
import permits and licenses. BRAD shall, with Buyer's assistance,
obtain the issuance of a Canadian export license to enable Buyer to
export the Aircraft from Canada, subject to prevailing export control
regulations in effect on the Delivery Date. Except as provided in
Articles 8.1, 8.2 and 8.3 BRAD shall not be obligated to obtain any
other certificates or approvals as part of this Agreement.
8.4 If any addition or change to, or modification or testing of the
Aircraft is required or will be required by the passage of time by
any law or governmental regulation or requirement or interpretation
thereof by any governmental agency having jurisdiction subsequent to
the date of this Agreement but prior to the Delivery Date in order to
meet the requirements of Article 8.2 (a "Regulatory Change"), such
Regulatory Change shall be made to the Aircraft prior to Delivery
Date, or at such other time after the Delivery Date as the parties
may agree upon taking into account the terminating action deadline.
8.5 The Regulatory Change shall be made without additional charge to
Buyer unless such Regulatory Change is:
(a) necessary to comply with any requirement of the United States,
the country of import, which varies from or is in addition to its
regulation, requirement or interpretation in effect on the date
hereof for the issuance of a Certificate of Airworthiness in said
country of import (unless such requirement has been imposed to
correct a defect specific to the Aircraft or to the Canadair
Regional Jet fleet of aircraft), in which case Buyer shall pay
BRAD's reasonable charges for such Regulatory Change, or
(b) required by any governmental law or regulations or interpretation
thereof promulgated by TC or the FAA which is effective
subsequent to the date of this Agreement but before the Delivery
Date and which is applicable to all aircraft in general or to all
aircraft of the same category as the Aircraft, in which case
Buyer shall pay BRAD's reasonable charges for such Regulatory
Change incorporated in any such Aircraft.
8.6 *
8.7 BRAD shall issue a Change Order, reflecting any Regulatory Change
required to be made under this Article 8, which shall set forth in
detail the particular changes to be made and the effect, if any, of
such changes on design, performance, weight, balance, time of
delivery,
*
. Any Change Orders
issued pursuant to this Article shall be effective and binding upon
the date of BRAD's transmittal of such Change Order, all in
accordance with this Agreement.
*
8.8 If the use of any of the certificates identified in this Article 8
are discontinued during the performance of this Agreement, reference
to such discontinued certificate shall be deemed a reference to any
other certificate or instrument which corresponds to such certificate
or, if there should not be any such other certificate or instrument,
then BRAD shall be deemed to have obtained such discontinued
certificate(s) upon demonstrating that the Aircraft complies
substantially with the Specification.
ARTICLE 9 - ACCEPTANCE PROCEDURE
9.1 *
BRAD shall give Buyer at least * advance notice,
by facsimile or telegraphic communication or other expeditious means,
of the projected date of readiness of each Aircraft for inspection
and delivery. *
BRAD shall give Buyer at least *
advance notice, by facsimile or telegraphic communication or other
expeditious means, of the date on which an Aircraft will be ready for
Buyer's inspection, flight test and acceptance (the "Readiness
Date"),
*
9.2 Within two (2) days following receipt by Buyer of the notice of
Readiness Date Buyer shall:
(a) provide notice to BRAD as to the source and method of payment of
the balance of the Aircraft Purchase Price;
(b) identify to BRAD the names of Buyer's representatives who will
participate in the inspection, flight test and acceptance; and
(c) provide evidence of the authority of the designated persons to
execute the Certificate of Acceptance and other delivery
documents on behalf of Buyer.
9.3 Buyer shall have three (3) consecutive working days commencing on the
Readiness Date in which to complete the inspection and flight test
(such three (3) working day period being the "Acceptance Period").
This three (3) day period may be extended in the event of any delay
by BRAD in making the Aircraft available for inspection and flight
test.
9.4 Up to four (4) representatives of Buyer may participate in Buyer's
ground inspection of the Aircraft and two (2) representatives of
Buyer may participate in the flight test. BRAD shall, if requested
by Buyer, perform an acceptance flight of not less than one (1) and
not more than three (3) hours duration. Ground inspection, in
accordance with procedures to be mutually agreed to, and flight test
shall be conducted in accordance with BRAD's acceptance procedures (a
copy of which shall be provided to Buyer at least 30 days prior to
the Scheduled Delivery Date of the First Aircraft hereunder), as may
be amended by mutual agreement of Buyer and BRAD, and at BRAD's
expense. At all times during ground inspection and flight test, BRAD
shall retain control over the Aircraft.
9.5 If no Aircraft defect or discrepancy is revealed during the ground
inspection or flight test, Buyer shall accept the Aircraft on or
before the last day of the Acceptance Period in accordance with the
provisions of Article 9.7.
9.6 If any material defect or discrepancy in the Aircraft is revealed by
Buyer's ground inspection or flight test, the defect or discrepancy
will promptly be corrected by BRAD, at no cost to Buyer, which
correction may occur during or after the Acceptance Period depending
on the nature of the defect or discrepancy and of the time required
for correction. To the extent necessary to verify such correction,
BRAD shall perform one (1) or more further acceptance flights or
ground inspections as applicable.
*
9.7 Upon completion of the ground inspection and acceptance flight of the
Aircraft and correction of any defects or discrepancies:
(a) Buyer will sign a Certificate of Acceptance (in the form of
Exhibit I hereto) for the Aircraft. Execution of the
Certificate of Acceptance by or on behalf of Buyer shall be
evidence of Buyer having examined the Aircraft and found it in
accordance with the provisions of this Agreement. The date of
signature of the Certificate of Acceptance shall be the
"Acceptance Date";
(b) BRAD will supply a TC Certificate of Airworthiness for Export;
and
(c) Buyer shall pay BRAD the balance of
* any
other amounts due, at which time BRAD shall issue an FAA bill
of sale and a warranty bill of sale in a form acceptable to
BRAD and financiers (substantially in accordance with the forms
attached as Exhibit II(a) and Exhibit II(b) hereto), passing to
Buyer, or approved assignee pursuant to Article 20, good title
to the Aircraft free and clear of all liens, claims, charges
and encumbrances except for those liens, charges or
encumbrances created by or claimed through Buyer (the "Bill of
Sale"). The date on which BRAD delivers the Bill of Sale and
Buyer takes delivery of the Aircraft shall be the "Delivery
Date".
Delivery of the Aircraft shall be evidenced by the execution and
delivery of the Bill of Sale and of the Certificate of Receipt of
Aircraft (in the form of Exhibit III hereto).
9.8 Provided that BRAD has met all of its obligations under this Article
9, should Buyer not accept, pay for *
and take delivery of any of the
Aircraft within ten (10) calendar days after the end of the
Acceptance Period of such Aircraft, Buyer shall be deemed to be in
default of the terms of this Agreement *
*
9.9 Should the Buyer be in default pursuant to Article 9.8 hereof, Buyer
shall promptly, upon demand, reimburse BRAD for all costs and
expenses reasonably incurred by BRAD as a result of such Buyer's
failure to accept or take delivery of the Aircraft, including but not
limited to reasonable amounts for storage, insurance, taxes,
preservation or protection of the Aircraft, and provided that BRAD
has met all of its obligations under this Article 9, should Buyer not
accept, pay for and/or take delivery of any one of the Aircraft
within * following the end of
the Acceptance Period, BRAD may, at its option, terminate the present
Agreement with respect to any of the undelivered Aircraft. BRAD
shall however, have the option (but not the obligation) of waiving
such termination should Buyer, within ten (10) calendar days
following such termination, make arrangements satisfactory to BRAD to
accept delivery and provide payment for all amounts owing or to
become due pursuant to this Agreement.
ARTICLE 10 - TITLE AND RISK
10.1 Title to the Aircraft and risk of loss of or damage to the Aircraft
passes to Buyer when BRAD presents the Bill of Sale to Buyer on the
Delivery Date.
10.2 If, after transfer of title on the Delivery Date, the Aircraft
remains in or is returned to the care, custody or control of BRAD,
Buyer shall retain risk of loss of, or damage to the Aircraft and for
itself and on behalf of its insurer(s) hereby waives and renounces
to, and releases BRAD and any of BRAD's affiliates from any claim,
whether direct, indirect or by way of subrogation, for damages to or
loss of the Aircraft arising out of, or related to, or by reason of
such care, custody or control *
ARTICLE 11 - CHANGES
11.1 Other than a Permitted Change as described in Article 11.2, or a
Regulatory Change as described in Article 8.4, any change to this
Agreement (including without limitation the Specification) or any
features or Buyer Furnished Equipment ("BFE"), if any, changing the
Aircraft from that described in the Specification attached hereto,
and as may be mutually agreed upon by the parties hereto, shall be
made using a change order ("Change Order") substantially in the
format of Exhibit IV hereto. Should Buyer request a change, BRAD
shall advise Buyer, to the extent reasonably practical, of the
effect, if any, of such change request on:
(a) the Scheduled Delivery Date;
(b) the price and payment terms applicable to the Change Order; and
(c) any other material provisions of this Agreement which will be
affected by the Change Order.
Such Change Order shall become effective and binding on the parties
hereto when signed by a duly authorized representative of each party.
11.2 BRAD, prior to the Delivery Date and without a Change Order or
Buyer's consent, may:
(a) substitute the kind, type or source of any material, part,
accessory or equipment with any other material, part, accessory
or equipment of like, equivalent or better kind or type; or
(b) make such change or modification to the Specification as it deems
appropriate to:
1) improve the Aircraft, its maintainability or appearance, or
2) to prevent delays in manufacture or delivery, or
3) to meet the requirements of Articles 2 and 8, other than for a
Regulatory Change to which the provisions of Articles 8.4 and
8.5 shall apply,
provided that such substitution, change or modification shall not
affect the Aircraft Purchase Price or materially affect the Scheduled
Delivery Date, *
Any
change made in
accordance with the provisions of this Article 11.2 shall be deemed
to be a "Permitted Change" and the cost thereof shall be borne by
BRAD.
ARTICLE 12 - BUYER'S REPRESENTATIVES AT MANUFACTURE SITE
12.1 From time to time, commencing with the date of this Agreement and
ending with the Delivery Date of the last Aircraft purchased
hereunder, BRAD shall furnish, without charge, office space at BRAD's
facility for one (1) representative of Buyer. Buyer shall be
responsible for all expenses of its representative and shall notify
BRAD at least thirty (30) calendar days prior to the first scheduled
visit of such representative and three (3) days for each subsequent
visit.
12.2 BRAD's and BRAD's affiliates facilities shall be accessible to
Buyer's representative during normal working hours. Buyer's
representative shall have the right to periodically observe the work
at BRAD's or BRAD's affiliates' facilities where the work is being
carried out provided there shall be no disruption in the performance
of the work.
12.3 BRAD shall advise Buyer's representative of BRAD's or BRAD's
affiliates' rules and regulations applicable at the facilities being
visited and Buyer's representative shall conform to such rules and
regulations.
12.4 At any time prior to delivery of the Aircraft, Buyer's representative
may request, in writing, correction of parts or materials which they
reasonably believe are not in accordance with the Specification.
BRAD shall provide a written response to any such request.
Communication between Buyer's representative and BRAD shall be solely
through BRAD's Contract Department or its designate.
12.5 BUYER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD
HARMLESS BRAD, ITS ASSIGNEES AND AFFILIATES AND THEIR OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES AND CONTRACTORS FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES RESULTING FROM
INJURIES TO OR DEATH OF BUYER'S REPRESENTATIVES WHILE AT BRAD'S OR
BRAD'S AFFILIATES OR SUBCONTRACTOR'S FACILITIES AND/OR DURING
INSPECTION, FLIGHT TEST OR ACCEPTANCE OF THE AIRCRAFT, WHETHER OR NOT
CAUSED BY THE ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE OR STRICT
PRODUCTS LIABILITY OF BRAD, ITS ASSIGNEES, AFFILIATES OR THEIR
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES OR CONTRACTORS
*
12.6
*
ARTICLE 13 - EXCUSABLE DELAY
13.1.1 In the event of a delay on the part of BRAD in the performance
of its obligations or responsibilities under the provisions of this
Agreement due directly or indirectly to a cause which is beyond the
reasonable control or without the fault or negligence of BRAD (an
"Excusable Delay"), BRAD shall not be liable for, nor be deemed to be
in default under this Agreement on account of such delay in delivery
of the Aircraft or other performance hereunder and the time fixed or
required for the performance of any obligation or responsibility in
this Agreement shall be extended for a period equal to the period
during which any such cause or the effect thereof persist. Excusable
Delay shall be deemed to include, without limitation, delays
occasioned by the following causes:
(a) force majeure or acts of God;
(b) war, warlike operations, act of the enemy, armed aggression,
civil commotion, insurrection, riot or embargo;
(c) fire, explosion, earthquake, lightning, flood, draught, windstorm
or other action of the elements or other catastrophic or serious
accidents;
(d) epidemic or quarantine restrictions;
(e) any legislation, act, order, directive or regulation of any
governmental or other duly constituted authority;
(f) strikes, lock-out, walk-out, and/or other labour troubles causing
cessation, slow-down or interruption of work;
(g) lack or shortage or delay in delivery of supplies, materials,
accessories, equipment, tools or parts, *
(h) * , delay or
failure of carriers,
subcontractors or suppliers for any reason whatsoever; or
(i) delay in obtaining any airworthiness approval or certificate, or
any equivalent approval or certification, by reason of any law or
governmental order, directive or regulation or any change
thereto, or interpretation thereof, by a governmental agency, the
effective date of which is subsequent to the date of this
Agreement, or by reason of any change or addition made by BRAD or
its affiliates or requested by a governmental agency to the
compliance program of BRAD or of its affiliate, or any part
thereof, as same may have been approved by TC, or change to the
interpretation thereof to obtain any such airworthiness approval
or certificate; or
(j) *
13.1.2
*
13.2 (a) If BRAD concludes, based on its appraisal of the facts and normal
scheduling procedures, that due to Excusable Delay it can be
reasonably anticipated that delivery of the Aircraft will be
delayed, BRAD shall give prompt written notice to Buyer of such
delay. *
(b) *
(c) In the event of an Excusable Delay * ,
or an anticipated Excusable Delay
* shall conduct an
appraisal of the facts and normal scheduling procedures, and if
it concludes that delivery of one or more of the Aircraft will be
delayed *
after the originally Scheduled Delivery Date or any
revised date agreed to in writing by the parties,
*
may then terminate this
Agreement with
respect to such delayed Aircraft by giving written notice
*
(d) If, due to Excusable Delay * ,
delivery of any Aircraft is delayed for
* after the Scheduled Delivery Date,
either
party may terminate this Agreement with respect to such Aircraft
by giving written notice to the other within fifteen (15)
business days after the expiration of such
* period.
13.3 Termination under Article 13.2 shall discharge all obligations and
liabilities of Buyer and BRAD hereunder with respect to such delayed
Aircraft and all related undelivered items and services,
*
BRAD shall,
within* of
such termination, repay to Buyer, and BRAD's sole liability and
responsibility shall be limited to the repayment to Buyer, of all
deposits for such Aircraft received by BRAD less any amount due by
Buyer to BRAD.
13.4 The termination rights set forth in Article 13.2 are in substitution
for any and all other rights of termination or contract lapse arising
by operation of law in connection with Excusable Delays.
ARTICLE 14 - NON-EXCUSABLE DELAY
14.1 If delivery of the Aircraft is delayed beyond the end of the
Scheduled Delivery Date, by causes not excused under Article 13.1,
this shall constitute a non-excusable delay (a "Non-Excusable
Delay").
14.2 If as a result of an Non-Excusable Delay, delivery of the Aircraft
will be delayed to a date beyond the originally Scheduled Delivery
Date or any revised date previously agreed to in writing by the
parties, the Aircraft Purchase Price of the Aircraft at delivery,
*
ARTICLE 15 - LOSS OR DAMAGE
15.1 In the event that prior to the Delivery Date of any Aircraft, the
Aircraft is lost, destroyed or damaged beyond repair due to any
cause, BRAD shall promptly notify Buyer in writing. Such notice
shall specify the earliest date reasonably possible, consistent with
BRAD's other contractual commitments and production schedule, by
which BRAD estimates it would be able to deliver a replacement for
the lost, destroyed or damaged Aircraft. This Agreement shall
automatically terminate as to such Aircraft unless Buyer gives BRAD
written notice, within thirty (30) days of BRAD's notice, that Buyer
desires a replacement for such Aircraft. If Buyer gives such notice
to BRAD, the parties shall execute an amendment to this Agreement
which shall set forth the Delivery Date for such replacement aircraft
and corresponding new replacement Aircraft Purchase Price; provided,
however, that nothing herein shall obligate BRAD to manufacture and
deliver such replacement aircraft if it would require the
reactivation or acceleration of its production line for the model of
aircraft purchased hereunder. The terms and conditions of this
Agreement applicable to the replaced Aircraft shall apply to the
replacement aircraft.
15.2 *
ARTICLE 16 - TERMINATION
16.1 This Agreement may be terminated, in whole or in part, with respect
to any or all of the Aircraft before the Delivery Date by BRAD or
Buyer by notice of termination to the other party upon the occurrence
of any of the following events:
(a) a party makes an assignment for the benefit of creditors or
admits in writing its inability to pay its debts or generally
does not pay its debts as they become due; or
(b) a receiver or trustee is appointed for a party or for
substantially all of such party's assets and, if appointed
without such party's consent, such appointment is not discharged
or stayed within * 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*
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.
16.2 In addition, this Agreement may be terminated, with respect to any or
all undelivered Aircraft, in whole or in part, before the Delivery
Date
(a) as otherwise provided in this Agreement; and
(b) by BRAD * default or breach of any
material term
or condition of this Agreement and such party does not cure such
default or breach within forty-five (45) calendar days after
receipt of Notice from BRAD *
specifying such default or breach.
16.3 In case of termination of this Agreement under Articles 5.4, 9.9,
16.1 or 16.2:
(a) all rights (including property rights), if any, which Buyer or
its assignee may have or may have had in or to (i) this Agreement
or portion thereof with respect to the undelivered Aircraft, or
(ii) any or all of the undelivered Aircraft, shall become null
and void with immediate effect;
(b) BRAD may sell, lease or otherwise dispose of such Aircraft to
another party free of any claim by Buyer;
(c) * , all amounts paid by Buyer
with respect to
the applicable undelivered Aircraft shall be retained by BRAD and
shall be applied against the costs, expenses, losses and damages
incurred by BRAD as a result of Buyer's default and/or the
termination of this Agreement, to which BRAD shall be entitled
*
and
(d) *
16.4 Notwithstanding the foregoing, nothing herein contained shall, in the
event of termination of this Agreement, limit
ongoing rights and obligations
with respect to Aircraft delivered prior to the termination date,
such as the after sale support obligations described in Annex A, the
warranty provisions and Service Life Policy of Annex B and the
obligation contained in Letters of Agrement where it is expressly
provided that said obligations (or part thereof) shall survive
termination, subject to any adjustments of said rights or obligations
required to reflect the number of Aircraft in service, if applicable.
16.5 *
ARTICLE 17 - NOTICES
17.1 Any notice, request, approval, permission, consent or other
communication ("Notice"), to be given or required under this
Agreement shall be provided in writing, by registered mail,
facsimile, courier, telegraphic or other electronic communication
providing reasonable proof of transmission, except that no notice
shall be sent by mail if disruption of postal service exists or is
threatened either in the country of origin or of destination, by the
party giving the Notice and shall be addressed as follows until
changed by notice in writing:
(a) Notice to BRAD shall be addressed to:
Bombardier Inc.
Bombardier Regional Aircraft Division
123 Garratt Boulevard
Downsview, Ontario
Canada
M3K 1Y5
Attention: Director Contracts
Telephone: (416)375-4052
Telex: 06-22128
Facsimile: (416) 375-4533
(b) Notice to Buyer shall be addressed to:
ATLANTIC COAST AIRLINES
1 Export Drive,
Sterling , Virginia
20164
U.S.A.
Attention: General Counsel
Telephone: 703-406-6500
Facsimile: 703-406-7471
17.2 Notice given in accordance with Article 17.1 shall be deemed
sufficiently given to and received by the addressees:
(a) if delivered by hand, on the day when the same shall have been so
delivered; or
(b) if mailed or sent by courier on the day indicated on the
corresponding acknowledgment of receipt; or
(c) if sent by telex or facsimile on the day indicated by the
acknowledgment or the answer back of the receiver in provable
form.
ARTICLE 18 - INDEMNITY AGAINST PATENT INFRINGEMENT
18.1 In the case of any actual or alleged infringement of any Canadian or
United States patent or, subject to the conditions and exceptions set
forth below, any patent issued under the laws of any other country in
which Buyer from time to time may lawfully operate the Aircraft
("Other Patents"), by the Aircraft, or by any system, accessory,
equipment or part installed in such Aircraft at the time title to
such Aircraft passes to Buyer, BRAD shall indemnify, protect, hold
harmless and defend (subject to applicable court procedures) Buyer
from and against all claims, suits, actions, liabilities, damages
*
resulting from the
infringement, excluding any incidental or consequential damages
(which include without limitation loss of revenue or loss of profit)
and BRAD shall and as promptly as possible under the circumstances,
at its option and expense:
(a) procure for Buyer the right under such patent to use such
system, accessory, equipment or part; or
(b) replace such system, accessory, equipment or part with one of the
similar nature and quality that is non-infringing; or
(c) modify such system, accessory, equipment or part to make same
non-infringing in a manner such as to keep it otherwise in
compliance with the requirements of this Agreement.
BRAD's obligation hereunder shall extend to Other Patents only if
from the time of design of the Aircraft, system, accessory, equipment
or part until the alleged infringement claims are resolved:
(d) such other country and the country in which the Aircraft is
permanently registered have ratified and adhered to and are at
the time of the actual or alleged infringement contracting
parties to the Chicago Convention on International Civil Aviation
of December 7, 1944 and are fully entitled to all benefits of
Article 27 thereof; and
(e) such other country and the country of registration shall each
have been a party to the International Convention for the
Protection of Industrial Property (Paris Convention) or have
enacted patent laws which recognize and give adequate protection
to inventions made by the nationals of other countries which have
ratified, adhered to and are contracting parties to either of the
foregoing conventions.
18.2 The foregoing indemnity does not apply to BFE, or to avionics,
engines or any system, accessory, equipment or part that was not
manufactured to BRAD's detailed design or to any system, accessory,
equipment or part manufactured by a third party to BRAD's detailed
design without BRAD's authorization.
*
18.3 Buyer's remedy and BRAD's obligation and liability under this Article
are conditional upon (i) Buyer giving BRAD written notice within ten
(10) days after Buyer receives notice of a suit or action against
Buyer alleging infringement or within twenty (20) days after Buyer
receives any other written claim of infringement (ii) Buyer uses
reasonable efforts in full cooperation with BRAD to reduce or
mitigate any such expenses, damages, costs or royalties involved, and
(iii) Buyer furnishes promptly to BRAD all data, papers and records
in its possession or control necessary or useful to resist and defend
against such claim or suit. BRAD may at its option conduct
negotiations with any party claiming infringement and may intervene
in any suit or action. Whether or not BRAD intervenes, BRAD shall be
entitled at any stage of the proceedings to assume or control the
defense. Buyer's remedy and BRAD's obligation and liability are
further conditional upon BRAD's prior approval of Buyer's payment or
assumption of any liabilities, expenses, damages, royalties or costs
for which BRAD may be held liable or responsible.
18.4 THE INDEMNITY, OBLIGATIONS AND LIABILITIES OF BRAD AND REMEDIES OF
BUYER SET OUT IN THIS ARTICLE ARE EXCLUSIVE AND ACCEPTED BY BUYER TO
BE IN LIEU OF AND IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES,
RELEASES AND RENOUNCES, ALL OTHER INDEMNITIES, OBLIGATIONS AND
LIABILITIES OF BRAD AND OF ITS AFFILIATES AND ALL OTHER RIGHTS,
REMEDIES AND CLAIMS, INCLUDING CLAIMS FOR DAMAGES, DIRECT, INCIDENTAL
OR CONSEQUENTIAL, OF BUYER AGAINST BRAD AND ITS AFFILIATES EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY ACTUAL OR
ALLEGED PATENT INFRINGEMENT BY THE AIRCRAFT OR ANY INSTALLED SYSTEM,
ACCESSORY, EQUIPMENT OR PART.
ARTICLE 19 - LIMITATION OF LIABILITY AND INDEMNIFICATION
19.1 ANNEX B, EXCEPT AS OTHERWISE PROVIDED IN LETTERS OF AGREEMENT NO. 6,
8, 9 AND 15 HERETO, EXCLUSIVELY SETS FORTH BRAD'S OBLIGATIONS WITH
RESPECT TO ANY NON-CONFORMANCE OF THE AIRCRAFT WITH THE SPECIFICATION
OR ANY DEFECT IN THE AIRCRAFT AND THE OBLIGATIONS AND LIABILITIES OF
BRAD UNDER THE AFORESAID ARE ACCEPTED BY BUYER TO BE EXCLUSIVE AND IN
LIEU OF, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER
REMEDIES, WARRANTIES, GUARANTEES, OBLIGATIONS, REPRESENTATIONS OR
LIABILITIES, EXPRESS OR IMPLIED, OF BRAD AND ITS AFFILIATES WITH
RESPECT TO DEFECTS IN EACH AIRCRAFT OR PART THEREOF, PRODUCT,
DOCUMENT OR SERVICE DELIVERED OR PROVIDED UNDER THIS AGREEMENT,
ARISING IN FACT, IN LAW, IN CONTRACT, IN TORT, OR OTHERWISE,
INCLUDING, WITHOUT LIMITATION,
A. ANY IMPLIED WARRANTY OF CONDITION OR MERCHANTABILITY OR
FITNESS;
B. ANY IMPLIED WARRANTY OR CONDITION ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
C. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT,
WHETHER OR NOT ARISING FROM THE ACTIVE, PASSIVE OR IMPUTED
NEGLIGENCE OR STRICT PRODUCTS LIABILITY OF BRAD OR ITS
AFFILIATES, BY REASON OF THE DESIGN, MANUFACTURE, SALE,
REPAIR, LEASE OR USE OF THE AIRCRAFT OR PRODUCT AND SERVICES
DELIVERED HEREUNDER; AND
D. ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS
OF OR DAMAGE TO ANY AIRCRAFT OR PART THEREOF, ANY BRAD
PARTS, ANY POWER PLANT PARTS, ANY VENDOR PARTS, ANY SPARE
PARTS OR ANY TECHNICAL DATA.
19.2 BUYER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD
HARMLESS BRAD, ITS SUBSIDIARIES, AFFILIATES, SUBCONTRACTORS AND
LESSORS, AND THEIR RESPECTIVE EMPLOYEES, DIRECTORS, OFFICERS AND
AGENTS, AND EACH OF THEM (THE "INDEMNIFIED PARTIES"), FROM AND
AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, COSTS AND EXPENSES
FOR LOSS OF OR DAMAGE TO PROPERTY INCLUDING ANY AIRCRAFT, AND LOSS OF
USE THEREOF, OR INJURIES TO OR DEATH OF ANY AND ALL PERSONS
(INCLUDING BUYER'S DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES BUT
EXCLUDING BRAD'S DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES), ARISING
DIRECTLY OR INDIRECTLY OUT OF OR IN CONNECTION WITH ANY SERVICE
PROVIDED UNDER ANNEX A WHETHER OR NOT CAUSED BY THE ACTIVE, PASSIVE
OR IMPUTED NEGLIGENCE OR STRICT PRODUCTS LIABILITY OF THE INDEMNIFIED
PARTIES. THE FOREGOING SHALL NOT APPLY WHERE SUCH LOSSES OR DAMAGES
ARE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
INDEMNIFIED PARTIES.
19.3 NOTHING CONTAINED IN ARTICLE 19.1 OR 19.2 ABOVE SHALL CONSTITUTE A
WAIVER OR RELEASE OR RENUNCIATION OF, OR INDEMNITY FOR, ANY LOSSES,
DAMAGES OR CLAIMS, BY BUYER AGAINST BRAD FOR CONTRIBUTION TOWARD
THIRD-PARTY BODILY INJURY OR PROPERTY DAMAGE CLAIMS BASED ON PRODUCT
LIABILITY THEORIES TO THE EXTENT OF BRAD'S RELATIVE PERCENTAGE OF THE
TOTAL FAULT OR OTHER LEGAL RESPONSIBILITY OF PERSONS CAUSING SUCH
BODILY INJURY OR PROPERTY DAMAGE.
19.4 IN THE EVENT OF ANY LOSSES OR DAMAGES SUFFERED BY ANYONE FOR OR
ARISING OUT OF (i) ANY LACK OR LOSS OF USE OF ANY AIRCRAFT,
EQUIPMENT, BRAD PARTS, VENDOR PARTS, SPARE PARTS, GROUND SUPPORT
EQUIPMENT, TECHNICAL PUBLICATIONS OR DATA OR (ii) ANY SERVICES TO BE
PROVIDED HEREUNDER, OR (iii) FOR ANY FAILURE TO PERFORM ANY
OBLIGATIONS HEREUNDER, NEITHER PARTY SHALL HAVE ANY OBLIGATION FOR
LIABILITY TO THE OTHER (AT LAW OR IN EQUITY), WHETHER ARISING IN
CONTRACT (INCLUDING WITHOUT LIMITATION, WARRANTY), IN TORT (INCLUDING
THE ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE OR STRICT PRODUCTS
LIABILITY OF BRAD OR ITS AFFILIATES), OR OTHERWISE, FOR LOSS OF USE,
REVENUE OR PROFIT OR FOR ANY OTHER INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE.
ARTICLE 20 - ASSIGNMENT
This Agreement may be assigned only as follows:
20.1 Either party may assign, sell, transfer or dispose of (in whole or in
part) any of its rights and obligations hereunder to a wholly owned
subsidiary or affiliate provided that there is no increase to the
liability and/or responsibility of the non-assigning party and that
the assigning party remains jointly and severally liable with any
assignee for the performance of its obligation under this Agreement.
20.2 *
20.3 *
20.4 Except as provided in Articles 20.1, 20.2 and 20.3, Buyer shall not
assign, sell, transfer or dispose of (in whole or in part) any of its
rights or obligations hereunder without BRAD's prior written consent,
such consent not to be unreasonably withheld. In the event of such
assignment, sale, transfer or disposition Buyer shall remain jointly
and severally liable with any assignee for the performance of all and
any of Buyer's obligations under this Agreement and BRAD reserves the
right as a condition of its consent to amend one or more of the terms
and conditions of this Agreement.
20.5 *
20.6 BRAD may assign any of its rights to receive money hereunder without
the prior consent of Buyer.
20.7 Notwithstanding the other provisions of this Article 20, BRAD shall,
at Buyer's cost and expense, if so requested in writing by Buyer,
take any action reasonably required for the purpose of causing any of
the Aircraft to be subjected (i) to, at or after the Delivery Date,
an equipment trust, conditional sale or lien, leases and mortgages,
or (ii) to another arrangement for the financing of the Aircraft by
Buyer, providing, however, there shall be no increase to the
liability and/or responsibility of BRAD arising through such
financing.
ARTICLE 21 - SUCCESSORS
21.1 This Agreement shall inure to the benefit of and be binding upon each
of BRAD and Buyer and their respective successors and permitted
assignees.
21.2 As used herein, reference to an airworthiness authority such as
Transport Canada and the FAA, to a regulation or directive issued by
such airworthiness authority or other governmental authority, shall
include any successor to such authority then responsible for the
duties of such authority and regulation or directive covering the
same subject matters.
ARTICLE 22 - APPLICABLE LAWS
22.1 THIS AGREEMENT SHALL BE SUBJECT TO AND CONSTRUED IN ACCORDANCE WITH
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY THE DOMESTIC LAWS
OF THE STATE OF NEW YORK, U.S.A., EXCLUDING THE CHOICE OF LAW RULES,
AND THE PARTIES HAVE AGREED THAT THE APPLICATION OF THE UNITED
NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS
IS HEREBY EXCLUDED.
22.2 Each of Buyer and BRAD agrees that any legal action or proceeding
with respect to this Agreement may be brought in the Federal Courts
of the United States of America in the Southern District Courts of
New York or in the Supreme Courts of the State of New York in the
County of New York and by the execution and delivery of this
Agreement irrevocably consents and submits to the nonexclusive
jurisdiction of each of the aforesaid court in personam with respect
to any such action or proceeding and irrevocably waive any objection
either party may have as to venue or any such suit, action or
procedure brought in such court or that such court is an inconvenient
forum. Nothing in this paragraph shall affect the right of any party
hereto or their successors or assigns to bring any action or
proceeding against the other party hereto or their property in the
courts of other jurisdictions.
ARTICLE 23 - CONFIDENTIAL NATURE OF AGREEMENT
23.1 This Agreement is confidential between the parties and shall not,
without the prior written consent of the other party, be disclosed by
either party in whole or in part to any other person or body except:
i) as may be necessary for either party to carry out its
obligations under this Agreement or other agreements related
to this Agreement to which it is a party, and
ii) as may be required by law, and
iii) *
23.2 Except as may be reasonably required for the operation, maintenance,
overhaul, modification, storage and repair of the Aircraft by Buyer
or any third party, Buyer shall hold confidential all Technical Data
and other proprietary information (and so marked by BRAD) supplied by
or on behalf of BRAD, and shall not reproduce any such Technical Data
or proprietary information or divulge the same to any third party
unless such disclosure requires the third party to hold same in
confidence and use it only for the purposes stated above.
23.3 Either party may announce the signing of this Agreement by means of a
notice to the press provided that the content and date of the notice
has been agreed to by the other party.
23.4 *
ARTICLE 24 - AGREEMENT
24.1 This Agreement and the matters referred to herein constitute the
entire Agreement between BRAD and Buyer and supersede and cancel all
prior representations, brochures, alleged warranties, statements,
negotiations, undertakings, letters, memoranda of agreement,
acceptances, agreements, understandings, contracts and
communications, whether oral or written, between BRAD and Buyer or
their respective agents, with respect to or in connection with the
subject matter of this Agreement and no agreement or understanding
varying the terms and conditions hereof shall be binding on either
BRAD or Buyer hereto unless an amendment to this Agreement is issued
and duly signed by their respective authorized representatives
pursuant to the provisions of this Article hereof. In the event of
any inconsistencies between any provisions of this Agreement and
those of any Letter Agreements, the provisions of the Letter
Agreements 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 BENEFIT OF THE WAIVER, LIMITATION, RELEASE, RENUNCIATION AND/OR
EXCLUSION OF LIABILITY CONTAINED IN THIS AGREEMENT EXTENDS TO THE
OTHER DIVISIONS, OTHER SUBSIDIARIES, AND OTHER AFFILIATES OF
BOMBARDIER INC., INCLUDING DE HAVILLAND INC. (COLLECTIVELY THE
"BOMBARDIER GROUP") AND TO THE OFFICERS, DIRECTORS, EMPLOYEES AND
REPRESENTATIVES OF THE BOMBARDIER GROUP, ON WHOSE BEHALF AND FOR
WHOSE BENEFIT BRAD IS, FOR PURPOSES OF THIS ARTICLE 24.3, ACTING AS
AGENT AND TRUSTEE.
*
24.4 Buyer and BRAD agree that this Agreement has been the subject of
discussion and negotiation and is fully understood by the parties
hereto and that the price of the Aircraft and the other mutual
agreements of the parties set forth herein were arrived at in
consideration of the limitation provisions contained in Article 19
and the other similar provisions contained in this Agreement.
ARTICLE 25 - DISPUTES
25.1 Any dispute, difference, controversy or claim arising out of or relating
to
this Agreement, the breach, or non-performance thereof shall first be
attempted to be resolved by BRAD and Buyer through mutual negotiations,
consultation and discussions.
25.2 Should the parties hereto be unable to settle their differences or
disputes
which may arise between them with respect to the interpretation or
application of this Agreement (a "Dispute"), by mutual agreement as
provided in Article 25.1 above, the parties agree to each appoint two (2)
representatives to constitute a joint commission (the "Joint Commission")
to jointly hear the representations of each party regarding the Dispute.
One representative will be appointed as chair of the Joint Commission on an
alternate basis. At least one (1) representative of each party shall have
knowledge in technical or contractual matters depending on the nature of
the Dispute. The Joint Commission shall, following representations by each
party, issue non-binding written recommendations to the parties as to how
best settle the Dispute. If the representatives do not agree on joint
recommendations, the representatives of each party shall issue their own
recommendations.
25.3 Either party may request the formation of the Joint Commission if a
dispute
is not settled within forty-five (45) days following a written notice from
either party to the other detailing the nature of the Dispute and the
resolution sought. The request for a Joint Commission shall be made in
writing and shall contain the names of the representatives appointed by the
party requesting its formation. The other party shall then provide the
names of its representatives within thirty (30) days following the receipt
of the request for a Joint Commission.
25.4 The Joint Commission shall have forty-five (45) days from its formation to
agree on the procedure to be followed, including the place of hearing, if
any. The Joint Commission shall have sixty (60) days from the completion
of the representations by each party to issue its recommendations.
25.5 If, despite the recommendations of the Joint Commission, the parties are
unable to resolve the Dispute, either party may, except where the remedies
sought include termination of the Agreement in whole or in part or
injunctive relief, or other controversy involving an amount claimed in good
faith in excess of Five Million United States Dollars ( $5,000,000 U.S.)
unless otherwise agreed, request by sixty (60) days prior notice that the
Dispute be settled by arbitration in accordance with arbitration rules to
be agreed upon before delivery of the first Aircraft.
25.6 Within thirty (30) days of the demand to refer the Dispute to arbitration,
each party shall appoint one (1) arbitrator, who in turn will appoint the
third arbitrator, within thirty (30) days of their appointments. This
third arbitrator shall act as the chairman of the Arbitral Tribunal so
constituted.
25.7 The venue of arbitration shall be Toronto, Ontario, New York City, or
Washington, DC, U.S.A., as agreed between the parties.
25.8 The arbitrators shall not act as "Amiable Compositeur" and shall decide
according to the terms of the agreement and to the laws of New York.
25.9 The award of the arbitration shall be final and shall not be called in
question in any court or tribunal.
25.10 It is expressly agreed that any statement, representation or document
made
or produced to or in connection with, or as a result of the formation of a
Joint Commission shall be without prejudice and without admission of
liability by either party and shall not be used as such by the other party.
25.11 Each party shall be responsible for its own costs and expenses incurred
as a result of, or in connection with the Joint Commission and arbitration
including the cost, fees and expenses of its own representatives.
In witness whereof this Agreement was signed on the date written hereof:
For and on behalf of For an on behalf of
Atlantic Coast Airlines: Bombardier Inc.:
_______________________ ______________________
James B. Glennon Michel Bourgeois
Sr. Vice President and C.F.O. Vice President,
Contracts
APPENDIX I
REGIONAL JET AIRCRAFT
ECONOMIC ADJUSTMENT FORMULA
Pursuant to the provision of Article 4 of the Agreement, economic
adjustment will be calculated using the lesser amount of those generated by
the following two calculations:
(i) The Economic Adjustment Formula:
PP = PO (0.28 LD + 0.35 ED + 0.20 CD + 0.15 MD + 0.02 FD)
LO EO CO MO FO
*
Where:
PP = Aircraft Purchase Price;
PO = Base Price;
LD = the Canadian labour index based upon the indices for the last full
month preceding the month of delivery of the relevant Aircraft;
LO = the Canadian labour index which, as at 1 July 1995, is 19.69;
ED = the U.S. labour index based upon the indices for the last full month
preceding the month of delivery of the relevant Aircraft;
EO = the U.S. labor index which, as at 1 July 1995, is 18.07;
CD = the Industrial Commodities index based upon the indices for the last
full month preceding the month of delivery of the relevant Aircraft;
CO = the Industrial Commodities index which, as at 1 July 1995, is 126.6;
MD = the material index based upon the indices for the last full month
preceding the month of delivery of the relevant Aircraft;
MO = the material index which, as at 1 July 1995, is 134.8;
FD = the fuel index based on the indices for the last full month preceding
the month of delivery of the relevant Aircraft; and
FO = the fuel index which, as at 1 July 1995, is 81.0.
For the purpose of the Economic Adjustment Formula and the calculation of the
economic adjustment:
(a) the Canadian labour index shall be the index provided in the Standard
Industrial Classification (S.I.C.) Code 321 for Average Hourly
Earnings for the Aircraft and Parts Industry (Canada) published by
Statistics Canada in "Employment Earnings and Hours" Table 3.1.
(b) the U.S. labour index shall be the index provided in the Bureau of
Labor Statistics (B.L.S.) Code 372 Gross Hourly Earnings of
production and non-supervisory workers in the Aircraft and Aircraft
Parts Industry as published by the U.S. Department of Labor, Bureau
of Labor Statistics in "Employment and Earnings" Table C-2.
(c) the Industrial Commodities index shall be the index provided in the
Producer Price Index as Industrial Commodities as published by the
U.S. Department of Labor, Bureau of Labor Statistics in "Producer
Prices and Price Indexes" Table 6.
(d) the material index shall be the index provided in the Producer Price
Index for Code 10 Metals and Metals Products as published by the U.S.
Department of Labor, Bureau of Labor Statistics in "Producer Prices
and Price Indexes" Table 6.
(e) the fuel index shall be the index provided in the Bureau of Labor
Statistics (B.L.S.) Code 5 "Fuel and Related Products and Power"
Table 6 as published by the U.S. Department of Labor.
(f) in the event that BRAD shall be prevented from calculating the
Aircraft Purchase Price of each Aircraft due to any delay in the
publication of the required indices, BRAD shall use the last
provisionally published indices, and in the event that provisional
indices are not available, BRAD shall extrapolate from the last three
(3) months of published indices and where the balance of the Aircraft
Purchase Price payable is calculated on the provisionally published
indices, and/or extrapolation, BRAD will amend such installment on
publication of the final indices and will submit supplementary claims
or provide credit notes in respect of any adjustment so caused.
Notwithstanding the foregoing, it is the intention of the parties to
finalize the Aircraft Purchase Price within twelve (12) months
following the Aircraft delivery date. Accordingly, at the end of
each calendar quarter the parties shall review and finalize by mutual
agreement the Aircraft Purchase Price of the Aircraft delivered more
than twelve months prior to such review, using the best data and
information available at that time.
(g) the indices used in the Economic Adjustment Formula and the weighting
assigned to them, as well as the various indices as of July 1st, 1995
quoted here, are based on the information known to date and represent
the projection by BRAD of the manner in which BRAD will incur cost in
the production of the Aircraft. In the event there is a change in
the indices published or in circumstances which materially affects
the indices chosen or the weighting assigned to them, the indices
and/or the weighting shall be amended accordingly by mutual agreement
of the parties. The change in circumstances referred to above shall
include but not be limited to:
1) Any material change in the basis upon which the chosen indices have
been calculated or if any of said indices are discontinued or
withdrawn from publication,
2) Any change in manufacturing plan involving the letting of a new sub-
contract or the termination of an existing sub-contract, and
3) Any change in the escalation or Economic Adjustment Formula used in a
Vendor or sub-contractor contract with BRAD; and
In the calculation of the Aircraft Purchase Price the following guidelines in
respect of decimal places shall apply:
(a) All indices in the Economic Adjustment Formula shall be rounded to
the second decimal place,
(b) The Economic Adjustment Formula shall be calculated and rounded to
four decimal places, and
(c) The Aircraft Purchase Price resulting from the Economic Adjustment
Formula shall be rounded to the nearest dollar.
APPENDIX II
DELIVERY SCHEDULE
First Aircraft *
Second Aircraft *
Third Aircraft *
Fourth Aircraft *
Fifth Aircraft *
Sixth Aircraft *
Seventh Aircraft *
Eighth Aircraft *
Ninth Aircraft *
Tenth Aircraft *
Eleventh Aircraft *
Twelfth Aircraft *
APPENDIX III
SPECIFICATION
TYPE SPECIFICATION
*
APPENDIX IV
BUYER SELECTED OPTIONAL FEATURES
Description Price
(in Jul 1, 1995
US$)
Higher Design Weights (51,000 lbs MTOW) - ER
*
Centre Wing Fuel Tank
*
FAA Collins Strapping
*
Provision for Collins ACARS
*
F/A Call Annunciation Lights
*
Interior - Universal North American
*
Class C Baggage Compartment minus temperature
control
*
Leather Seat Covers
*
Reduced V2 Vref Speed
*
Red Anti-Ice Warning Light (FAA)
*
Logo Lights (includes Cargo Door Light)
*
Red Beacon Lights
*
Altimeter Reset Auto Flash
*
Single Collins FMS 4100*
*
EROS Magic Mask - Provisions Only
*
GE CF34-3B1 Engine - Series 200
*
Additional Flap Setting
*
Exterior Paint Scheme *
*
Total Technical Features
All prices listed above are expressed in July 1, 1995 US dollars, and are
subject to economic adjustment as provided in the Agreement.
*
CUSTOMER SUPPORT SERVICES
ANNEX A - TECHNICAL SUPPORT, SPARE PARTS, TRAINING AND
TECHNICAL DATA
The following Customer Support Services are those services to which
reference is made in Article 3 of the Agreement.
ARTICLE 1 - TECHNICAL SUPPORT
1.1 Factory Service
BRAD agrees to maintain or cause to be maintained the capability to
respond to Buyer's technical inquiries, to conduct investigations
concerning maintenance problems and to issue findings and recommend
action thereon. This service shall be provided for as long as ten
(10) CL-600-2B19 aircraft remain in commercial air transport service.
1.2 Field Service Representative
1.2.1 Services
BRAD shall assign one (1) Field Service Representative ("FSR")
to Buyer's main base of operation or other location as may be
mutually agreed.
1.2.2 Term
Such assignment shall be for
* and shall commence
approximately one (1) month prior to the Delivery Date of the
first Aircraft. The FSR assignment may be extended on terms
and conditions to be mutually agreed.
1.2.3 Responsibility
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 by Buyer's designated personnel ("FSR Services").
1.2.4 Travel
If requested by Buyer, the FSR may, at Buyer's expense, travel
to another location to provide technical advice to Buyer. The
FSR must fly on Buyer's airline, if such service is available.
1.2.5 Office Facilities
Buyer shall furnish the FSR, at no charge to BRAD, suitable and
private office facilities * and related
equipment including desk, file cabinet, access to two
telephone lines, facsimile and photocopy equipment conveniently
located at Buyer's main base of operation or other location as
may be mutually agreed.
1.2.6 Additional Expenses
Buyer shall reimburse BRAD (net of any additional taxes on such
reimbursement) the amount of any and all taxes (except Canadian
taxes on the income of the FSR) and fees of whatever nature,
including any customs duties, withholding taxes or fees
together with any penalties or interest thereon, paid or
incurred by BRAD or the FSR or other BRAD employee as a result
of or in connection with the rendering of the services.
1.2.7 Right to Stop Work
BRAD shall not be required to commence or continue the FSR
Services 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 BRAD employee; or
d.) the Government of the country where Buyer's facilities
are located or where Buyer desires the FSR to
travel refuses the BRAD employee permission to
enter said country or Buyer's base of operations.
1.2.8 Work Permits and Clearances
Buyer shall assist in arranging for all necessary airport
security clearances required for the FSR or other BRAD employee
to permit timely accomplishment of the FSR services.
1.3 Maintenance Planning Support
1.3.1 Scheduled Maintenance Task Cards
As described in Annex A Attachment A, BRAD shall provide Buyer
BRAD's standard format scheduled maintenance task cards that
shall conform to the Aircraft at the Delivery Date. At Buyer's
request BRAD shall provide a proposal for task cards produced
to Buyer's format.
1.3.2 In-Service Maintenance Data
Buyer agrees to provide to BRAD in-service maintenance data in
order to provide updates to BRAD's recommended maintenance
program. Buyer and BRAD shall agree on standards and frequency
for communication of such data.
1.4 Additional Services
At Buyer's request BRAD shall provide a proposal to provide such
additional support services as the parties may agree upon, which may
include special investigations, maintenance and repair of the
Aircraft.
ARTICLE 2 - SPARE PARTS, GSE, TOOLS AND TEST EQUIPMENT
2.1.1 Definitions
a. "BRAD Parts":
any spare parts, ground support equipment, tools and test
equipment which bear an inhouse Cage Code number in the BRAD
Provisioning Files (as that expression is defined in ATA
Specification 2000).
b. "Power Plant Parts":
any power plant or power plant part or assembly carrying the power
plant manufacturer's part number or any part furnished by the
power plant manufacturer for incorporation on the Aircraft.
c. "Vendor Parts":
any spare parts, ground support equipment, tools and test
equipment for the Aircraft which are not BRAD 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 BRAD. The term Spare Parts includes BRAD
Parts, Power Plant Part and Vendor Parts.
e. "Order":
any order for Spare Parts issued by Buyer to BRAD; and
f. "Technical Data":
shall have the meaning attributed to it in Annex A Article 4.1.
2.1 Term and Applicability
The term of this Annex A Article 2 shall become effective on the date
hereof and shall remain in full force and effect with respect to the
purchase and sale of Spare Parts for each Aircraft so long as at
least ten (10) of the CL-600-2B19 aircraft remain in commercial air
transport service. The provisions of Annex A Articles 2.2, 2.6.5,
2.24 and Annex B Article 5.0 shall survive expiration or termination
of this Agreement.
2.2 Order Terms
Terms and conditions hereof shall apply to all Orders placed by Buyer
with BRAD in lieu of any terms and conditions in Buyer's purchase
orders.
2.3 Purchase and Sale of Spare Parts
2.3.1 Agreement to Manufacture and Sell
BRAD shall manufacture, or procure, and make available for sale
to Buyer suitable Spare Parts in quantities sufficient to meet
the reasonably anticipated needs of Buyer for normal
maintenance and normal spares inventory replacement for each
Aircraft. During the term specified in Annex A Article 2.1
above, BRAD shall also maintain, or cause to be maintained, a
shelf stock of certain BRAD Parts selected by BRAD to ensure
reasonable re-order lead times and emergency support. BRAD
shall maintain, or cause to be maintained, a reasonable
quantity of BRAD insurance parts at a U.S. distribution centre.
Insurance parts as used herein shall include, but not be
limited to, dispatch-essential parts such as major flight
control surfaces.
2.4 Agreement to Purchase BRAD Parts
2.4.1 *
2.4.2 Buyer's Right to Purchase, Redesign or Manufacture
*
shall not be
construed as a granting of a license by BRAD and shall not
obligate BRAD to disclose to anyone Technical Data or other
information nor to the payment of any license fee or royalty or
create any obligation whatsoever to BRAD and BRAD shall be
relieved of any obligation or liability with respect to patent
infringement in connection with any such redesigned part.
Buyer shall be responsible for obtaining all regulatory
authority approvals required by Buyer to repair the Aircraft
using redesigned or manufactured BRAD Parts as described in the
preceding Article. Any such redesigned part shall be
identified with Buyer's part number only.
2.4.3 Notice to BRAD of Redesigned Parts
BRAD reserves the right to negotiate with Buyer the access to
redesigned parts, drawings and the non-exclusive manufacturing
rights of the redesigned part, if Buyer redesigns or has had
any BRAD parts redesigned.
2.5 Purchase of Vendor Parts & Power Plant Parts
BRAD shall not be obligated to maintain a stock of Power Plant Parts.
BRAD maintains a spares stock of selected Vendor Parts at its own
discretion to support provisioning and replenishment sales. BRAD
agrees to use all reasonable efforts to require its vendors to comply
with the terms and conditions of this Annex A Article 2 as they apply
to Vendor Parts. Vendor Parts shall be delivered in accordance with
the vendor's quoted lead time plus BRAD's internal processing time.
2.6 Spare Parts Pricing
2.6.1 Spare Parts Price Catalogue
Prices for commonly used BRAD Parts stocked by BRAD shall be
published in the spare parts price catalogue ("Spare Parts
Price Catalogue"). BRAD shall hold the published prices firm
for catalogue stock class items for a period of twelve (12)
months and shall provide at least ninety (90) calendar days
notice prior to changing the published price.
2.6.2 BRAD prices for Vendor Parts
If Buyer orders Vendor Parts from BRAD, the price shall be as
published in the Spare Parts Price Catalogue.
2.6.3 Quotations
Price and delivery quotations for items not included in the
Spare Parts Price Catalogue shall be provided at Buyer's
request by BRAD. Price quotations will be held firm for a
period of ninety (90) calendar days or as otherwise specified
by BRAD. Responses to quotation requests will be provided
within ten (10) calendar days.
2.6.4 Currency and Taxes
All Spare Parts Price Catalogue and quotation prices shall be
in U.S. dollars and exclusive of transportation, taxes, duties
and licenses.
Buyer shall pay to BRAD upon demand the amount of any sales,
use, value-added, excise or similar taxes imposed by any
federal, provincial or local taxing authority within Canada,
and the amount of all taxes imposed by any taxing authority
outside Canada, required to be paid by BRAD as a result of any
sale, use, delivery, storage or transfer of any Spare Parts.
If BRAD has reason to believe that any such tax is applicable,
BRAD shall separately state the amount of such tax in its
invoice. If a claim is made against BRAD for any such tax,
BRAD shall promptly notify Buyer.
In addition, Buyer shall pay to BRAD on demand the amount of
any customs duties required to be paid by BRAD with respect to
the importation by Buyer of any Spare Parts.
2.6.5 Vendor Pricing
BRAD shall use reasonable efforts to require its major vendors
to maintain any published price for their parts for a period of
at least twelve (12) months with a ninety (90) calendar day
notice period prior to changing a published price.
2.7 Provisioning
2.7.1 Pre-provisioning/Provisioning Conference
Pre-provisioning and provisioning conferences shall be convened
on dates to be mutually agreed between Buyer and BRAD in order
to:
(i) discuss the operational parameters to be provided by
Buyer to BRAD which BRAD considers necessary for preparing
its quantity recommendations for initial provisioning of
Spare Parts to be purchased from BRAD or vendors
("Provisioning Items");
(ii) review Buyer's ground support equipment and special tool
requirements for the Aircraft;
(iii) discuss the format of the provisioning documentation to
be provided to Buyer from BRAD for the selection of
Provisioning Items; and
(iv) arrive at a schedule of events for the initial
provisioning process, including the establishment of a date
for the initial provisioning conference ("Initial
Provisioning Conference") which shall be scheduled where
possible at least six (6) months prior to delivery of the
first Aircraft.
The time and location of the pre-provisioning conference shall
be mutually agreed upon between the parties; however, BRAD and
Buyer shall use their best efforts to convene such meeting
within thirty (30) days after execution of the Agreement.
2.8 Initial Provisioning Documentation
Initial provisioning documentation for BRAD Parts and Vendor Parts
shall be provided by BRAD as follows:
a) BRAD shall provide, as applicable to Buyer, no later than six (6)
months prior to the Scheduled Delivery Date of the first Aircraft,
or as may be mutually agreed, the initial issue of provisioning
files.
Revisions to this provisioning data shall be issued by BRAD every
ninety (90) calendar days until ninety (90) calendar days
following the Delivery Date of the last Aircraft or as may be
mutually agreed; and
b) the Illustrated Parts Catalogue designed to support provisioning
shall be issued concurrently with provisioning data files and
revised at ninety (90) calendar day intervals.
2.8.1 Obligation to Substitute Obsolete Spare Parts
In the event that, prior to delivery of the first Aircraft, any
Spare Part purchased by Buyer from BRAD is rendered obsolete or
unusable due to the redesign of the Aircraft or of any
accessory, equipment or part thereto (other than a redesign at
Buyer's request), BRAD shall deliver to Buyer new and usable
Spare Parts in substitution for such obsolete or unusable Spare
Parts upon return of such Spare Parts to BRAD by Buyer. BRAD
shall credit Buyer's account with the price paid by Buyer for
any such obsolete or unusable Spare Part and shall invoice
Buyer for the purchase price of any such substitute Spare Part
delivered to Buyer.
2.8.2 Delivery of Obsolete Spare Parts and Substitutes
Obsolete or unusable Spare Parts returned by Buyer pursuant to
Annex A Article 2.8.1. shall be delivered to BRAD at its plant
in Ontario or Quebec, or such other destination as BRAD may
reasonably designate. Spare Parts substituted for such
returned obsolete or unusable Spare Parts shall be delivered to
Buyer from BRAD's plant in Ontario or Quebec, or such other
BRAD shipping point as BRAD may reasonably designate. BRAD
shall pay the freight charges for the shipment from Buyer to
BRAD of any such obsolete or unusable Spare Part and for the
shipment from BRAD to Buyer of any such substitute Spare Part.
2.8.3 Obligation to Repurchase Surplus Provisioning Items
During a period
*
BRAD
shall, upon receipt of Buyer's written request and subject to
the exceptions in Annex A Article 2.8.4, repurchase unused and
undamaged Provisioning Items which: (i) were recommended by
BRAD as initial provisioning for the Aircraft, (ii) were
purchased by Buyer from BRAD or Vendor at BRAD's
recommendation, and (iii) are surplus to Buyer's needs.
2.8.4 Exceptions
BRAD shall not be obligated under Annex A Article 2.8.3 to
repurchase any of the following: (i) quantities of
Provisioning Items in excess of those quantities recommended by
BRAD in its Recommended Spare Parts List ("RSPL") for the
Aircraft, (ii) Power Plant Parts, QEC Kits, standard hardware,
bulk and raw materials, ground support equipment and special
tools, (iii) Provisioning Items which have become obsolete or
have been replaced by other Provisioning Items as a result of
Buyer's modification of the Aircraft and (iv) Provisioning
Items which become surplus as a result of a change in Buyer's
operating parameters provided to BRAD pursuant to Annex A
Article 2.7, which were the basis of BRAD's initial
provisioning recommendations for the Aircraft.
2.8.5 Notification and Format
Buyer shall notify BRAD, in writing, when Buyer desires to
return Provisioning Items which Buyer's review indicates are
eligible for repurchase by BRAD under the provisions of Annex
A Article 2.8.3. Buyer's notification shall include a detailed
summary, in part number sequence, of the Provisioning Items
Buyer desires to return. Such summary shall be in the form of
listings as may be mutually agreed between BRAD and Buyer, and
shall include part number, nomenclature, purchase order number,
purchase order date and quantity to be returned.
Within sixty (60) calendar days after receipt of Buyer's
notification and detailed summary BRAD shall complete the
review of such summary.
2.8.6 Review and Acceptance by BRAD
Upon completion of BRAD's review of any detailed summary
submitted by Buyer pursuant to Annex A Article 2.8.5., BRAD
shall within sixty calendar days issue to Buyer a Material
Return Authorization notice ("MRA") for those Provisioning
Items BRAD agrees are eligible for repurchase in accordance
with Annex A Article 2.8.3. BRAD will advise Buyer of the
reason that any Provisioning Items included in Buyer's detailed
summary are not eligible for return. The MRA notice shall
state the date by which Provisioning Items listed in the MRA
notice must be redelivered to BRAD as agreed between the
parties, and Buyer shall arrange for shipment of such
Provisioning Items accordingly, to the U.S. distribution
centre.
2.8.7 Price and Payment
The price of each Provisioning Item repurchased by BRAD
pursuant to Annex A Article 2.8.6 will be the original invoice
price thereof. BRAD shall pay the repurchase price by issuing
a credit memorandum in favour of Buyer which may be applied
against amounts due BRAD for the purchase of Spare Parts and
services.
2.8.8 Return of Surplus Provisioning Items
Provisioning Items repurchased by BRAD pursuant to Annex A
Article 2.8.6 shall be delivered to BRAD *
2.8.9 Obsolete Spare Parts and Surplus Provisioning Items - Title and
Risk of Loss
Title to and risk of loss of any obsolete or unusable Spare
Parts returned to BRAD pursuant to Annex A Article 2.8.8 shall
pass to BRAD upon delivery thereof to BRAD. Title to and risk
of loss of any Spare Parts substituted for an obsolete or
unusable Spare Part pursuant to Annex A Article 2.8.1 shall
pass to Buyer upon delivery thereof to Buyer. Title to and
risk of loss of any Provisioning Items repurchased by BRAD
pursuant to Annex A Article 2.8.3 shall pass to BRAD upon
delivery thereof to BRAD.
With respect to the obsolete or unusable Spare Parts which may
be returned to BRAD and the Spare Parts substituted therefor,
pursuant to Annex A Article 2.8.1, and the Provisioning Items
which may be repurchased by BRAD, pursuant to Annex A Article
2.8.3, the party which has the risk of loss of any such Spare
Part or Provisioning Item shall have the responsibility of
providing any insurance coverage thereon desired by such party.
2.9 Procedure for Ordering Spare Parts
Orders for Spare Parts may be placed by Buyer to BRAD by any method
of order placement (including but not limited to SITA, ARINC,
telecopier, letter, telex, facsimile, telephone or hard copy purchase
order).
2.9.1 Requirements
Orders shall include at a minimum order number, part number,
nomenclature, quantity, delivery schedule requested, shipping
instructions and BRAD's price, if available.
2.9.2 Processing of Orders
Upon acceptance of any Order, unless otherwise directed by
Buyer, BRAD shall, if the Spare Parts are in stock, proceed
immediately to prepare the Spare Parts for shipment to Buyer.
If BRAD does not have the Spare Parts in stock, BRAD shall
proceed immediately to acquire or manufacture the Spare Parts.
Purchase order status and actions related to the shipment of
Spare Parts shall be generally consistent with the provisions
of the World Airline Suppliers Guide, as applicable to Buyer.
2.9.3 Changes
BRAD reserves the right, without Buyer's consent, to make any
necessary corrections or changes in the design, part number and
nomenclature of Spare Parts covered by an Order, to substitute
Spare Parts and to adjust prices accordingly, provided that
interchangeability is not affected and the unit price is not
increased by more than 10% or $50.00, whichever is less, unless
Buyer's order specifically and reasonably prohibits such
substitution. BRAD shall promptly give Buyer written notice of
corrections, changes, substitutions and consequent price
adjustments. Corrections, changes, substitutions and price
adjustments which affect interchangeability or exceed the price
limitations set forth above may be made only with Buyer's
written consent, which consent shall conclusively be deemed to
have been given unless Buyer gives BRAD written notice of
objection within thirty (30) calendar days after receipt of
BRAD's notice. In case of any objection, the affected Spare
Part will be deemed to be deleted from Buyer's Order.
2.10 Packing
All Spare Parts ordered shall receive standard commercial packing
suitable for export shipment via air freight. Such standard packing
will generally be to ATA 300 standards as amended from time to time.
All AOG orders will be handled, processed, packed and shipped
separately.
2.11 Packing List
BRAD shall insert in each shipment a packing list/release note
itemized to show:
(i) the contents of the shipment,
(ii) the approved signature of BRAD's TC authority attesting to the
airworthiness of the Spare Parts.
(iii) value of the shipment for customs clearance if required.
2.12 Container Marks
Upon Buyer's request each container shall be marked with shipping
marks as specified on the Order. In addition BRAD shall, upon
request, include in the markings: gross weight and cubic
measurements.
2.13 Delivery, Title and Risk of Loss
2.13.1 Delivery Point
Spare Parts, other than AOG and Critical Orders, shall be
delivered to Buyer FOB BRAD's U.S. distribution centre. AOG
and Critical Orders shall be delivered FOB point of origin.
2.13.2 Delivery Time
BRAD shall use reasonable efforts so that shipment of BRAD
Parts to Buyer be as follows:
a) AOG Orders
Ship AOG Orders within four (4) hours of receipt of Order.
Buyer's affected Aircraft factory production number shall be
required on AOG Orders;
b) Critical Orders (A1)
Ship critical Orders within twenty-four (24) hours of order
receipt;
c) Expedite Orders (A2)
Ship expedite Orders within seven (7) calendar days of order
receipt;
d) Initial Provisioning Orders
Prior to the Delivery Date of the first Aircraft or as may
be mutually agreed; and
e.) Other Orders
Shipment of stock items shall be approximately thirty (30)
calendar days after BRAD's receipt of Buyer's Order.
Shipment of non-stock items shall be in accordance with
quoted lead times or lead times published in the current
Spare Parts Price Catalogue, procurement data, or
provisioning data.
2.14 Collect Shipments
Where collect shipments are not deemed practicable by BRAD, charges
for shipment, insurance, prepaid freight charges and all other costs
paid by BRAD shall be paid by Buyer promptly upon presentation to
Buyer of invoices covering the same.
2.15 Freight Forwarder
If Buyer elects to use the services of a freight forwarder for the
onward movement of Spare Parts, Buyer agrees to release BRAD from and
indemnify it for any liability for any fines or seizures of Spare
Parts imposed under any governmental Goods in Transit regulations.
Any such fines levied against BRAD will be invoiced to Buyer and any
Spare Parts seized under such regulations will be deemed to be
received, inspected, and accepted by Buyer at the time of seizure.
2.16 Intentionally Left Blank
2.17 Title and Risk of Loss
Property and title to the Spare Parts will pass to Buyer upon payment
for the Spare Parts in full. Until payment in full for Spare Parts,
(a) title to them will not pass to Buyer, and (b) BRAD maintains a
purchase money security interest in them. Risk of loss of the Spare
Parts will pass to the Buyer upon delivery by BRAD. With respect to
Spare Parts rejected by Buyer pursuant to Annex A Article 2.19, risk
of loss shall remain with Buyer until such Spare Parts are re-
delivered to BRAD .
BRAD agrees to notify Buyer when material is shipped and shall
provide carrier's reference information (i.e., waybill number).
2.18 Inspection and Acceptance
All Spare Parts shall be subject to inspection by Buyer at
destination. Use of Spare Parts or failure of Buyer to give notice of
rejection within forty-five (45) days after receipt shall constitute
acceptance. Acceptance shall be final and Buyer waives the right to
revoke acceptance for any reason, whether or not known to Buyer at
the time of acceptance. Buyer's remedies for defects discovered
before acceptance are exclusively provided for in Annex A Article
2.19 herein.
2.19 Rejection
Any notice of rejection referred to in Annex A Article 2.18 shall
specify the reasons for rejection. If BRAD concurs with a rejection,
BRAD shall, at its option, either correct, repair or replace the
rejected Spare Parts. Buyer shall, upon receipt of BRAD's written
instructions and Material Return Authorization ("MRA") number, which
BRAD shall issue in a timely manner, return the rejected Spare Parts
to BRAD at its specified plant, or other destination as may be
mutually agreeable. The return of the rejected Spare Parts to BRAD
and the return or delivery of a corrected or repaired rejected Spare
Part or any replacement for any such Spare Part to Buyer shall be at
BRAD's expense. Any corrected, repaired or replacement Spare Parts
shall be subject to the provisions of this Agreement.
2.20 Payment
Except as provided in Annex A Article 2.22 below, payment terms shall
be net thirty (30) calendar days of invoice date for established open
accounts. Any overdue amount shall bear interest from the due date
until actual payment is received by BRAD at an annual rate of
interest equal to the U.S. prime interest rate as established from
time to time by the Chase Manhattan Bank, New York Branch, or its
successor,,, plus two percent (2%) calculated and compounded monthly.
2.21 Payment for Provisioning Items
Payment for Provisioning Items purchased by Buyer as contemplated by
Paragraph 2.7.1(i) shall be made by Buyer as follows:
a) a deposit of 35% of the total price of the Provisioning Items as
selected by Buyer, upon signature of the spares provisioning
document; and
b) the balance of the total price of Provisioning Items upon their
delivery.
2.22 Modified Terms of Payment
BRAD reserves the right to alter the terms of payment without
prior notice if Buyer fails to pay when due an amount Buyer owes
under any agreement with BRAD, unless such failure relates to a
good faith dispute of an invoice.
2.23 Regulations
Buyer shall comply with all applicable monetary and exchange control
regulations and shall obtain any necessary authority from the
governmental agencies administering such regulations to enable Buyer
to make payments at the time and place and in the manner specified
herein.
2.24 Warranty
The warranty applicable to Spare Parts is set forth in Annex B
hereto.
2.25 Cancellation of Orders
Except as otherwise may apply to initial provisioning, if Buyer
cancels an Order, BRAD, at its option, shall be entitled to recover
actual damages, but not less than the following cancellation charges
or more than the purchase price of the Spare Parts covered by the
Order:
a) if work accomplished on the Order has been limited to BRAD Spares
Department, or the part has been identified as "shelf stock" in
the Spare Parts Price Catalogue, no cancellation charges shall be
made;
b) if production planning has been completed on the Order and shop
orders have been written, but no shop time or material charges
have been made against the Order, the cancellation charge shall be
10% of the price but not to exceed $100 per unit;
c) if shop time or material charges have been made against the Order,
the cancellation charge shall be based on the cost of such time
and materials, plus overhead; and
d) if the Spare Parts covered by the Order can be absorbed into
BRAD's inventory without increasing BRAD's normal maximum stock
level, no cancellation charges shall be made.
2.26 Lease
BRAD shall select and make available certain parts for lease, subject
to availability Buyer has the option to negotiate a lease agreement
with BRAD separate from this Agreement.
2.27 Additional Terms and Conditions
BRAD's conditions of sale are deemed to incorporate the terms and
conditions stated herein. Additional terms and conditions applicable
at time of receipt of each order from Buyer may be added providing
such terms and conditions do not conflict with the terms and
conditions provided herein. Such additional terms and conditions
shall be provided to Buyer at least ninety (90) calendar days prior
to their effective date.
ARTICLE 3 - TRAINING
3.1 General Terms
3.1.1 The objective of the training programs (the "Programs"),
as described herein, shall be to familiarize and assist Buyer's
personnel in the introduction, operation, and maintenance of
the Aircraft.
BRAD shall offer to the Buyer the Programs in the English
language at a BRAD designated facility.
*
3.1.2 Buyer shall be responsible for all travel and living
expenses, including local transportation, of Buyer's personnel
incurred in connection with the Programs.
3.1.3 The Programs shall be designed to reflect the model
and/or configuration of the Aircraft and may include
differences training to identify such configuration or model.
Manuals which are provided during the Programs exclude revision
service.
3.1.4 A training conference shall be held where possible no
later than six (6) months prior to the Scheduled Delivery Date
of the first Aircraft to the Buyer, or as may be otherwise
agreed, to establish the Programs' content and schedule.
3.2 Flight Crew Training
3.2.1 Flight Crew Ground Training
At no additional charge, BRAD will provide with each delivered
Aircraft, a TC or FAA approved transition training for one (1)
of Buyer's crews (two (2) pilots) who meet the minimum entry
requirement provided in the applicable training manual. Each
course shall consist of up to eighty (80) hours of classroom
instruction which may include part task trainer, Computer Based
Training (CBT), and/or Flight Training Device (FTD). BRAD
shall furnish each of Buyer's licensed pilots attending the
course one copy of the Flight Crew Operating Manual.
3.2.2 Pilot Simulator Training
BRAD shall provide access at Buyer's expense to a TC or FAA
approved flight simulator for the crew trained under Annex A
Article 3.2.1. BRAD shall provide a simulator instructor for
eight (8) missions for the crew trained on BRAD's designated
simulator in Montreal; each mission shall consist of four (4)
hours in the simulator and required briefing/debriefing
sessions.
3.2.3 In-flight Training
Should Buyer require aircraft flight training, such training
shall be conducted in Buyer's Aircraft after the Delivery Date
for up to a maximum of four (4) of Buyer's pilots. BRAD shall
provide an instructor pilot at no additional charge; Buyer
shall be responsible for the cost of fuel, oil, landing fees,
taxes, insurance, maintenance, and other associated operating
expenses required for the Aircraft during such training.
3.2.4 Flight Attendant Course
A familiarization course for up to two (2) of Buyer's flight
attendant personnel shall be conducted. Each course shall be
for a maximum of five (5) working days duration. This course
shall present general information on the Aircraft and detailed
information on the operation of the passenger safety equipment
and emergency equipment. BRAD shall furnish for each
participant in this course one (1) copy of the Flight Attendant
Training Guide which shall not be revised. Buyer shall assist
BRAD in the development of the Flight Attendant Training Guide
to incorporate Buyer's specific equipment and procedures.
3.2.5 Flight Dispatcher Course
A course for up to two (2) of Buyer's flight dispatch personnel
shall be conducted. Each course shall be for a maximum of five
(5) working days duration. The course shall consist of
classroom instruction covering general Aircraft
familiarization, coverage of performance, flight planning,
weight and balance and the Minimum Equipment List. BRAD shall
furnish for each participant in this course one (1) copy of the
Flight Crew Operating Manual which shall not be revised.
3.2.6 Recurrent Pilot Training
BRAD shall, upon Buyer's request, provide a proposal for a TC
or FAA approved course for type rated pilots, customized in
content to meet the recurrent training of Buyer's pilots.
3.2.7 Course Training Material
BRAD shall, upon Buyer's request, present a proposal to provide
one (1) set of the materials (without revision service) used
to conduct the Flight Crew Ground Training course, as follows:
i) 35 mm slides;
ii) Instructional Narrative and/or Instruction Guides;
iii) Overhead Projection Transparencies;
iv) Motion picture and/or Video tapes; and
v) Audio cassettes tapes.
3.3 Maintenance Training
3.3.1 Airframe and Powerplant Systems Maintenance Course
BRAD shall, at no additional charge, train up to two (2) of
Buyer's qualified personnel. This course shall emphasize
detailed systems description, operation, and routine line
maintenance practices. The course material shall be
principally mechanical with electrical and avionics information
for overall systems comprehension. The course duration shall
be for a maximum of twenty-five (25) working days.
3.3.2 Electrical and Avionics Systems Maintenance Course
BRAD shall, at no additional charge, train up to two (2) of
Buyer's qualified personnel. The course shall emphasis detailed
systems description, operation and routine line maintenance
practices. The course material shall be principally electrical
and avionic but shall include mechanical information for
overall systems comprehension. The course duration shall be
for a maximum of twenty-five (25) working days.
3.3.3 Ground Handling Course
BRAD shall, at no additional charge, train up to two (2) of
Buyer's qualified personnel. This course shall provide ramp
service personnel with training to be able to tow and park
Aircraft and perform routine ramp servicing tasks. Such
training shall be conducted in class with a practical
demonstration on Buyer's Aircraft after acceptance. The course
duration shall be a maximum of five (5) working days and the
practical demonstration shall not exceed two (2) working days.
3.3.4 General Familiarization Course
BRAD shall, at no additional charge, train up to * of
Buyer's personnel.
The course shall generally describe the Aircraft, the systems
and the maintenance and support requirements. This course is
primarily designed for Buyer's facilities planning, parts
provisioning and aircraft management personnel. The course
duration is for a maximum of five (5) working days.
3.3.5 Engine Run-up Course
BRAD shall provide an Engine Run-up course, at no additional
charge, for up to of Buyer's qualified personnel.
This course enables Buyer's personnel to gain proficiency in
engine and APU runs, cockpit management procedures ,
malfunctions and exceedences. A prerequisite for this course
is satisfactory completion of the Airframe and Powerplant
Systems Maintenance course. The course duration shall be for a
maximum of two (2) working days.
3.3.6 Specialist Courses
At Buyer's request, BRAD shall make a proposal for specialist
courses which will be derived from BRAD's standard courses
detailed herein.
3.3.7 Recurrent Training
At Buyer's request, BRAD shall make a proposal for a Regulatory
Authority approved training plan for maintenance recurrent
training.
3.3.8 Vendor Training
At Buyer's request, BRAD shall assist Buyer to obtain vendor
maintenance training.
3.3.9 Course Training Material
BRAD, upon Buyer's request, shall present a proposal to provide
one (1) set of the training materials (without revision
service) used to conduct BRAD's standard training as detailed
herein:
i) 35 mm slides;
ii) Lesson Guides;
iii) Overhead Projection Transparencies;
iv) Motion picture and/or Video tapes; and
v) Audio cassettes tapes.
3.4 Insurance
3.4.1 Buyer shall at all times during flight training in
Buyer's Aircraft secure and maintain in effect, at its own
expense, insurance policies covering the Aircraft including
without limitation:
a) liability insurance covering public liability,
passenger, crew, property and cargo damage in
amounts *
b) all risk aircraft hull and engine insurance for an
amount which is not less than its then fair market
value.
3.4.2 The liability policy shall name BRAD (and its affiliates)
as additional insured. The hull policy shall contain a
waiver of subrogation in favour of BRAD (and its
affiliates); *
. All
insurance policies shall provide for payments despite any
misrepresentations or breach of warranty by any
person (other than the assured receiving payments) and
shall not be subject to any offset by any other insurance
carried by BRAD except that Buyer shall not be required
to provide insurance with respect to the manufacturing,
repair and maintenance activities of BRAD (and of its
affiliates) and the related potential liability (product
or otherwise) arising therefrom.
ARTICLE 4 - TECHNICAL DATA
4.1 Technical Data Provided
BRAD shall furnish to Buyer the Technical Data described in
Attachment A hereto (the "Technical Data"). The Technical Data shall
be in the English language and shall provide information on items
manufactured according to BRAD's detailed design and in those units
of measures used in the Specification or as may otherwise be required
to reflect Aircraft instrumentation as may be mutually agreed.
4.2 Shipment
All Technical Data provided hereunder shall be delivered to Buyer
Free Carrier (Incoterms) BRAD's designated facilities and at the time
indicated in Attachment A.
4.3 Proprietary Technical Data
It is understood and Buyer acknowledges that the Technical Data
provided herein is proprietary to BRAD and all rights to copyright
belong to BRAD and the Technical Data shall be kept confidential by
Buyer. Buyer agrees to use the Technical Data solely to maintain,
operate, overhaul or repair the Aircraft or to make installation or
alteration thereto allowed by BRAD.
Technical Data shall not be disclosed to third parties or used by
Buyer or furnished by Buyer for the design or manufacture of any
aircraft or Spare Parts including BRAD Parts or items of equipment,
except when manufacture or redesign is permitted under the provisions
Article 23.2 of the Agreement or of Annex A Article 2.4 hereof and
then only to the extent and for the purposes expressly permitted
therein.
*
THREE PAGE ATTACHMENT OMITTED
ANNEX B - WARRANTY AND SERVICE LIFE POLICY
ARTICLE 1 - WARRANTY
The following warranty is that to which reference is made in Article 3
of the Agreement.
1.1 Warranty
1.1.1 Subject to Annex B Articles 1.9, 1.10, and 2, BRAD warrants
that, at the date of delivery of the Aircraft or BRAD Part,
as applicable :
a) the Aircraft shall conform to the Specification, except
that any matter stated in the Specification as type
characteristics, estimates or approximations is excluded
from this Warranty;
b) the Aircraft shall be free from defects caused by the
failure of BRAD to install a Vendor Part or Powerplant
Part in accordance with reasonable instructions of the
vendor;
c) the Aircraft, excluding however Vendor Parts and
Powerplant Parts which shall be governed by Article 2
hereof, shall be free from defects in material or
workmanship * and
d.) the Aircraft, excluding however Vendor Parts and
Powerplant Parts which shall be governed by Article 2
hereof, shall be free from defects in design, having
regard to the state of the art as of the date of such
design.
1.1.2 The Warranty set forth in Annex B Article 1.1.1 (c) and (d)
above shall also be applicable to BRAD Parts purchased as
Spare Parts.
1.1.3 BRAD further warrants that, at the time of delivery, the
Technical Data shall be free from error.
1.2 Warranty Period
1.2.1 The Warranty set forth in Annex B Article 1.1 shall remain
in effect for any defect covered by the Warranty (a
"Defect") becoming apparent during the following periods
(individually, the "Warranty Period"):
a) for failure to conform to the Specification and in the
installation referred to in Annex B Article 1.1.1 (a) and
1.1.1 (b), thirty-six (36) months from the Delivery Date;
b) for those Defects in material or workmanship referred to
in Annex B Article 1.1.1 (c) and 1.1.2, thirty-six (36)
months from the date of delivery of the Aircraft or BRAD
Parts, as applicable;
c) for those Defects in design referred to in Annex B
Article 1.1.1 (d), thirty-six (36) months from the date
of delivery of the Aircraft or BRAD Parts, as applicable;
and
d) for errors in the Technical Data referred to in Annex B
Article 1.1.3, twelve (12) months from the date of
delivery of the applicable Technical Data.
1.3 Repair, Replacement or Rework
As to each matter covered by this Warranty BRAD's sole obligation
and liability under this Warranty is expressly limited to, at
BRAD's election, correction by the repair, replacement or rework
of the defective part or item of Technical Data. The repaired,
replaced or reworked part or item of Technical Data which is the
subject of the Warranty claim shall then be warranted under the
same terms and conditions for the then unexpired portion of the
Warranty Period.
In the case of a Defect relating to non-conformance with the
Specification, BRAD shall correct that Defect in the equipment
item or part in which the Defect appears, except that BRAD will
not be obligated to correct any Defect which has no material
adverse effect on the maintenance, use or operation of the
Aircraft or the image of Buyer as a reputable airline operator.
1.4 Claims Information
BRAD's obligations hereunder are subject to a Warranty claim to be
submitted in writing to BRAD's warranty administrator, which claim
shall include but not be limited to the following information:
a) the identity of the part or item involved, including the Part
number, serial number if applicable nomenclature and the
quantity claimed to be defective;
b) the manufacturer's serial number of the Aircraft from which the
part was removed;
c) the date the claimed Defect became apparent to Buyer;
d) the total flight hours (and cycles if applicable) accrued on
the part at the time the claimed Defect became apparent to
Buyer; and
e) a description of the claimed Defect and the circumstances
pertaining thereto.
1.5 Intentionally Left Blank .
1.6 Timely Corrections
BRAD shall make the repair, replacement or rework, following
receipt of the defective part or item, with reasonable care and
dispatch.
*
1.7 Labour Reimbursement
For correction of Defects BRAD shall establish a reasonable
estimate for the labour hours required for the repair, replacement
or rework of the defective BRAD Part and, if the repair,
replacement or rework is performed by Buyer or by third party on
behalf of Buyer, BRAD shall reimburse Buyer for BRAD estimated
hours or for Buyer's or third party's actual labour hours,
whichever is less, for the repair, replacement or rework of the
defective BRAD Part excluding any work necessary to gain access to
said BRAD Part. Such reimbursement shall be based upon Buyer's
direct labour rate per manhour plus burden rate of fifty percent
(50%), subject to annual review and adjustment of such labour rate
as mutually agreed; provided, however, that this amount shall not
exceed fifty percent (50%) of the BRAD published selling labour
rate.
1.8 Approval, Audit, Transportation and Waiver
All Warranty claims shall be subject to audit and approval by
BRAD. BRAD will use reasonable efforts to advise in writing the
disposition of Buyer's Warranty claim within thirty (30) days
following the receipt of the claim and (if requested) return of
the defective BRAD Part to BRAD's designated facility. BRAD shall
notify Buyer of BRAD's disposition of each claim.
Buyer shall pay all costs of transportation of the defective part
from Buyer to BRAD's U.S. distribution centre and BRAD shall pay
all costs of transportation of the repaired, corrected or
replacement parts back to Buyer.
1.9 Limitations
1.9.1 BRAD shall be relieved of and shall have no obligation or
liability under this Warranty if:
a) the Aircraft was operated with any products or parts not
specifically approved by BRAD, unless Buyer furnishes
reasonable evidence acceptable to BRAD that such products
or parts were not a cause of the Defect; or
b) the Aircraft was not operated or maintained in accordance
with the Technical Data listed in Attachment A of Annex A
and the manufacturer's documentation furnished to Buyer
(including Service Bulletins and airworthiness
directives) unless Buyer furnishes reasonable evidence
acceptable to BRAD that such operation or maintenance was
not a cause of the Defect; or
c) the Aircraft was not operated under normal airline use,
unless Buyer furnishes reasonable evidence acceptable to
BRAD that such operation was not a cause of the Defect;
or
d) Buyer does not
1) report the Defect in writing to BRAD's Warranty
administrator within forty-five (45) calendar days
following such Defect becoming apparent, and
2) retain the BRAD Part claimed to be defective until
advised by BRAD to return such BRAD Part to BRAD's
designated facility in order for BRAD to finalize its
evaluation of the Warranty claim or to otherwise
dispose of such BRAD Part; or
e) Buyer does not submit reasonable demonstration to BRAD
within forty-five (45) calendar days after the Defect
becomes apparent that the Defect is due to a matter
covered within this Warranty; or
f) Buyer does not allow BRAD reasonable opportunity (taking
into account Buyer's wish to replace Aircraft back in
service) to be present during the disassembly and
inspection of the BRAD Part claimed to be defective.
1.9.2 The above warranties do not apply to Buyer Furnished
Equipment.
1.10 Normal Usage
Normal wear and tear and the need for regular maintenance and
overhaul shall not constitute a Defect or failure under this
Warranty.
1.11 Overhaul of Warranty Parts
BRAD's liability for a BRAD Part which has a Defect and is
overhauled by Buyer within the Warranty Period shall be limited
only to that portion of the labour and material replacement
related to the Defect.
1.12 No Fault Found
In the event that a BRAD Part returned under a Warranty claim is
subsequently established to be serviceable then BRAD shall be
entitled to charge and recover from Buyer any reasonable
inspection, transportation, repair and other costs of a similar
nature incurred by BRAD in connection with such Warranty claim.
Providing, however, in the event that repetitive in-service
failure occurs on the particular BRAD Part which is subsequently
identified by BRAD on a repeated basis to be "no fault found,"
then BRAD and Buyer shall discuss and mutually agree a course of
further action to help identify the problem. In the event the
fault is ultimately confirmed to be a legitimate Warranty claim
then the above mentioned costs, if incurred by BRAD will be borne
by BRAD, and any such costs already paid by Buyer will be
reimbursed by BRAD.
ARTICLE 2 - VENDOR WARRANTIES
2.1 Warranties from Vendors
The Warranty provisions of this Annex B apply to BRAD Parts only.
However, BRAD has made or shall make reasonable efforts to obtain
favourable warranties from vendors, with respect to Vendor Parts
and Power Plant Parts. Except as specifically provided under this
Annex B Article 2, BRAD shall have no liability or responsibility
for any such Vendor Parts and Power Plant Parts and the warranties
for those Vendor Parts and Power Plant Parts shall be the
responsibility of the vendor and a matter as between Buyer and
vendor.
2.2 Vendor Warranty Backstop
For those Vendor Parts installed on the Aircraft at the Delivery
Date or subsequently purchased through BRAD, excluding the
Powerplant or the Power Plant Parts, in the event the parties
agree that a vendor is in default in the performance of any
material obligation under any applicable warranty obtained by BRAD
from such vendor pursuant to Annex B Article 2.1 above, the
warranties and all other terms and conditions of Annex B Article 1
shall become applicable as if the Vendor Parts had been a BRAD
Part, except that the warranty period shall be the Warranty Period
as set forth herein or by the vendor's warranty, whichever is
shorter.
2.3 BRAD's Interface Commitment
In the event of a dispute in the application of a Vendor Part
warranty, at Buyer's request addressed to BRAD's warranty
administrator, BRAD shall, without charge, conduct an
investigation and analysis of any such dispute resulting from a
technical interface problem to determine, if possible, the cause
of the interface problem and then recommend feasible corrective
action. Buyer shall furnish to BRAD all data and information in
Buyer's possession relevant to the interface problem and shall
cooperate with BRAD in the conduct of its investigation and such
tests as may be required. BRAD, at the conclusion of its
investigation, shall advise Buyer in writing of BRAD's opinion as
to the cause of the problem and BRAD's recommended corrective
action.
ARTICLE 3 - SERVICE LIFE POLICY
3.1 Applicability
The Service Life Policy ("SLP") described in this Annex B Article
3 shall apply if * in any Covered
Component which is defined in Annex B Article 3.7 below.
3.2 Term
3.2.1 Should such failures occur in any Covered Component within
one hundred and forty-four (144) months following delivery
of the Aircraft containing such Covered Component, BRAD
shall, as promptly as practicable and at its option;
a) design and/or furnish a correction for such failed
Covered Component; or
b) furnish a replacement Covered Component (exclusive of
standard parts such as bearings, bushings, nuts, bolts,
consumables and similar low value items).
3.3 Price
Any Covered Component which BRAD is required to furnish under this
SLP shall be provided for at a price calculated in accordance with
the following formula:
P = C x T
144
Where:
P = Price of Covered Component to Buyer;
C = BRAD's then current price for the Covered Component;
T = The total time to the nearest month since the Aircraft
containing the Covered Component,
*
was delivered by BRAD
3.4 Conditions and Limitations
3.4.1 The following general conditions and limitations shall apply
to the SLP:
a) the transportation cost for the return to BRAD's
designated facility, if practicable, of any failed
Covered Component necessary for failure investigation or
redesigning studies shall be borne by BRAD but Buyer
agrees to use reasonable efforts to ship the Covered
Component on Buyer's aircraft to a scheduled destination
closest to Canadair's designated facility at no cost to
BRAD;
b) BRAD's obligations under this SLP are conditional upon
the submission of reasonable proof acceptable to BRAD
that the failure is covered hereby;
c) Buyer shall report any failure of a Covered Component in
writing to BRAD`s Warranty administrator within two (2)
months after such failure becomes evident
* . Failure to give this
required notice shall excuse BRAD from all obligations
with respect to such failure;
d) the provisions of Annex B Article 1.9 of the Warranty
(except for subparagraphs (d) and (e) thereof) are
incorporated by this reference and shall condition BRAD's
obligations under this SLP with respect to any Covered
Component;
e) BRAD's obligations under this SLP shall not apply to any
Aircraft which has not been correctly modified in
accordance with the specifications or instructions
contained in the relevant Service Bulletins which are
furnished to Buyer prior to receipt by BRAD from Buyer of
any notice of an occurrence which constitutes a failure
in a Covered Component, subject to Buyer having had
reasonable time to i) obtain parts required for the
installation of the Service Bulletin and ii) incorporate
the Service Bulletin into the Aircraft. The provisions
of this subparagraph shall not apply in the event that
Buyer furnishes reasonable evidence acceptable to BRAD
that such failure was not caused by Buyer's failure to so
modify the Aircraft;
f) this SLP shall not apply to a failure of a Covered
Component if BRAD determines that such failure may not
reasonably be expected to occur on a repetitive basis
unless subsequently demonstrated to be; and
g) this SLP shall not apply to a Covered Component where the
failure results from an accident, abuse, misuse,
degradation, except for normal wear and tear, negligence
or wrongful act or omission, unauthorized repair or
modification adversely affecting a Covered Component,
impact or foreign object damage, to any Covered
Component.
3.5 Coverage
This SLP is neither a warranty, performance guarantee nor an
agreement to modify the Aircraft to conform to new developments in
design and manufacturing art. BRAD's obligation is only to
provide correction instructions to correct a Covered Component or
furnish replacement at a reduced price as provided in this SLP.
3.6 Covered Component
Only those items or part thereof listed in Attachment A to this
Annex B shall be deemed to be a Covered Component, and subject to
the provisions of this SLP.
ARTICLE 4 - GENERAL
4.1 It is agreed that BRAD shall not be obligated to provide to Buyer
any remedy which is a duplicate of any other remedy which has been
provided to Buyer under any other part of this Annex B.
Atlantic Coast Airlines 1
Initials
Buyer ________ BRAD ________
c-36
Atlantic Coast Airlines
Initials
Buyer ________ BRAD ________
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-001
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 001 to Purchase Agreement No. RJ-0350 dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Credit Memorandum
1.0 This letter constitutes an integral part of the Agreement and
evidences our further agreement with the matters set forth below.
All terms used herein and in the Agreement and not defined herein,
shall have the same meaning as in the Agreement.
2.0
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 truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
Letter Agreement 001
Credit Memorandum
Atlantic Coast Airlines 3
Date:3/22/97
Initials
Buyer________
BRAD ________
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-002
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 002 to Purchase Agreement No. RJ-0350 dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12) Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Conditions Precedent
1.0 This letter constitutes an integral part of the Agreement and evidences
our further agreement with the matters set forth below. All terms used
herein and in the Agreement and not defined herein, shall have the same
meaning as in the Agreement.
2.0 In consideration of Buyer having entered into the above referenced
Agreement for the purchase of twelve (12) Aircraft, BRAD and Buyer
agree that the Agreement is subject to the following conditions:
2.1 *
*
2.2 Board Approval
BRAD and Buyer confirm to each other they have each obtained the
required authorizations and fulfilled any conditions applicable to
enable each of them to enter into this Agreement, except that
Buyer's final acceptance of the Agreement will be conditioned on
the approval of Buyer's Board of Directors to be obtained ten (10)
business days following execution of the Agreement, failing
receipt of which, either party may terminate this Agreement by
providing ten (10) days prior notice.
2.3 *
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 BRAD.
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 truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-003
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 003 to Purchase Agreement No. RJ-0350 dated January 8,
1997 (the "Agreement") between Bombardier Inc. ("BRAD") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12) Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Option Aircraft
1.0 This letter constitutes an integral part of the Agreement and evidences
our further agreement with the matters set forth below. All terms used
herein and in the Agreement and not defined herein, shall have the same
meaning as in the Agreement.
2.0
*
[3 PAGES OF CONFIDENTIAL MATERIALS OMITTED]
6.0 *
7.0 *
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 truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-004
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 004 to Purchase Agreement No. RJ-0350 dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12) Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Options
1.0 This letter constitutes an integral part of the Agreement and evidences
our further agreement with the matters set forth below. All terms used
herein and in the Agreement and not defined herein, shall have the same
meaning as in the Agreement.
2.0 *
*
[TWO PAGES OF CONFIDENTIAL MATERIALS OMITTED]
5.0 *
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 truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-005
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 005 to Purchase Agreement No. RJ-0350 dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12) Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: FIPP
1.0 This letter constitutes an integral part of the Agreement and evidences
our further agreement with the matters set forth below. All terms used
herein and in the Agreement and not defined herein, shall have the same
meaning as in the Agreement.
2.0 *
*
[TWO PAGES OF CONFIDENTIAL MATERIALS OMITTED]
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 truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-006
Atlantic Coast Airlines,
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 006 to Purchase Agreement No. RJ-0350 dated January 8,
1997 (the "Agreement") between Bombardier Inc. ("BRAD") and Atlantic Coast
Airlines, Inc ("Buyer") relating to the purchase of twelve (12) Canadair
Regional Jet Aircraft (the "Aircraft")
Subject: Operational Restrictions
1.0 This letter constitutes an integral part of the Agreement and evidences
our further agreement with the matters set forth below. All terms used
herein and in the Agreement and not defined herein, shall have the same
meaning as in the Agreement.
2.0 Grounding
2.1 In the event that
*
*
3.0 During the time that Buyer is prevented from operating the Aircraft due to
such operational restrictions, Buyer shall use best efforts to reschedule the
Aircraft within its total route system such that the restriction does not
prevent the Aircraft from operating in revenue service.
4.0 The undertaking by BRAD in this Letter Agreement excludes any such
grounding or operational restriction caused by:
(i) BFE or Buyer-selected equipment or other products or parts not
specifically approved by BRAD;
(ii) failure by Buyer (subject to parts availability) to comply with or
incorporate a service bulletin which would have prevented the
grounding;
(iii) failure by Buyer to comply with the conditions of the Airworthiness
Directive, within a reasonable length of time given the availability
of BRAD Parts, Vendor Parts or Powerplant Parts;
(iv) modifications made to the Aircraft or its Vendor Parts subsequent to
the Delivery Date by Buyer or a third party, unless approved by BRAD;
(v) failure to operate or maintain the Aircraft in accordance with the
Technical Data; or
(vi) not operating the Aircraft in normal commercial airline service.
5.0 The term of this Letter Agreement shall commence on the date of start of
revenue service of Buyer's first Aircraft and shall expire three (3) years
thereafter, *
6.0 Without limitation to the foregoing, during any period of grounding or
operational restrictions, BRAD will diligently work to correct the cause(s)
relating thereto and Buyer will provide all reasonable assistance, if
required.
7.0 Limitation
7.1 *
8.0 The provisions of this Letter Agreement are personal to Buyer and
shall not be assigned or otherwise disposed of by Buyer except as
part of an assignment of the Agreement without the prior written
consent of BRAD.
9.0 This Letter Agreement constitutes an integral part of the
Agreement and subject to the terms and conditions contained
therein.
10.0 *
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.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
4
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8 1997
Our Ref: B96-7701-RJTL-RJ0350-007
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 007 to Purchase Agreement No. RJ-0350 dated January 8,
1997 (the "Agreement") between Bombardier Inc. ("BRAD") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12) Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Financing
1.0 This letter constitutes an integral part of the Agreement and evidences
our further agreement with the matters set forth below. All terms used
herein and in the Agreement and not defined herein, shall have the same
meaning as in the Agreement.
1.1 *
2.0
*
[FOUR PAGES OF CONFIDENTIAL MATERIALS OMITTED]
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 truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
*
[TWO PAGE CONFIDENTIAL ANNEX OMITTED]
[Footnote continued from previous page]
[Footnote continued on next page]
4
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-008
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 008 to Purchase Agreement No. RJ-0350 dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12) Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Schedule Completion Rate
1.0 This letter constitutes an integral part of the Agreement and
evidences our further agreement with the matters set forth below.
All terms used herein and in the Agreement and not defined herein,
shall have the same meaning as in the Agreement.
2.0 Intent
*
*
[SIX PAGES OF CONFIDENTIAL MATERIALS REDACTED]
14.0 The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed of by
Buyer without the prior written consent of BRAD, which
consent shall not be unreasonably withheld.
15.0 This Letter Agreement constitutes an integral part of the
Agreement and subject to the terms and conditions contained
therein.
16.0 In the event of the Termination of the Agreement, this Letter
Agreement shall become automatically null and void.
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 truly,
BOMBARDIER INC.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-009
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Dear Sirs,
Letter Agreement No. 009 to Purchase Agreement No. RJ-0350 dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic
Coast Airlines, Inc. ("Buyer") relating to the purchase of twelve (12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Airframe Direct Maintenance Cost
1.0 This letter constitutes an integral part of the Agreement and
evidences our further agreement with the matters set forth below.
All terms used herein and in the Agreement and not defined herein,
shall have the same meaning as in the Agreement.
2.0 Intent
*
*
[TEN PAGES OF CONFIDENTIAL MATERIAL OMITTED]
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.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
*
[THREE PAGE CONFIDENTIAL ANNEX OMITTED]
[Footnote continued from previous page]
[Footnote continued on next page]
4
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-010
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 010 to Purchase Agreement No. RJ-0350 dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12) Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Additional Customer Support
1.0 This letter constitutes an integral part of the Agreement and evidences
our further agreement with the matters set forth below. All terms used
herein and in the Agreement and not defined herein, shall have the same
meaning as in the Agreement.
2.0 Training
2.1 General Terms
2.1.1 The objective of the training programs (the "Programs"), as
described herein, shall be to familiarize and assist Buyer's
personnel in the introduction, operation, and maintenance of the
aircraft.
BRAD shall offer to the Buyer the Programs in the English language
at a BRAD designated facility.
*
2.1.2 *
2.1.3 The Programs shall be designed to reflect the model and/or the
configuration of the Aircraft and may include differences training
to identify such configuration or model. Manuals and training
materials which are provided during the Programs exclude revision
service.
2.1.4 A Training Conference shall be held where possible no later than
six (6) months prior to the Scheduled Delivery of the first
aircraft to the Buyer, or as may be otherwise agreed, to establish
the Programs' content and schedule.
2.2 *
2.3 *
4.2 *
5.0 Manuals on CD-ROM
5.1 BRAD and Buyer are aware that BRAD is currently in the
process of investigating and bringing on-line CD-ROM
versions of various manuals. BRAD hereby commits that in
the event that it is able to successfully and cost-
effectively complete this program, it will provide Buyer
with CD-ROM versions of Buyer's technical publications *
6.0 *
7.0 The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed of by
Buyer except as part of an assignment of the Agreement
expressly permitted by Article 20 of the Agreement (with the
exception of Article 4.0 hereof, which can only be assigned
to a wholly owned subsidiary).
8.0 This Letter Agreement constitutes an integral part of the
Agreement and subject to the terms and conditions contained
therein.
9.0 In the event of the Termination of the Agreement, this
Letter Agreement shall become automatically null and void.
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.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
5
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-011
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 011 to Purchase Agreement No. RJ-0350 dated
January 8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD")
and Atlantic Coast Airlines ("Buyer") relating to the purchase of
twelve (12) Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Spares
1.0 This letter constitutes an integral part of the Agreement
and evidences our further agreement with the matters set
forth below. All terms used herein and in the Agreement and
not defined herein, shall have the same meaning as in the
Agreement.
2.0 *
3.0 *
4.0 The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed of by
Buyer except as part of an assignment of the Agreement (in
whole but not in part) expressly permitted by Article 20 of
the Agreement.
5.0 This Letter Agreement constitutes an integral part of the
Agreement and subject to the terms and conditions contained
therein.
6.0 In the event of the Termination of the Agreement, this
Letter Agreement shall become automatically null and void.
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.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-012
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 012 to Purchase Agreement No. RJ-0350 dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Marketing Support
1.0 This letter constitutes an integral part of the Agreement and
evidences our further agreement with the matters set forth below.
All terms used herein and in the Agreement and not defined herein,
shall have the same meaning as in the Agreement.
2.0 *
3.0 The provisions of this Letter Agreement are personal to Buyer and
shall not be assigned or otherwise disposed of by Buyer except as
part of an assignment of the Agreement expressly permitted under
Article 20 of the Agreement.
4.0 This Letter Agreement constitutes an integral part of the
Agreement and subject to the terms and conditions contained
therein.
5.0 In the event of the Termination of the Agreement, this Letter
Agreement shall become automatically null and void.
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.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
2
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-013
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 013 to Purchase Agreement No. RJ-0350 dated January 8,
1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic Coast
Airlines ("Buyer") relating to the purchase of twelve (12) Canadair Regional
Jet Aircraft (the "Aircraft")
Subject: Spares Credit
1.0 This letter constitutes an integral part of the Agreement and evidences
our further agreement with the matters set forth below. All terms used
herein and in the Agreement and not defined herein, shall have the same
meaning as in the Agreement.
2.0 *
3.0 *
*
4.0 *
5.0 The provisions of this Letter Agreement are personal to Buyer and
shall not be assigned or otherwise disposed of by Buyer except as
part of an assignment of the Agreement expressly permitted in
Article 20 of the Agreement.
6.0 This Letter Agreement constitutes an integral part of the
Agreement and subject to the terms and conditions contained
therein.
7.0 In the event of the Termination of the Agreement, this Letter
Agreement shall become automatically null and void with respect to
any undelivered Aircraft.
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.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-014
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 014 to Purchase Agreement No. RJ-0350 dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Taxes, Duties and Licenses
1.0 This letter constitutes an integral part of the Agreement and
evidences our further agreement with the matters set forth below.
All terms used herein and in the Agreement and not defined herein,
shall have the same meaning as in the Agreement.
2.0 The parties contemplate that at time of delivery, the Aircraft
will be sold to a United States company or other USA entity (the
"Lessor"), and directly exported from Canada and subsequently
leased to Buyer. *
3.0 *
*
4.0 *
5.0 The provisions of this Letter Agreement are personal to Buyer and
shall not be assigned or otherwise disposed of by Buyer except as
part of an assignment of the Agreement expressly permitted by
Article 20 of the Agreement without the prior written consent of
BRAD.
6.0 This Letter Agreement constitutes an integral part of the
Agreement and subject to the terms and conditions contained
therein.
7.0 In the event of the Termination of the Agreement, this Letter
Agreement shall become automatically null and void.
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.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997
Our Ref: B96-7701-RJTL-RJ0350-015
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 015 to Purchase Agreement No. RJ-0350 dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Airworthiness Directives
1.0 *
2.0 *
3.0 *
4.0 *
5.0 This letter constitutes an integral part of the Agreement and
evidences our further agreement with the matters set forth below.
All terms used herein and in the Agreement and not defined herein,
shall have the same meaning as in the Agreement.
6.0 The provisions of this Letter Agreement are personal to
Buyer and shall not be assigned or otherwise disposed of by
Buyer except as part of an assignment of the Agreement
expressly permitted in Article 20 of the Agreement.
7.0 *
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.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
* CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST.
January 8, 1997, 1996
Our Ref: B96-7701-RJTL-RJ0350-016
Atlantic Coast Airlines
1 Export Drive,
Sterling, Virginia,
U.S.A. 20164
Gentlemen,
Letter Agreement No. 016 to Purchase Agreement No. RJ-0350 dated January
8, 1997 (the "Agreement" between Bombardier Inc. ("BRAD") and Atlantic
Coast Airlines ("Buyer") relating to the purchase of twelve (12)
Canadair Regional Jet Aircraft (the "Aircraft")
Subject: Reconciliation
1.0 *
2.0 *
3.0 *
4.0 This letter constitutes an integral part of the Agreement and
evidences our further agreement with the matters set forth below.
All terms used herein and in the Agreement and not defined herein,
shall have the same meaning as in the Agreement.
5.0 The provisions of this Letter Agreement are personal to Buyer and
shall not be assigned or otherwise disposed of by Buyer except as
part of an assignment of the Agreement (in whole not in part)
expressly permitted under Article 20 of the Agreement and otherwise
such consent shall not be unreasonably withheld.
6.0 In the event of the Termination of the Agreement, this Letter
Agreement shall become automatically null and void.
7.0 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.
________________________ Date:_____________
Michel Bourgeois
Vice President, Contracts
Acknowledged and Accepted
Atlantic Coast Airlines
________________________ Date:_____________
James B. Glennon
Sr. Vice President and C.F.O.
[Footnote continued from previous page]
[Footnote continued on next page]
3
