PURCHASE AGREEMENT
BETWEEN
BOMBARDIER INC.
AND
NORTHWEST AIRLINES, INC.
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RELATING TO THE PURCHASE OF SEVENTY FIVE (75)
CANADAIR REGIONAL JET AIRCRAFT
INCLUDING RELATED CUSTOMER SUPPORT SERVICES
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Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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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 NORTHWEST INFORMATION
8 CERTIFICATION FOR EXPORT
9 ACCEPTANCE PROCEDURE
10 TITLE AND RISK
11 CHANGES
12 NORTHWEST'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
EXHIBIT I CERTIFICATE OF ACCEPTANCE
EXHIBIT II XXXX OF SALE
EXHIBIT IIIA CERTIFICATE OF RECEIPT OF AIRCRAFT
EXHIBIT IIIB QUEBEC TAX CERTIFICATE
EXHIBIT IV CHANGE ORDER
SCHEDULE I PRICE
SCHEDULE II DELIVERY SCHEDULE
SCHEDULE III ANNEX A - PRODUCT SUPPORT SERVICES
ANNEX B - WARRANTY AND SERVICE LIFE POLICY
SCHEDULE IV TRAINING
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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This Agreement is made on the 6th day of July 2001
BY AND BETWEEN: BOMBARDIER INC., a Canadian corporation represented by
Bombardier Aerospace, Regional Aircraft having an office
located at 000 Xxxxxxx Xxxxxxxxx, Xxxxxxxxx,Xxxxxxx,
Xxxxxx
("Bombardier")
AND: NORTHWEST AIRLINES, INC., a Minnesota corporation having
an office located at 0000 Xxxxxxxxx Xxxxx, Xx. Xxxx,
Xxxxxxxxx 00000-0000
("Northwest")
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WHEREAS Northwest desires to purchase seventy-five (75) Aircraft
(as later defined) and to secure purchase rights for
additional aircraft (Option Aircraft and Purchase Right
Aircraft as later defined) and related data,
documents, and services under this Agreement (as later
defined), and Bombardier desires to arrange the sale of
such Aircraft, data, documents and services to Northwest,
NOW THEREFORE, in consideration of the mutual covenants herein contained,
Northwest and Bombardier agree as follows:
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE 1 - INTERPRETATION
1.1 The recitals above have been inserted for convenience only and do not form
part of this 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, Schedules
and Letter Agreements, if any, attached hereto (each of which is
incorporated in this Agreement by this reference), as they may be
amended pursuant to the provisions of this Agreement;
(d) "Aircraft" shall have the meaning attributed to it in Article 2.1.
"Aircraft" shall also include Option Aircraft (including Purchase
Right Aircraft which become Option Aircraft) once the option rights
have been exercised by Northwest;
(e) "Aircraft Base Price" shall have the meaning attributed to it in
Article 4.1;
(ee) "Aircraft Net Price" shall have the meaning attributed to it in
Article 3 of Schedule I;
(f) "Aircraft Purchase Price" shall have the meaning attributed to it in
Article 4.2;
(g) "Xxxx 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;
(i) "Northwest Selected Optional Features" shall have the meaning
attributed to it in Article 2.1;
(j) "Option Aircraft" shall have the meaning attributed to it in Article
2.2;
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Exchange Commission pursuant to a request for confidential treatment.
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(k) "Delivery Date" shall have the meaning attributed to it in Article
9.7(c);
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Exchange Commission pursuant to a request for confidential treatment.
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(l) "Economic Adjustment Formula" shall have the meaning attributed to
it in Article 4.2;
(m) "Excusable Delay" shall have the meaning attributed to it in Article
13.1;
(n) "FAA" shall have the meaning attributed to it in Article 8.1;
(o) "Non-Excusable Delay" shall have the meaning attributed to it in
Article 14.1;
(p) "Notice" shall have the meaning attributed to it in Article 17.1;
(q) "Purchase Right Aircraft" shall have the meaning attributed to it in
Article 2.3;
(r) "Other Patents" shall have the meaning attributed to it in Article
18.1;
(s) "Permitted Change" shall have the meaning attributed to it in
Article 11.2;
(t) "Readiness Date" shall have the meaning attributed to it in Article
9.1;
(u) "Regulatory Change" shall have the meaning attributed to it in
Article 8.4;
(v) "Scheduled Delivery Dates" shall have the meaning attributed to it
in Article 6;
(w) "Specification" shall have the meaning attributed to it in Article
2.1;
(x) "Taxes" shall have the meaning attributed to it in Article 4.3;
(y) "TC" shall have the meaning attributed to it in Article 8.1; and
(z) "CRJ-440" shall have the meaning attributed to it in Article 2.1.
1.5 All dollar amounts in this Agreement are in United States Dollars.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE 2 - SUBJECT MATTER OF SALE
2.1 Subject to the provisions of this Agreement, Bombardier will sell and
Northwest will purchase seventy-five (75) Canadair Regional Jet aircraft
model CL-600-2B19 manufactured pursuant to specification no. RAD 601R-206
("CRJ-440") dated March 2001 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 Northwest selected
optional features ("Northwest Selected Optional Features") listed in
Attachment A to Article 1 of Schedule I hereto (individually an "Aircraft"
and collectively the "Aircraft").
2.2 Subject to the provisions of this Agreement, Northwest may purchase [*]
additional Aircraft (the "Option Aircraft") in accordance with the terms
set forth in Letter Agreement No. 03 attached hereto.
2.3 Subject to the provisions of this Agreement, Northwest may purchase a
further [*] additional Aircraft (the "Purchase Right Aircraft") in
accordance with the terms set forth in Letter Agreement No. 04 attached
hereto.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
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Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE 3 - PRODUCT SUPPORT
3.1 Bombardier shall provide to Northwest the product support for the Aircraft
including, on-site support, technical publications and spares
provisioning, pursuant to the provisions of Schedule III - Annex A
attached hereto.
3.2 Bombardier shall provide to Northwest the warranty and the service life
policy described in Schedule III - Annex B attached hereto which shall be
the exclusive warranty applicable to the Aircraft.
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 provided at no
additional charge to Northwest.
3.4 Bombardier shall provide to Northwest the [*] as set forth in Letter
Agreement No. 02 hereto.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE 4 - PRICE
4.1 The Aircraft base price shall be the base price for the Aircraft as stated
in Article 1.1 of Schedule I attached hereto plus the base price of the
Northwest Selected Optional Features listed in Attachment A to Schedule I
attached hereto as such base price is quoted in Article 1.2 of Schedule I
("Aircraft Base Price"). Any changes to the Northwest Selected Optional
Features will be governed by Article 11.
4.2 The price of each Aircraft shall be the Aircraft Base Price adjusted for
agreed changes made pursuant to Article 11 and any Regulatory Changes
pursuant to Articles 8.4 and 8.5, and further adjusted to the Delivery
Date (subject to Articles 13.6 and 14.4) to reflect economic fluctuations
during the period from July 1, 1998 to the Delivery Date of each Aircraft
("Aircraft Purchase Price"). Such adjustments for economic fluctuations
shall be based on the economic adjustment formula attached set forth in
Article 4 of Schedule I attached hereto ("Economic Adjustment Formula")
but when adjusted, the Aircraft Purchase Price shall in no case be lower
than the Aircraft Base Price, as stipulated in Article 4.1 above.
4.3 The Aircraft Purchase Price does not include any taxes, fees or duties
including, but not limited to, sales, use, value added (including the
Canadian Goods and Services Tax), personal property, gross receipts,
franchise, excise taxes, assessments or duties ("Taxes") which are or may
be imposed by law upon Bombardier, any affiliate of Bombardier, Northwest
or the Aircraft whether or not there is an obligation for Bombardier to
collect same from Northwest, 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.
4.4 Northwest shall pay all Taxes [*] , should any taxing authority seek to
collect from Bombardier any Taxes for which Northwest is liable hereunder,
Bombardier shall promptly notify Northwest of any such Taxes (including
interest and penalties) and Northwest shall promptly, but no later than
fifteen (15) working days after receiving such notice, pay such Taxes
directly to the taxing authority, or reimburse Bombardier for said Taxes,
including interest and penalties, but in no event shall any such payment
be required to be made by Northwest more than five (5) days prior to the
date such Taxes are due.
4.5 [*]
4.6 [*]
4.7 If Northwest pays any Taxes in accordance with Article 4.4, Bombardier
shall promptly refund to Northwest any credit, refund, reimbursement or
like payments that
Purchase Agreement PA-0498
Northwest Airlines, Inc.
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Exchange Commission pursuant to a request for confidential treatment.
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it actually receives from any governmental authority or agency in
connection with such Taxes. Bombardier shall, at Northwest's request and
expense, use reasonable efforts to pursue the recovery of any such credit,
refund, reimbursement, or like payments and shall ensure that Northwest is
kept promptly and regularly informed about the progress of such recovery
action. Northwest and Bombardier agree to cooperate in pursuing any
credit, refund, reimbursement or like payments and such cooperation may
include Bombardier paying such Taxes (to be simultaneously reimbursed by
Northwest) as a condition of pursuing the recovery of such credit, refund,
reimbursement or like payments.
4.8 The parties agree to execute and deliver to each other any documents and
certificates that they deem necessary or desirable in connection with any
exemption from or reduction of or the contestation of or the defense
against any imposition of Taxes.
4.9 Bombardier shall promptly, upon receipt from any taxing authority of any
levy, notice, assessment, or withholding of any tax, duty or charge for
which Northwest may be obligated, notify Northwest in writing. If, under
the applicable law of the taxing jurisdiction, Northwest is allowed
directly to contest any Taxes payable in its own name, then Northwest
shall be entitled, at its own expense and in its own name, to contest the
imposition, validity, applicability or amount of such Taxes and, to the
extent permitted by laws, withhold payment of such Taxes during pendency
of such contest. If Northwest is not permitted by law to contest such
Taxes in its own name, upon Northwest's request, Bombardier shall in good
faith, at Northwest's expense, contest the imposition, validity,
applicability or amount of such Taxes. In such case, Bombardier shall (a)
supply Northwest with such information and documents requested by
Northwest as are necessary or advisable for Northwest to control or
participate in any proceeding to the extent permitted herein, and (b) make
reasonable efforts to assist Northwest with evidentiary and procedural
development of such contest or protest, provided Northwest shall at all
times indemnify and hold Bombardier harmless from the imposition of any
Taxes for which Northwest is liable hereunder or for any and all costs and
expenses related to any contest of the imposition, validity, applicability
or amount of such Taxes.
4.10 Northwest hereby covenants that it shall export the Aircraft immediately
following delivery and that there will be no consumption, use or supply of
the Aircraft in Canada prior to export. [*]
4.11 [*]
4.12 [*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE 5 - PAYMENT
5.1 Northwest shall make payment or cause payment to be made for the Aircraft
in accordance with the payment schedule set forth in Article 5 of Schedule
I.
5.2 Subject to the provisions of Letter Agreement No. 1 and Article 9.9
hereof, should Northwest fail to make any of the payments set forth in
Article 5 of Schedule I with respect to the Aircraft [*] on or before the
stipulated dates [*], Northwest shall be in default of this Agreement and
this Agreement shall automatically terminate and Bombardier shall have no
further obligation to Northwest under this Agreement, including the
obligation to proceed further with the manufacture of the Aircraft on
behalf of Northwest or the sale and/or delivery of the Aircraft to
Northwest. Notwithstanding the preceding sentence Bombardier shall have
the option (but not the obligation) of waiving such termination should
Northwest make arrangements satisfactory to Bombardier for such payment
and all future payments within ten (10) calendar days of Northwest's
default.
5.3 Northwest shall pay Bombardier daily interest on late payments, including
any late payments on any [*], from the date that any payment becomes due
up to and including the day prior to receipt of payment, at a rate of [*]
per annum over the prime rate charged by Chase Manhattan Bank from time to
time. Bombardier's right to receive such interest is in addition to any
other right or remedy Bombardier has at law as a result of Northwest's
failure to make payments when due.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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5.4 Northwest shall make all payments due under this Agreement in immediately
available funds by deposit on or before the due date to Bombardier's
account in the following manner:
TRANSFER TO: [*]
PLEASE REFERENCE: INVOICE # AND/OR AIRCRAFT SERIAL # AND AGREEMENT NO. PA-0498
5.5 All other amounts due with respect to each Aircraft shall be paid on or
prior to the Delivery Date of the respective Aircraft.
5.6 All payments provided for under this Agreement shall be made so as to be
received in immediately available funds on or before the dates stipulated
herein.
5.7 Bombardier shall remain the exclusive owner of the Aircraft, free and
clear of all rights, liens, charges or encumbrances created by or through
Northwest, until such time as all payments referred to in this Article 5
have been made.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE 6 - DELIVERY PROGRAM
6.1 The Aircraft shall be offered for inspection and acceptance to Northwest
at Bombardier's facility in Montreal, Quebec during the months or quarters
proposed in Schedule II attached hereto (the "Scheduled Delivery Dates").
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE 7 - NORTHWEST INFORMATION
7.1 During the manufacture of the Aircraft, Northwest shall provide to
Bombardier on or before the date required by Bombardier, all information
as Bombardier may reasonably request to manufacture the Aircraft
including, without limitation, the selection of furnishings and internal
and external colour schemes.
Nine (9) months prior to delivery of the first Aircraft, Northwest will:
(a) provide Bombardier with an external paint scheme agreed on by the
parties;
(b) select interior colours; and
(c) provide to Bombardier, on drawings which will be forwarded to
Northwest, language translations for interior and exterior Aircraft
labels.
In addition, six (6) months prior to delivery of each Aircraft, Northwest
will provide to Bombardier the following information:
(d) the Mode S Transponder Octal Code, as applicable;
(e) the SELCAL Code, as applicable; and
(f) the GPWS Audio Call-out (Mode 6) Code, as applicable.
In addition, Northwest will provide to Bombardier the Aircraft
registration number within ten (10) days of Bombardier providing the
serial number of the Aircraft to Northwest.
Failure of Northwest to comply with these requirements may result in an
increase in price, a delay in delivery of the Aircraft, or both. If any
such information is revised by Northwest after the due date stated above,
the terms and conditions of Article 11.1 shall be applicable.
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Exchange Commission pursuant to a request for confidential treatment.
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7.2 As soon as practicable following execution of this Agreement but in any
event no later than the date which is twelve (12) months prior to delivery
of the first Aircraft, Northwest shall notify Bombardier in writing of the
BFE (if any) that Northwest wishes to have incorporated into each
Aircraft. Northwest shall also provide details of:
(a) weights and dimensions of the BFE;
(b) test equipment or special tools required to incorporate the BFE;
and
(c) any other information Bombardier may reasonably require.
Within one hundred and twenty (120) calendar days thereafter, Bombardier
shall advise Northwest of its acceptance or rejection of the BFE and of
the dates by which each item of BFE is required by Bombardier. If required
the parties hereto shall execute a Change Order in accordance with Article
11.1 to cover those BFE accepted by Bombardier.
7.3 The BFE accepted by Bombardier pursuant to this Article shall be
incorporated in the manufacturing process of the Aircraft subject to the
following conditions:
(a) Title to the BFE shall remain at all times with Northwest and risk
of loss of the BFE shall remain at all times with Northwest.
Bombardier shall have such responsibilities for the BFE as is
applicable by law to a bailee for hire;
(b) The BFE must be received Carriage Paid To (Incoterms 1990)
Bombardier's plant or other destination as may be mutually
agreeable, no later than the date notified pursuant to Article
7.2, free and clear of any taxes, duties, licenses, charges, liens
or other similar claims;
(c) The BFE shall meet:
1) the reasonable and generally applicable standards of quality of
Bombardier, and
2) the requirements of the applicable airworthiness certification
agency;
(d) The BFE shall be delivered to Bombardier in good condition and
ready for immediate incorporation into the Aircraft. Bombardier
shall, upon receipt, inspect the BFE as to quantity and apparent
defects and inform Northwest of any discrepancies and the required
corrective actions to be taken; and
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Exchange Commission pursuant to a request for confidential treatment.
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(e) Bombardier shall only be responsible for the fitment and testing
of the BFE in the Aircraft using reasonable care and good
manufacturing practices, in accordance with Northwest's written
detailed description of the dimensions and weight of such BFE.
Northwest shall also furnish information necessary for its proper
storage, fitment, servicing, maintenance and operation and
availability of test equipment or special tools.
7.4 If at any time between receipt of the BFE by Bombardier and [*] prior to
the Delivery Date, it is determined by Bombardier that an item of BFE
supplied does not meet the standards and requirements described above or
its fitment, integration and testing in the Aircraft or Aircraft systems
create delays in the manufacturing or certification process, then such BFE
may be removed and replaced by other BFE or by Bombardier's equipment. Any
costs associated with the removal, refitment, replacement, testing,
certification and/or delays in the Delivery Date of the Aircraft shall be
borne by Northwest. Bombardier will cooperate with Northwest in finding an
alternate solution in the event that any BFE is found by Bombardier not to
be acceptable however, any delays in delivery resulting from the shipment
to Bombardier of unacceptable BFE will be deemed to be an Excusable Delay
as defined in Article 13 hereof.
7.5 In the event that the delivery of an Aircraft is delayed due to any delay
caused by Northwest's failure to:
(a) deliver or have BFE meeting the requirements of Article 7.3 (c),
(d) and (e) delivered by the date required;
(b) furnish or obtain applicable BFE data;
(c) furnish or obtain any approvals in compliance with the provisions
of this Article; or
(d) comply with the conditions of this Article.
Bombardier agrees to discuss with Northwest the steps to be taken to
minimize, cure, eliminate or work around the delay, but any delay incurred
shall be the responsibility of Northwest and Northwest shall pay to
Bombardier any costs and expenses reasonably incurred by Bombardier due to
such delay.
7.6 Should there be a delay in delivery caused either by a failure of
Northwest described in Article 7.5, or by an event to which reference is
made in Article 13.1 in connection with the BFE, and if such delay cannot
reasonably be minimized, cured, eliminated or worked around by agreement
of the parties, Northwest agrees that Bombardier may
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Exchange Commission pursuant to a request for confidential treatment.
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deliver the Aircraft without installing the unapproved, delayed or
nonconforming BFE, and Northwest agrees to take delivery of and pay for
the Aircraft.
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Northwest Airlines, Inc.
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Exchange Commission pursuant to a request for confidential treatment.
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7.7 [*]
7.8 [*]
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Northwest Airlines, Inc.
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Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE 8 - CERTIFICATION FOR EXPORT
8.1 Bombardier will obtain, prior to the Delivery Date of the first Aircraft,
from Transport Canada ("TC"), a 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 Each Aircraft will be delivered to Northwest with a TC Certificate of
Airworthiness (Transport Category) for export and in a condition enabling
Northwest (or a person eligible to obtain such certificate under then
applicable law) to obtain at the time of delivery a Standard Airworthiness
Certificate issued pursuant to Part 25 of the U.S. Federal Aviation
Regulations.
8.3 Bombardier shall not be obligated to obtain any other certificates or
approvals as part of this Agreement. 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 Northwest. [*]
8.4 If any addition or change to, or modification or testing of any Aircraft
is required by any law or governmental regulation or requirement or
interpretation thereof by any governmental agency having jurisdiction in
order to meet the requirements of Article 8.1 or 8.2 (a "Regulatory
Change"), such Regulatory Change shall be made to such Aircraft prior to
its Delivery Date, or if the parties acting reasonably agree, after the
Delivery Date.
8.5 The Regulatory Change shall be made without additional charge to Northwest
unless such Regulatory Change is 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 Northwest
shall pay Bombardier's reasonable charges for such Regulatory Change
incorporated in any such Aircraft.
8.6 If delivery of an Aircraft is delayed by the incorporation of any
Regulatory Change, such delay shall be an Excusable Delay within the
meaning of Article 13 and the Scheduled Delivery Date for such Aircraft
shall be postponed to the extent of such delay.
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Exchange Commission pursuant to a request for confidential treatment.
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8.7 Bombardier 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, Base Price and
Aircraft Purchase Price. Any Change Orders issued pursuant to this Article
shall be effective and binding upon the date of Bombardier's transmittal
of such Change Order.
8.8 If the use of any of the certificates identified in this Article 8 are
discontinued during the performance of this Agreement, reference to such
discontinued certificate shall be deemed a reference to any other
certificate or instrument which corresponds to such certificate.
8.9 Reference to a regulatory authority shall include any succeeding
department or agency then responsible for the duties of said regulatory
authority.
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Exchange Commission pursuant to a request for confidential treatment.
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ARTICLE 9 - ACCEPTANCE PROCEDURE
9.1 Bombardier shall give Northwest at least [*] advance notice, by facsimile
or other expeditious means, of the projected week of readiness of each
Aircraft for inspection and delivery. Bombardier shall give Northwest [*]
advance notice by facsimile or other expeditious means, of any changes to
the original projected week of readiness. Bombardier shall give Northwest
thirty (30) days advance notice, by facsimile or other expeditious means,
of the projected date of readiness of each Aircraft for inspection and
delivery. It is understood by the parties that the above projected weeks
and date of readiness will be provided to Northwest by Bombardier for
Northwest's planning purposes only and are subject to change without
penalty or damages payable by Bombardier. [*] Notwithstanding the
foregoing, Bombardier's commitment with respect to delivery dates shall be
the Scheduled Delivery Dates as detailed in Schedule II attached hereto.
Bombardier shall give Northwest at least ten (10) working days advance
notice, by facsimile or other expeditious means, of the date on which each
of the Aircraft will be ready for Northwest's inspection, flight test and
acceptance (the "Readiness Date").
9.2 Within two (2) working days following receipt by Northwest of the notice
of Readiness Date Northwest shall:
(a) identify to Bombardier the names of Northwest's representatives who
will participate in the inspection, flight test and acceptance; and
(b) provide evidence of the authority of the designated persons to
execute the Certificate of Acceptance and other delivery documents on
behalf of Northwest.
9.3 Northwest 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").
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Exchange Commission pursuant to a request for confidential treatment.
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9.4 Up to four (4) representatives of Northwest may participate in Northwest's
ground inspection of each Aircraft and two (2) representatives of
Northwest may participate in the flight test. Bombardier shall, if
requested by Northwest, perform an acceptance flight for such period(s) as
may be reasonably required to demonstrate to Northwest the functioning of
the Aircraft and its equipment in accordance with this Agreement. For the
avoidance of doubt, it is agreed that unless agreed by the parties
otherwise, such acceptance flight shall not be less than one and one-half
(1 1/2) hours and not more than three (3) hours. Ground inspection and
flight test shall be conducted in accordance with Bombardier's acceptance
procedures to be agreed with Northwest and at Bombardier's expense. At all
times during ground inspection and flight test, Bombardier shall retain
control over each Aircraft.
9.5 If no Aircraft defect or discrepancy, except for immaterial defects or
discrepancies, is revealed during the ground inspection or flight test,
Northwest shall accept such Aircraft on or before the last day of the
Acceptance Period in accordance with the provisions of Article 9.7.
9.6 If any defect or discrepancy in any Aircraft is revealed by Northwest's
ground inspection or flight test, the defect or discrepancy will promptly
be corrected by Bombardier, at no cost to Northwest, which correction
shall occur [*]. To the extent necessary to verify such correction,
Bombardier shall perform one (1) or more further acceptance flights.
9.7 Upon completion of the ground inspection and acceptance flight of each
Aircraft and correction of any defects or discrepancies:
(a) Northwest will sign a Certificate of Acceptance and Certificate of
Receipt and, if required by law or to minimize or eliminate any taxes
payable, a Quebec Tax Certificate (in the form of Exhibits I, IIIA
and IIIB respectively hereto) for such Aircraft. Execution of the
Certificate of Acceptance by or on behalf of Northwest shall be
evidence of Northwest having examined such 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) Bombardier will supply a TC Certificate of Airworthiness for Export;
and
(c) Northwest shall pay Bombardier the balance of the Aircraft Purchase
Price and any other amounts due, at which time Bombardier shall issue
a xxxx of sale (in the form of Exhibit II hereto) passing to
Northwest good title to such Aircraft free and clear of all liens,
claims, charges and encumbrances except for those liens, charges or
encumbrances created by or claimed through Northwest (the "Xxxx of
Sale"). The date on which Bombardier delivers the Xxxx of Sale and
Northwest takes delivery of the Aircraft shall be the "Delivery
Date".
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
23
Delivery of each Aircraft shall be evidenced by the execution and delivery
of the Xxxx of Sale and of the Certificate of Receipt of Aircraft (in the
form of Exhibits II and IIIA respectively, attached hereto).
9.8 Provided that Bombardier has met all of its obligations under this Article
9, should Northwest not accept, pay for and take delivery of any of the
Aircraft within ten (10) calendar days after the end of the Acceptance
Period for such Aircraft, Northwest shall be deemed to be in default of
the terms of this Agreement.
9.9 In the event of a deemed default by Northwest pursuant to Article 9.8
above, Northwest shall promptly, upon demand, reimburse Bombardier for all
costs and expenses [*]. Provided that Bombardier has met all of its
obligations under this Article 9, should Northwest not accept, pay for
and/or take delivery of any Aircraft within [*] calendar days following
the end of the Acceptance Period for such Aircraft, this Agreement shall
automatically terminate. Bombardier shall however, have the option (but
not the obligation) of waiving such termination should Northwest, within
ten (10) calendar days following such termination, make arrangements
satisfactory to Bombardier to accept delivery and provide payment for all
amounts owing or to become due pursuant to this Agreement.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
24
ARTICLE 10 - TITLE AND RISK
10.1 Title to the Aircraft and risk of loss of or damage to the Aircraft passes
to Northwest when Bombardier presents the executed Xxxx of Sale to
Northwest and Northwest presents the executed Certificate of Acceptance,
Certificate of Receipt and Quebec Tax Certificate (the latter, only if
required) to Bombardier on the Delivery Date.
10.2 If, after transfer of title on the Delivery Date, an Aircraft remains in
or is returned to the care, custody or control of Bombardier, Northwest
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
Bombardier and any of Bombardier'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.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
25
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, requested by
Northwest, 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 Northwest request a change, Bombardier shall
advise Northwest of the availability of said change and, 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 Bombardier, prior to the Delivery Date and without a Change Order or
Northwest'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 Article 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 increase
the Aircraft Purchase Price or delay delivery of the relevant Aircraft or
adversely affect the operational or performance characteristics of the
relevant Aircraft other than in an immaterial way or the
interchangeability or replaceability of [*] spare parts. 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 Bombardier.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
26
ARTICLE 12 - NORTHWEST'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,
Bombardier shall furnish, without charge, office space at Bombardier's
facility for up to [*] representative of Northwest. Northwest shall be
responsible for all expenses of its representative and shall notify
Bombardier at least thirty (30) calendar days prior to the first scheduled
visit of such representative and three (3) days for each subsequent visit.
12.2 The facilities of Bombardier and its affiliates shall be accessible to
Northwest's representative during normal working hours. Northwest's
representative shall have the right to observe the work at such facilities
where the work is being carried out provided there shall be no disruption
in the performance of such work.
12.3 Bombardier shall advise Northwest's representative of Bombardier's or
Bombardier's affiliates' rules and regulations generally applicable at the
facilities being visited and Northwest's representative shall conform to
such rules and regulations.
12.4 At any time prior to delivery of an Aircraft, Northwest's representative
may request, in writing, correction of parts or materials which he
reasonably believes are not in accordance with the Specification.
Bombardier shall provide a written response to any such request.
Communication between Northwest's representative and Bombardier shall be
solely through Bombardier's Contracts Department or its designate.
12.5 NORTHWEST HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD
HARMLESS BOMBARDIER, ITS ASSIGNEES AND AFFILIATES AND THEIR OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES AND CONTRACTORS FROM AND AGAINST ALL
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES RESULTING FROM LOSS OF OR
DAMAGE TO NORTHWEST PROPERTY OR INJURIES TO OR DEATH OF NORTHWEST'S
REPRESENTATIVES WHILE AT BOMBARDIER OR BOMBARDIER'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 OF BOMBARDIER, ITS ASSIGNEES, AFFILIATES OR THEIR
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES OR CONTRACTORS, [*].
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
27
ARTICLE 13 - EXCUSABLE DELAY
13.1 In the event of a delay on the part of Bombardier in the performance of
its obligations or responsibilities under the provisions of this Agreement
due to B [*] (an "Excusable Delay"), Bombardier 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,
subject to Article 13.2 below, 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 Excusable
Delay persists. Excusable Delay shall be deemed to include, without
limitation, delays occasioned by the following causes:
(a) 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, drought, 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) [*], inability to procure or delay in delivery of supplies,
materials, accessories,equipment, tools or parts;
(h) [*], delay or failure of transportation; or
(i) [*], delay in obtaining any airworthiness approval or certificate for
a previously uncertificated Aircraft part, component or computer
software.
13.2 (a) In respect of any Aircraft, Bombardier may conclude, based on a
reasonable and good faith appraisal of the facts and normal
scheduling procedures, that one or more Excusable Delays will delay
delivery of such Aircraft for more than [*] months after the
originally Scheduled Delivery Date or any revised date agreed to in
writing by the parties or prevent delivery of such Aircraft. In such
case, Bombardier shall promptly notify Northwest in writing of such
delay and its related changes to the Scheduled Delivery Date(s) or of
such non delivery. Within thirty (30) days after receipt by Northwest
of Bombardier's notice (or in the event any delay in delivery of an
Aircraft pursuant to this Article 13.2 actually exceeds [*] months),
Northwest may terminate this Agreement with respect to the delayed or
non deliverable Aircraft by giving written notice to Bombardier.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
28
(b) If, due to Excusable Delay, delivery of any Aircraft is delayed or
prevented for more than twelve (12) months after its Scheduled
Delivery Date, Bombardier may terminate this Agreement with respect
to such Aircraft by giving written notice to Northwest within thirty
(30) days after the expiration of such twelve (12) month period.
13.3 Termination under Article 13.2 shall discharge all obligations and
liabilities of Northwest and Bombardier hereunder with respect to such
delayed Aircraft and all related undelivered items and services, except
that Bombardier shall promptly repay (on a pro rata basis if advance
payments were made in accordance with Article 5.1 of Schedule I) to
Northwest, and Bombardier's sole liability and responsibility with respect
to such Aircraft shall be limited to the repayment to Northwest, of all
advance payments for such terminated Aircraft received by Bombardier.
13.4 [*]
13.5 [*]. 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.
13.6 [*]
13.7 In the event this Agreement is terminated with respect to any Aircraft
pursuant to the provisions of this Article 13, at Northwest's election,
Bombardier shall [*].
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
29
ARTICLE 14 - NON-EXCUSABLE DELAY
14.1 If delivery of an Aircraft is delayed beyond the Scheduled Delivery Date
by causes not excused under Article 13.1 (a "Non-Excusable Delay"),
Bombardier shall pay Northwest, as liquidated damages and not as a penalty
for the [*] day delay period referred to in Article 14.2 [*] for each day
of Non-Excusable Delay in excess of a grace period of [*] days to a
maximum of [*] for any such delayed Aircraft.
14.2 If Bombardier has not offered an Aircraft for inspection and acceptance
before the end of the [*] period following the grace period of [*] days
set forth in Article 14.1 above, Northwest may terminate this Agreement as
to such Aircraft by giving notice to Bombardier. For further clarity, it
is agreed that Northwest's right to terminate under this Article 14.2
shall not exist before the end of such [*] day period. Northwest shall,
effective upon such termination, be entitled to recover from Bombardier
and Bombardier shall promptly repay to Northwest (on a pro rata basis if
advance payments were made in accordance with Article 5.1 of Schedule I)
all advance payments for such Aircraft plus daily simple interest thereon
from the date of receipt to the date of repayment at the prime rate
charged by the Chase Manhattan Bank from time to time, calculated and
compounded monthly. [*]
14.3 [*]
14.4 [*]
14.5 [*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
30
ARTICLE 15 - LOSS OR DAMAGE
15.1 In the event that prior to the Delivery Date of any Aircraft, such
Aircraft is lost, destroyed or damaged beyond repair due to any cause,
Bombardier shall promptly (and in any event, within ten (10) days after
such occurrence), notify Northwest in writing. Such notice shall specify
the earliest date reasonably possible consistent with Bombardier's other
contractual commitments and production schedule, by which Bombardier
reasonably and in good faith determines it would be able to deliver a
replacement for the lost, destroyed or damaged Aircraft. This Agreement
shall automatically terminate as to such Aircraft [*]. If Northwest gives
such notice to Bombardier, the parties shall execute an amendment to this
Agreement which shall set forth the revised Delivery Date for the
replacement aircraft. Nothing herein shall obligate Bombardier 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
(including, without limitation, the price and price adjustment provisions
of Article 4 of this Agreement) applicable to the replaced Aircraft shall
apply to the replacement aircraft.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
31
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 either party by notice
of termination to the other party upon the occurrence of any of the
following events:
(a) such other 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 such other party or for
substantially all of such party's assets and, if appointed without
such party's consent, such appointment is not discharged or stayed
within [*] calendar days thereafter; or
(c) proceedings or action under any law relating to bankruptcy,
insolvency or the reorganization or relief of debtors are instituted
by or against such other party, and, if contested by such party, are
not dismissed or stayed within [*] calendar days thereafter; or
(d) any writ of attachment or execution or any similar process is issued
or levied against such other party or any significant part of its
property and is not released, stayed, bonded or vacated within [*]
calendar days after its issue or levy.
16.2 In addition, this Agreement may be terminated, in whole or in part, before
the Delivery Date with respect to any or all undelivered Aircraft
(a) as otherwise provided in this Agreement; or
(b) by Bombardier, if Northwest is in default or breach of any material
term or condition of this Agreement and Northwest does not cure such
default or breach within [*] calendar days after receipt of notice
from Bombardier specifying such default or breach; or
(c) by Northwest,if Bombardier is in default or breach of any material
term or condition of this Agreement other than delay in delivery or
non-delivery pursuant to the terms of Articles 13, 14 or 15 in which
case the termination provisions are set forth therein, and such
default or breach remains uncured for a period of [*] calendar days
following receipt of a notice from Northwest specifying the nature of
default or breach.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
32
16.3 In case of termination of this Agreement under Articles 5.2 or 9.9, or by
Bombardier pursuant to Articles 16.1 or 16.2:
(a) all rights (including property rights), if any, which Northwest or
its assignee may have or may have had in or to this Agreement or any
or all of the undelivered Aircraft shall become null and void with
immediate effect;
(b) Bombardier may sell, lease or otherwise dispose of such Aircraft to
another party free of any claim by Northwest; and
(c) all amounts paid by Northwest with respect to the applicable
undelivered Aircraft shall be retained by Bombardier and shall be
applied against the costs, expenses, losses and damages incurred by
Bombardier as a result of Northwest's default and/or the termination
of this Agreement including, without limitation, [*]. Northwest
hereby acknowledges and recognizes that Bombardier shall have all
rights permitted by law to recover from Northwest such costs,
expenses, losses and damages.
16.4 Subject to Article 14, in the event of termination of this Agreement by
Northwest, Northwest's sole rights, remedies and recourses against
Bombardier and Bombardier's obligations to Northwest shall be limited to
only the return by Bombardier of those amounts paid by Northwest to
Bombardier hereunder on account of the undelivered Aircraft [*].
16.5 Notwithstanding any other provision of this Agreement, in the event this
Agreement is terminated, whether in whole or in part, the Bombardier's
Warranty, Service Life Policy, Patent Indemnity obligations and guarantees
pertaining to the Aircraft (the guarantees revised to reflect a reduced
number of Aircraft, if applicable) and Northwest's payment obligations
with regard to the Aircraft that have been previously delivered will
continue in full force and effect in accordance with the terms of this
Agreement.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
33
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 or other electronic
communication providing reasonable proof of transmission, except that no
notice shall be sent by mail if disruption of postal service exists or is
threatened either in the country of origin or of destination, by the party
giving the Notice and shall be addressed as follows:
(a) Notices to Bombardier shall be addressed to:
Bombardier Inc.
Bombardier Aerospace, Regional Aircraft
000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxx
X0X 0X0
Attention: Director of Contracts, Americas with a copy to V.P.
Legal, Bombardier Aerospace.
Facsimile:
(b) Notices to Northwest shall be addressed to:
Northwest Airlines, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Attention: Vice President - Aircraft Transactions with a copy to
General Counsel Northwest
Airlines, Inc.
Facsimile:
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
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
34
(c) if sent by telex or facsimile on the day indicated by the
acknowledgment or the answer back of the receiver in provable form.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
35
ARTICLE 18 - INDEMNITY AGAINST PATENT INFRINGEMENT
18.1 In the case of any actual or alleged infringement by the Aircraft (or by
any system, accessory, equipment or part installed in such Aircraft at the
time title to such Aircraft passes to Northwest) 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
Northwest from time to time may lawfully operate the Aircraft ("Other
Patents"), Bombardier shall indemnify, defend, protect and hold harmless
Northwest from and against all claims, suits, actions, liabilities,
damages and costs (including actual costs with respect to any adverse
affect on interchangeability or replaceability of Spare Parts and
performance characteristics of the Aircraft) resulting from the
infringement, excluding any indirect, incidental or consequential damages
(which include without limitation loss of revenue or loss of profit) and
Bombardier shall, at its option and expense:
(a) procure for Northwest 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.
Bombardier'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:
(a) such other country and the country in which the Aircraft is
permanently registered have ratified and adhered to and are at the
time of the actual or alleged infringement contracting parties to the
Chicago Convention on International Civil Aviation of December 7,
1944 and are fully entitled to all benefits of Article 27 thereof;
and
(b) such other country and the country of registration shall each have
been a party to the International Convention for the Protection of
Industrial Property (Paris Convention) or have enacted patent laws
which recognize and give adequate protection to inventions made by
the nationals of other countries which have ratified, adhered to and
are contracting parties to both of the forgoing conventions.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
36
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
Bombardier's detailed design or to any system, accessory, equipment or
part manufactured by a third party to Bombardier's detailed design without
Bombardier's authorization.
18.3 Bombardier shall control and conduct the defense and/or settlement of such
suit or action either in the name of Bombardier or Northwest, or both.
[*]. Northwest's remedy and Bombardier's obligation and liability under
this Article are conditional upon (i) Northwest giving Bombardier written
notice within ten (10) days after Northwest receives notice of a suit or
action against Northwest alleging infringement or within twenty (20) days
after Northwest receives any other written claim of infringement, (ii)
Northwest using reasonable efforts in cooperation with Bombardier to
reduce or mitigate any such expenses, damages, costs or royalties involved
and, upon Bombardier's request and at Bombardier's expense, arranging for
attendance of its representatives at hearings and trial and assisting in
effecting settlements, obtaining the attendance of witnesses and in the
conduct of the defense of such suits or actions, and (iii) Northwest
furnishing promptly to Bombardier all data, papers and records in its
possession or control relevant to the resistance of and defense against
such claim or suit. Provided that Bombardier is in compliance with its
obligations under this Article 18, Northwest's remedy and Bombardier's
obligation and liability are further conditional upon Bombardier's prior
approval of Northwest's payment or assumption of any liabilities,
expenses, damages, royalties or costs for which Bombardier may be held
liable or responsible (other than any such payment or assumption required
by a final judgment of a court of competent jurisdiction).
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
37
ARTICLE 19 - LIMITATION OF LIABILITY AND INDEMNIFICATION
19.1 [*] BOMBARDIER SHALL HAVE NO OBLIGATION OR LIABILITY (AT LAW OR IN
EQUITY), WHETHER ARISING IN CONTRACT (INCLUDING WITHOUT LIMITATION,
WARRANTY), IN TORT (INCLUDING THE ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE OR
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR STRICT PRODUCTS LIABILITY OF
BOMBARDIER OR ITS AFFILIATES), OR OTHERWISE, FOR ANY CLAIM, CAUSE OF
ACTION, OR MATTER OF ANY KIND ARISING UNDER, IN CONNECTION WITH OR
PURSUANT TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN FOR
LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER INDIRECT, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE.
19.2 THE WARRANTIES, LIABILITIES AND OBLIGATIONS OF BOMBARDIER, AND THE
REMEDIES OF NORTHWEST SET FORTH IN THIS AGREEMENT (INCLUDING, WITHOUT
LIMITATION, ALL SCHEDULES, LETTER AGREEMENTS OR OTHER DOCUMENTS ATTACHED
THERETO) ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND NORTHWEST HEREBY
WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, GUARANTEES,
OBLIGATIONS, REPRESENTATIONS AND LIABILITIES OF, AND RIGHTS, CLAIMS,
REMEDIES, DAMAGES, COSTS AND EXPENSES AGAINST BOMBARDIER OR ANY SUCCESSOR
OR PERMITTED ASSIGNEE OF BOMBARDIER, EXPRESS OR IMPLIED, ARISING IN FACT,
IN LAW, IN EQUITY, IN CONTRACT, IN TORT OR OTHERWISE, INCLUDING BUT NOT
LIMITED TO (A) ANY IMPLIED WARRANTY OR CONDITIONS OF 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
NEGLIGENCE, ACTUAL OR IMPUTED, INTENTIONAL ACT, OR STRICT LIABILITY OF
BOMARDIER OR ITS AFFILIATES AND (D) ANY OTHER OBLIGATION, LIABILITY,
RIGHT, CLAIM OR REMEDY FOR NON-CONFORMANCE, INFRINGEMENT OR DEFECT OR
FAILURE OF ANY KIND OR LOSS OF OR DAMAGE TO ANY AIRCRAFT OR PART THEREOF,
ANY BOMBARDIER PARTS, ANY POWER PLANT PARTS, ANY VENDOR PARTS, ANY SPARE
PARTS, ANY BFE OR ANY TECHNICAL DATA, PRODUCT, DOCUMENT OR SERVICE
PROVIDED UNDER THIS AGREEMENT.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
38
19.3 NORTHWEST HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD
HARMLESS BOMBARDIER, ITS SUBSIDIARIES, AFFILIATES, SUBCONTRACTORS AND
LESSORS, AND THEIR RESPECTIVE EMPLOYEES, DIRECTORS, OFFICERS AND AGENTS,
AND EACH OF THEM, 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 NORTHWEST'S DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES
BUT EXCLUDING BOMBARDIER'S DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES),
ARISING DIRECTLY OR INDIRECTLY OUT OF OR IN CONNECTION WITH ANY SERVICES
PROVIDED UNDER, ARTICLE 1 AND 3 OF SCHEDULE III - ANNEX A [*].
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
39
ARTICLE 20 - ASSIGNMENT
20.1 Northwest may, at any time and from time to time before or after transfer
of title of the Aircraft, assign, or transfer (in whole or in part) any of
its rights and obligations hereunder in connection with a lease or
sub-lease by Northwest of any Aircraft to any Permitted Assignee as more
particularly described below; provided, however, that there is no material
increase to the liability and/or responsibility of Bombardier and that
Northwest shall remain jointly and severally liable with any Permitted
Assignee to accept delivery of the Aircraft and to pay the Aircraft
Purchase Price in accordance with the payment terms provided in this
Agreement provided further that the [*] shall not be assignable by
Northwest. In the event Bombardier reasonably concludes that any such
assignment or transfer by Northwest would require a modification to the
Performance Guarantees (Letter Agreement Nos. 13 and 14), the Airframe
Direct Maintenance Cost Guarantee (Letter Agreement No. 10) and the
Aircraft Heavy Maintenance Check Cost Guarantee (Letter Agreement No. 20),
then appropriate adjustments shall be made to such guarantees or guarantee
levels using the same methodologies and procedures as were used to
determine the original guarantees or guarantee levels.
20.2 For the purposes of this Agreement, "Permitted Assignee" shall be defined
as any of the following entities having their principal place of business
and operation in Canada, Mexico, the Caribbean or the United States of
America: Mesaba Aviation, Inc. and/or Express Airlines I, Inc., or any
Northwest Airlink Carrier. "Northwest Airlink Carrier" shall mean any
regional airline with whom Northwest may [*], the rights contained in the
following documents shall not be assignable nor be disclosed by Northwest
without Bombardier's prior written consent:
- Basic Aircraft Credit Memorandum (Letter Agreement No. 1)
- SIA Credit Memorandum (Letter Agreement No. 2);
- Dispatch Reliability(Letter Agreement No. 8);
- Schedule Completion Rate (Letter Agreement No. 9)_;
- Airframe Direct Maintenance Cost Guarantee (Letter Agreement No. 10);
- [*] (Letter Agreement No. 11);
- Additional Spare Parts Services (Letter Agreement No. 15)
- Reconciliation (Letter Agreement No. 16);
- [*] (Letter Agreement No. 17)
- Vendor Matrix (Letter Agreement No. 18)
- Noise Guarantee (Letter Agreement No. 19)
- Aircraft Heavy Maintenance Check Cost Guarantee (Letter Agreement No.
20)
- [*] (Letter Agreement No. 22);
- Aircraft Heavy Maintenance Agreement (Letter Agreement No. 26)
- Performance Guarantee (Letter Agreement No. 13 - [*]);
- Performance Guarantee (Letter Agreement No. 14 - [*]);
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
40
- Articles 2.4, 2.7, 2.8 and 4.4 of Annex A to Schedule III and Annex B
to Schedule III of the Purchase Agreement, provided however that the
then unexpired portion of Bombardier's standard Product Support
Services and Warranty and Service Life Policy shall apply to such
airline.
[*]. Any assignment of rights by Northwest to a Permitted Assignee as
permitted herein shall be terminated if the applicable Permitted Assignee
ceases to be a Northwest Airlink Carrier.
20.3 Except as provided in Article 20.1 and Article 20.2, Northwest shall not
assign, sell, transfer or dispose of (in whole or in part) any of its
rights or obligations hereunder without Bombardier's prior written
consent, [*]. In the event of such assignment, sale, transfer or
disposition, Northwest shall remain jointly and severally liable with any
assignee for the performance of all and any of Northwest's obligations
under this Agreement and Bombardier reserves its rights as a condition of
its consent to amend one or more of the terms and conditions of this
Agreement.
20.4 Notwithstanding Article 20.3 above, Northwest may, after transfer of title
of an Aircraft, assign and disclose to a third party purchaser only those
rights under the Purchase Agreement which remain applicable after transfer
of title of the Aircraft, provided, however, that there is no increase to
the liability and/or responsibility of Bombardier and that said third
party acknowledges in writing to be bound by the applicable terms and
condition of this Agreement, including but not limited to the provisions
and limitations in Indemnity Against Patent Infringement (Article 18),
Limitation of Liability (Article 19), and any on going obligations of
Northwest, which shall apply to it to the same extent as if such third
party was Northwest hereunder and provided further that Schedule III of
the Purchase Agreement and Letter Agreement No. 1 to Letter Agreement No.
24 inclusively shall not be assignable by Northwest nor shall they be
disclosed by Northwest to such assignee and shall automatically become
null and void with respect to the assigned Aircraft. [*]
20.5 Bombardier may assign any of its rights to receive money hereunder without
the prior consent of Northwest.
20.6 Notwithstanding the other provisions of this Article 20, Bombardier shall,
at Northwest cost and expense, if so requested in writing by Northwest,
take any action reasonably required for the purpose of causing any of the
Aircraft to be subjected to: (i) after the Delivery Date, an equipment
trust, conditional sale or lien, or (ii) another arrangement for the
financing of the Aircraft by Northwest, providing, however, there shall be
no increase to the liability and/or responsibility of Bombardier arising
through such financing.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
41
20.7 Northwest further undertakes to cause any Permitted Assignee or third
party to whom any rights or obligations hereunder are assigned to abide by
the terms of Article 23.0.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
42
ARTICLE 21 - SUCCESSORS
This Agreement shall inure to the benefit of and be binding upon each of
Bombardier and Northwest and their respective successors and permitted
assignees.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
43
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 LAWS OF THE STATE OF
NEW YORK, 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.
[*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
44
ARTICLE 23 - CONFIDENTIAL NATURE OF AGREEMENT
23.1 This Agreement is confidential between the parties and shall not, without
the prior written consent of the other party, be disclosed by either party
in whole or in part to any other person or body except as may be necessary
for either party to carry out its obligations under this Agreement.
23.2 Except as may be reasonably required for the normal operation,
maintenance, overhaul and repair of the Aircraft, Northwest shall hold
confidential all technical data and information supplied by or on behalf
of Bombardier. Except in accordance with this Agreement, Northwest shall
not reproduce any technical data or information or divulge the same to any
third party without the prior written consent of Bombardier.
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 In the event Northwest is required to file this Agreement as an exhibit to
a registration statement under the Securities Act of 1933, as amended (the
"Securities Act") or a periodic report under the Exchange Act of 1934, as
amended (the "Exchange Act"), Northwest shall notify Bombardier, by
written notice, at least forty-five (45) days prior to the date of such
anticipated filing of such determination and the reasons therefor, and [*]
work with Bombardier to prepare and file with the Securities and Exchange
Commission (the "Commission") a request for confidential treatment
pursuant to Rule 24b-2 under the Exchange Act or Rule 406 under the
Securities Act, as the case may be, with respect to information in this
Agreement.
Subject to compliance with the foregoing, and notwithstanding the other
provisions of this Article, portions of this Agreement may be filed as
exhibits to such registration statement or periodic report to the extent
required by the Commission and such filing shall not constitute a breach
hereof by Northwest.
23.5 Either party (the "Disclosing Party") may disclose this Agreement in
response to any summons or subpoena or in connection with any litigation
provided that, if practicable and not in violation of any applicable law,
rule, regulation or order, notice of such disclosure shall be given to the
other party hereto, and (if applicable and not so in violation) in advance
of such disclosure, and such other party shall be permitted to resist such
disclosure by the appropriate legal proceedings, provided such resistance
does not adversely affect the Disclosing Party.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
45
The Disclosing Party may also disclose this Agreement if it is required to
do so in order to comply with any law, rule, regulation or order
(including, without limitation, applicable securities laws and
regulations) applicable to such party, provided that, if practicable and
not in violation of any such applicable law, rule, regulation or order,
notice of such disclosure shall be given to the other party, and (if
practicable and not so in violation) in advance of such disclosure, and
such other party shall be permitted (if practicable and not so in
violation) to resist or seek confidential treatment of such disclosure and
the Disclosing Party shall use all reasonable efforts to cooperate with
and assist the other party in resisting or seeking confidential treatment
of such disclosure, including undertaking the appropriate proceedings or
making the appropriate applications or requests (at the cost of the other
party) for such purpose where such other party is not entitled to do so on
its own behalf.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
46
ARTICLE 24 - AGREEMENT
24.1 This Agreement and the matters referred to herein constitute the entire
Agreement between Bombardier and Northwest and supersede and cancel all
prior representations, brochures, alleged warranties, statements,
negotiations, undertakings, letters, memoranda of agreement, proposals,
acceptances, agreements, understandings, contracts and communications,
whether oral or written, between Bombardier and Northwest or their
respective agents, with respect to or in connection with the subject
matter of this Agreement and no agreement or understanding varying the
terms and conditions hereof shall be binding on either Bombardier or
Northwest 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.
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, RELEASE, RENUNCIATION AND EXCLUSION OF
LIABILITY IN THIS AGREEMENT EXTENDS ALSO TO THE DIVISIONS AND SUBSIDIARIES
OF BOMBARDIER INC., AND OTHER AFFILIATES OF BOMBARDIER INC. WHICH
BOMBARDIER INC. DIRECTLY OR INDIRECTLY CONTROLS (COLLECTIVELY THE
"BOMBARDIER GROUP") AND TO THE OFFICERS, DIRECTORS, EMPLOYEES AND
REPRESENTATIVES OF THE BOMBARDIER GROUP, ON WHOSE BEHALF AND FOR WHOSE
BENEFIT BOMBARDIER IS, FOR PURPOSES OF THIS ARTICLE 24.3, ACTING AS AGENT
AND TRUSTEE.
24.4 Bombardier and Northwest 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.
24.5 Northwest and Bombardier agree that this Agreement has been the subject of
discussion and negotiation and is fully understood by the parties hereto
and that the price of the Aircraft and the other mutual agreements of the
parties set forth herein were arrived at in consideration of the
provisions contained in Article 19.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
47
In witness whereof this Agreement was signed on the date written hereof:
For and on behalf of For and on behalf of
NORTHWEST AIRLINES, INC. Bombardier Inc.
Bombardier Aerospace
REGIONAL AIRCRAFT
--------------------------------- -----------------------------
Name: Xxxxxxx X. May Name: Xxxxxxx Xxxxxxxx
Title: Vice President -- Aircraft Transactions Title: Manager, Contracts
Date: Date:
--------------------------- -----------------------
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
48
EXHIBIT I
CERTIFICATE OF ACCEPTANCE
The undersigned hereby acknowledges on behalf of Northwest acceptance
of the Aircraft bearing manufacturer's serial number
____________________ fitted with two (2) General Electric CF-34-3B1
turbofan engines bearing serial numbers _____________________ and
__________________ as being in accordance with the terms and conditions
of the Agreement signed on the day of , 2001 between Bombardier Inc. as
represented by Bombardier Aerospace, Regional Aircraft and Northwest.
Place: Date:
---------------------- ------------------------
SIGNED FOR AND ON BEHALF OF
NORTHWEST AIRLINES, INC.
Per:
------------------------------
Title:
------------------------------
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
49
EXHIBIT II
XXXX OF SALE
1. FOR VALUABLE CONSIDERATION, BOMBARDIER INC. AS REPRESENTED BY
BOMBARDIER AEROSPACE REGIONAL AIRCRAFT ("Bombardier"), OWNER OF THE
FULL LEGAL AND BENEFICIAL TITLE OF THE AIRCRAFT DESCRIBED AS FOLLOWS:
ONE CANADAIR REGIONAL JET MODEL CL-600-2B19 AIRCRAFT BEARING:
MANUFACTURER'S SERIAL NO.: _________________________,
WITH:
CF34-3B1 ENGINES SERIAL NOS.: _________________________,
AND
AUXILIARY POWER UNIT NO.: __________________________
DOES THIS ________ DAY OF ______ 20__, REPRESENT AND WARRANT TO
NORTHWEST AIRLINES, INC. HEREAFTER REFERRED TO AS "NORTHWEST":
(I) THAT BOMBARDIER HAS GOOD AND MARKETABLE TITLE TO THE AIRCRAFT AND
THE GOOD AND LAWFUL RIGHT TO THE AIRCRAFT AND THE GOOD AND LAWFUL RIGHT
TO SELL THE SAME TO NORTHWEST; AND
(II) THE GOOD AND MARKETABLE TITLE TO THE AIRCRAFT IS HEREBY DULY
VESTED IN NORTHWEST FREE AND CLEAR OF ALL CLAIMS, LIENS, ENCUMBRANCES
AND RIGHTS OF OTHERS OF ANY NATURE. BOMBARDIER INC. HEREBY COVENANTS
AND AGREES TO DEFEND SUCH TITLE FOREVER AGAINST ALL CLAIMS AND DEMANDS
WHATSOEVER.
BY VIRTUE OF THE EXECUTION OF THIS XXXX OF SALE, BOMBARDIER HEREBY
DIVESTS ITSELF OF ALL ITS RIGHT, TITLE AND INTEREST OF ANY KIND IN THE
AIRCRAFT, IN FAVOUR OF NORTHWEST.
NORTHWEST:
PLACE:__________________ TIME:____________________
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
50
For and on behalf of
BOMBARDIER INC.
Bombardier Aerospace
Regional Aircraft
Per:
--------------------------------------
Title:
-------------------------------------
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
51
EXHIBIT IIIA
CERTIFICATE OF RECEIPT OF AIRCRAFT
THE UNDERSIGNED HEREBY ACKNOWLEDGES TO HAVE RECEIVED FROM BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT, AT DORVAL AIRPORT, ADJACENT TO BOMBARDIER'S PLANT IN DORVAL,
PROVINCE OF QUEBEC, CANADA, ON THE _____________ DAY OF ______________ , AT THE
HOUR OF _____________ O'CLOCK, ONE (1) CANADAIR REGIONAL JET AIRCRAFT MODEL
CL-600-2B19 AIRCRAFT, BEARING SERIAL NUMBER ______________, INCLUDING WITH THE
AIRCRAFT TWO (2) CF34-3B1 TURBOFAN ENGINES BEARING MANUFACTURER'S SERIAL NUMBERS
_____________ & __________________ AND OTHER MAJOR REPLACEABLE ACCESSORIES
ATTACHED TO THE AIRCRAFT AND ENGINES.
Signed for and on behalf of
Northwest Airlines, Inc.
Per:
-------------------------------------------------
Title:
-----------------------------------------------
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
52
EXHIBIT IIIB
AIRCRAFT S/N
Certificate for the Purpose of the Quebec Sales Tax and
any Canadian Goods and Services Tax and Regulations
The undersigned, _________________ of Northwest, hereby certifies that:
1) The Canadair Regional Jet aircraft serial no. ________ (the "Aircraft")
purchased by Northwest from Bombardier Inc. pursuant to purchase agreement
no. PA -0498 with Bombardier Inc., dated _______________ 2001, will be
ferried out of the Province of Quebec immediately or within a reasonable time
after delivery to Northwest;
2) Northwest is purchasing the Aircraft for use principally outside of the
Province of Quebec;
3) The Aircraft will be permanently based outside the
Province of Quebec; and
4) The Aircraft has not been acquired or leased for use in Quebec before being
ferried out of Quebec.
Signed for and on behalf of
Northwest Airlines, Inc.
-----------------------
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
53
EXHIBIT IV
================================================================================
CONTRACT CHANGE ORDER
================================================================================
PURCHASER:
PURCHASE AGREEMENT NO.: AIRCRAFT TYPE:
C.C.O. NO.: DATED:
PAGE __ of __
REASON FOR CHANGE:
---------------------------------------------------------------------
DESCRIPTION OF CHANGE:
ALL OTHER TERMS AND CONDITIONS OF THE AGREEMENT WILL REMAIN UNCHANGED
FOR ADMINISTRATIVE PURPOSES ONLY, A CONSOLIDATION OF THE AMENDMENTS CONTAINED
IN THIS CCO IS ATTACHED. IN THE EVENT OF INCONSISTENCIES BETWEEN THE
CONSOLIDATION AND THIS CCO, THIS CCO SHALL PREVAIL.
----------------------------------------------------------------------
FOR AND ON BEHALF OF: FOR AND ON BEHALF OF:
Bombardier Aerospace, Regional Aircraft Northwest Airlines, Inc.
Signed:_______________________ Signed:_________________
Date:_________________________ Date:___________________
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Xxxxxxxx Xxxxxxxxx XX-0000
Xxxxxxxxx Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
54
SCHEDULE I - PRICE AND PAYMENTS
ARTICLE 1 - PRICE [*]
1.1 The base price for each of the Aircraft (excluding the Northwest Selected
Optional Features) Ex Works (Incoterms 1990) Bombardier's facilities in
Montreal, Quebec, is [*] [*]
1.2 The base price of the Northwest Selected Optional Features as listed in
Attachment A hereto for each of the Aircraft is [*] [*]
AIRCRAFT BASE PRICE [*]
(as per Article 4.1 of the Agreement)
(subject to economic adjustment)
ARTICLE 2 - CREDIT MEMORANDUM
In consideration of Northwest entering into the Agreement, Bombardier shall
issue to Northwest, at the time of delivery of and payment of the amounts due
for each of the Aircraft, a credit memorandum (the "Aircraft Credit Memorandum")
in the amount of [*] (to be adjusted in accordance with the Economic Adjustment
Formula), in accordance with Article 1.0 of Letter Agreement No. 1 to this
Agreement. The Aircraft Credit Memorandum shall be used by Northwest to pay the
balance of the payment due for the Aircraft at the time of delivery.
CREDIT MEMORANDUM [*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
55
In further consideration of Northwest entering into the Agreement and meeting
its payment obligations set forth in Article 5 of this Schedule I to the
Agreement and [*] [*]
ARTICLE 3 - NET PRICE
For information purposes, the net price of each Aircraft (including the [*])
[*], subject to adjustment in accordance with Article 2.0 of Letter Agreement
No. 1.
AIRCRAFT NET PRICE (AS APPLICABLE) [*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
56
SCHEDULE I - ATTACHMENT A
NORTHWEST SELECTED OPTIONAL FEATURES
PRICES AND DESCRIPTIONS CRJ-440
CR REF. # OPTION DESCRIPTION
[*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
57
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
58
ARTICLE 4 - ECONOMIC ADJUSTMENT FORMULA
Pursuant to the provision of Article 4 of the Agreement, the Aircraft Base Price
as stipulated in Article 1 to this Schedule I above as adjusted for any changes
made pursuant to Article 11 of the Agreement and any Regulatory Changes pursuant
to Articles 8.4 and 8.5 of the Agreement to the account of Northwest shall be
adjusted from [*] to the Delivery Date of each Aircraft using the following
economic adjustment formula ("Economic Adjustment Formula") to determine the
Aircraft Purchase Price for each Aircraft in accordance with Article 4.2 of the
Agreement. The Aircraft Credit Memorandum [*] shall be similarly adjusted in
accordance with the following formula. [*]
[*]
PP = [*]
where:
PP = Aircraft Purchase Price;
PO = Base Price;
LD = the Canadian labour index based upon the indices for the
arithmetic average of the fifth, sixth and seventh full month
preceding the month of delivery of the relevant Aircraft;
LO = is [*], being the arithmetic average of the Canadian labour index
for
ED = the U.S. labour index based upon the indices for the arithmetic
average of the fifth, sixth and seventh full month preceding the
month of delivery of the relevant Aircraft;
EO = is [*], being the arithmetic average of the U.S. labor index for
CD = the Industrial Commodities index based upon the indices for
the arithmetic average of the fifth, sixth and seventh full
month preceding the month of delivery of the relevant
Aircraft;
CO = is [*], being arithmetic average of the Industrial Commodities
index for [*];
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
59
MD = the material index based upon the indices for the arithmetic
average of the fifth, sixth and seventh full month preceding
the month of delivery of the relevant Aircraft;
MO = is [*], being the arithmetic average of the material index for
[*];
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 North
American Industrial Classification System(N.A.I.C.S.) Code 3364 for
Average Hourly Earnings (including overtime) for Aerospace Products
and Parts manufacturing (Canada) published by Statistics Canada.
(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.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
60
(e) in the event that Bombardier shall be prevented from calculating the
Aircraft Purchase Price of each Aircraft due to any delay in the
publication of the required indices, Bombardier shall use the last
provisionally published indices, and in the event that provisional
indices are not available, Bombardier shall extrapolate from the
last three (3) months of published indices and such extrapolation
shall be final and shall be used to determine the Aircraft Purchase
Price.
(f) the indices used in the Economic Adjustment Formula represent the
projection by Bombardier of the manner in which Bombardier will
incur cost in the production of the Aircraft. In the event that
there is a change in circumstances which materially affects the
indices chosen, the indices and shall be amended accordingly. The
change in circumstances referred to above are:
1) Any change in the methodology of calculation of the indices
or, 2) if any of said indices are permanently or temporarily
discontinued or withdrawn from publication or 3) the data
samples used to calculate any of the indices are changed
significantly, in which case, the most nearly comparable index
published by another appropriate government body, or a
recognized financial institution, financial publication or
university shall be selected by mutual agreement of the parties
to be used as a substitute index. Such substitute index will
reflect as closely as possible the actual variations of the
wages or of the material commodities/material costs, as the case
may be used in the calculation of the original index. As a
result of the selection of a substitute index, the Economic
Adjustment Formula will be adjusted for the successive
utilization of the original index and of the substitute index.
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 used to the
second decimal place,
(b) The Economic Adjustment Formula shall be calculated to four decimal
places, and
(c) The Aircraft Purchase Price resulting from the Economic Adjustment
Formula shall be corrected to the nearest dollar.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
61
ARTICLE 5 - PAYMENT SCHEDULE
5.1 Northwest shall make payment or cause payment to be made for the Aircraft
as follows:
[*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
62
SCHEDULE II - DELIVERY SCHEDULE
75 AIRCRAFT
1. [*] 27. [*] 53. [*]
2. 28. 54.
3. 29. 55.
4. 30. 56.
5. 31. 57.
6. 32. 58.
7. 33. 59.
8. 34. 60.
9. 35. 61.
10. 36. 62.
11. 37. 63.
12. 38. 64.
13. 39. 65.
14. 40. 66.
15. 41. 67.
16. 42. 68.
17. 43. 69.
18. 44. 70.
19. 45. 71.
20. 46. 72.
21. 47. 73.
22. 48. 74.
23. 49. 75.
24. 50.
25. 51.
26. 52.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
63
SCHEDULE III - PRODUCT SUPPORT SERVICES
ANNEX A - TECHNICAL SUPPORT, SPARES PROVISIONING, SIMULATOR,
TRAINING, TECHNICAL DATA AND GUARANTEES
The following Product Support Services are those services to which reference is
made in Article 3 of the Agreement.
ARTICLE 1 - TECHNICAL SUPPORT
1.1 FACTORY SERVICE
Bombardier agrees to maintain or cause to be maintained the capability to
respond to Northwest's technical inquiries, to conduct investigations
concerning repetitive 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
In consideration and subject to Northwest purchasing the Aircraft
identified in this Purchase Agreement, Bombardier shall, subject
to Article 1.2.2, assign up to [*] Field Service Representatives
("FSR") [*] to Northwest's main base of operation or other
location as may be mutually agreed. FSR [*] hours of operation
shall be Monday through Friday, eight (8) hours per day
(excluding holidays).
1.2.2 TERM
For each of the Aircraft purchased by Buyer, such FSR [*] and
shall commence approximately one (1) month prior to the Delivery
Date of the first Aircraft or as mutually agreed.
The FSR [*] assignment may be extended immediately following the
expiration of the above term according to the terms and
conditions herein and [*].
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
2
1.3 MAINTENANCE PLANNING SUPPORT
1.3.1 SCHEDULED MAINTENANCE TASK CARDS
As described in Schedule III - Annex A, Attachment A, Bombardier
shall provide Northwest Bombardier's scheduled maintenance task
cards [*]. At Northwest's request Bombardier shall provide a
proposal for task cards produced to Northwest's format.
1.3.2 IN-SERVICE MAINTENANCE DATA
Northwest agrees to provide to Bombardier in-service maintenance
data in order to provide updates to Bombardier's recommended
maintenance program. Northwest and Bombardier shall agree on
standards and frequency for communication of such data.
1.4 [*]
1.5 TRAVEL
If requested by Northwest, the FSR, [*], at Northwest's expense with
respect to travel and lodging expenses, but using Northwest's air
transportation services to the maximum extent possible, travel to another
location to provide technical advice to Northwest.
1.6 WORK PERMITS AND CLEARANCES
Northwest shall arrange for all necessary work permits and airport
security clearances required for the FSR or other Bombardier employees
[*].
1.7 ADDITIONAL SERVICES
At Northwest's request Bombardier shall provide a proposal to provide such
additional support services, at Bombardier's then current published (if
published) rates or at commercially reasonable rates, if not published, as
the parties may agree upon, which may include special investigations,
maintenance and repair of the Aircraft.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
3
ARTICLE 2 - SPARE PARTS, GSE, TOOLS AND TEST EQUIPMENT
2.1 DEFINITIONS AND TERM
a. "BOMBARDIER PARTS":
any spare parts, ground support equipment, tools and test equipment
which bear an in-house Cage Code number in the Bombardier
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 Bombardier Parts or Power Plant Parts.
d. "SPARE PARTS":
all materials, spare parts, assemblies, special tools and items of
equipment, including ground support equipment, ordered for the
Aircraft by Northwest from Bombardier and not installed on the
Aircraft at delivery. The term Spare Parts includes Bombardier Parts,
Power Plant Parts and Vendor Parts.
e. "ORDER":
any order for Spare Parts issued by Northwest to Bombardier; and
f. "TECHNICAL DATA":
shall have the meaning attributed to it in Schedule III - Annex A
Article 4.1.
g. TERM AND APPLICABILITY
The term of this Schedule III, 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) CL-600-2B19 aircraft remain in
commercial air transport service. The provisions of Schedule
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Northwest Airlines, Inc.
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4
III, Annex A Articles 2.2 and 2.6.5 shall survive expiration or
termination of this Agreement.
2.2 ORDER TERMS
Terms and conditions hereof shall apply to all Orders placed by Northwest
with Bombardier in lieu of any terms and conditions in Northwest's
purchase orders.
2.3 PURCHASE AND SALE OF SPARE PARTS
2.3.1 AGREEMENT TO MANUFACTURE AND SELL
Bombardier shall manufacture, or procure, and make available for
sale to Northwest suitable Spare Parts in quantities sufficient
to meet the reasonably anticipated needs of Northwest for normal
maintenance and normal spares inventory replacement for each
Aircraft. During the term specified in Schedule III, Annex A
Article 2.1 above, Bombardier shall also maintain a shelf stock
of certain Bombardier Parts selected by Bombardier to ensure
reasonable re-order lead times and emergency support. Bombardier
shall maintain a reasonable quantity of Bombardier insurance
parts. [*]
2.4 AGREEMENT TO PURCHASE OR REDESIGN BOMBARDIER PARTS
2.4.1 PURCHASE OR REDESIGN OF BOMBARDIER PARTS
In consideration of Bombardier's obligation under Schedule III,
Annex A Article 2.3.1, during the term stated in Schedule III,
Annex A Article 2.1, Northwest agrees to purchase Bombardier
Parts only from Bombardier [*].
2.4.2 NORTHWEST'S RIGHT TO PURCHASE, REDESIGN OR MANUFACTURE
2.4.2.1 Northwest's right to purchase, redesign or to have
redesigned or manufacture or to have manufactured
Bombardier Parts under the preceding Article shall not be
construed as a granting of a license by Bombardier and
shall not obligate Bombardier 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 Bombardier and Bombardier shall be relieved
of any obligation or liability with respect to patent
infringement in connection with any such redesigned part.
Northwest shall be responsible for obtaining all
regulatory authority approvals to repair the Aircraft
using redesigned or manufactured Bombardier Parts as
described in the preceding Article. Any such redesigned
part shall be identified with Northwest's part number
only.
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Northwest Airlines, Inc.
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Northwest agrees to relieve Bombardier of any obligation
or liability in connection with any Bombardier Part
redesigned or manufactured by Northwest including any
Warranty obligations.
2.4.2.2 Should Bombardier reasonably determine through its
investigation of any claim submitted by Northwest with
respect to the Warranty and Service Life Policy as set
out in Schedule III Annex A and B respectively to the
Agreement or with respect to any guarantees and
additional coverage as set out in the Letter Agreements
identified below, that any Bombardier Part manufactured
by Northwest was a contributing factor for such claim,
then Bombardier's obligation under the Warranty, Service
Life Policy or under such guarantees or additional
coverage provisions, as applicable, will be adjusted as
Bombardier reasonably considers appropriate unless
Northwest can furnish reasonable evidence that such part
was not a contributing factor of the claim:
Letter Agreement No.08 (Dispatch Reliability Guarantee);
Letter Agreement No.09 (Schedule Completion Rate
Guarantee)(l)
Letter Agreement No.10 (ADMC Guarantee);
Letter Agreement No.11 (Additional Warranty Coverage)
Letter Agreement No.13 (Performance Guarantee CRJ 440);
Letter Agreement No.14 (Performance Guarantee CRJ 200);
Letter Agreement No.19 (Noise Guarantee); and
Letter Agreement No.20
2.4.3 NOTICE TO BOMBARDIER OF REDESIGNED PARTS
If Northwest redesigns or has had any Bombardier Parts
redesigned, Northwest agrees to thereafter advise Bombardier
thereof and make available to Bombardier and its affiliates the
design for any such redesigned part, provided Bombardier agrees
to relieve Northwest of any obligation or liability in connection
with any such redesigned Bombardier Part if Northwest's design is
used by Bombardier. If Bombardier requests, Northwest agrees to
offer Bombardier the opportunity to negotiate in good faith the
granting to Bombardier of the exclusive manufacturing rights of
the redesigned part.
2.5 PURCHASE OF VENDOR PARTS & POWER PLANT PARTS
Bombardier shall maintain a spares stock of selected Vendor Parts to
support provisioning and replenishment sales to its customers. Bombardier
agrees to use reasonable efforts to require its vendors to comply with the
terms and conditions of this Schedule III, Annex A Article 2 as they apply
to Vendor Parts. [*]
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Northwest Airlines, Inc.
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2.6 SPARE PARTS PRICING
2.6.1 SPARE PARTS PRICE CATALOGUE
Prices for commonly used Bombardier Parts and Vendor Parts
stocked by Bombardier shall be published in the spare parts price
catalogue ("Spare Parts Price Catalogue"). [*]
2.6.2 BOMBARDIER PRICES FOR VENDOR PARTS
If Northwest orders Vendor Parts from Bombardier, the price shall
be as published in the Spare Parts Price Catalogue. If there is
no such price published in the Spare Parts Price Catalogue,
Bombardier will provide a quotation.
2.6.3 QUOTATIONS
Price and delivery quotations for items not included in the
Spare Parts Price Catalogue shall be provided at Northwest's
request by Bombardier. [*]
2.6.4 PRICE APPLICABILITY
The purchase price of Bombardier Parts shall be the applicable
price set forth in the Spare Parts Price Catalogue at time of
receipt by Bombardier of Northwest's Order or as quoted by
Bombardier to Northwest upon request. If Northwest requests
accelerated delivery or special handling for Bombardier Parts
not included in the Spare Parts Price Catalogue, Bombardier
may increase the price from the original quotation to cover
any additional actual direct costs to Bombardier.
2.6.5 CURRENCY AND TAXES
2.6.5.1 All Spare Parts Catalogue and quotation prices
shall be in U.S. dollars and exclusive of
transportation, taxes, duties and licenses.
2.6.5.2 Except as provided herein, Northwest shall pay to
ombardier the amount of any sales, use, value-added
including the Canadian Goods and Services Tax),
excise or similar taxes that are lawfully imposed by
any federal, provincial or local taxing authority
within Canada, the
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Northwest Airlines, Inc.
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United States or any other jurisdiction and that are required to
be paid as a result of any sale, use, delivery, storage or
transfer of any Spare Parts ("Spare Parts Taxes"). If any such
Spare Parts Taxes are applicable, Bombardier shall separately
state the amount of such tax in its invoice provided Bombardier
has the obligation to collect and remit such Taxes under
applicable law.
2.6.5.3 [*]
2.6.5.4 [*]
2.6.5.5 [*]
2.6.5.6 [*]
2.6.5.7 [*]
2.6.5.8 [*]
2.6.5.9 [*]
2.6.6 VENDOR PRICING
Bombardier 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 Northwest and Bombardier
in order to:
(i) discuss the operational parameters to be provided by
Northwest to Bombardier which Bombardier considers
necessary for preparing its quantity recommendations for
initial provisioning of Spare Parts to be purchased from
Bombardier or vendors ("Provisioning Items");
(ii) review Northwest's ground support equipment and special
tool requirements for the Aircraft;
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Northwest Airlines, Inc.
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(iii) discuss the format of the provisioning documentation to be
provided to Northwest from Bombardier 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 at least twelve (12)
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, Bombardier and
Northwest 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 Bombardier Parts and Vendor Parts
shall be provided by Bombardier as follows:
a) Bombardier shall provide, as applicable to Northwest, no later than
nine (9) months prior to the Scheduled Delivery Date of the first
Aircraft, or as may be mutually agreed, the initial issue of
provisioning files as required by ATA Specification 200, Chapter 1;
Revisions to this provisioning data shall be issued by Bombardier
every ninety (90) calendar days until ninety (90) calendar days
following the Delivery Date of the last Aircraft or as may be
mutually agreed;
b) Bombardier shall provide, as required by Northwest, all data files
defined in Chapter 1 of ATA Specification 200; and
c) the Illustrated Parts Catalogue designed to support provisioning
shall be issued concurrently with provisioning data files and
2.8.1 [*]
2.8.2 DELIVERY OF OBSOLETE SPARE PARTS AND SUBSTITUTES
Obsolete or unusable Spare Parts returned by Northwest pursuant
to Schedule III, Annex A Article 2.8.1. shall be delivered to
Bombardier at its plant in Ontario or Quebec, or such other
destination as Bombardier and Northwest may agree. Spare Parts
substituted for such returned obsolete or unusable Spare Parts
shall be delivered to Northwest from Bombardier's plant in
Ontario or Quebec, or such other Bombardier shipping point as
Bombardier and Northwest may agree. [*]
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Northwest Airlines, Inc.
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2.8.3 OBLIGATION TO REPURCHASE SURPLUS PROVISIONING ITEMS
During a period commencing one (1) year after the Delivery Date
of the first Aircraft, and ending five (5) years after such
Delivery Date, Bombardier shall, upon receipt of Northwest's
written request and subject to the exceptions in Schedule III,
Annex A Article 2.8.4, repurchase unused and undamaged
Provisioning Items which: (i) were recommended by Bombardier as
initial provisioning for the Aircraft, (ii) were purchased by
Northwest from Bombardier, and (iii) are surplus to Northwest's
needs.
2.8.4 EXCEPTIONS
Bombardier shall not be obligated under Schedule III, Annex A
Article 2.8.3 to repurchase any of the following: (i) quantities
of Provisioning Items in excess of those quantities recommended
by Bombardier 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 (a) Northwest's modification of the Aircraft or (b)
design improvement by the Aircraft manufacturer or the vendor
(other than Provisioning Items which have become obsolete because
of a defect in design if such defect has not been remedied by an
offer by Bombardier or the vendor to provide no charge retrofit
kits or replacement parts which correct such defect), and (iv)
Provisioning Items which become surplus as a result of a change
in Northwest's operating parameters provided to Bombardier
pursuant to Schedule III, Annex A Article 2.7, which were the
basis of Bombardier's initial provisioning recommendations for
the Aircraft.
2.8.5 NOTIFICATION AND FORMAT
Northwest shall notify Bombardier, in writing, when Northwest
desires to return Provisioning Items which Northwest's review
indicates are eligible for repurchase by Bombardier under the
provisions of Schedule III, Annex A Article 2.8.3. Northwest's
notification shall include a summary, in part number sequence, of
the Provisioning Items Northwest desires to return. Such summary
shall be in the form of listings as may be mutually agreed
between Bombardier and Northwest prior to the first delivery, and
shall include part number, nomenclature, purchase order number,
purchase order date and quantity to be returned.
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Northwest Airlines, Inc.
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Within [*] business days after receipt of Northwest's
notification Bombardier shall complete its review of such
summary.
2.8.6 REVIEW AND ACCEPTANCE BY BOMBARDIER
Upon completion of Bombardier's review of any detailed summary
submitted by Northwest pursuant to Schedule III, Annex A Article
2.8.5, Bombardier shall issue to Northwest a Material Return
Authorization notice ("MRA") for those Provisioning Items
Bombardier agrees are eligible for repurchase in accordance with
Schedule III, Annex A Article 2.8.3. Bombardier will advise
Northwest of the reason that any Provisioning Items included in
Northwest'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 Bombardier and Northwest
shall arrange for shipment of such Provisioning Items
accordingly.
2.8.7 PRICE AND PAYMENT
[*] Bombardier shall pay the repurchase price by issuing a credit
memorandum in favour of Northwest which may be applied against
amounts due Bombardier for the purchase of Spare Parts and
services.
2.8.8 RETURN OF SURPLUS PROVISIONING ITEMS
Provisioning Items repurchased by Bombardier pursuant to Schedule
III, Annex A Article 2.8.6 shall be delivered to Bombardier Free
Carrier (Incoterms), [*].
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 Bombardier pursuant to Schedule III, Annex A Article
2.8.3 shall pass to Bombardier upon delivery thereof to
Bombardier. Title to and risk of loss of any Spare Parts
substituted for an obsolete or unusable Spare Part pursuant to
Schedule III, Annex A Article 2.8.1 shall pass to Northwest upon
delivery thereof to Northwest. Title to and risk of loss of any
Provisioning Items repurchased by Bombardier pursuant to Schedule
III, Annex A Article 2.8.3 shall pass to Bombardier upon delivery
thereof to Bombardier.
[*]
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Northwest Airlines, Inc.
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2.9 PROCEDURE FOR ORDERING SPARE PARTS
Orders for Spare Parts may be placed by Northwest to Bombardier by any
method of order placement (including but not limited to SITA, ARINC, EDI
(including the Internet, if such facilities become available at
Bombardier), 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 Bombardier's price, if available. [*]
2.9.2 PROCESSING OF ORDERS
[*]
2.9.3 CHANGES
[*]
2.9.4 ELECTRONIC DATA INTERCHANGE
2.9.4.1 USE OF ELECTRONIC DATA INTERCHANGE (EDI)
The SPEC 2000 Protocol shall be used for any EDI
transaction. Buyer and Bombardier shall implement
security procedures to ensure proper use of this
communication. A message will be considered received only
at the point where it is in a format which can be
accepted by the receiving computer according to ATA SPEC
2000 rules on transmissions. If garbled transmissions are
received, the receiver shall promptly notify the sender
through use of the S1REJECT command.
2.9.4.2 ACCEPTANCE OF EDI TRANSACTIONS
The SIBOOKED transaction creates an obligation on the
part of Buyer to purchase the material and quantities as
specified in the transmission. Bombardier is obliged to
sell the material and quantities as specified except as
may be identified in a subsequent SIORDEXC message. With
respect to a S1QUOTES transaction, Buyer and Bombardier
are bound to respect the prices quoted in the
transmission in any resultant S1BOOKED order transaction
based
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Northwest Airlines, Inc.
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upon that S1QUOTES message within the validity period of
the S1QUOTES message. An S1NVOICE message will be
considered as the official commercial invoice for the
goods shipped. An S1STOCKS, S1SHIPPD, S1POSTAT or
S1PNSTAT message creates no obligations on either the
Buyer or Bombardier.
If an S1BOOKED acknowledgment is not sent within 24 hours
by Bombardier then Buyer shall resend the original
message.
Any document which has been properly received shall not
give rise to any obligation unless and until the party
receiving such document has properly transmitted in
return an acknowledgment document according to SPEC 2000
Protocol.
2.9.4.3 SYSTEMS OPERATIONS
Buyer and Bombardier, at their own expense, shall provide
and maintain the equipment, software, services and
testing necessary to effectively and reliably transmit
and receive documents.
2.9.4.4 VALIDITY OF DOCUMENTS
Schedule III, Annex A Article 2.9.4 has been agreed to by
Buyer and Bombardier to evidence their mutual intent to
create binding purchase and sale obligations pursuant to
the electronic transmission and receipt of documents as
described herein.
Such documents properly transmitted pursuant to this
Schedule III, Annex A Article 2.9.4 shall be considered,
in connection with any transaction or any other
agreement, to be a "writing" or "in writing" and shall be
deemed for all purposes (a) to have been "signed" and (b)
to constitute an "original" when printed from electronic
files or records established and maintained in the normal
course of business.
Signed documents, if introduced as evidence on paper in
any judicial, arbitration, mediation or administrative
proceedings, will be admissible as between Buyer and
Bombardier to the same extent and under the same
conditions as other business records originated and
maintained in documentary form. Neither Buyer nor
Bombardier shall contest the admissibility of copies of
signed documents under either the business records
exception to the hearsay rule or the best evidence rule
on the basis that the signed documents were not
originated or maintained in documentary form.
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2.9.4.5 LIMITATION OF LIABILITY
NEITHER BUYER NOR BOMBARDIER SHALL BE LIABLE TO THE OTHER
FOR ANY INDIRECT, SPECIAL, INCIDENTAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING FROM OR AS A
RESULT OF ANY DELAY, OMISSION OR ERROR IN THE ELECTRONIC
TRANSMISSION OR RECEIPT OF ANY DOCUMENTS PURSUANT TO THIS
ANNEX A ARTICLE 2.9.4, EVEN IF EITHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
2.10 PACKING
All Spare Parts ordered shall receive standard commercial packing
suitable for export shipment via airfreight. Such standard packing will
generally be to ATA 300 standards as amended from time to time. [*]
2.11 PACKING LIST
Bombardier shall insert in each shipment a packing list/release note
itemized to show:
(i) the contents of the shipment,
(ii) the approved signature of Bombardier's TC authority attesting to
the airworthiness of the Spare Parts, and
(iii) value of the shipment for customs clearance if required.
2.12 CONTAINER MARKS
Upon Northwest's request each container shall be marked with shipping
marks as specified on the Order. In addition Bombardier shall, upon
request, include in the markings: gross weight and cubic measurements.
2.13 DELIVERY, TITLE AND RISK OF LOSS
2.13.1 DELIVERY POINT
Spare Parts shall be delivered to Northwest in one of the
following manners at Bombardier's sole option:
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(i) Free Carrier (Incoterms 1990) Bombardier's plant in either
Ontario or Quebec, Canada; or
(ii) Free Carrier (Incoterms 1990) other Bombardier depots or
shipping points; or
(iii) Free Carrier (Incoterms 1990) vendor's or subcontractor's
plant.
2.13.2 DELIVERY TIME
Bombardier shall use reasonable efforts so that shipment of
Bombardier Parts to Northwest be as follows:
a) AOG ORDERS
Ship AOG Orders within four (4) hours of receipt of Order.
Northwest'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 Bombardier's receipt of Northwest'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
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Northwest Airlines, Inc.
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Where collect shipments are not deemed practicable by Bombardier, charges
for shipment, insurance, prepaid freight charges and all other costs paid
by Bombardier (without xxxx-up) shall be paid by Northwest promptly upon
presentation to Northwest of invoices covering the same.
2.15 FREIGHT FORWARDER
If Northwest elects to use the services of a freight forwarder for the
onward movement of Spare Parts, Northwest agrees to release Bombardier
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 Bombardier will be invoiced to Northwest and any
Spare Parts seized under such regulations will be deemed to be received,
inspected, and accepted by Northwest at the time of seizure.
2.16 REIMBURSEMENT OF EXPENSES
If Bombardier gives Northwest written notice that an Order is ready for
shipment and shipment is delayed more than [*] days at Northwest's
request, Northwest shall promptly reimburse Bombardier upon demand for all
costs and expenses, including but not limited to reasonable amounts for
storage, handling, insurance and taxes, incurred by Bombardier as a result
of such delay.
2.17 TITLE AND RISK OF LOSS
Property and title to the Spare Parts will pass to Northwest upon payment
for the Spare Parts in full. Until payment in full for Spare Parts, (a)
title to them will not pass to Northwest, and (b) Bombardier maintains a
purchase money security interest in them. Risk of loss of the Spare Parts
will pass to Northwest upon delivery by Bombardier. With respect to Spare
Parts rejected by Northwest pursuant to Schedule III, Annex A Article
2.19, risk of loss shall remain with Northwest until such Spare Parts are
re-delivered to Bombardier.
[*]
2.18 INSPECTION AND ACCEPTANCE
All Spare Parts shall be subject to inspection by Northwest at
destination. Use of Spare Parts or failure of Northwest to give notice of
rejection within thirty (30) days after receipt shall constitute
acceptance. Acceptance shall be final and Northwest waives the right to
revoke acceptance for any reason, whether or not known to Northwest at the
time of acceptance. Northwest's remedies for defects discovered before
acceptance are exclusively provided for in Schedule III, Annex A Article
2.19 herein.
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Northwest Airlines, Inc.
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2.19 REJECTION
Any notice of rejection referred to in Schedule III, Annex A Article 2.18
shall specify the reasons for rejection. If such Spare Part(s) are validly
rejected and unused, Bombardier shall replace the rejected Spare Part(s).
Northwest shall, upon receipt of Bombardier's written instructions and
Material Return Authorization ("MRA") number, return the rejected Spare
Parts to Bombardier at its specified plant, or other destination as may be
mutually agreeable. [*]
2.20 PAYMENT
Except as provided in Schedule III, 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 Bombardier at the annual rate
of interest set forth in Article 5.3 of this Agreement.
2.21 PAYMENT FOR PROVISIONING ITEMS
Payment for Provisioning Items shall be made by Northwest as follows:
a) a deposit of [*] of the total order value for each order of
Provisioning Items upon placing such order which shall be least ninety
(90) days in advance of shipment; and
b) the balance of the total price of Provisioning Items upon their
delivery.
2.22 MODIFIED TERMS OF PAYMENT
Bombardier reserves the right to alter the terms of payment without prior
notice if Northwest fails to pay when due an amount Northwest owes under
any agreement with Bombardier.
2.23 REGULATIONS
Northwest 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 Northwest to make
payments at the time and place and in the manner specified herein.
2.24 INTENTIONALLY LEFT BLANK
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Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
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2.25 CANCELLATION OF ORDERS
Except as otherwise may apply to initial provisioning, if Northwest
cancels an Order, Bombardier, 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 Bombardier 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
Bombardier's inventory without increasing Bombardier's normal maximum
stock level, no cancellation charges shall be made.
ARTICLE 3 - TRAINING
3.1 GENERAL TERMS
3.1.1 The objective of the training programs (the "Programs"), to be
described herein, shall be to familiarize and assist Northwest's
personnel in the introduction, operation, and maintenance of the
Aircraft.
Bombardier shall offer to the Northwest the Programs in the
English language at a Bombardier designated facility; the
Programs shall be completed prior to the Delivery Date of the
last Aircraft purchased herein.
3.1.2 Northwest shall be responsible for all travel and living
expenses, including local transportation, of Northwest'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.
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Northwest Airlines, Inc.
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3.1.4 A training conference shall be held where possible no later than
twelve (12) months prior to the Scheduled Delivery Date of the
first Aircraft to Northwest, or as may be otherwise agreed, to
establish the Programs' content and schedule.
3.1.5 The Programs are designed for candidates who meet the following
minimum prerequisites:
PILOTS
(a) hold airplane multi-engine rating;
(b) have recent multi-crew experience;
(c) hold valid instrument flight rating;
(d) hold valid medical certificate;
(e) have a functional comprehension of the English language;
(f) captains hold current and valid ATP license or equivalent;
and
(g) first officers hold current and valid commercial license or
equivalent.
FLIGHT ATTENDANTS
(a) has successfully completed Northwest's operator's flight
attendant training program; and
(b) have a functional comprehension of the English language.
FLIGHT DISPATCHERS
(a) qualified flight dispatcher with previous experience; or
(b) familiar with aircraft performance, weight and balance and
flight planning; and
(c) have a functional comprehension of the English language.
MAINTENANCE TECHNICIANS
(a) hold a valid AME license or equivalent, or have sufficient
knowledge and experience;
(b) have experience with digital communications, glass cockpit
and built-in test equipment; and
(c) have a functional comprehension of the English language.
3.2 TRAINING PROGRAMS
Training Program course descriptions for flight crew and
maintenance training which may be purchased by Northwest using
its SIA Credit, together with
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Northwest Airlines, Inc.
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19
prices for such training courses, are set out in Schedule III,
Annex A - Attachments A-1 and A-2.
ARTICLE 4 - TECHNICAL DATA
4.1 TECHNICAL DATA PROVIDED
Bombardier shall furnish to Northwest the Technical Data described in
Schedule III, Annex A Attachment B-1 hereto. Additional technical
publications, as set forth in Schedule III, Annex A Attachment B-2, may be
purchased by Northwest at the prices set forth in Schedule III, Annex A
Attachment B-2, which together with the technical manuals/documents
referred to in Schedule III, Annex A - Attachment B-1 shall be referred to
as "Technical Data". The Technical Data shall be in the English language
and shall provide information on items manufactured according to
Bombardier's detailed design and in those units of measures used in the
Specification or as may otherwise be required to reflect Aircraft
instrumentation as may be mutually agreed. Should Northwest determine that
the quantities of some manuals listed in Schedule III Annex A Attachment
B-1 are in excess of its requirements, Northwest may request a reduced
lesser quantity of manuals and may apply the unused value of the manuals
against the purchase of other manuals or revision service as listed on
Schedule III Annex A Attachment B-2.
4.2 PROPRIETARY TECHNICAL DATA
It is understood and Northwest acknowledges that the Technical Data
provided herein is proprietary to Bombardier and all rights to copyright
belong to Bombardier and the Technical Data shall be kept confidential by
Northwest. Northwest agrees to use the Technical Data solely to maintain,
operate, overhaul or repair the Aircraft or to make installation or
alteration thereto allowed by Bombardier.
Technical Data shall not be disclosed to third parties except for the
purposes permitted by Schedule III Annex A Article 2.4 provided that the
recipient enters into a non-disclosure agreement acceptable to Bombardier.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
20
[*]
4.3 Any data license agreements that may have been entered into by
Bombardier and Northwest may not be disclosed or assigned to any other
party without Bombardier's prior written consent.
4.4 REVISION SERVICE
A. Revision services for the Technical Data identified in Schedule
III Annex A, Attachment B-1 shall be available at no charge for
[*] following the Delivery Date of Northwest's first Aircraft.
Subsequent revision service shall be provided at Bombardier's
published rates.
B. [*]
C. Provided the revision service is being supplied under the terms
of this Agreement or by subsequent purchase order, Bombardier
shall incorporate in the applicable documents all applicable
Bombardier originated Service Bulletins in a regular revision
following formal notification by Northwest that such Service
Bulletins shall be accomplished on Northwest's Aircraft. The
manuals shall then contain both original and revised
configuration until Northwest advises Bombardier in writing that
one configuration is no longer required.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
21
SCHEDULE III, ANNEX A - ATTACHMENT A-1
COURSE DESCRIPTIONS
1.0 FLIGHT CREW TRAINING PROGRAMS
CRJ STANDARD FLIGHT CREW TRAINING (FMS) - PILOT
This training consists of up to eighty (80) hours of classroom
instruction including Computer Based Training ("CBT"), Cockpit
Procedures Trainer ("CPT") and/or Flight Training Device ("FTD").
This is followed by eight (8) training sessions plus one (1)
check ride session (for a total of nine (9) sessions) in a TC or
FAA approved flight simulator for each crew trained. Each mission
shall consist of four (4) hours in the simulator and required
briefing/debriefing sessions. Each pilot attending the course
receives one (1) copy of the Pilot Training Reference Manual
(without revision service).
IN-FLIGHT TRAINING
Should Northwest require on-aircraft flight training, such
training shall be conducted in Northwest's Aircraft after the
Delivery Date. Upon request, Bombardier would be pleased to
provide a proposal for such In-flight training. Northwest shall
be responsible for the cost of fuel, oil, landing fees, Taxes,
insurance as set forth in Article 4 below, maintenance, and other
associated operating expenses required for the Aircraft during
such training.
ADDITIONAL SIMULATOR TRAINING
Additional simulator training can be purchased to supplement the
simulator training provided in the CRJ standard flight crew
training above which would assist to qualify the Pilots as
Instructor Pilots.
FLIGHT ATTENDANT COURSE
This course presents general information on the Aircraft and
detailed information on the operation of the passenger safety
equipment and emergency equipment. Each participant in this
course receives one (1) copy of the Flight Attendant Training
Guide which shall not be revised. Northwest shall assist
Bombardier in the development of the Flight Attendant Training
Guide to incorporate Northwest's specific equipment and
procedures.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
22
FLIGHT DISPATCHER COURSE
This course consists of classroom instruction covering general
Aircraft familiarization, coverage of performance, flight
planning, weight and balance and the Minimum Equipment List.
Bombardier shall furnish for each participant in this course one
(1) copy of the Flight Crew Operating Manual which shall not be
revised.
2.0 MAINTENANCE TRAINING
CRJ AIRFRAME AND POWERPLANT SYSTEMS MAINTENANCE COURSE
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.
CRJ ELECTRICAL AND AVIONICS SYSTEMS MAINTENANCE COURSE
This course shall emphasize detailed systems description,
operation and routine line maintenance practices. The course
material shall be principally electrical and avionics but shall
include mechanical information for overall systems comprehension.
The course duration shall be for a maximum of twenty-five (25)
working days.
GROUND HANDLING COURSE
This course shall provide ramp service personnel with training to
be able to tow and park Aircraft and perform routine ramp
servicing tasks. Such training shall be conducted in class with a
practical demonstration on Northwest's Aircraft after acceptance.
GENERAL FAMILIARIZATION COURSE
This course shall generally describe the Aircraft, the systems
and the maintenance and support requirements. This course is
primarily designed for Northwest's facilities planning, parts
provisioning and aircraft management personnel. The course
duration is for a maximum of five (5) working days.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
23
ENGINE RUN-UP COURSE
This course enables Northwest'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.
AVIONICS TECHNICIAN COURSE
This course shall cover the components and operation of the
Aircraft's avionics systems with emphasis on the interpretation
of maintenance diagnostic indications.
ELECTRICAL / MECHANICAL INTERFACE COURSE
This course shall cover the components and operation of the
Aircraft's airframe and powerplant systems, concentrating on the
electrical/electronic interface and built-in testing.
TAXI RUN COURSE
This course enables Northwest's personnel to gain proficiency in
taxiing of the Aircraft.
3.0 ADDITIONAL TRAINING ASSISTANCE
Should any of Northwest's personnel require additional assistance training
to enable successful completion of the above courses, Bombardier would be
pleased to make recommendations on the required training assistance and
provide a quotation for any additional assistance training services.
4.0 INSURANCE
4.1 Northwest shall at all times during flight training in
Northwest'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 not less than
[*] for any single occurrence;
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
24
4.2 The liability policy shall name Bombardier (and its
affiliates) as additional insured. 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 Bombardier except that
Northwest shall not be required to provide insurance with
respect to the manufacturing, repair and maintenance
activities of Bombardier (and of its affiliates) and the
related potential liability (product or otherwise) arising
therefrom.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
25
SCHEDULE III, ANNEX A - ATTACHMENT A-2
CUSTOMER SUPPORT SERVICES LIST AND PRICES
----------------------------------------------------------------------------------------------------------------------
CRJ 200 - CUSTOMER SUPPORT SERVICES PRICE LIST
----------------------------------------------------------------------------------------------------------------------
COURSE PRICE** UNIT REMARKS
TRAINING LENGTH*
----------------------------------------------------------------------------------------------------------------------
CRJ - General Familiarization 3 to 5 days [*] per student
----------------------------------------------------------------------------------------------------------------------
CRJ Standard Flight Crew Training 20 days [*] per student Includes groundschool and 9 sim
(FMS) - Pilot sessions
----------------------------------------------------------------------------------------------------------------------
CRJ Pilot Differences Training 5 days [*] per student
----------------------------------------------------------------------------------------------------------------------
Dry Simulator Rental [*] per hour Customer to supply qualified sim
instructor
----------------------------------------------------------------------------------------------------------------------
Wet Simulator Rental [*] per hour Includes instructor
----------------------------------------------------------------------------------------------------------------------
Flight Dispatcher 3 days [*] per student
----------------------------------------------------------------------------------------------------------------------
Flight Attendant Training 4 days [*] per student Minimum 4 students per class.
Above 4 students add $2000 more
for each student.
----------------------------------------------------------------------------------------------------------------------
CRJ Airframe and Powerplant Systems 25 days [*] per student
Maintenance Course
----------------------------------------------------------------------------------------------------------------------
CRJ Electrical and Avionics Systems 25 days [*] per student
Maintenance Course
----------------------------------------------------------------------------------------------------------------------
Engine Run-Up Training 1 day [*] per student
----------------------------------------------------------------------------------------------------------------------
Electrical/Mechanical Interface 10 days [*] per student
Training
----------------------------------------------------------------------------------------------------------------------
Avionics Technician Training 10 days [*] per student
----------------------------------------------------------------------------------------------------------------------
Ground Handling 1 day [*] per student
----------------------------------------------------------------------------------------------------------------------
Taxi Run Training 2 hrs [*] per student
----------------------------------------------------------------------------------------------------------------------
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
26
ANNEX A - ATTACHMENT A-2 CONTINUED
CUSTOMER SUPPORT SERVICES LIST AND PRICES
----------------------------------------------------------------------------------------------------------
PRICE UNIT REMARKS
----------------------------------------------------------------------------------------------------------
ON-SITE CUSTOMER TRAINING
(FIELD SERVICE)
----------------------------------------------------------------------------------------------------------
Field Service Representative or [*] per For service immediately
Inventory Support Representative man-month following the term identified
in Article 1.2.2.
----------------------------------------------------------------------------------------------------------
Instructor Pilot [*] per route proving & line flying
man-month
----------------------------------------------------------------------------------------------------------
Maintenance Technician [*] per Maintenance assistance & OJT
man-month
----------------------------------------------------------------------------------------------------------
Maintenance Planning [*] per Maintenance Program Development
man-month
----------------------------------------------------------------------------------------------------------
* Approximate course length
** All prices are Bombardier's published list prices as of the date of this
proposal. All prices quoted are in year 0000 X.X. funds and are subject to
change without prior notice.
All training provided in the English language at a Bombardier designated
facility.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
27
ANNEX A - ATTACHMENT B-1
LIST OF TECHNICAL DATA
With the delivery of the first Aircraft, Bombardier will provide to Northwest at
no additional charge the Technical Data listed in the table below in the
quantities indicated, in hardcopy format or if available, CD-ROM at Northwest's
discretion.
----------------------------------------------------------------------------------------------------------------------
CL 600-2B19 SERIES 200 CSP NO. CUSTOMIZED TOTAL QUANTITY
TECHNICAL MANUALS QUANTITY
----------------------------------------------------------------------------------------------------------------------
PUBLICATION TITLE
----------------------------------------------------------------------------------------------------------------------
Airplane Flight Manual (AFM) A-012 X
----------------------------------------------------------------------------------------------------------------------
Flight Crew Operating Manual (FCOM) A-013 X
----------------------------------------------------------------------------------------------------------------------
Quick Reference Handbook (QRH) A-022 X
----------------------------------------------------------------------------------------------------------------------
Pilot's Checklist A-017 X
----------------------------------------------------------------------------------------------------------------------
Passenger Information Sheet A-048
----------------------------------------------------------------------------------------------------------------------
Weight and Balance Manual A-041 X
----------------------------------------------------------------------------------------------------------------------
Flight Planning & Cruise Control Manual-Hot 3B1 (Metric) A-085
----------------------------------------------------------------------------------------------------------------------
Airport Planning Manual (APM) A-020
----------------------------------------------------------------------------------------------------------------------
Crash Crew Chart A-072 X
----------------------------------------------------------------------------------------------------------------------
Dispatch Deviation Guide (DDG) (FAA) A-046
----------------------------------------------------------------------------------------------------------------------
Master Minimum Equipment List (MMEL) (FAA) A-045
----------------------------------------------------------------------------------------------------------------------
Maintenance Facilities and Equipment Planning Manual A-035
----------------------------------------------------------------------------------------------------------------------
Maintenance Planning Manual (MPM) A-054 X
----------------------------------------------------------------------------------------------------------------------
Maintenance Requirements Manual (MRM) A-053
----------------------------------------------------------------------------------------------------------------------
Maintenance Task Cards A-089 X
----------------------------------------------------------------------------------------------------------------------
*Aircraft Maintenance Manual (AMM) A-001 X+
----------------------------------------------------------------------------------------------------------------------
*Powerplant Build-up Manual (PPBM) A-002
----------------------------------------------------------------------------------------------------------------------
Powerplant Ground Run Manual A-056
----------------------------------------------------------------------------------------------------------------------
*Wiring Diagram Manual (WDM) A-003 X
----------------------------------------------------------------------------------------------------------------------
System Schematic Manual (SSM) A-004 X
----------------------------------------------------------------------------------------------------------------------
*Illustrated Parts Catalogue (IPC) A-006 X
----------------------------------------------------------------------------------------------------------------------
Illustrated Tool & Equipment Manual (ITEM) A-007
----------------------------------------------------------------------------------------------------------------------
*Structural Repair Manual (SRM) A-008
----------------------------------------------------------------------------------------------------------------------
Fault Isolation Manual (FIM) A-009
----------------------------------------------------------------------------------------------------------------------
Non-Destructive Test Manual (NDT) A-010
----------------------------------------------------------------------------------------------------------------------
Master Index of Technical Publications A-011
----------------------------------------------------------------------------------------------------------------------
Component Maintenance Manual (CMM) A-033
----------------------------------------------------------------------------------------------------------------------
Refuel/Defuel Handbook A-021
----------------------------------------------------------------------------------------------------------------------
Computer Self-Test/Bite Reset Users Guide A-047
----------------------------------------------------------------------------------------------------------------------
ATA Chapter Breakdown A-064
----------------------------------------------------------------------------------------------------------------------
Service Bulletins/Service Letters
----------------------------------------------------------------------------------------------------------------------
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
28
* SHALL BE AVAILABLE IN CD-ROM OR OTHER ELECTRONIC MEDIA THAT BOMBARDIER ELECTS
TO MAKE AVAILABLE TO ITS OPERATORS GENERALLY.
+ PROVIDED TAKEN IN ELECTRONIC FORMAT
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
29
ANNEX A - ATTACHMENT B-2
TECHNICAL PUBLICATIONS LIST AND PRICES
----------------------------------------------------------------------------------------------------------------------
CRJ 200 - TECHNICAL PUBLICATIONS PRICE LIST
----------------------------------------------------------------------------------------------------------------------
PUBLICATION NO. PRICE *
----------------------------------------------------------------------------------------------------------------------
DOCUMENT TITLE PAPER CD-ROM CD-ROM
SINGLE NETWORK
----------------------------------------------------------------------------------------------------------------------
Aircraft Maintenance Manual (AMM - Part II) CSP A-001 [*] [*]
----------------------------------------------------------------------------------------------------------------------
System Description Section (AMM - Part I)
----------------------------------------------------------------------------------------------------------------------
Power Plant Build-Up Manual CSP A-002 [*] [*]
----------------------------------------------------------------------------------------------------------------------
Wiring Diagram Manual (WDM) CSP A-003 [*] [*]
----------------------------------------------------------------------------------------------------------------------
System Schematic Manual CSP A-004 [*]
----------------------------------------------------------------------------------------------------------------------
Aircraft Illustrated Parts Catalog (AIPC) CSP A-006 [*] [*]
----------------------------------------------------------------------------------------------------------------------
Illustrated Tool & Equipment Manual (ITEM) CSP A-007 [*]
----------------------------------------------------------------------------------------------------------------------
Structural Repair Manual (SRM) CSP A-008 [*] [*]
----------------------------------------------------------------------------------------------------------------------
Fault Isolation Manual (FIM)/System CSP A-009 [*]
Schematic Manual (SSM)
----------------------------------------------------------------------------------------------------------------------
Non-Destructive Test Manual (NDT) CSP A-010 [*]
----------------------------------------------------------------------------------------------------------------------
Master Index of Technical Publications CSP A-011 [*]
----------------------------------------------------------------------------------------------------------------------
Airplane Flight Manual (AFM) CSP A-012 [*]
----------------------------------------------------------------------------------------------------------------------
Flight Crew Operating Manual (FCOM) CSP A-013 [*]
----------------------------------------------------------------------------------------------------------------------
Flight Planning and Cruise Control - Metric (FPCC) CSP A-015 [*]
----------------------------------------------------------------------------------------------------------------------
Dispatch Deviation Guide CSP A-016 [*]
----------------------------------------------------------------------------------------------------------------------
Pilot Checklist CSP A-017 [*]
----------------------------------------------------------------------------------------------------------------------
Flight Planning and Cruise Control - Imperial (FPCC) CSP A-018 [*]
----------------------------------------------------------------------------------------------------------------------
Airport Planning Manual (APM) CSP A-020 [*]
----------------------------------------------------------------------------------------------------------------------
Refuel/Defuel Handbook CSP A-021 [*]
----------------------------------------------------------------------------------------------------------------------
Quick Reference Handbook (QRH) CSP A-022 [*]
----------------------------------------------------------------------------------------------------------------------
Airframe/Engine Maintenance Training Manual CSP A-024 [*]
----------------------------------------------------------------------------------------------------------------------
Avionics/Electrical Maintenance Training Manual CSP A-025 [*]
----------------------------------------------------------------------------------------------------------------------
RJ Familiarization Training Manual CSP A-026 [*]
----------------------------------------------------------------------------------------------------------------------
Component Maintenance Manuals (CMM) CSP A-033 [*]
----------------------------------------------------------------------------------------------------------------------
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
30
ANNEX A - ATTACHMENT B-2 CONTINUED
TECHNICAL PUBLICATIONS LIST AND PRICES
--------------------------------------------------------------------------------------
Pilot Reference Manual CSP A-034
Volume I - Systems [*]
Volume II - Procedures [*]
--------------------------------------------------------------------------------------
Maintenance Facilities and Equipment Planning Manual CSP A-035 [*]
(MFEPM)
--------------------------------------------------------------------------------------
Ramp Servicing Training Manual CSP A-040 [*]
--------------------------------------------------------------------------------------
Weight and Balance Manual (WBM) CSP A-041 [*]
--------------------------------------------------------------------------------------
Master Minimum Equipment Manual (MMEL) - TC CSP A-044 [*]
--------------------------------------------------------------------------------------
Master Minimum Equipment Manual (MMEL) - FAA CSP A-045 [*]
--------------------------------------------------------------------------------------
Dispatch Deviation Guide (FAA) CSP A-046 [*]
--------------------------------------------------------------------------------------
Computer Self-Test/Bite Reset User Guide CSP A-047
--------------------------------------------------------------------------------------
Maintenance Requirements Manual (MRM) CSP A-053 [*]
--------------------------------------------------------------------------------------
Maintenance Planning Manual (MPM) CSP A-054 [*]
--------------------------------------------------------------------------------------
Power Plant Ground Run Manual CSP A-056 [*]
--------------------------------------------------------------------------------------
ATA Chapter Breakdown CSP A-064 [*]
--------------------------------------------------------------------------------------
Crash Crew Chart CSP A-072 [*]
--------------------------------------------------------------------------------------
Flight Planning & Cruise Control 3B1 - Basic Metric CSP A-083 [*]
--------------------------------------------------------------------------------------
Flight Planning & Cruise Control 3B1 - Hot/High Metric CSP A-085 [*]
--------------------------------------------------------------------------------------
Flight Planning & Cruise Control 3B1 - Hot/High Imperial CSP A-086 [*]
--------------------------------------------------------------------------------------
Maintenance Task Cards CSP A-089 [*]
--------------------------------------------------------------------------------------
Service Bulletins/Service Letters [*]
--------------------------------------------------------------------------------------
Passenger Information Sheet
--------------------------------------------------------------------------------------
* All prices are Bombardier's published list prices as of the date of this
proposal. All prices quoted are in year 0000 X.X. funds and are subject to
change without prior notice.
Subject to Annex A, Article 4.4, revision service for manuals may be purchased
at the rate of ten percent (10%) of the price of the applicable manual for each
year of revision service.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
31
ANNEX B TO SCHEDULE III
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 Schedule III - Annex B Articles 1.9, 1.10, and 2.0,
Bombardier warrants that, at the date of delivery of the Aircraft
or Bombardier 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 Bombardier to install a Vendor Part or Powerplant
Part in accordance with instructions of the vendor;
c) the Bombardier Parts shall be free from defects in material
or workmanship (including, without limitation, processes of
manufacturing); and
d) the Bombardier Parts shall be free from defects in design
(including, without limitation, selection of materials),
having regard to the state of the art as of the date of such
design.
1.1.2 The Warranty set forth in Schedule III - Annex B Article 1.1.1(c)
and (d) above shall also be applicable to Bombardier Parts
purchased as Spare Parts.
1.1.3 Bombardier 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 Schedule III - 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"):
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
32
a) for failure to conform to the Specification and in the
installation referred to in Schedule III - Annex B Article
1.1.1(a) and 1.1.1(b), [*] months from the Delivery Date;
b) for those Defects in material or workmanship in Bombardier
Parts referred to in Schedule III - Annex B Article 1.1.1(c)
and 1.1.2, [*] months from the date of delivery of such
parts;
c) for those Defects in design referred to in Schedule III -
Annex B Article 1.1.1(d) and 1.1.2, [*] months from the date
of delivery of such parts; and
d) for errors in the Technical Data referred to in Schedule III
- Annex B Article 1.1.3, [*] 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 Bombardier's sole obligation
and liability under this Warranty is expressly limited to correction by,
at Bombardier's election, the repair, replacement or rework of the
defective part or item of Technical Data. [*]
[*]
1.4 CLAIMS INFORMATION
Bombardier's obligations hereunder are subject to a Warranty claim being
submitted in writing to Bombardier's warranty administrator, which claim
shall include 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 Northwest;
d) the total flight hours (and cycles if applicable) accrued on the part
at the time the claimed Defect became apparent to Northwest; and
e) a description of the claimed Defect and the circumstances pertaining
thereto.
[*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
33
1.5 BOMBARDIER'S APPROVAL
[*]
1.6 TIMELY CORRECTIONS
Bombardier 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 Bombardier shall establish a reasonable estimate
for the labour hours required for the repair, replacement or rework of the
defective Bombardier Part and, if the repair, replacement or rework is
performed by Northwest, Bombardier shall reimburse Northwest for
Bombardier reasonably estimated hours using Bombardier's published repair
estimates if any exist for the repair, replacement or rework of the
defective Bombardier Part excluding any work necessary to gain access to
said Bombardier Part. [*]
1.8 APPROVAL, AUDIT, TRANSPORTATION AND WAIVER
All Warranty claims shall be subject to audit and approval by Bombardier.
Northwest must make its warranty claim within ninety (90) days of its
discovery of the defect. [*]
1.9 LIMITATIONS
1.9.1 Bombardier 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 Bombardier, unless Northwest
furnishes reasonable evidence to Bombardier 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 Schedule
III - Annex A and the manufacturer's documentation furnished
to Northwest (including Service Bulletins and airworthiness
directives) unless Northwest furnishes reasonable evidence
acceptable to Bombardier that such operation or maintenance
was not a cause of the Defect; or
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
34
c) the Aircraft was not operated under normal airline use,
unless Northwest furnishes reasonable evidence acceptable to
Bombardier that such operation was not a cause of the
Defect; or
d) Northwest does not
1) report the Defect in writing to Bombardier's Warranty
administrator within ninety (90) calendar days following
such Defect becoming apparent, and
2) retain the Bombardier Part claimed to be defective until
advised by Bombardier to return such Bombardier Part to
Bombardier's designated facility in order for Bombardier to
finalize its evaluation of the Warranty claim or to
otherwise dispose of such Bombardier Part; or
e) Northwest does not submit reasonable proof to Bombardier
within ninety (90) calendar days after the Defect becomes
apparent that the Defect is due to a matter covered within
this Warranty; or
f) Northwest does not allow Bombardier reasonable opportunity
to be present during the disassembly and inspection of the
Bombardier Part claimed to be defective (unless it was
necessary for Northwest to correct the defect in order to
avoid an adverse affect on its scheduled flight operations).
1.9.2 The above warranties do not apply to Buyer Furnished Equipment.
1.10 NORMAL USAGE
Normal wear and tear of expendable items and the need for regular
maintenance and overhaul shall not constitute a Defect or failure under
this Warranty.
1.11 OVERHAUL OF WARRANTY PARTS
Bombardier's liability for a Bombardier Part which has a Defect and is
overhauled by Northwest 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 Bombardier Part returned under a Warranty claim is
subsequently established to be serviceable then Bombardier shall be
entitled to charge and recover
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
35
from Northwest any reasonable costs incurred by Bombardier in connection
with such Warranty claim. [*]
ARTICLE 2 - VENDOR WARRANTIES
2.1 WARRANTIES FROM VENDORS
The Warranty provisions of this Schedule III - Annex B apply to Bombardier
Parts only. [*] Except as specifically provided under this Schedule III -
Annex B Article 2, Bombardier 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 Northwest and vendor.
2.2 VENDOR WARRANTY BACKSTOP
For those Vendor Parts installed on the Aircraft at the Delivery Date or
subsequently purchased through Bombardier, excluding the Powerplant or the
Power Plant Parts, in the event that a vendor is in default in the
performance of any obligation under any applicable warranty obtained by
Bombardier from such vendor pursuant to Schedule III - Annex B Article 2.1
above, the warranties and all other terms and conditions of Schedule III -
Annex B Article 1 shall become applicable as if the Vendor Parts had been
a Bombardier Part, except that the warranty period shall be the Warranty
Period as set forth herein or by the vendor's warranty, whichever is
shorter and all transportation costs associated with the Vendor Parts
shall be borne by Northwest.
2.3 BOMBARDIER'S INTERFACE COMMITMENT
In the event of a dispute in the application of a Vendor Part warranty, at
Northwest's request addressed to Bombardier's warranty administrator,
Bombardier shall, without charge, promptly 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. Northwest shall furnish to
Bombardier all data and information in Northwest's possession relevant to
the interface problem and shall cooperate with Bombardier in the conduct
of its investigation and such tests as may be required. Bombardier, at the
conclusion of its investigation, shall advise Northwest in writing of
Bombardier's opinion as to the cause of the problem and Bombardier will
use reasonable efforts to assist Northwest in collection of warranty
items.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
36
ARTICLE 3 - SERVICE LIFE POLICY
3.1 APPLICABILITY
The Service Life Policy ("SLP") described in this Schedule III - Annex B
Article 3 shall apply if a failure may reasonably be expected to occur [*]
in any Covered Component which is defined in Schedule III - Annex B
Article 3.6 below.
3.2 TERM
3.2.1 Should failures occur in any Covered Component within the months
or cycles identified in the table below
----------------------------------
[*] [*] [*] [*]
----------------------------------
[*] [*] [*]
----------------------------------
[*] [*] [*]
----------------------------------
[*] [*] [*] [*]
----------------------------------
following delivery of the Aircraft containing such Covered
Component, Bombardier shall, as promptly as practicable and at
its option;
a) [*]
b) [*]
3.3 PRICE
3.3.1 Any Covered Component, [*] is required to furnish under this SLP
shall be provided for at a price calculated in accordance with
the following formula:
P = [*]
Where:
P = Price of Covered Component to Northwest;
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
37
[*]
[*]
3.3.2 [*]
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 Bombardier's
designated facility, if practicable, of any failed Covered
Component necessary for failure investigation or redesigning
studies shall be borne by Northwest;
b) Bombardier's obligations under this SLP are conditional upon
the submission of reasonable proof acceptable to Bombardier
that the failure is covered hereby;
c) Northwest shall report any failure of a Covered Component in
writing to Bombardier's warranty administrator within ninety
(90) days after such failure becomes evident. Failure to
give this required notice shall excuse Bombardier from all
obligations with respect to such failure;
d) the provisions of Schedule III - Annex B Article 1.9 of the
Warranty (except for subparagraphs (d) and (e) thereof) are
incorporated by this reference and shall condition
Bombardier's obligations under this SLP with respect to any
Covered Component;
e) Bombardier'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
Northwest prior to receipt by Bombardier from Northwest of
any notice of an occurrence which constitutes a failure in a
Covered Component. The provisions of this subparagraph shall
not apply in the event that Northwest furnishes reasonable
evidence acceptable to Bombardier that such failure was not
caused by Northwest's failure to so modify the Aircraft, or,
if Northwest and Bombardier, acting reasonably, have jointly
determined that there has been insufficient time to
incorporate the Service Bulletin since its issue; and
f) this SLP shall not apply to a Covered Component where the
failure results from an accident, abuse, misuse, negligence
or wrongful act or omission, unauthorized repair or
modification adversely affecting a
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
38
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. Bombardier's obligation is only as set forth in Article
3.2.1 above.
3.6 COVERED COMPONENT
Only those items or part thereof listed in Attachment A to this Schedule
III - 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 Bombardier shall not be obligated to provide to
Northwest any remedy which is a duplicate of any other remedy which has
been provided to Northwest under any other part of this Schedule III -
Annex B.
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
39
SCHEDULE III - ANNEX B - ATTACHMENT A
COVERED COMPONENTS
[*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
40
DELIVERY SCHEDULE - CONTINUED
[*] OPTION AIRCRAFT
[*]
Purchase Agreement PA-0498
Northwest Airlines, Inc.
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
41
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-1-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 0 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001 (THE
"AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
AIRCRAFT CREDIT MEMORANDUM
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 In consideration of Northwest having entered into the Agreement and as an
adjustment to the Aircraft Purchase Price, Bombardier shall issue to
Northwest, at the time of delivery of each of the Aircraft, a credit
memorandum (the "Aircraft Credit Memorandum") in the amount of [*]. Each
Aircraft Credit Memorandum will be issued in [*] and adjusted to the time
of Aircraft delivery in accordance with the Economic Adjustment Formula in
Article 4 of Schedule I to the Agreement. The Aircraft Credit Memorandum
will be used by Northwest to pay the balance of the payment due for the
Aircraft at the time of delivery.
2.0 In consideration for Northwest having entered into the Agreement,
including this letter agreement, Bombardier agrees to [*]. Such amount
shall be paid by [*] and shall be applied against the balance of the
payment due for such Aircraft.
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-2-
------------------
[*] [*]
------------------
[*] [*]
------------------
[*] [*]
------------------
[*] [*]
------------------
[*] [*]
------------------
[*] [*]
------------------
[*] [*]
------------------
[*] [*]
------------------
[*] [*]
------------------
[*]
4.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
5.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
6.0 This letter agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
Should there be any inconsistency between this letter agreement and the
Agreement with respect to the subject matter covered by the terms hereof, this
letter agreement shall prevail. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-3-
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-4-
ATTACHMENT A
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-5-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 0 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001 (THE
"AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
SIA CREDIT MEMORANDUM
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 In consideration of Northwest having entered into the above referenced
Agreement Bombardier agrees to establish in favour of Northwest upon
delivery and payment in full for each Aircraft a [*] ("SIA") credit
memorandum that may be used, at Northwest's option, either for the
purchase of goods and services directly from Bombardier or to reduce the
purchase price of the Aircraft at delivery.
2.0 The SIA credit memorandum will be in the amount of [*] for each of the
delivered Aircraft. [*]
[*]
5.0 In the event oftermination of the Agreement, this letter agreement shall
become null and void and Northwest will [*].
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-6-
6.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
7.0 This letter agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
Should there be any inconsistency between this letter agreement and the
Agreement with respect to the subject matter covered by the terms hereof, then
this letter agreement shall prevail. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-7-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 0 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001 (THE
"AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
OPTION AIRCRAFT
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 In consideration of Northwest entering into the Agreement to purchase the
Aircraft, Bombardier agrees to provide Northwest with the right to
purchase an additional [*] (the "Option Aircraft") under the following
terms and conditions. [*]
2.0 [*]
3.0 The Option Aircraft shall be offered for inspection and acceptance to
Northwest at Bombardier's facility in Montreal, Quebec during the months
or quarters proposed in Schedule II of the Agreement (the "Scheduled
Delivery Date(s)"). Northwest shall exercise its right to purchase the
Option Aircraft by providing to Bombardier its irrevocable written notice
of its intention to do so no later than the first day of the [*] month
prior to the applicable Scheduled Delivery Date of the applicable Option
Aircraft.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-8-
4.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
5.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
7.0 This letter agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
Should there be any inconsistency between this letter agreement and the
Agreement with respect to the subject matter covered by the terms hereof, then
this letter agreement shall prevail. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-9-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT
PURCHASE RIGHT AIRCRAFT
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 In consideration of Northwest entering into the Agreement to purchase the
Aircraft, Bombardier agrees to provide Northwest with [*] (the "Purchase
Right Aircraft") under the following terms and conditions. Unless stated
otherwise in the Agreement,
[*]
2.0 [*]
3.0 Following the receipt of Northwest's written request for [*] Purchase
Right Aircraft, Bombardier will provide Northwest with [*] subject to the
following: [*]
4.0 Within [*] business days of having received [*] for the Purchase Right
Aircraft from Bombardier, Northwest shall have the option to exercise its
right to any such Purchase Right Aircraft by providing Bombardier with
written confirmation that it wishes to do so. [*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-10-
5.0 [*]
6.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
7.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
8.0 This letter agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
Should there be any inconsistency between this letter agreement and the
Agreement with respect to the subject matter covered by the terms hereof, then
this letter agreement shall prevail. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-11-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
AIRCRAFT DELIVERY FLEXIBILITY
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 AIRCRAFT DELIVERY [*]
1.1 In consideration of Northwest having entered into the Agreement,
Northwest may from time to time [*] the Scheduled Delivery Date
of one (1) or more of the [*] ; that is, Northwest shall be
allowed to [*], subject to the following:
[*]
1.2 If Bombardier is unable to accommodate a scheduled delivery date
requested by Northwest, Bombardier may, subject to 1.1(iii) and
(iv) above, elect to provide to Northwest Aircraft with [*]
1.3 If Bombardier is unable to accommodate a scheduled delivery date
within the timeframe provided for in Article 1.1(iii) above,
Northwest may [*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-12-
1.4 [*] under Article 1.3 shall [*] of Northwest and Bombardier
hereunder with respect to such Aircraft Northwest wishes to [*]
related undelivered items and services, except that Bombardier
shall promptly [*], and Bombardier's sole liability and
responsibility with respect to such Aircraft shall be limited to
the [*]
2.0 [*]
2.1 In consideration of Northwest having entered into the Agreement,
Northwest may from time to time elect [*]
2.2 Within five (5) business days of receiving Northwest's notice,
Bombardier will provide to Northwest a [*].
3.0 AIRCRAFT DELIVERY FLEXIBILITY - GENERAL
3.1 It is the intent of the parties to schedule quarterly meetings
with each other to review Northwest's then current delivery
requirements for [*], model mix requirements and Northwest's
future requirements for delivery dates of [*]. Following such
meetings, Bombardier will, in good faith and without limitation
of its obligations under this letter agreement, [*], if any, in
the [*] and/or [*], taking into account Bombardier's production
requirements or restraints at the time of the request, and will
provide feedback to Northwest with regards to the [*].
[*]
4.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise provided in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
5.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
6.0 This letter agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-13-
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-14-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
AIRCRAFT CONVERSION TO CRJ SERIES 200 AIRCRAFT
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 In consideration of Northwest entering into the Agreement to purchase the
Aircraft, and prior to delivery of an Aircraft to Northwest, Bombardier
agrees to provide Northwest with the right to request, from time to time,
conversion of such Aircraft to a 50 seat Canadair Regional Jet aircraft
model CL-600-2B19 (the "CRJ-200") manufactured pursuant to specification
no. RAD 601R-202 Rev B dated Feb 2000, as that specification may be
modified from time to time (the "CRJ-200 Specification"), and as
supplemented to reflect the incorporation of the Northwest selected
optional features (the "CRJ-200 Northwest Selected Optional Features")
listed in Attachment A to this letter agreement (the "Conversion Rights").
2.0 Northwest may exercise its Conversion Rights by providing written notice
to Bombardier of its intent to do so no later than the first (1st) day of
the [*] prior to the Scheduled Delivery Date of the CRJ-440 being
converted. At the same time, Northwest shall, subject to Articles 7.3 to
7.7 of the Agreement, provide to Bombardier three (3) seat pairs, complete
with Northwest selected seat dress covers.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-15-
3.0 Northwest recognizes that conversion of the Aircraft [*]
4.0 Should Northwest exercise its Conversion Rights by providing written
notice to Bombardier of its intent to convert a CRJ-440 to a CRJ-200 no
later than the first (1st) day of the [*] month prior to the Scheduled
Delivery Date of the CRJ-440 being converted, [*]
5.0 Northwest shall be entitled to give only one (1) notice pursuant to this
letter agreement with respect to each Aircraft.
6.0 [*]
7.0 Following transfer of title of the Aircraft, [*]
8.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
9.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
10.0 This letter agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
Should there be any inconsistency between this letter agreement and the
Agreement with respect to the subject matter covered by the terms hereof, then
this letter agreement shall prevail. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-16-
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-17-
ATTACHMENT A
NORTHWEST SELECTED OPTIONAL FEATURES
PRICES AND DESCRIPTIONS - CRJ-200
CR REF. # OPTION DESCRIPTION PRICE
--------- ------------------ -----
[*] [*]
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-18-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
OPTION AIRCRAFT AND/OR PURCHASE RIGHT AIRCRAFT CONVERSION TO CRJ 700 OR CRJ 900
AIRCRAFT.
1.0 In consideration of Northwest entering into the Agreement to purchase the
Aircraft, Bombardier agrees to provide Northwest with the right to
request, from time to time, conversion of one (1) or more of the [*]
Option Aircraft or [*] Purchase Right Aircraft, to an equivalent number of
Canadair Regional Jet aircraft model CL600-2C10 Series 700 (the "CRJ 700")
or Canadair Regional Jet aircraft model CL600-2D24 Series 900 (the "CRJ
900") (the "CRJ700/CRJ900 Conversion Rights"), subject to availability of
aircraft.
2.0 Northwest may exercise its CRJ700/CRJ900 Conversion Rights by providing
written notice to Bombardier of its intent to convert an Aircraft delivery
no later than the first (1st) day of the [*] month prior to the then
Scheduled Delivery Date of the Aircraft to be converted. Within five (5)
business days of receiving Northwest's notice, Bombardier will provide to
Northwest a Scheduled Delivery Date for the CRJ 700 or the CRJ 900
aircraft in question as close to Northwest's original Scheduled Delivery
Date as it is reasonably able to do; [*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-19-
3.0 Within ten (10) business days of receipt of the revised scheduled delivery
date for the CRJ 700 or CRJ 900 aircraft, Northwest will notify Bombardier
whether it is electing to proceed with the conversion of purchase rights
to the CRJ 700 or CRJ 900, at which time Northwest's election will become
irrevocable. [*]
4.0 [*]
5.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
6.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
7.0 This letter agreement constitutes an integral part of the Agreement and is
subject to the terms and conditions contained therein.
Should there be any inconsistency between this letter agreement and the
Agreement with respect to the subject matter covered by the terms hereof, then
this letter agreement shall prevail. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-20-
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-21-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 0 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001 (THE
"AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
DISPATCH RELIABILITY
This letter agreement, when accepted by and agreed to by Northwest
contemporaneously with the execution of the Agreement, will evidence our further
agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 This letter agreement 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
The intent of the Dispatch Reliability Guarantee ("DRG") is to achieve the
full potential of the inherent technical reliability of Northwest's [*]
through the joint efforts of Bombardier and Northwest. To that end,
Bombardier agrees to take action as specified below and Northwest agrees
to set its Aircraft fleet dispatch reliability target equal to or greater
than the applicable Guarantee Value so that both Northwest and
Bombardier's technical staff can pursue attainment of the applicable
Guarantee Value.
3.0 DEFINITION
For the purposes of this guarantee, a chargeable technical delay shall be
any delay greater than fifteen (15) minutes beyond scheduled revenue
departure time caused
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-22-
by malfunction of equipment affecting any of the Aircraft ("Chargeable
Technical Delay") provided that no more than one (1) Chargeable Technical
Delay shall be charged to a specific malfunction of a specific Aircraft.
4.0 GUARANTEE VALUE
Bombardier guarantees that the Aircraft fleet dispatch reliability with
respect to avoidance of Chargeable Technical Delays shall, at the end of
the periods commencing with the date of start of revenue service of
Northwest's first delivered Aircraft indicated below, meet the guarantee
value percentages specified below ("Guarantee Value") as indicated [*]:
PERIOD* GUARANTEE VALUE (%)
------- -------------------
First twelve months [*]
Months thirteen to twenty-four [*]
Months twenty-five to thirty-six [*]
Months thirty-seven to forty-eight [*]
Months forty-nine to sixty [*]
* After delivery of the first Aircraft under this Agreement
[*]
5.0 TERM OF GUARANTEE
The term of this DRG shall commence upon the execution of this Agreement
and shall expire five (5) years after delivery of the first Aircraft under
this Agreement.
6.0 FORMULA
As the term is used herein, "dispatch reliability" shall be an average
numerical value (expressed as a percentage) during the guarantee periods
specified which shall be calculated by application of the following
formula:
DR = 100(1 - CD/SD)
Where:
DR = Dispatch Reliability (expressed as percentage)
CD = Total Chargeable Technical Delays.
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[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-23-
SD = Total Scheduled Revenue Departures
7.0 ASSUMPTIONS
[*]
8.0 CONDITIONS AND LIMITATIONS
8.1 Intentionally Left Blank.
8.2 Any delay due to any one or more of the following causes, or any
of the delays identified in "Attachment A", with the exception of
those listed as Chargeable Technical Delays, shall not be
considered a Chargeable Technical Delay in computing compliance
with this DRG:
a) Delay due to unavailability of trained personnel
(Northwest's, Permitted Assignee's or their contractor's);
b) Delay caused by problems that have had relevant recommended
Service Bulletins or Airworthiness Directives issued against
them, if Northwest has not incorporated the bulletin on the
Aircraft in question, provided that Northwest has had
reasonable time to incorporate said bulletin or directive
consistent with Northwest's maintenance program. Bombardier
shall not exclude delays for Service Bulletins not
incorporated by Northwest when Northwest has demonstrated
that the recommended Service Bulletin in question is not
cost effective for Northwest. In the event of a disagreement
between Bombardier and Northwest as to the
cost-effectiveness of a recommended Service Bulletin change
proposed by Bombardier, Northwest will explain its financial
analysis used to evaluate the implementation of such
recommended Service Bulletin;
c) Delay caused by BFE of Northwest or Northwest designated
equipment (equipment designated by Northwest and purchased
by Bombardier on behalf of Northwest);
d) Delay due to any modifications to the Aircraft made by
Northwest not in accordance with Bombardier approved data
unless such modification was not a prime cause of the delay;
or
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-24-
e) Any delay due to acts of God or acts of third parties, force
majeure or Northwest's labour disputes.
8.3 REPORTING
Northwest shall provide to Bombardier not later than thirty (30)
days after the last day of each month all reports pertaining to
dispatch reliability as required by Northwest's regulatory
authority. Northwest shall also provide a report to Bombardier of
the corrective action for such Chargeable Technical Delays, and
the information on modifications or Service Bulletins relevant to
such Chargeable Technical Delays accomplished during each month.
Northwest shall also provide Bombardier such other information
and data as Bombardier may reasonably request for the purpose of
analyzing Chargeable Technical Delays. Bombardier shall respond
to the data in a timely manner and shall provide Northwest with a
summary of fleetwide dispatch reliability reports on a monthly
basis. Failure of Northwest to provide the data as required above
shall void this letter agreement.
8.4 MASTER RECORD
The master record of dispatch reliability will be maintained by
Bombardier in its format based upon information provided by
Northwest as requested herein.
9.0 CORRECTIVE ACTION
9.1 In the event Northwest's achieved Aircraft fleet twelve (12)
month average dispatch reliability, as reported to Northwest by
Bombardier for each preceding twelve (12) month period, fails to
equal the applicable Guarantee Value for the applicable twelve
(12) month guarantee period, or in the event that Northwest's
achieved Aircraft fleet monthly average dispatch reliability, as
reported to Northwest by Bombardier for each preceding month,
falls below the applicable Guarantee Value for the applicable [*]
period by at least [*], Bombardier and Northwest will jointly
review the performance for that period to identify improvement
changes required. [*]
9.2 [*]
10.0 AUDIT
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-25-
Upon five (5) business days prior written notification by Bombardier to
Northwest and at Bombardier's expense, Bombardier shall have the right
during normal business hours to audit all Northwest's data reported under
Article 8.2 of this letter agreement, Northwest's applicable maintenance
and operational practices and procedures, and applicable Aircraft records,
where normally and customarily maintained, pertaining to dispatch
reliability, Service Bulletin and Airworthiness Directive incorporation
and modification of the Aircraft. Such audit shall not interfere with the
conduct of business by Northwest nor shall Northwest be required to
undertake or incur additional liability or obligations with respect to the
audit.
11.0 IMPLEMENTATION OF CHANGES
Northwest may, at its option, decline to implement any change proposed by
Bombardier under [*]. If Northwest so declines, Bombardier may adjust the
number of Chargeable Technical Delays by an amount consistent with the
expected reduction in Chargeable Technical Delays based on reasonable
substantiation to Northwest (including other operator experience, if any),
of such expected reduction if such change had been incorporated.
Bombardier shall not make adjustments when Northwest has reasonably
demonstrated that such change is not cost effective to Northwest.
12.0 [*]
13.0 [*]
14.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise provided in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
15.0 This letter agreement constitutes an integral part of the Agreement and is
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 with respect to any undelivered
Aircraft. The terms and conditions of this letter agreement will continue
to apply, albeit with revised guarantee values to reflect a reduction in
the number of Aircraft or changed circumstances, as applicable, to the
Aircraft delivered prior to the date of termination.
LA 0498-18 (Vendor Matrix)
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Exchange Commission pursuant to a request for confidential treatment.
-26-
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. Without limiting the foregoing, the parties
agree that Articles 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
----------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
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-27-
"Attachment A"
Northwest Airlines
Delay Code Definitions -- Effective January 1, 2001
NON-CHARGEABLE TECHNICAL DELAYS
CODE DESCRIPTION
ADM AIRCRAFT DAMAGE - MAINTENANCE When an aircraft is damaged by NWA
Maintenance personnel or other airlines/contract maintenance
personnel, equipment, FOD etc., all subsequent delays or
cancellations will be coded IRM or XQM. This would include delays
and cancels that span multiple days due to the repair of the
aircraft damage. SCEPTRE log page entry required.
NOTE: FAA REPORTABLE
CXM MUST RIDE - MAINTENANCE/PART(S)
When aircraft is held to wait for part(s)/mechanic needed to
return an aircraft or critical place of ground equipment to
service at another station. MINIMUM TEXT REQUIREMENTS: Aircraft
number, time the part was delivered to the departing aircraft,
name of person approving delay to be taken to load part.
DDM DEPARTURE DELAY- TECHNICAL OPERATIONS
Delay caused when NW line maintenance personnel or equipment are
not ready to perform start and push back. When airstarts are
required and are not ready the delay will be assigned to the
department (TO or GO) responsible for airstart. When APU fails at
departure, assign to DFM. MINIMUM TEXT REQUIREMENTS: Brief
description of problem, door closure time, for "shared push"
references include gate and flight number that caused delay.
EIM ENGINEERING INSPECTION
Used when a delay occurs while waiting for inspection or
engineering disposition or documentation to sign off repair
authorization. SCEPTRE log page entry required.
NOTE: FM REPORTABLE
IPM IRREGULAR PROCEDURES - MAINTENANCE
When circumstances are not covered by normal policy or practices.
This would include inoperative pushback vehicle headsets and
correction of improperly deferred MEL's. etc.
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-28-
"Attachment A"
Northwest Airlines
Delay Code Definitions -- Effective January 1, 2001
NON-CHARGEABLE TECHNICAL DELAYS
CODE DESCRIPTION
IRM IRREGULAR ROUTING - MAINTENANCE
Irregular routing due to continuing delays following an
originating mechanical delay or cancellation in originating
station or downline station. Excludes parts related delays (PBM,
PLM, PNM, PSM). Original aircraft number scheduled on flight,
SCEPTRE log page entry/number, time the swap was initiated, name
of Ops Planner or Aircraft Router, maximum delay is linked to
Standard Service Times For Late Arriving Aircraft located on
pages 2-4.
LQM LATE EQUIPMENT- MAINTENANCE
A late operation of a flight caused by a maintenance delay a
previous station.
MBM BASE MAINTENANCE
To be used when the aircraft is produced late out of Base or
intermediate Maintenance OR mechanical malfunctions observed
during the first flight from or repetitively on subsequent
flights after production from Base or intermediate Maintenance.
All subsequent delays or cancellations are coded IRM or XQM and
must reference the first segment delayed or canceled. This would
include delays and cancellations that span multiple days.
MLM LINE MAINTENANCE
To be used on the first segment delayed due the completion of a
scheduled maintenance check. Only three possible ATA codes will
accepted: 0514 -Overnight Line, 0515 - Turn Around or 0590 -
Other Scheduled Checks. ie. B-Check.
NOM MAINTENANCE - CHECKED OK
When a reported mechanical problem is checked out by the mechanic
and found to be OK for service. No corrective action performed.
SCEPTRE log page entry required.
NOTE: FAA REPORTABLE.
ODM OPERATIONAL DECISION - MAINTENANCE
A discretionary maintenance action to accomplish a repair,
inspection, or to close an open XXX item upon direction of a FAA
inspector or Maintenance Control. Does not include situations
where aircraft cannot be dispatched with an open XXX etc., due to
weather, runway conditions, etc. (should be coded MTM). SCEPTRE
log page entry required MINIMUM TEXT REQUIREMENTS: Name of
maintenance controller/shift manager approving the delay. If FAA,
state "FAA".
NOTE: FAA REPORTABLE
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LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-30-
"Attachment A"
Northwest Airlines
Delay Code Definitions -- Effective January 1, 2001
NON-CHARGEABLE TECHNICAL DELAYS
CODE DESCRIPTION
PLM LATE FROM STORES
Parts are allocated or pooled and available but an inordinate
amount of time is spent getting these parts to the aircraft or
parts delivered to the wrong gate. Refer to "PARTS Delivery
Standards for Line Maintenance Operations" located on pages 9
&10.
NOTE: FAA REPORTABLE
PQM LATE EQUIPMENT - UPLINE PARTS DELAY
Delay caused by the late arrival of an aircraft due to an upline
parts delay (PBM/PLM/PNM/PSM).
RBM RETURN TO GATE DUE TO MAINTENANCE
The aircraft departs from the gate and has to return due to
maintenance. The difference between the block out and block in
times is coded RBM. The remaining delay time is coded to the
appropriate maintenance delay code.
THERE MUST BE ANOTHER MAINTENANCE DELAY CODE TO ACCOMPANY THE RBM
CODE.
SVM SERVICING - MAINTENANCE
Normal servicing of fluids such as oil, hydraulic fluid, etc.,
change of tire and brakes due to wear, cuts, chunking, low
pressure; alternate fueling at a maintenance location, replacing
oxygen bottles; thawing of frozen water system when protection is
the responsibility of maintenance; complying with DDG on
previously XXX'ed items; replacing amenity lights. SCEPTRE log
page entry required.
VEM PASSENGER COMM./ENTERTAINMENT EQUIPMENT
Delay caused by a mechanical problem with Vendor equipment
on-board aircraft. i.e. AT&T/Avicom. SCEPTRE log page entry
required.
NOTE: FAA REPORTABLE
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-31-
"Attachment A"
Northwest Airlines
Delay Code Definitions-- Effective January 1, 2001
CHARGEABLE TECHNICAL DELAYS
CODE DESCRIPTION
CIM RESET/RECYCLE/EXERCISE COMPONENTS
When a mechanical problem or maintenance fault massage Is
corrected by reset, bite, recycling a component such as a circuit
breaker, door, valve, switch, etc., also includes massages
cleared by procedures such as TSM, F.I.M., LAND TESTS, etc.
SCEPTRE log page entry required.
NOTE: FAA REPORTABLE
DFM DEFERRAL
Delay caused by deferral of maintenance item for later repair
i.e. XXX, CDL, LLM, MC Deferrals (also see DFF). SCEPTRE log page
entry required. MINIMUM TEXT REQUIREMENTS: If problem was
identified on inbound or outbound leg.
NOTE: FAA REPORTABLE
EQM EQUIPMENT CHANGE DUE TO MECHANICAL MALFUNCTION
When an aircraft has a no-go mechanical malfunction and/or has no
XXX relief and a substitute aircraft is used. SCEPTRE log page
entry for problem aircraft required. MINIMUM TEXT REQUIREMENTS:
Original aircraft number scheduled on flight, SCEPTRE log page
entry/number, time the swap was initiated, maximum delay is
linked to Equipment Swap Service Times located on pages 11 & 12.
NOTE: FAA REPORTABLE
MTM MECHANICAL MALFUNCTION
A reported mechanical malfunction that requires corrective action
by a mechanic. SCEPTRE log page entry required.
NOTE: FAA REPORTABLE
PBM PART(S) UNSERVICEABLE
When component(s) or engine(s) received are unserviceable or
mechanical malfunctions are observed during the first flight
after installation or repetitively on subsequent flights after
installation. SCEPTRE log-page and stock number entry required.
NOTE: FAA REPORTABLE
PNM PART(S) SHORTAGE - NON-STATION ALLOCATED ITEM
When required part(s) or accessories are not immediately
available to correct the maintenance problem. i.e., part(s) not
normally stocked at station. Includes all delays for robbed parts
due to non-station allocation items. This code is also to be used
when routing changes caused by lack of non-stocked parts induce
delay(s). SCEPTRE log-page and stock number entry required.
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-32-
NOTE: FAA REPORTABLE
PSM PART(S) SHORTAGE - STATION ALLOCATED ITEM
A shortage of stocked part(s) or accessories required to correct
or troubleshoot a maintenance problem. Includes all delays for
robbed parts due to NIS of station allocation items. This code is
to be used when routing changes caused by shortage of normally
stocked parts induce delay(s). SCEPTRE log-page and stock number
entry required.
NOTE: FAA REPORTABLE
LA 0498-18 (Vendor Matrix)
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Exchange Commission pursuant to a request for confidential treatment.
-33-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 0 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001 (THE
"AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
SCHEDULE COMPLETION RATE
This letter agreement, when accepted by and agreed to by Northwest
contemporaneously with the execution of the Agreement, will evidence our further
agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 This letter agreement 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
The intent of the Schedule Completion Rate Guarantee ("SCRG") is to
achieve the full potential of the inherent technical reliability of
Northwest's [*] through the joint efforts of Bombardier and Northwest. [*]
To that end, Bombardier agrees to take action as specified below and
Northwest agrees [*] so that both Northwest and Bombardier's technical
staff can pursue attainment of the applicable Guarantee Value.
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Exchange Commission pursuant to a request for confidential treatment.
-34-
3.0 DEFINITION
A cancellation ("Chargeable Cancellation"), shall be defined as the
deletion of a flight segment from Northwest's operating schedule caused by
the malfunction of equipment affecting any of the Aircraft.
4.0 GUARANTEE VALUE
Bombardier guarantees that the Aircraft fleet average schedule completion
rate ("Scheduled Completion Rate") with respect to avoidance of Chargeable
Cancellations shall, at the end of the periods commencing with the date of
start of revenue service of Northwest's first delivered Aircraft indicated
below, meet the guarantee value percentages specified below (the
"Guarantee Values") as indicated [*] thereafter shall be in accordance
with the following:
PERIOD* GUARANTEE VALUE (%)
------- -------------------
First twelve months [*]
Thirteen to twenty-four months [*]
Twenty-five to thirty-six months [*]
Thirty-six to forty-eight months [*]
Forty-nine to sixty months [*]
* After delivery of the first Aircraft under this Agreement
[*]
5.0 TERM OF GUARANTEE
The term of this SCRG shall commence upon the execution of this Agreement
and shall expire five (5) years after delivery of the first Aircraft under
the Agreement.
6.0 FORMULA
As the term is used herein, Schedule Completion Rate shall be an average
numerical value (expressed as a percentage) during the performance periods
specified, which shall be calculated by application of the following
formula:
CR = 100 (1 - CC/SD)
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Exchange Commission pursuant to a request for confidential treatment.
-35-
Where: CR = Schedule Completion Rate (expressed as percentage)
CC = Total Chargeable Cancellations.
SD = Total Scheduled Revenue Departures
7.0 ASSUMPTIONS
[*]
8.0 CONDITIONS AND LIMITATIONS
8.1 Intentionally Left Blank.
8.2 Any cancellation due to any one or more of the following causes, or
any of the cancellations identified in "Attachment A", with the
exception of those listed as Chargeable Cancellations, shall not be
considered a Chargeable Cancellation in computing compliance with
this SCRG:
a) Cancellation due to unavailability of trained personnel (Northwest's
or Permitted Assignee's or their contractor's);
b) Cancellation caused by problems that have had relevant recommended
Service Bulletins or Airworthiness Directives issued against them,
if Northwest has not incorporated the Service Bulletin or
Airworthiness Directive on the Aircraft in question, provided that
Northwest has had reasonable time to incorporate said bulletin or
directive consistent with Northwest's maintenance program.
Bombardier shall not exclude cancellations for Service Bulletins not
incorporated by Northwest when Northwest has demonstrated that the
recommended Service Bulletin in question is not cost effective for
Northwest. In the event of a disagreement between Bombardier and
Northwest as to the cost-effectiveness of a recommended Service
Bulletin change proposed by Bombardier, Northwest will explain its
financial analysis used to evaluate the implementation of such
recommended Service Bulletin;
c) Cancellation caused by buyer furnished equipment (BFE) of Northwest
or Northwest designated equipment (equipment designated by Northwest
and purchased by Bombardier on behalf of Northwest);
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-36-
d) Cancellation due to any modifications to the Aircraft made by
Northwest not in accordance with Bombardier approved data unless
such modification was not a prime cause of the cancellation; or
e) Any cancellation due to acts of God or acts of third parties, force
majeure or Northwest's labour disputes.
8.3 REPORTING
Northwest shall provide to Bombardier not later than thirty (30)
days after the last day of each month all reports as required by
Northwest's regulatory authority relating to scheduled completion.
Northwest shall also provide a report to Bombardier of any
corrective action for such Chargeable Cancellations, and the
information on modifications or Service Bulletins relevant to such
Chargeable Cancellations accomplished during each month. Northwest
shall also provide Bombardier such other information and data as
Bombardier may reasonably request for the purpose of analyzing
Chargeable Cancellations. Bombardier shall respond to the data in a
timely manner and shall provide Northwest with a summary of
fleetwide scheduled completion reports on a monthly basis
approximately six (6) weeks after the end of the month. Failure of
Northwest to provide the data as required above shall void this
letter agreement.
8.4 MASTER RECORD
The master record of Schedule Completion Rate will be maintained by
Bombardier in its format based upon information provided by
Northwest as requested herein.
Bombardier will provide a copy to Northwest of the data. Northwest
shall review the data and if it is not in agreement with Northwest's
records, Northwest and Bombardier will consult to resolve any
differences.
9.0 CORRECTIVE ACTION
9.1 In the event Northwest's achieved Aircraft fleet twelve (12) month
average Schedule Completion Rate, as reported to Northwest by
Bombardier for each preceding twelve (12) month period fails to
equal the applicable Guarantee Value for the applicable twelve (12)
month guarantee period, or in the event Northwest's achieved
Aircraft fleet monthly average Schedule Completion Rate, as reported
to Northwest by Bombardier for each preceding month, [*]
[*]
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-37-
9.2 [*]
10.0 AUDIT
Upon five (5) business days prior written notification by Bombardier to
Northwest and at Bombardier's expense, Bombardier shall have the right
during normal business hours to audit all Northwest's data reported under
Article 8.2 of this letter agreement, Northwest's applicable maintenance
and operational practices and procedures, and applicable Aircraft records,
where normally and customarily maintained, pertaining to scheduled
completion, Service Bulletin and Airworthiness Directive incorporation and
modification of the Aircraft. Such audit shall not interfere with the
conduct of business by Northwest nor shall Northwest be required to
undertake or incur additional liability or obligations with respect to the
audit.
11.0 IMPLEMENTATION OF CHANGES
Northwest may, at its option, decline to implement any change
proposed by Bombardier [*]. If Northwest so declines, Bombardier may
adjust the number of Chargeable Cancellations by an amount consistent with
the expected reduction in Chargeable Cancellations based on reasonable
substantiation to Northwest (including other operator experience, if any)
if such change had been incorporated. Bombardier shall not make
adjustments when Northwest has reasonably demonstrated that such change is
not cost effective to Northwest.
12.0 [*]
13.0 [*]
14.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise set forth in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier, which consent shall not be unreasonably withheld.
15.0 This letter agreement constitutes an integral part of the Agreement and is
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 with respect to all undelivered
Aircraft. The terms and conditions of this letter agreement will continue
to apply (albeit with revised guarantee values to reflect a reduced number
of Aircraft or changed circumstances, as applicable) to
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Exchange Commission pursuant to a request for confidential treatment.
-38-
the Aircraft delivered prior to the date of termination.
LA 0498-18 (Vendor Matrix)
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Exchange Commission pursuant to a request for confidential treatment.
-39-
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. Without limiting the foregoing, the parties
agree that Articles 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
---------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-18 (Vendor Matrix)
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Exchange Commission pursuant to a request for confidential treatment.
-40-
"Attachment A"
Northwest Airlines
Cancellation Code Definitions - Effective January 1, 2001
NON-CHARGEABLE CANCELLATIONS
CODE DESCRIPTION
XEM OPERATIONAL DECISION
A discretionary maintenance action to accomplish a repair,
inspection or to close an open XXX item upon direction of a FAA
Inspector or Maintenance Official. Does not include situations
where aircraft cannot be dispatched with an open XXX etc., due to
weather, runway conditions, etc.(should be coded XYM).
NOTE: FAA REPORTABLE
XLM SCHEDULED LINE MAINTENANCE
To be used on the first segment canceled due to the completion of
a scheduled maintenance check. Only four possible ATA codes will
be accepted: 0513 - Through-Flight Line, 0514 - Overnight Line,
0515 - Turn Around or 0590 - Other Scheduled Checks i.e. B-check.
XSM PART(S) SHORTAGE - STATION ALLOCATED ITEM
A shortage of stocked part(s) or accessories required to correct
a maintenance problem, includes all cancellation for robbed parts
due to NIS of station allocated items. SCEPTRE log-page and stock
number entry required.
NOTE: FAA REPORTABLE
XOM MAINTENANCE - CHECKED OK
When a reported mechanical problem is checked out by the mechanic
and found to be OK for service or within limits. No maintenance
performed. SCEPTRE log page entry required.
NOTE: FAA REPORTABLE
LA 0498-18 (Vendor Matrix)
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-41-
"Attachment A"
Northwest Airlines
Cancellation Code Definitions - Effective January 1, 2001
CHARGEABLE CANCELLATIONS
CODE DESCRIPTION
XMM XXX/CDL DEFERRAL
When Minimum Equipment List, Configuration Deviation List, Lower
Landing Minimum, and/or any other deferral procedures cannot be
used. SCEPTRE log page entry required.
NOTE: FAA REPORTABLE
XPM PART(S) UNSERVICEABLE
When component(s) or engine(s) received are unserviceable or
mechanical malfunctions are observed during the first flight
after installation or repetitively on subsequent flights after
installation. SCEPTRE log-page and stock number entry required.
NOTE: FAA REPORTABLE
XQM EQUIPMENT MAINTENANCE
Will be used on all subsequent segments canceled following an
original mechanical malfunction cancel or delay. Example: Segment
1 is canceled due to XTM or due to MTM delay. Segments 2, 3, and
4 including the return balance of equipment will be coded XQM.
NOTE: FAA REPORTABLE
XNM PART(S) SHORTAGE NON-STATION ALLOCATED ITEM
When required part(s) or accessories are not immediately
available to correct maintenance problem i.e., part(s) not
normally stocked at station. Includes all cancellations for
robbed parts due to non-station allocated Items. SCEPTRE log-page
and stock number entry required.
NOTE: FAA REPORTABLE
XTM MECHANICAL MALFUNCTION
A reported mechanical that requires corrective action by a
mechanic. SCEPTRE log page entry required.
NOTE: FAA REPORTABLE
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NOTE: FAA REPORTABLE
JULY 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Subject: AIRFRAME DIRECT MAINTENANCE COST GUARANTEE
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 INTENT
1.1 The intent of the Airframe direct maintenance cost guarantee is
to achieve the full potential of the maintainability of
Northwest's [*] through the joint efforts of Bombardier and
Northwest. [*] To that end, Bombardier agrees to provide [*]
pursuant to the terms and conditions hereof and Northwest agrees
to provide data defined below.
1.2 The "Airframe" shall mean [*]
2.0 AIRFRAME DIRECT MAINTENANCE COST GUARANTEE ("ADMCG")
2.1 Bombardier guarantees that for the fleet of Aircraft operated by
Northwest during the term of this letter agreement the cumulative
average Airframe direct maintenance cost per flight hour for [*]
shall not exceed a constant cumulative dollar value average of
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-43-
[*]
2.1.3 Appropriate reductions shall be made in material costs per
flight hour for the following:
a) Material costs resulting from maintenance not performed
in accordance with the Technical Data (as defined in
Article 4.1 of Schedule III, Annex A) and Federal
Aviation Regulations ("FAR's") 43, 65, 121 and 145 and
other FAR's as may become applicable to Northwest's
maintenance operations or from configuration changes
made by Northwest without Bombardier's written
agreement which have a material adverse effect on the
ADMRC and ADMEC, or because recommended Service
Bulletins which cause a material reduction in direct
maintenance cost have not been incorporated, provided
Northwest has had sufficient time to incorporate said
Service Bulletins consistent with Northwest's
maintenance program. Bombardier shall not make
reductions when Northwest has demonstrated that such
recommended Service Bulletin change is not cost
effective for Northwest. In the event of a disagreement
between Bombardier and Northwest as to the
cost-effectiveness of a recommended Service Bulletin
change proposed by Bombardier, Northwest will explain
its financial analysis used to evaluate the
implementation of such recommended Service Bulletin;
b) Material costs incurred to repair damages resulting
from accidents, foreign object damage (FOD), negligence
in maintaining the Aircraft or for modification of the
Aircraft which is capitalized by Northwest (except for
actions on Airworthiness Directives);
c) Credits, warranty payments, guarantee payments or other
payments such as parts or services at reduced cost that
Bombardier or vendors have made that compensate
Northwest for or reduce Northwest's direct maintenance
cost;
d) Scheduled maintenance checks which are not accomplished
consistent with Northwest's standard maintenance
practices; and
e) Material costs incurred due to shipping, transportation
and handling delays.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-44-
3.0 CALCULATION OF COST
3.1 AIRFRAME DIRECT MAINTENANCE MATERIAL COST ("ADMMC")
The ADMMC is defined as the annual cost of material consumed,
which excludes initial provisioning purchases, for the direct
airframe maintenance of the Aircraft, less any transportation,
duties, taxes or license fees. Notwithstanding Northwest's
internal cost allocation system, all expendables and all elements
of indirect material such as cleaning supplies, consumable tools,
hydraulic fluids, oils and greases, welding supplies, sealants,
paints, protective coatings, adhesives or material resulting from
damage, misuse, or misdiagnosis (no fault found) provided such no
fault founds were not a result of Northwest's following
Bombardier's built in elctronic test equipment and/or
troubleshooting procedures are excluded from the calculation of
ADMMC.
3.2 AIRFRAME DIRECT OUTSIDE SERVICE COST ("ADOSC")
The ADOSC is defined as the annual cost expended in outside
services for repair of rotable parts. The ADOSC shall include the
total outside service charges of both labour and material costs,
but excluding transportation and taxes.
3.3 HOURLY AIRFRAME DIRECT MAINTENANCE ROTABLE COST ("ADMRC")
The following formula shall be used to calculate the annual
hourly ADMRC:
ADMRC = ADMMC + ADOSC
-------------
T
Where:
ADMMC = Airframe Direct Maintenance Material Cost,
ADOSC = Airframe Direct Outside Service Cost,
T = Total flight hours for the Aircraft recorded for the
applicable year.
4.0 CREDIT CALCULATION
4.1 The ADMRC calculated in accordance with sub paragraph 3.3 hereof
shall be compared by Bombardier against the ADMRG on an annual
basis.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-45-
4.2 If the ADMRC exceeds the ADMRG for the applicable year, Northwest
will be credited with a compensation credit ("Qb") calculated in
accordance with the following formula:
Qb = [*]
Where:
Qb = Northwest's compensation credit in dollars when
Qb is positive,
ADMRC = The ADMRC values for the relevant year,
ADMRG = Airframe Direct Maintenance Rotables Guarantee
defined in Article 2.1 hereof,
T = Same meaning as used in Article 3.3, above
4.3 If the ADMRC is less than the ADMRG for the applicable year,
Bombardier shall accrue an incentive credit ("Qs") which shall be
used as an offset against any potential liabilities of Bombardier
during the term of this letter agreement in accordance with the
following formula:
Qs = [*]
Where:
Qs = Bombardier's incentive credit in dollars when
Qs is positive.
ADMRC, ADMRG and T shall have the same meaning as used in
Article 4.2 above.
5.0 [*]
[*]
6.1 AIRFRAME DIRECT MAINTENANCE EXPENDABLE COST ("ADMEC")
The ADMEC is defined as the annual cost of expendables consumed,
which excludes initial provisioning purchases, for the direct
airframe maintenance of the Aircraft, less any transportation,
duties, taxes or license fees. Notwithstanding
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-46-
Northwest's internal cost allocation system, all elements of
indirect material such as cleaning supplies, consumable tools,
hydraulic fluids, oils and greases, welding supplies, sealants,
paints, protective coatings, adhesives, or material resulting
from damage, misuse, or misdiagnosis (no fault found) provided
such no fault founds were not a result of Northwest's following
Bombardier's built in electronic test equipment and/or
troubleshooting procedures or misuse are excluded from the
calculation of ADMEC.
6.2 HOURLY AIRFRAME DIRECT EXPENDABLE COST ("ADEC")
The following formula shall be used to calculate the annual
hourly ADMEC:
ADEC = ADMEC
-----
T
Where:
ADMEC = Airframe Direct Maintenance Expendable Cost,
T = Total flight hours for the Aircraft recorded
for the applicable year.
7.0 CREDIT CALCULATION
7.1 The ADEC calculated in accordance with Article 6.2 hereof shall
be compared by Bombardier against the ADMEG on an annual basis.
7.2 If the ADEC exceeds the ADMEG for the applicable year, Northwest
will be credited with a compensation credit ("Qd") calculated in
accordance with the following formula:
Qd = [*]
Where:
Qd = Northwest's compensation credit in dollars when
Qd is positive,
ADEC = The ADEC values for the relevant year,
ADMEG = Airframe Direct Maintenance Expendable
Guarantee defined in sub Article 2.1 hereof,
T = Same meaning as used in Article 6.2, above
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-47-
7.3 If the ADEC is less than the ADMEG for the applicable year,
Bombardier shall accrue an incentive credit ("Qt") which shall be
used as an offset against any potential liabilities of Bombardier
during the term of this letter agreement in accordance with the
following formula:
Qt = [*]
Where:
Qt = Bombardier's incentive credit in dollars when
Qs is positive.
ADEC, ADMEG and T shall have the same meaning as used in Article
7.2 above.
8.0 [*]
[*]
9.0 AUDIT
Upon five (5) business days prior written notification by Bombardier to
Northwest and at Bombardier's expense, Bombardier shall have the right
during normal business hours to audit all charges reported under this
letter agreement, Northwest's applicable maintenance practices and
procedures, and applicable Aircraft records, where normally and
customarily maintained, relative to maintenance, Airworthiness
Directives, Mandatory and Optional Service Bulletin incorporation and
modification of the Aircraft. Such audit shall not interfere with the
conduct of business by Northwest nor shall Northwest be required to
undertake or incur additional liability or obligations with respect to
the audit.
10.0 REPORTING
10.1 Bombardier shall provide a quarterly report to Northwest on the
status of the Airframe direct maintenance cost based on data
submitted by Northwest and approved by Bombardier. Failure of
Northwest to provide the required data for a period of one
hundred and eighty (180) days, in spite of Bombardier's repeated
notices of such failure thirty (30) or more and sixty (60) days
or more from the initial failure to report, shall void this
letter agreement. [*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-48-
10.2 The Airframe Direct Maintenance Cost Guarantee was based upon the
assumptions outlined in the Appendix to this letter agreement.
Any deviation from the assumptions outlined in the Appendix shall
cause a modification in the Airframe Direct Maintenance Cost
Guarantee by Bombardier.
11.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
12.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void with respect to any
undelivered Aircraft. The terms and conditions of this letter agreement
will continue to apply, albeit with revised guarantee values to reflect
a reduction in the number of Aircraft or changed circumstances, as
applicable, to the Aircraft delivered prior to the date of termination.
13.0 This letter agreement constitutes an integral part of the Agreement
and subject to the terms and conditions contained therein.
Should there be any inconsistency between this letter agreement and the
Agreement with respect to the subject matter covered by the terms hereof, then
this letter agreement shall prevail. Without limiting the foregoing, the parties
agree that Articles 19.1 and 19.2 of the Agreement are fully applicable to this
letter agreement.
Yours very truly,
Bombardier Inc.
--------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this _____ day of July 2001
by Northwest Airlines, Inc.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-49-
--------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-50-
APPENDIX A
AIRFRAME DIRECT MAINTENANCE COST GUARANTEE
GUARANTEE VALUE ASSUMPTIONS
The following is a listing of all assumptions used to establish the ADMCG per
flight hour. It is understood by the parties that these assumptions may change
in which case the parties, with mutual agreement, will adjust the ADMCG.
All costs are based upon Specification.
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-51-
APPENDIX B
ADMCG ECONOMIC ADJUSTMENT FORMULA
The ADMCG economic adjustment will be calculated using the following Guarantee
Adjustment (GA) Formula. The ADMCG term is specified in Section 2.1.1 of the
letter agreement.
GA = G1 - G0
Where G1 =
GA = ADMCG Value Adjustment
G0 = ADMCG Value
G1 ADMCG Value adjusted to the current year
L1 = the current year index for labour obtained by calculating the
arithmetic average of the labour indexes published by the United States
Department of Labour Statistics - Employment Cost Index (Series ID:
ECU28122I) for the fourth, fifth and sixth months prior to the month in
the current year which defines the ADMCG term.
L0 = [*] which equals the [*] index for labour obtained by calculating the
arithmetic average of the labour indexes published by the United States
Department of Labour Statistics - Employment Cost Index (Series ID:
ECU28122I) for the fourth, fifth and sixth months prior to the date
specified in Appendix A, Article 2 of this letter agreement.
M1 = the current year index for material obtained by calculating the
arithmetic average of the material indexes published by the United
States Department of Labour - Material Industrial Commodities, Producer
Price Index, (Series ID: WPU142) for the fourth, fifth and sixth months
prior to the month in the current year which defines the ADMCG term.
M0 = [*] which equals the [*] index for material obtained by calculating
the arithmetic average of the material indexes published by the United
States Department of Labour - Material Industrial Commodities, Producer
Price Index (Series ID: WPU142) for the fourth, fifth and sixth months
prior to the date specified in Appendix A, Article 2 of this letter
agreement.
If, during any economic adjustment period, G1 is less than G0, G1 will be deemed
to equal G0.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-52-
APPENDIX C
ATA CHAPTER DIRECT MAINTENANCE COST ESTIMATES
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-53-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
Letter Agreement No. 11 to Purchase Agreement No. PA-0498 dated July 6, 2001
(the "Agreement") between Bombardier Inc. represented by Bombardier Aerospace,
Regional Aircraft ("Bombardier") and Northwest Airlines Inc. ("Northwest")
relating to the purchase of seventy-five (75) Canadair Regional Jet Aircraft.
[*]
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 [*]
In consideration of Northwest having entered into the Agreement,
Bombardier will provide [*]
[*]
6.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
7.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
8.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-54-
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-55-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
[*]
This Letter Agreement, when accepted and agreed to by Northwest
contemporaneously with the execution of the Agreement, will evidence our further
agreement with respect to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meanings as in the Agreement.
[*]
5.0 The provisions of this letter agreement are personal to Northwest and
shall not be assigned or otherwise disposed of by Northwest.
6.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
7.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-56-
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-57-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
CRJ-440-LR PERFORMANCE GUARANTEE
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 AIRCRAFT CONFIGURATION
The guarantees listed below are based on the CRJ-440-LR aircraft
configurations ("Aircraft") as defined in Canadair Type Specification
RAD-601R-206, issue NC with addition of Northwest Selected Optional
Features and equipped with GE CF34-3B1 engines as defined in GE Engines
Specification E1271A. The weight data corresponds to the [*]
1.1 TERM OF THE GUARANTEE
The period for which the provisions of this letter agreement shall be
effective (the "Term of the Guarantee") shall commence with the
delivery of the first Aircraft (CRJ-440 and/or CRJ-200) and [*]
2.0 PERFORMANCE GUARANTEES
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-58-
7.0 The provisions of this letter agreement are personal to Northwest and,
except as agreed in the Agreement, shall not be assigned or otherwise
disposed of by Northwest without the prior written consent of
Bombardier.
8.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
9.0 In the event of termination of the Agreement, this letter agreement shall
automatically become 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. Without limiting the foregoing, the parties
agree that Article 19 is fully applicable to this letter agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this _____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-59-
APPENDIX A - PRE-DELIVERY PERFORMANCE VERIFICATION TEST PLAN
The following test techniques and procedures will be used for each of
the Northwest's Aircraft that will be tested.
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-60-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
CRJ-200-LR PERFORMANCE GUARANTEE
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 AIRCRAFT CONFIGURATION
The guarantees listed below are based on the CRJ-200-LR aircraft
configuration ("Aircraft") as defined in Canadair Type Specification
RAD-601R-202, issue B with addition of Buyer Selected Optional Features
and equipped with GE CF34-3B1 engines as defined in GE Engines
Specification E1271A. [*]
1.1 TERM OF THE GUARANTEE
The period for which the provisions of this letter agreement shall be
effective (the "Term of the Guarantee") shall commence with the
delivery of the first Aircraft [*]
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-61-
7.0 The provisions of this letter agreement are personal to Northwest and,
except as agreed in the Agreement, shall not be assigned or otherwise
disposed of by Northwest without the prior written consent of
Bombardier.
8.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
9.0 In the event of termination of the Agreement, this letter agreement shall
automatically become 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. Without limiting the foregoing, the parties
agree that Article 19 is fully applicable to this letter agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this _____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-62-
APPENDIX A - PRE-DELIVERY PERFORMANCE VERIFICATION TEST PLAN
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-63-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
Letter Agreement No.15 to Purchase Agreement No. PA-0498 dated July 6, 2001 (the
"Agreement") between Bombardier Inc. represented by Bombardier Aerospace,
Regional Aircraft ("Bombardier") and Northwest Airlines Inc. ("Northwest")
relating to the purchase of seventy-five (75) Canadair Regional Jet Aircraft.
[*] SPARE PARTS SERVICES
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 BOMBARDIER PARTS
1.1 In consideration of Northwest having entered into the above
referenced Agreement, Bombardier hereby confirms that the [*]
2.0 INITIAL PROVISIONING SHIPMENTS
[*]
3.0 [*]
[*]
4.0 SPARE PARTS [*]
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-64-
4.1 INITIAL PROVISIONING [*]
[*]
4.2 [*]
[*]
[*]
4.4 INSURANCE PARTS
[*]
5.0 TECHNICAL INFORMATION
[*]
6.0 [*]
7.0 [*]
[*]
10.0 In the event of the termination of the Agreement, this letter agreement
shall automatically become null and void.
11.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
12.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-65-
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this _____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-66-
ATTACHMENT A
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-67-
ATTACHMENT B
[*]
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-68-
Attachment C
Order Type Priority Definitions
For the Order Types identified in Articles 4.2 and 4.3 of the Letter Agreement
the following definitions apply;
AOG - An Aircraft On Ground ("AOG") means (i) an aircraft which requires a
No Go or a Go If Spare Part to return the aircraft back to revenue
service with no other maintenance action or service action available
to enable return of the aircraft to revenue service, or (ii) an
aircraft which will be in the situation described in clause (i)
within the following twenty-four (24) hours.
[*]
Critical - A Critical ("Critical") Spare Part requirement is one that, if not
filled, will result in an AOG situation within twenty-four (24)
hours to ten (10) days.
[*]
Expedite - An Expedite ("Expedite") Spare Part is one required in
more than ten (10) days but less than the standard committed
leadtime.
[*]
Routine - A Routine ("Routine") Spare Part is one required within the
standard committed leadtime usually to replenish Spare Parts
inventories.
Orders placed by Northwest on Routine basis will be ready for
shipment identified by the advice of airwaybill number within
committed leadtime.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-69-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX.00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001 (THE
"AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
RECONCILIATION
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 [*]
2.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
3.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
4.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-70-
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-71-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
Letter Agreement No.17 to Purchase Agreement No. PA-0498 dated July 6, 2001 (the
"Agreement") between Bombardier Inc. represented by Bombardier Aerospace,
Regional Aircraft ("Bombardier") and Northwest Airlines Inc. ("Northwest")
relating to the purchase of seventy-five (75) Canadair Regional Jet Aircraft.
[*]
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 [*]
[*]
2.0 In the event of the termination of the Agreement, this letter agreement
shall automatically become null and void.
3.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
4.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-72-
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-73-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
Letter Agreement No. 18 to Purchase Agreement No. PA-0498 dated July 6, 2001
(the "Agreement") between Bombardier Inc. represented by Bombardier Aerospace,
Regional Aircraft ("Bombardier") and Northwest Airlines Inc. ("Northwest")
relating to the purchase of seventy-five (75) Canadair Regional Jet Aircraft.
VENDOR MATRIX
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 [*]
2.0 In the event of the termination of the Agreement, this letter agreement
shall automatically become null and void.
3.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
4.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-74-
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-18 (Vendor Matrix)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-75-
[*]
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-1-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
NOISE GUARANTEE FOR CRJ-200 AND CRJ-440
Gentlemen,
LETTER AGREEMENT XX.00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001 (THE
"AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("BUYER") RELATING
TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
This letter, when accepted by and agreed to by Buyer contemporaneously with the
execution of the Agreement, will evidence our further agreement with respect to
the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 Aircraft Configuration
[*]
[*]
7.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
8.0 The provisions of this letter agreement are personal to Buyer and shall
not, except as otherwise provided for in the Agreement, be assigned or
otherwise disposed of by Buyer without the prior written consent of
Bombardier.
9.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-2-
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. Without limiting the foregoing, the parties
agree that Article 19 is fully applicable to this letter agreement.
Yours very truly,
Bombardier Inc.
------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
-------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-3-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
Letter Agreement No.20 to Purchase Agreement No. PA-0498 dated July 6, 2001 (the
"Agreement") between Bombardier Inc. represented by Bombardier Aerospace,
Regional Aircraft ("Bombardier") and Northwest Airlines Inc. ("Northwest")
relating to the purchase of seventy-five (75) Canadair Regional Jet Aircraft.
[*]
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 Intent
[*]
2.0 [*]
[*]
[*]
6.0 Audit
Upon five (5) business days prior written notification by Bombardier to
Northwest and at Bombardier's expense, Bombardier shall have the right
during normal business hours to audit all charges reported under this
Letter Agreement, Northwest's applicable maintenance practices and
procedures, and applicable Aircraft records, where normally
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-4-
and customarily maintained, relative to maintenance, Airworthiness
Directives, Mandatory and Optional Service Bulletin incorporation and
modification of the Aircraft. [*]
[*]
8.0 The provisions of this Letter Agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
9.0 In the event of the termination of the Agreement, this Letter Agreement
shall become automatically null and void with respect to any
undelivered Aircraft. The terms and conditions of this Letter Agreement
will continue to apply, [*], to the Aircraft delivered prior to the
date of termination.
10.0 This Letter Agreement constitutes an integral part of the Agreement
and subject to the terms and conditions contained therein.
Should there be any inconsistency between this Letter Agreement and the
Agreement with respect to the subject matter covered by the terms hereof, then
this Letter Agreement shall prevail. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement are fully applicable to this Letter
Agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-5-
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-6-
APPENDIX A
[*]
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-7-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX.00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001 (THE
"AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT
[*]
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 [*]
2.0 [*]
3.0 [*]
4.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
5.0 The provisions of this letter agreement are personal to Northwest and
shall not, except as otherwise provided for in the Agreement, be
assigned or otherwise disposed of by Northwest without the prior
written consent of Bombardier.
6.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-8-
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. Without limiting the foregoing, the parties
agree that Articles 19 of the Agreement are fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transaction
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-9-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
[*]
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein shall have the
same meaning as in the Agreement.
1.0 [*]
2.0 [*]
3.0 [*]
4.0 [*]
5.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
6.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise provided in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
7.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-10-
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
BOMBARDIER AEROSPACE
REGIONAL AIRCRAFT
Accepted and Agreed to this ____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-11-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
TRAINING ASSISTANCE
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 [*] Training
Bombardier shall provide at no cost to Northwest [*] training courses
identified in the table below [*]. The courses provided are typically
as described in [*]. The courses will be provided for the maximum
number of students as identified in the table below [*].
--------------------------------------------------------
TRAINING COURSE COURSE NUMBER MAXIMUM
DURATION OF NUMBER OF
COURSES STUDENTS
--------------------------------------------------------
[*] [*] [*] [*]
--------------------------------------------------------
[*] [*] [*] [*]
--------------------------------------------------------
[*] [*] [*] [*]
--------------------------------------------------------
[*] [*] [*] [*]
--------------------------------------------------------
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-12-
2.0 Computer Based Training - Maintenance
[*]
3.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
4.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
5.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this _____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-13-
LETTER AGREEMENT NO. 24
FINANCING SUPPORT AGREEMENT
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
Department A4010
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, XX
00000-0000 XXX
Attention: Xxxxxx X. Xxxxxxxx
Senior Vice President & Treasurer
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. 0000 DATED JULY 6, 2001 (THE
"AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES, INC. (FOR PURPOSES OF
THIS LETTER AGREEMENT "BUYER") [*]
Gentlemen:
[*]
11.0 The provisions of this Letter Agreement are personal to Buyer
and, except as otherwise agreed, shall not be assigned or
otherwise disposed of by Buyer without the prior written consent
of Bombardier.
12.0 This Letter Agreement constitutes an integral part of the
Agreement and is subject to the terms and conditions contained
therein.
13.0 Except for the provisions of Section 15.0 (which shall survive),
in the event of the termination of the Agreement, this Letter
Agreement shall become automatically null and void.
14.0 Bombardier agrees that it, will not make any public statement or
authorize the publication of any press release disclosing any of
the terms of the financing contained in this Letter Agreement or
Attachment 1 hereto without the prior review and written approval
of Northwest Airlines, Inc.'s Treasury and Corporate
Communications Departments. Bombardier will require agreement to
this provision from other financing parties, including but not
limited to [*]
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-14-
15.0 [*]
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this Letter
Agreement.
Yours truly,
---------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts Acknowledged and agreed
Northwest Airlines, Inc.
Bombardier Aerospace
Regional Aircraft
---------------------------
By: Xxxxxx X. Xxxxxxxx
Senior Vice President and Treasurer
Date:
---------------------------
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-15-
ATTACHMENT 1 TO LETTER AGREEMENT NO. 0498-24
[*]
Yours very truly,
-----------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
Regional Aircraft
Northwest Airlines, Inc.
Per:
--------------------------
Mr. Xxxxxx Xxxxxxxx
Senior Vice President and Treasurer
Date:
--------------------------
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-00-
XXXXXXXXXX / XXXXXXXXX AIRLINES
[*]
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-17-
SCHEDULE 1 TO ATTACHMENT 2
[*]
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-18-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 As a consequence of [*], Northwest and Bombardier have collaborated on
a number of initiatives associated with the management tool known as
"Six Sigma". Six Sigma is, among other things, a system for measuring
and analyzing data pertaining to an organization's processes,
implementing changes to those processes and controlling such changes,
all with the objective of reducing cycle time and ultimately operating
costs. Bombardier and Northwest believe there may still be mutual
benefits to be achieved with respect to process improvements in areas
affecting Northwest, and as a result, the parties agree to [*] the time
frame of the Delivery Schedule of Aircraft purchased under the
Agreement.
3.0 In consideration of entering into the Agreement, Bombardier and
Northwest agree to measure their respective performance under the
Agreement in areas to be agreed upon, in accordance with the Six Sigma
methodology. The areas of performance may include, without limitation, the
following: Aircraft definition, delivery process, warranty claims process,
spare parts delivery and Aircraft reliability. Where considered
appropriate and beneficial, the parties agree to set up joint Six Sigma
projects to improve the processes concerned. Northwest and Bombardier may
together determine other areas of operation for which a Six Sigma project
including Northwest's participation would be appropriate.
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-19-
3.0 [*]
4.0 The provisions of this letter agreement are personal to Northwest and,
except as agreed in the Agreement, shall not be assigned or otherwise
disposed of by Northwest without the prior written consent of Bombardier.
5.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
6.0 In the event of termination of the Agreement, this letter agreement shall
automatically become 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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-20-
Accepted and Agreed to this _____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-21-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
AIRCRAFT HEAVY MAINTENANCE AGREEMENT
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 In consideration of Northwest having entered into the above referenced
Agreement, Bombardier will provide, subject to Northwest entering into an
Aircraft Heavy Maintenance Service Agreement, a long-term heavy
maintenance, multi-year inspection program on a "price per flight hour"
basis (the "Aircraft Heavy Maintenance Program"). [*]
2.0 [*]
3.0 [*]
4.0 In the event of the termination of the Agreement, this Letter Agreement
shall become automatically null and void.
5.0 This letter agreement constitutes an integral part of the Agreement
and subject to the terms and conditions contained therein.
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-22-
6.0 The provisions of this letter agreement are personal to Northwest and,
except as otherwise agreed in the Agreement, shall not be assigned or
otherwise disposed of by Northwest without the prior written consent of
Bombardier.
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. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this _____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President - Aircraft Transactions
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-23-
July 6, 0000
Xxxxxxxxx Xxxxxxxx, Inc.
0000 Xxxxxxxxx Xxxxx
Xx. Xxxx, Xxxxxxxxx
00000-0000 XXX
Gentlemen,
LETTER AGREEMENT XX. 00 XX XXXXXXXX XXXXXXXXX XX. XX-0000 DATED JULY 6, 2001
(THE "AGREEMENT") BETWEEN BOMBARDIER INC. REPRESENTED BY BOMBARDIER AEROSPACE,
REGIONAL AIRCRAFT ("BOMBARDIER") AND NORTHWEST AIRLINES INC. ("NORTHWEST")
RELATING TO THE PURCHASE OF SEVENTY-FIVE (75) CANADAIR REGIONAL JET AIRCRAFT.
[*] ASSIGNMENT RIGHTS
This letter, when accepted by and agreed to by Northwest contemporaneously with
the execution of the Agreement, will evidence our further agreement with respect
to the matters set forth below.
All terms used herein and in the Agreement and not defined herein, shall have
the same meaning as in the Agreement.
1.0 Within thirty (30) days from the execution of the Agreement, the parties
shall execute a Contract Change Order [*]
2.0 In the event of the termination of the Agreement, this letter agreement
shall become automatically null and void.
3.0 The provisions of this letter agreement are personal to Northwest and
shall not be assigned or otherwise disposed of by Northwest without the
prior written consent of Bombardier.
4.0 This letter agreement constitutes an integral part of the Agreement
and is subject to the terms and conditions contained therein.
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
-24-
Should there be any inconsistency between this letter agreement and the
Agreement with respect to the subject matter covered by the terms hereof, this
letter agreement shall prevail. Without limiting the foregoing, the parties
agree that Article 19 of the Agreement is fully applicable to this letter
agreement.
Yours very truly,
Bombardier Inc.
--------------------------
Xxxxxxx Xxxxxxxx
Manager, Contracts
Bombardier Aerospace
REGIONAL AIRCRAFT
Accepted and Agreed to this _____ day of July 2001
by Northwest Airlines, Inc.
--------------------------
Xxxxxxx X. May
Vice President -- Aircraft Transactions
LA 0498-01final (Aircraft Credit Memorandum)
[*] Confidential material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.
25
