Exhibit 10.45
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST.
AGREEMENT
FOR
SALE AND PURCHASE
OF
DORNIER 328-300 AIRCRAFT
BY AND BETWEEN
XXXXXXXXX DORNIER GMBH
AND
ATLANTIC COAST AIRLINES
DATED
DECEMBER 20, 2000
(reference: PA296)
TABLE OF CONTENTS
Article Page
A. Preamble 1
B. Summary of Definitions 1
Article 1 Subject Matter 4
Article 2 RESERVED 4
Article 3 Price, Taxes 4
Article 4 Terms of Payment 5
Article 5 Inspection, Acceptance, Delivery 6
Article 6 Certification 10
Article 7 Technical Changes 11
Article 8 Aircraft Configuration 12
Article 9 Product Warranties 12
Article 10 RESERVED 12
Article 11 Excusable Delay 12
Article 12 Non-Excusable Delay 16
Article 13 Event of Default, Remedies 18
Article 14 Limited Liability, Indemnification 20
Article 15 Patent Infringement 22
Article 16 Assignment, Resale, Lease, Merger or Transfer
of Assets 24
Article 17 Seller's Representations and Warranties 27
Article 18 Purchaser's Representations and Warranties 28
Article 19 RESERVED 28
Article 20 ********** 29
Article 21 PA296 Option Aircraft 50
Article 22 RESERVED 55
Article 23 ********** 55
Article 24 ********** 55
Article 25 RESERVED 56
Article 26 RESERVED 56
Article 27 RESERVED 56
Article 28 RESERVED 56
Article 29 ********** 56
Article 30 ********** 62
Article 31 RESERVED 63
Article 32 RESERVED 63
Article 33 Notices, Requests 63
Article 34 Applicable Law, Jurisdiction 64
Article 35 Miscellaneous 65
Exhibit Page
Exhibit I Specifications 71
Exhibit II Optional Equipment 72
Exhibit III Delivery Schedule 74
Exhibit IV Power of Attorney Form 75
Exhibit V Certificate of Acceptance Form 76
Exhibit VI Aircraft Receipt Form 77
Exhibit VII Warranty Xxxx of Sale Form 78
Exhibit VIII Product Warranties 80
- Annex A: Service Life Policy Items 89
Exhibit IX RESERVED 92
Exhibit X RESERVED 93
Exhibit XI Price Adjustment Formula 94
Exhibit XII RESERVED 97
Exhibit XIII RESERVED 98
Exhibit XIV ********** 99
Exhibit XV ********** 100
Exhibit XVI ********** 101
Exhibit XVII RESERVED 103
Exhibit XVIIIRESERVED 104
Exhibit XIX 105
Exhibit XX Certificate of Technical Acceptance Form 106
This Aircraft Purchase Agreement with reference No. PA296 is made as
of this 20th day of December 2000 by and between Xxxxxxxxx Dornier
GmbH, a corporation registered under the laws of the Federal
Republic of Germany, having its principal office at
Oberpfaffenhofen, X.X. Xxx 0000, X-00000 Xxxxxxxx, Xxxxxxx Xxxxxxxx
of Germany ("Seller") and Atlantic Coast Airlines, a California
corporation, having its principal office at 00000 Xxxxxxxx Xxxxx,
Xxxxxx, Xxxxxxxx 00000, XXX ("Purchaser").
A. PREAMBLE
WHEREAS, Seller is the manufacturer of the Dornier 328-300 aircraft;
and
WHEREAS, Purchaser desires to purchase, and Seller is willing to
sell, in accordance with the terms and conditions hereinafter set
forth, certain Dornier 328-300 aircraft; and
WHEREAS, Purchaser desires and Seller is willing to provide certain
product warranties, customer support and other inducements necessary
for the acquisition, maintenance and operation of such Dornier
aircraft;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, Seller and Purchaser (hereinafter
individually a "Party" and collectively the "Parties") agree as
follows:
B. SUMMARY OF DEFINITIONS
Unless the context otherwise requires, the following terms shall
have the following meanings. The definitions shall be equally
applicable to both singular and plural forms of the terms defined.
Acceptance Purchaser's acceptance of the
Aircraft in accordance with Article
5.5a.
Agreement This agreement, the Schedule,
including exhibits, annexes,
appendices and letter agreements,
if any, (each of which is
incorporated in the Agreement) as
may be amended pursuant to the
provisions of this Agreement.
Agreement PA295 The Aircraft Purchase Agreement
with reference No. PA295 dated even
herewith between Xxxxxxxxx Dornier
GmbH and Atlantic Coast Airlines.
Aircraft The Dornier 328-300 aircraft to be
delivered to Purchaser completed
with the Optional Equipment. See
Article 1.1.
Aircraft Delivery Price The price to be paid by Purchaser
for the Aircraft. See Article 3.3.
Business Days Any day, other than a Saturday or
Sunday, on which commercial banking
institutions in New York City are
not authorized or required to be
closed.
Date of Availability The date on which the Aircraft
shall be available for inspection
and acceptance by Purchaser. See
Article 5.2.
Effectiveness See Article 35.12.
FAA United States Federal Aviation
Administration or successor agency
of the U.S. Government.
FAR Federal Aviation Regulations,
issued by the FAA or its successor
agencies.
JAA European Joint Aviation
Authorities.
JAR European Joint Airworthiness
Requirements, issued by the JAA.
LBA Luftfahrtbundesamt of the Federal
Republic of Germany. The German federal
aviation authority.
MSCN Manufacturer Specification Change
Notice. See Article 7.2.
Optional Equipment Aircraft Equipment selected by
Purchaser as set forth in Exhibit
II. See Article 1.1.
Purchaser One or more individuals duly
Representative(s) authorized by Purchaser to inspect,
perform the acceptance flight, note
any non-compliance, execute the
Aircraft Receipt Form and
Certificate of Technical Acceptance
and take delivery of the Aircraft.
See Article 5.3.
SCN Specification Change Notice. See
Article 7.1.
Schedule The Schedule to Agreement PA295 and
PA296 dated even herewith between
Xxxxxxxxx Dornier GmbH and Atlantic
Coast Airlines.
Spare Parts Collectively, Proprietary Parts and
Standard Parts (both as defined in
the Schedule), and Vendor Parts (as
defined in Exhibit VIII.3.1).
Specification The specifications for the Aircraft
as set forth in Exhibit I. See
Article 1.1.
US$ or US Dollars The lawful currency of the United
States of America.
Vendor A supplier of parts listed in the
Vendor Information Manual. See
Exhibit VIII.3.1.
ARTICLE 1 SUBJECT MATTER
In accordance with the terms and conditions hereinafter set forth
and those set forth in the Schedule, Seller hereby agrees to sell
and Purchaser hereby agrees to purchase thirty-two (32) new Dornier
328-300 aircraft (hereinafter referred to as the "Aircraft")
designed and manufactured in compliance with the specification set
forth in Exhibit I hereto (the "Specification"), together with the
optional equipment selected by Purchaser and installed in the
Aircraft, as set forth in Exhibit II hereto (the "Optional
Equipment").
ARTICLE 2 RESERVED
ARTICLE 3 PRICE, TAXES
3.1 Aircraft Price
a. The base price of each Aircraft is********** (the
"Aircraft Base Price") which is the sum of:
(i) the price of each Aircraft, together with the
Standard SCNs, as set forth in Exhibit II, Clause
2.1, in the amount of **********; and
(ii) the price of the Optional Equipment, as set forth in
Exhibit II, Clause 2.2, installed in the Aircraft in
the amount of**********.
b.***********.
3.2 RESERVED
3.3 The Adjusted Aircraft Base Price is based on January 1999
economic conditions and is subject to adjustment from January
1999 to the month of Aircraft delivery in accordance with the
price adjustment provisions set forth in Exhibit XI, attached
hereto ("Price Adjustment Formula") and the terms of this
Agreement with respect to the application of the Price
Adjustment Formula. The Adjusted Aircraft Base Price so
adjusted shall be referred to as the "Aircraft Delivery Price."
3.4 Except as otherwise provided in this Article 3.4, the Aircraft
Delivery Price is exclusive of any taxes, duties, imposts,
value added or similar taxes or charges, (collectively "Taxes")
which shall be for the account of Purchaser. If under the
provision of any applicable law or regulation such Taxes are to
be paid by Seller, Purchaser shall reimburse Seller
accordingly. Seller hereby represents to Purchaser that
pursuant to current U.S. and German law, German and U.S. Taxes
are not applicable to aircraft sold and exported from Germany
into the United States. Should there be a change in such law,
Purchaser and Seller agree to modify this Agreement on mutually
acceptable terms (which may include mutual termination).
Purchaser shall, in any case, not be responsible for any Taxes
normally borne by sellers of aircraft, including but not
limited to Taxes on Seller's gross or net income.
ARTICLE 4 TERMS OF PAYMENT
4.1 Payment Terms
a. Purchaser has paid to Seller a cash deposit in the amount
of********** per Aircraft for a total deposit of ********** ("
Deposit").
b. RESERVED
c. The Aircraft Delivery Price shall be payable by Purchaser
to Seller as follows:
(i) application of the Deposit in equal installments
of********** per Aircraft;
(ii) on **************** ("Progress Payment"); and
(iii) upon delivery of each Aircraft, the balance of
the Aircraft Delivery Price.
d.********** (i) **********
**********
4.2 RESERVED
4.3 Seller shall submit an invoice to Purchaser for each payment
due pursuant to Article 4.1c above. The invoice for the
balance of the Aircraft Delivery Price (or the full purchase
price in the case of a financed Aircraft, as requested by
Purchaser) shall detail the price adjustment calculations
pursuant to Article 3.3 above.
4.4 Any other amount due to Seller pursuant to this Agreement shall
be invoiced separately and shall be paid no later than thirty
(30) days after the date of invoice except as may be otherwise
provided for herein.
ARTICLE 5 INSPECTION, ACCEPTANCE, DELIVERY
5.1 The Aircraft shall be available for inspection, reinspection,
acceptance and delivery at Seller's facilities in
Oberpfaffenhofen, Federal Republic of Germany (the "Delivery
Location") in accordance with the delivery schedule specified
in Exhibit III hereto ("Delivery Schedule") as it may be
adjusted by mutual agreement of the Parties or in accordance
with the provisions of this Agreement. *******
5.2 Seller shall provide preliminary written notification to
Purchaser, no later than sixty (60) days prior to the
projected date each Aircraft shall be available for inspection
and acceptance tests. Thereafter, Seller shall provide written
notification to Purchaser, no later than thirty (30) days prior
to the date each Aircraft shall be available for inspection and
acceptance tests ("Date of Availability") and Purchaser shall
inspect, and if the Aircraft conforms with this Agreement,
accept and take delivery (as hereinafter defined) of the
Aircraft not later than five (5) days after such Date of
Availability (the "Inspection Period"). During the Inspection
Period, Seller shall have appropriate personnel available to
assist Purchaser in the conduct of its inspection. In the
event the Aircraft is not in compliance with this Agreement,
the Inspection Period will be deemed to be extended, pursuant
to Article 5.4c below, by the number of days required to
complete Purchaser's ground inspection and flight inspection,
including any needed re-inspections, until Purchaser either
determines the Aircraft does or does not comply with the
provisions of this Agreement. If (i) the Date of Availability
is scheduled by Seller less than five (5) days before the end
of a month or (ii) the Acceptance is extended beyond the month
of the original Date of Availability due to the Aircraft not
being in compliance with this Agreement, then the Price
Adjustment Formula shall not apply to such Aircraft after the
month of the original Date of Availability.
5.3 During the Inspection Period and at the Delivery Location,
Purchaser shall, in coordination with Seller, inspect, perform
the acceptance flight and accept the Aircraft in accordance
with this Agreement. Purchaser shall authorize its
representative(s) (the "Purchaser's Representative"), as
evidenced by a written Power of Attorney in the form set forth
in Exhibit IV hereto, to inspect the Aircraft and perform the
acceptance flight in order to confirm the Aircraft are in
compliance with this Agreement and, if so, execute the Aircraft
Receipt Form and the Certificate of Technical Acceptance on
behalf of Purchaser. Seller shall make facilities available to
Purchaser's Representatives to perform inspections of the
Aircraft.
5.4 Inspection and Acceptance
a. During the Inspection Period, Purchaser's Representative
shall, in coordination with Seller, promptly inspect the
Aircraft and perform the acceptance flight of the
Aircraft. Purchaser's Representative shall be permitted to
participate in the acceptance flight of the Aircraft for a
period not to exceed three (3) hours, provided, however,
such acceptance flight shall at all times remain under the
complete control of Seller with Seller's pilot in command.
The acceptance flight shall be performed in accordance
with Purchaser's flight inspection procedures as agreed to
by Seller. Seller shall not be required to provide any
special instrumentation for the acceptance flight.
b. Provided the Aircraft complies with the terms of this
Agreement, then promptly upon completion of the inspection
and acceptance flight of the Aircraft, which confirms
compliance with this Agreement, Purchaser's Representative
shall deliver to Seller a signed certificate of technical
acceptance in the form set forth in Exhibit XX hereto (the
"Certificate of Technical Acceptance"). Such signed
Certificate of Technical Acceptance shall irrevocably
constitute conclusive evidence that such Aircraft
technically complies with the terms and conditions of this
Agreement and has been technically accepted without any
condition or reservation by Purchaser except as (i) such
condition or reservation is noted on the Certificate of
Technical Acceptance and (ii) to non-conformance with the
Specification that is not reasonably susceptible to
identification during Purchaser's inspection as set forth
in Exhibit VIII, Clause 1.3.a. Upon execution of the
Certificate of Technical Acceptance, Seller shall lock and
otherwise secure the Aircraft until Acceptance.
c. In the event Purchaser's Representative determines, after
an inspection (as described herein) that the Aircraft is
not in compliance with this Agreement, Purchaser's
Representative shall provide Seller, in writing, specific
details of any alleged non-compliance. Upon Seller's
confirmation of any non-compliance with the terms of this
Agreement and prior to the execution of the Certificate of
Technical Acceptance, Seller shall, at Seller's sole
expense, remedy any non-compliance, or agree in writing to
remedy or cause to remedy the non-compliance as soon as
reasonably practicable after Aircraft delivery. Purchaser
shall have the right to reinspect the Aircraft to confirm
Seller has remedied the non-compliance and that the
Aircraft conforms to the terms of this Agreement. Such
confirmation may include another acceptance flight of the
Aircraft. Upon Seller's remedy of any non-compliance or
the Parties agreement on performing such remedy after
Aircraft delivery, Purchaser's Representative shall
execute and deliver to Seller the Certificate of Technical
Acceptance.
d. In the event, without just and reasonable cause (reasons
of Force Majeure constitute just and reasonable cause),
Purchaser's Representative is not present at the Delivery
Location within five (5) days of the Date of Availability
for the inspection and acceptance flight, or fails,
without lawful cause, to execute a Certificate of
Technical Acceptance and Aircraft Receipt Form, or
Purchaser fails to take delivery as required by Article
5.5a ("Default of Acceptance"), Seller shall, in addition
to any other rights of Seller under this Agreement and/or
at law or equity, be entitled to compensation from
Purchaser for all costs and expenses incurred or to be
borne by Seller as a result of such delay including, but
not limited to, the reasonable cost of storage,
maintenance, insurance, and tax. Additionally, such
Default of Acceptance shall be deemed to be a failure of
Purchaser to effect any payment when due, pursuant to
Article 13 herein.
5.5 Delivery
a. The Aircraft shall be delivered upon full payment to
Seller of the amounts due for such Aircraft pursuant to
Article 4.1 herein or as otherwise provided in Article 20.
Upon delivery of the Aircraft, Purchaser shall (i) execute
and deliver a certificate of final acceptance in the form
set forth in Exhibit V hereto (the "Certificate of Final
Acceptance") to Seller ("Acceptance"), and (ii) confirm
receipt of the Aircraft in the form set forth in Exhibit
VI hereto, and Seller shall deliver to Purchaser an
executed Xxxx of Sale, conveying good and marketable title
free and clear of any encumbrances, in the form set forth
in Exhibit VII hereto and an FAA Xxxx of Sale. No
delivery shall be scheduled on a day before a non-Business
Day. Risk of loss or damage to each Aircraft shall pass
from Seller to Purchaser upon Acceptance.
b. Purchaser shall not, by virtue of anything contained in
this Agreement, including, without limitation, any
payments made by Purchaser hereunder or any designation or
identification by Seller of any particular aircraft as
Aircraft, acquire title to, special property or any other
right in any Aircraft, prior to receipt by Purchaser of
the Xxxx of Sale for such Aircraft or except as otherwise
may be provided for in Article 20.
5.6 Ferry Flight
a. Purchaser shall be responsible for obtaining any licenses,
permits or authorizations required for the importation of
each of the Aircraft into the country of destination.
Seller will, on behalf of and for the expense of Purchaser
(such expenses shall not include any expenses of Seller),
apply for any licenses, permits or authorizations required
for the exportation of each Aircraft after delivery from
the Federal Republic of Germany to the United States and
for all licenses or permits required to ferry the Aircraft
to the United States. Each Party agrees, upon the request
of the other, to assist the requesting Party in obtaining
any of the licenses, permits or authorizations the
requesting Party is obligated to obtain hereunder.
b. All of Purchaser`s Representative's personal and
incidental expenses related to Aircraft inspection,
acceptance and delivery and the cost of catering for its
fly-away shall be borne by Purchaser.
c. After delivery, the Aircraft shall be ferried to Dulles
International Airport, Dulles, Virginia ("Dulles") with a crew
consisting of Seller's co-pilot and Purchaser's pilot. Seller's co-
pilot shall be available for duty after Acceptance so as to permit
Purchaser to immediately export the Aircraft from Germany.*****
Seller will also furnish the Aircraft ferry kit for each ferry
flight. Purchaser, at its cost, will ship the ferry kits from
Dulles back to Seller at the Delivery Location. Aircraft
discrepancies occurring during the ferry flight will be
corrected by Seller on site in accordance with its warranty
policy. Any Taxes imposed on Purchaser due to the failure of
Seller's co-pilot to be available for ferry service so that the
Aircraft is subject to taxation in Germany because it could not
be exported from Germany shall be borne by Seller
notwithstanding the provision of Article 3.4 hereof.
ARTICLE 6 CERTIFICATION
6.1 At time of delivery, each Aircraft will comply with Part 25 of
the Federal Aviation Regulations ("FAR") of the United States
Federal Aviation Administration ("FAA"), as set forth in the
Specification. If the Aircraft is delivered with a temporary
exemption from FAR Parts 25 and 121, which exemption expires
while the Aircraft are being operated by Purchaser, Seller
shall at its expense implement permanent corrective action.
If, after delivery of the Aircraft, the FAA decides that
certification of the Aircraft under Part 25 was in error,
Seller shall, at its cost, bring the Aircraft into compliance
with Part 25.
6.2 The Aircraft will be delivered in an airworthy condition with a
valid and effective Certificate of Airworthiness for Export
issued by the LBA and a valid and effective FAA Standard
Certificate of Airworthiness.
6.3 If prior to delivery of the Aircraft the issuance of any of the
certificates under this Article 6 is discontinued, Seller shall
be deemed to have provided such discontinued certificate by
submitting to Purchaser the corresponding substitute
certificate or, if not existing, by demonstrating that the
Aircraft complies with the Specification and that such
certificate(s) is no longer required to export or operate the
Aircraft.
6.4 When delivered, the Aircraft, as configured in accordance with
Exhibit II, shall comply with the airworthiness requirements
set forth in this Article 6 and with FAR Part 121. Any
additional equipment ("Additional Equipment") required to be
installed in or on the Aircraft to comply with airworthiness or
operational requirements for Purchaser's specific operations
and/or to comply with changes to FAR Part 121, additional
airworthiness, operational, registration or certification
requirements becoming effective after execution of this
Agreement which is applicable to all aircraft in general or to
all aircraft of the same category as the Aircraft (a
"Regulatory Change") will be for the account of Purchaser and
subject to an amendment to this Agreement, including an
appropriate adjustment in the Aircraft Delivery Price and
Delivery Schedule. Any Additional Equipment installed to
correct a defect specific to the Aircraft, to the components
thereof or the fleet of Aircraft, will be for the account of
Seller and such Aircraft will not be subject to the Price
Adjustment Formula for the period of time necessary to correct
the defect. Purchaser shall be obligated to accept the
Aircraft if the Aircraft Delivery Price increase (related to
installation of such Additional Equipment as a result of a
Regulatory Change) does not exceed US$********** per Aircraft.
Any delay in the delivery of the Aircraft as a result of a
Regulatory Change shall be deemed an Excusable Delay, as
defined in Article 11.1a.
ARTICLE 7 TECHNICAL CHANGES
7.1 Except as provided in Articles 7.2 herein and 6.4 above, the
Specification and Optional Equipment may be changed or amended
from time to time by written agreement between the Parties in
the form of a specification change notice issued by Seller and
approved by Purchaser (the "Specification Change Notice" or
"SCN"). The SCN shall set forth in detail the particular
changes to be made, and the effect, if any, of such changes on
design, performance, weight and balance, date of delivery,
price of the Aircraft, on the affected paragraphs of the
Specification and on the Optional Equipment. Any such changes
as evidenced by an SCN shall constitute an amendment to this
Agreement, including an appropriate adjustment in the Aircraft
Delivery Price and Delivery Schedule.
7.2 Notwithstanding anything to the contrary contained in Article
7.1 herein, Seller shall have the right, at its expense,
without the prior consent of Purchaser, to make modifications,
alterations or changes to the Specification, or the Optional
Equipment or to substitute substantially equivalent equipment,
accessories or materials in the Aircraft where such changes or
substitutions are deemed necessary by Seller in order to
prevent delays in manufacture or delivery, or to improve the
performance, manufacture, reliability, stability, control,
utility, maintenance or appearance of the Aircraft
("Manufacturer Specification Change Notice" or "MSCN"),
provided such substitutions, modifications, alterations, or
changes shall not affect the Aircraft Delivery Price, the
Delivery Schedule, the Aircraft warranties, maintenance cost
and operational guarantees, Purchaser's spare parts inventory
requirements or the interchangeabilty, maintainability
(including, but not limited to, maintenance cost or
replaceability of spare parts) or the performance
characteristics of the Aircraft or of the changed components.
Seller shall inform Purchaser of any significant changes to the
Specification or the Optional Equipment and shall supply to
Purchaser appropriate revisions to the Specification or this
Agreement, as this case may be.
ARTICLE 8 AIRCRAFT CONFIGURATION
8.1 The Aircraft will be delivered to Purchaser in accordance with
the Specification and with the Optional Equipment installed as
set forth in Exhibit I and II.
8.2 Purchaser shall provide Seller with its interior/exterior
selections for the Aircraft by no later than March1, 2001. Any
changes shall be subject to an amendment to this Agreement,
including an adjustment in the Aircraft Delivery Price and
Delivery Schedule, if appropriate.
8.3 The Aircraft will be delivered in the current production
specification incorporating Purchaser's Optional Equipment as
set forth in Exhibit II, and those highly recommended Service
Bulletins as may be incorporated during the Aircraft assembly
process without delaying series production or Aircraft
delivery. Should the incorporation of such Service Bulletins
threaten to delay production or delivery, then the relevant
Service Bulletin modification kits shall be provided to
Purchaser under the terms of Exhibit VIII, Clauses1.4.e. and f.
ARTICLE 9 PRODUCT WARRANTIES
Concurrently with the delivery of each Aircraft, Seller shall
provide or cause to be provided to Purchaser the product warranties
and service life policy as set forth in Exhibit VIII hereto (the
"Product Warranties").
ARTICLE 10 RESERVED
ARTICLE 11 EXCUSABLE DELAY
11.1 Force Majeure
a. (i) Seller shall have no responsibility or liability
with respect to any failure or delay in the
performance of any term or condition of this
Agreement, if such failure or delay in performance is
due in whole or in part to any cause which is
unforeseeable, unavoidable or beyond Seller's
reasonable control including, but not limited to:
acts of God; flood; fire; explosions; epidemics;
quarantine restrictions; labor disputes; industrial
unrest; acts of war; public enemy; insurrection; riot
or civil disorder; any order, decree, law or
regulation of any court, government or governmental
agency; failure or delay in obtaining any
governmental approvals (due to another Excusable
Delay); allocation regulations affecting materials,
labor, equipment, facilities or aircraft; or delay or
failure on the part of suppliers or subcontractors
due to any of the above events.
(ii)**********
(iii) A failure or delay in the performance by
********** of any term or condition of this Agreement
attributable to any of the foregoing events in (i)
and (ii) above ("Force Majeure") shall constitute an
excusable delay ("Excusable Delay").
b. Any date or period of time stipulated herein for the
performance of any obligation which is affected by an
event of Force Majeure shall be prolonged to the extent of
the duration of such Force Majeure, provided a right of
termination as specified hereinafter is not exercised.
Seller and Purchaser agree to collaborate and to use their
reasonable efforts to mitigate the impact of such event of
Force Majeure.
c. If an event of Force Majeure occurs, which may result in a
delay of the delivery of the Aircraft, written notice
thereof shall be provided. Such notice shall reasonably
identify the event and specify either:
(i) the period of delay which may reasonably be expected
to result therefrom, or
(ii) that such period of probable delay is so uncertain
that it cannot be reasonably estimated.
As soon as possible after the occurrence of an event of
Force Majeure, Seller shall provide Purchaser with a
revised Aircraft delivery schedule (the "Revised Delivery
Schedule") which shall replace the Delivery Schedule set
forth in Exhibit III hereto. Seller shall not
discriminate against Purchaser in the event that such
event of Force Majeure requires Seller to reschedule
deliveries to more than one customer.
d. If, as a result of one or more events of Force Majeure due
to reasons set forth in Article 11.1.a.(i):
(i) the Revised Delivery Schedule provides that the
delivery of an Aircraft shall take place more than
******* after the last day of the calendar month in
which delivery of such Aircraft is otherwise required
hereunder, Purchaser may terminate this Agreement in
respect to such delayed Aircraft, by giving written
notification of such termination within thirty (30)
days after receipt by Purchaser of such Revised
Delivery Schedule; or
(ii) the actual delivery of the Aircraft has not taken
place after ******* after the last day of the
calendar month in which delivery of such Aircraft is
otherwise required hereunder, Purchaser may terminate
this Agreement in respect to such delayed Aircraft,
by giving written notification of such termination
within thirty (30) days after expiration of such
*******.
(iii) ******* However, if, as the result of such
Force Majeure, Seller discontinues manufacture of the
specific aircraft model sold under this Agreement,
and continued deliveries to Purchaser would require
reactivation of the production line for such specific
aircraft model or otherwise cause undue hardship to
Seller, Seller will have no obligation to deliver
future Aircraft.
e. If, as a result of one or more events of Force Majeure due
to reasons set forth in Article 11.1.a.(ii), each of six
(6) or more Consecutive Aircraft is not delivered within
ten (10) months after the last day of the calendar month
in which such Aircraft was scheduled to be delivered, this
Agreement and Agreement PA295 may be terminated by Seller
giving thirty (30) days prior written notice after
expiration of such ten (10) months.
For the purposes of this Article 11, "Consecutive Aircraft"
means the Aircraft to be delivered pursuant to this Agreement
and Agreement PA295. In the event of such termination, the
rights of the Parties shall be determined in accordance with
Article 11.4 herein. In the event a Party fails to exercise
its right of termination pursuant to Article 11.1.d. or Article
11.1.e, such Party shall have no further right pursuant to this
Article 11 to terminate this Agreement or Agreement PA295 with
respect to such delayed Aircraft.
11.2 Lost or Destroyed Aircraft
a. In the event that prior to delivery of an Aircraft, the
aircraft allocated by Seller to Purchaser is lost,
destroyed or in Seller's opinion damaged beyond repair
(the "Lost Aircraft"), Seller shall promptly notify
Purchaser in writing of such event. As soon as possible
after such event, Seller shall notify Purchaser of the
date on which delivery of a replacement aircraft (the
"Replacement Aircraft") manufactured in the same
configuration as the Lost Aircraft, can be expected,
consistent with Seller's other contractual commitments and
production schedule. Seller shall not discriminate
against Purchaser in the event that Aircraft of more than
one customer are lost or destroyed in the same incident.
b. Purchaser shall notify Seller, not later than thirty (30)
days after receipt of Seller's notice, of Purchaser's
acceptance or rejection of Seller's proposed Replacement
Aircraft delivery date. Non-receipt by Seller of
Purchaser's notification within such period is deemed to
be considered as Purchaser's acceptance of Seller's
proposed Replacement Aircraft delivery date.
c. In the event Purchaser rejects Seller's proposed
Replacement Aircraft delivery date and an alternative
Replacement Aircraft delivery date is not mutually agreed
by the Parties, either Party is entitled to terminate this
Agreement as to the Lost Aircraft by providing written
notification to the other Party within thirty (30) days of
the date of Seller's receipt of Purchaser's rejection of
the proposed Replacement Aircraft delivery date. In the
event of such termination, the rights of the Parties shall
be determined in accordance with Article 11.4 herein.
d. If a Replacement Aircraft delivery date is agreed between
the Parties, an amendment to this Agreement shall be
executed establishing the delivery date for such
Replacement Aircraft. The time required to replace the
Lost Aircraft shall be deemed an Excusable Delay. The
remaining terms and conditions of this Agreement
applicable to the Lost Aircraft shall apply to the
Replacement Aircraft.
e. Notwithstanding the foregoing, nothing herein shall oblige
Seller to deliver a Replacement Aircraft if the
manufacture of the specific aircraft model sold under this
Agreement has been discontinued and delivery of a
Replacement Aircraft would require reactivation of the
production line for such aircraft model or otherwise cause
an undue hardship to Seller.
11.3 Price Adjustment
In the event of a delay in the delivery of an Aircraft
attributable to the provisions of this Article 11, the Adjusted
Aircraft Base Price shall be adjusted pursuant to Article 3.3
to the actual date of Acceptance***************.
11.4 Termination
Nothing herein will limit either Party's ongoing rights and
obligations under this Agreement with respect to any Aircraft
delivered prior to termination. Termination pursuant to Article
11.1.d. or 11.2.c. herein shall terminate and discharge all
obligations and liabilities of the Parties whatsoever only with
respect to the terminated Aircraft and all undelivered items
and services to be supplied hereunder, which are specifically
related thereto. Notwithstanding the foregoing, Seller shall
return to Purchaser any Deposits and Progress Payments paid to
Seller by Purchaser in respect of such terminated Aircraft,
without interest.
ARTICLE 12 NON-EXCUSABLE DELAY
12.1 In the event that Seller, through no fault of Purchaser, does
not deliver an Aircraft within ***** after the last day of the
calendar month in which delivery of that Aircraft is scheduled,
such delay not being an Excusable Delay, then:
a. If Seller advises Purchaser more than ********** before
the first day of a month in which an Aircraft is scheduled
to be delivered that such delivery will be delayed more
than **********after the last day of such month, Seller
shall pay US$1,000 as liquidated damages for each day of
delay in the delivery of such delayed Aircraft,
*************************************.
b. If Seller advises Purchaser less than ********** before
the first day of a month in which an Aircraft is scheduled
to be delivered that such delivery will be delayed more
than ********** after the last day of such month, Seller
shall pay as liquidated damages, for each Aircraft delayed
more than **********, US$*************** in
the delivery of such delayed
Aircraft,**********************************.
12.2 In the event that delivery of an Aircraft is delayed by more
than *******************after the last day of the calendar month in
which delivery of that Aircraft is scheduled, and such delay is not
an Excusable Delay, Purchaser may, by written notice to Seller given
no later than **********after expiration of such ***************,
terminate this Agreement only in respect to that Aircraft which is
the subject of such delay. Seller, at Purchaser's option, shall
return or credit to Purchaser, within ********* after such notice,
all sums previously paid by Purchaser to Seller in respect of that
Aircraft ******************.
12.3 It is expressly acknowledged that any amount to be paid by
Seller and Purchaser's rights and remedies as a result of a
delay in delivery of any Aircraft (but not as a result of
Seller's failure to deliver any Aircraft) as set forth in this
Article 12 is agreed and accepted as liquidated damages and not
as a penalty (no other method of quantifying such damages being
possible) and are agreed as final and exclusive and in lieu of
any other rights and remedies.
12.4**********
12.5 In the event of a delay in the delivery of an Aircraft, through
no fault of Purchaser, attributable to the provisions of this
Article 12, which causes such Aircraft delivery to be delayed
past the calendar month in which delivery of that Aircraft is
scheduled*******
ARTICLE 13 EVENT OF DEFAULT, REMEDIES
13.1 Each of the following events shall be deemed to be an "Event of
Default":
a. Either Party fails to make any payment or payments
totaling ********** or more under this Agreement and
Agreement PA295 within ******Business Days after the due
date;
b. Either Party fails to make any other payment under this
Agreement when due, and such failure continues for
**********Business Days after the defaulting Party
receives written notice thereof;
c. Either Party fails to perform or observe any other
material obligation for at least**********) days after
receipt of written notice, unless such failure cannot be
remedied with diligent effort during such ********** day
period and the non-defaulting Party (i) determines in good
faith that such failure may be remedied with additional
efforts within an additional period of ********** days,
and (ii) is diligently proceeding by appropriate
proceedings to correct such failure, in which case such
failure continues for a period in excess of such longer
period (not exceeding *********** days from the date of
notice) as may be necessary to remedy such failure with
diligent effort of the defaulting Party;
d. Any material representation or warranty of either Party is
incorrect in a material respect when made, remains
material when discovered ("Misrepresentation"), and, if
the effect of such Misrepresentation is curable, is not
cured within *********** days after the defaulting Party's
receipt of written notice thereof from the other Party. If
the effect of such Misrepresentation is not curable, an
Event of Default shall exist immediately upon receipt of
such written notice;
e. At any time prior to delivery of an Aircraft, either Party
(i) becomes bankrupt or insolvent, or admits in writing
that it is unable, or is in fact unable, to pay its
debts as they mature; or
(ii) applies for or consents to or suffers the appointment
of a receiver for any of its business or assets; or
(iii) has a trustee, liquidator or similar officer
appointed for it after a petition has been filed for
its winding up or reorganization under a bankruptcy
law and is not withdrawn or dismissed within ninety
(90) days thereafter; or
(iv) makes an assignment for the benefit of its creditors;
or
(v) commences any bankruptcy, reorganization,
arrangements, insolvency or liquidation or winding up
proceedings, or other proceedings for relief under
any bankruptcy law or similar law for relief of
debtors or any such proceeding is instituted against
it;
f. The guaranty of the guarantor ********* ceases to be
in full force and effect, or said guarantor repudiates the
validity of the guaranty, in each case, at any time prior
to the termination of such guaranty in accordance with its
terms; or
g. There exists an Event of Default with respect to either
Party under Agreement PA295.
13.2 Upon the occurrence of any one or more of the Events of Default
as defined in Article 13.1a, e, f, and Article 13.1a, e, and f
of Agreement PA295, and at any time thereafter as long as the
same may be continuing, the non-defaulting Party may exercise
the following remedies:
a. suspend performance of its obligations until such Event of
Default has been cured with respect to any undelivered
Aircraft or services with respect to such undelivered
Aircraft; and/or
b. in the event of an Event of Default under Article 13.1.a, the
defaulting Party shall pay, for each day of payment delay, interest,
computed daily on the sum due, at a rate equal to *************
but not to exceed the maximum rate allowed by applicable
law ("Past Due Rate"); and/or
c. terminate this Agreement with respect to any undelivered
Aircraft or services with respect to such undelivered
Aircraft that are subject to this Agreement; and/or
d. exercise any rights and remedies to which the non-
defaulting Party may be entitled including the return of
any Deposits, Progress Payments or other payments made
pursuant to the provisions of this Agreement and as may be
available at law or in equity.
13.3 Upon the occurrence of any one or more of the Events of Default
as defined in Article 13.1b, c, d, and Articles 13.1b, c and d
of Agreement PA295, and at any time thereafter as long as the
same may be continuing, the non-defaulting Party may exercise
the following remedies:
a. subject to the outcome of Arbitration and Consultation as
provided for in Article 34.2, suspend performance of its
obligations until such Event of Default has been cured;
and/or
b. in the event of an Event of Default under Article 13.1.b,
the defaulting Party shall pay, for each day of payment
delay, interest, computed daily on the sum due, at a rate
equal to the Past Due Rate; and/or
c. subject to the outcome of Arbitration and Consultation as
provided for in Article 34.2, terminate this Agreement
with respect to any undelivered Aircraft or services with
respect to such undelivered Aircraft as are subject to
this Agreement; and/or
d. subject to the outcome of Arbitration and Consultation as
provided for in Article 34.2, exercise any rights and
remedies to which the non-defaulting Party may be entitled
with respect to such undelivered Aircraft pursuant to the
provisions of this Agreement and as may be available at
law or in equity.
13.4 The exercise or failure to exercise any remedy hereunder shall
not constitute a waiver of nor prevent the exercise of any other
remedy in this Agreement or any related agreement and no waiver of
any breach or failure to declare any default shall prevent the non-
defaulting Party from declaring this Agreement and/or Agreement
PA295 to be in default and to exercise any remedy provided
hereunder.
ARTICLE 14 LIMITED LIABILITY, INDEMNIFICATION
14.1 THE PARTIES TO THIS AGREEMENT EXPRESSLY RECOGNIZE THE
COMMERCIAL NEED TO DEFINE, APPORTION AND LIMIT CONTRACTUALLY
THE RISKS ASSOCIATED WITH THE PURCHASE, SALE AND USE OF THE
AIRCRAFT AND THE PRODUCTS, INFORMATION, INSTRUCTIONS, TRAINING
SERVICES AND OTHER THINGS PROVIDED UNDER THIS AGREEMENT AND ANY
RELATED AGREEMENTS REFERENCED HEREIN. TO ACHIEVE THIS END,
SELLER AND PURCHASER UNDERSTAND AND AGREE THAT ALL OF THEIR
RESPECTIVE REMEDIES FOR ANY ALLEGED LIABILITY ARISING UNDER OR
IN ANY WAY RELATED TO THIS AGREEMENT AND ANY REMEDIES SET FORTH
IN ANY RELATED AGREEMENTS INCORPORATING SELLER'S OBLIGATIONS TO
PURCHASER ARISING OUT OF ARTICLES 20 AND 29 OF THIS AGREEMENT
("RELATED AGREEMENTS") SHALL BE LIMITED TO THE REMEDIES
EXPRESSLY AGREED UPON AND STATED IN THIS AGREEMENT AND ANY
"RELATED AGREEMENTS". SELLER AND PURCHASER EXPRESSLY AGREE
THAT THEY SHALL HAVE NO OTHER REMEDIES OTHER THAN THOSE
EXPRESSLY STATED IN THIS AGREEMENT AND ANY "RELATED AGREEMENTS"
AND THAT THE TERMS OF THIS ARTICLE 14 ARE AN ESSENTIAL BASIS OF
THIS BARGAIN.
14.2 THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF SELLER, AND THE
REMEDIES AGAINST SELLER WHICH ARE EXPRESSLY SET FORTH IN THIS
AGREEMENT AND ANY "RELATED AGREEMENTS" ARE EXCLUSIVE AND IN
LIEU OF ANY OTHER WARRANTIES, OBLIGATIONS, LIABILITIES AND
REMEDIES OF ANY NATURE WHATSOEVER, EXCEPT WITH RESPECT TO
WARRANTY OF TITLE. PURCHASER HEREBY EXPRESSLY ACKNOWLEDGES
SELLER'S DISCLAIMER OF ALL OTHER WARRANTIES, GUARANTEES,
OBLIGATIONS, AND LIABILITIES OF SELLER AND EXPRESSLY WAIVES ALL
OTHER RIGHTS OR REMEDIES AGAINST SELLER, EXPRESS OR IMPLIED,
ARISING BY LAW, IN CONTRACT, IN TORT OR OTHERWISE, WITH RESPECT
TO ANY BREACH OF THIS AGREEMENT, INCLUDING DELAY OR DEFAULT,
AND WITH RESPECT TO ANY DEFECT, NONCONFORMANCE OR DEFICIENCY IN
ANY PRODUCTS DELIVERED UNDER THIS AGREEMENT AND ANY "RELATED
AGREEMENTS" OR IN ANY OF THE MANUALS, TECHNICAL PUBLICATIONS,
INFORMATION, INSTRUCTIONS OR OTHER GOODS OR SERVICES PROVIDED
PURSUANT TO THIS AGREEMENT.
WITHOUT LIMITATION, SELLER HEREBY DISCLAIMS:
(I) ALL IMPLIED WARRANTIES OF MERCHANTABILITY;
(II) ALL IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR
PURPOSE; AND
(III) ALL IMPLIED WARRANTIES ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OR TRADE
PRACTICES.
AS USED HEREIN, THE TERM "SELLER" INCLUDES SELLER, ITS PARENT,
SUBSIDIARIES, AFFILIATES OR RELATED COMPANIES, ASSIGNEES AND
SUCCESSORS, VENDORS AND SUBCONTRACTORS AS WELL AS ALL OF THEIR
OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES AND AGENTS AS
USED HEREIN, THE TERM "PURCHASER" INCLUDES PURCHASER, ITS
PARENT, SUBSIDIARIES, AFFLILIATES AND RELATED COMPANIES,
ASSIGNEES AND SUCCESSORS AS WELL AS PURCHASER'S OFFICERS,
DIRECTORS, EMPLOYEES, REPRESENTATIVES AND AGENTS.
14.3 NEITHER SELLER NOR PURCHASER SHALL, UNDER ANY CIRCUMSTANCES OR
UNDER ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), HAVE ANY
LIABILITY TO THE OTHER PARTY FOR CONSEQUENTIAL, SPECIAL,
INCIDENTAL AND/OR PUNITIVE DAMAGES INCLUDING, BUT NOT LIMITED
TO, LOSS OF REVENUES RESULTING FROM ANY BREACH OF THIS
AGREEMENT OR FAILURE OF EITHER PARTY TO PERFORM ANY OBLIGATION
HEREUNDER. SELLER AND PURCHASER EXPRESSLY WAIVE ANY AND ALL
RIGHTS WHICH IT MAY HAVE OTHERWISE HAD TO SEEK AND/OR TO
RECOVER SUCH DAMAGES, EXCEPT IF OCCASIONED BY WILLFUL
MISCONDUCT OF THE OTHER PARTY. NOTHING CONTAINED HEREIN SHALL
PRECLUDE PURCHASER FROM EXERCISING ANY REMEDIES IT HAS OR MAY
HAVE UNDER ANY "RELATED AGREEMENTS".
14.4 NOTHING CONTAINED IN THIS ARTICLE 14 SHALL CONSTITUE A WAIVER
OR RELEASE OR RENUNCIATION OF, OR INDEMNITY FOR, ANY LOSSES,
DAMAGES OR CLAIMS BY PURCHASER AGAINST SELLER FOR CONTRIBUTION
TOWARD THIRD PARTY BODILY INJURY OR PROPERTY DAMAGE CLAIMS
BASED ON PRODUCT LIABILITY THEORIES (TO THE EXTENT OF SELLER'S
RELATIVE PERCENTAGE OF THE TOTAL FAULT OR OTHER LEGAL
RESPONSIBLITY OF PERSONS CAUSING SUCH BODILY INJURY OR
PROPERTY DAMAGE).
14.5 EXCEPT AS OTHERWISE PROVIDED FOR IN THIS AGREEMENT, PURCHASER
SHALL BE RESPONSIBLE FOR AND SHALL INDEMNIFY AND HOLD HARMLESS
SELLER, AS DEFINED IN ARTICLE 14.3 ABOVE, FROM AND AGAINST ALL
CLAIMS, DEMANDS OR CAUSES OF ACTION, LIABILITIES, LOSSES,
JUDGEMENTS, SUITS (INCLUDING, BUT NOT LIMITED TO, COSTS,
EXPENSES AND LEGAL FEES INCIDENT THERETO), AND DAMAGES OF ANY
NATURE - TANGIBLE OR INTANGIBLE, WHETHER IN CONTRACT, TORT,
STATUTE OR OTHERWISE, WHICH IN ANY WAY ARE CONNECTED TO OR
ARISING FROM THIS AGREEMENT OR THE USE, OPERATION, OWNERSHIP OR
CONTROL OF THE AIRCRAFT, AND WHICH RESULT IN ANY DEGREE FROM
ACTS OR OMISSIONS OR THE LEGAL RESPONSIBILITY OF PURCHASER.
FURTHERMORE, PURCHASER SHALL INDEMNIFY AND HOLD HARMLESS SELLER
FROM AND AGAINST SUCH OCCURRENCES, MENTIONED IN THE PRECEDING
SENTENCE, CAUSED BY PURCHASER OR SELLER, (WHETHER OR NOT
ARISING FROM THEIR NEGLIGENCE), ARISING OUT OF, RELATING TO OR
RESULTING FROM THE OPERATION OF THE AIRCRAFT SUBSEQUENT TO THE
ACCEPTANCE OF SUCH AIRCRAFT OR THE ACTS OR OMISSIONS OF SELLER
WHEN PERFORMING SERVICES AT PURCHASER'S FACILITY OR UNDER
PURCHASER'S AUSPICES. NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED IN THIS ARTICLE 14.5, SELLER SHALL NOT BE ENTITLED TO
INDEMNIFICATION FOR BODILY INJURY, DEATH OR LOSS OR DAMAGE TO
PROPERTY CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF SELLER.
14.6 IN THE EVENT THAT ANY PART OF THIS ARTICLE 14 IS HELD TO BE
INEFFECTIVE FOR ANY REASON, THE REMAINDER OF SUCH PROVISION
SHALL REMAIN IN FULL FORCE AND EFFECT. IN THE EVENT ANY TERM
OF THIS ARTICLE 14 CONFLICTS WITH THE TERMS OF ANY OTHER
ARTICLE OF THIS AGREEMENT, THE TERMS OF THIS ARTICLE 14 SHALL
PREVAIL.
ARTICLE 15 PATENT INFRINGEMENT
15.1 Seller shall indemnify and hold harmless Purchaser from and
against all claims, suits, demands, proceedings, damages and
costs or expenses (excluding any incidental or consequential
damages and excluding any liabilities, costs, loss of revenues
or profit resulting from loss of use, but including costs of
replacing the infringing item or of otherwise curing any
infringement preventing Purchaser from using the Aircraft),
resulting from any actual or alleged infringement of any
Canadian, U.S., and German patents which have been issued as of
the date of delivery of the Aircraft, by the Aircraft, or by
any accessory, equipment or part installed therein. Such
indemnity shall also extend to patents issued by other
countries 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 in which the Aircraft is permanently
registered has ratified and adhered to and is at the time
of the actual or alleged infringement, a contracting party
to the Chicago Convention on a International Civil
Aviation of December 7, 1994 and is fully entitled to all
benefits of Article 27 thereof, and
b. such other country and the country of registration shall
each have been a party to the International Convention for
the Protection of Industrial Property (Paris Convention)
or have enacted patent laws which recognize and give
adequate protection to inventions made by the nationals of
other countries which have ratified, adhered to and are
contracting parties to either of the foregoing
conventions.
15.2 Seller's obligation under Article 15.1 herein
a. shall not apply to Purchaser furnished equipment nor to
any accessory, equipment or part that was not manufactured
by Seller or pursuant to Seller's detailed design nor to
any accessory, equipment or part manufactured to Seller's
detailed design without Seller's written authorization.
b. is conditional upon Purchaser giving Seller written notice
within ten (10) days after Purchaser receives notice of a
suit or action against Purchaser alleging infringement or
within twenty-five (25) days after Purchaser's receipt of
written claim of infringement, whichever occurs first.
c. is conditional upon Purchaser promptly furnishing to
Seller all data, records and assistance, within
Purchaser's control, material to such claim, suit, demand
or proceedings, and, except as to amounts payable under a
judgement, upon Purchaser not making payment and assuming
any liabilities or paying any, damages, royalties or costs
without the prior approval of Seller.
15.3 Seller shall be entitled, in its own name or on behalf of
Purchaser, to conduct negotiations and/or settlements with the
party or parties alleging infringement and may assume and
conduct the defense of any suit or claim. In each case, Seller
will consult with Purchaser and be cognizant of its operational
needs in any settlement or conduct of its defense.
15.4 In the event Purchaser is legally prevented from using any
accessory, equipment or part of an Aircraft because of any such
infringement pursuant to Article 15.1 herein, Seller shall, at
its option and expense, procure for Purchaser the right to
unrestrictively use such accessory, equipment or part, or
replace and install such accessory, equipment or part as soon
as possible with a non-infringing substitute which shall be
deemed to be in compliance with this Agreement or to modify it
so it becomes not infringing but equivalent.
15.5 The foregoing states the entire liability of Seller concerning
patent infringement in the course of, or resulting from, sales of
Aircraft under this Agreement.
ARTICLE 16 ASSIGNMENT, RESALE, LEASE, MERGER OR TRANSFER OF ASSETS
16.1 Neither the rights nor the obligations of either Party under
this Agreement may be assigned, transferred or otherwise disposed
of, in whole or part, by either Party without the prior written
consent of the other Party, such consent not to be unreasonably
withheld or delayed.
16.2 a. Notwithstanding Article 16.1 hereinabove, Seller may
assign any of its rights to receive payments hereunder to
any third party and/or any part of its rights and
obligations herein including, but not limited to, its title
to or any interest in any Aircraft or service to be
delivered hereunder, its right to receive payments and to
be indemnified, to any subsidiary or affiliate of Seller.
b. Notwithstanding Article 16.1 hereinabove, Purchaser or
its asignee may assign or reassign any of its rights and
obligations herein, including rights and obligations in the
Schedule, to its parent company, or any wholly owned
subsidiary, or a wholly owned subsidiary of its parent
company.
16.3 Prior to delivery of the Aircraft and receipt of total payment
by Seller pursuant to Article 4.1 or as otherwise provided in
Article 20, Purchaser shall not resell, lease, transfer, pledge
or otherwise dispose of the Aircraft, or contract to do so,
without Seller's prior written consent. The consent of Seller
shall not be unreasonably withheld or delayed to a transaction
involving any Aircraft, provided that the main purpose of such
transaction is to arrange financing for the acquisition of such
Aircraft by Purchaser and provided further that Purchaser shall
be the operator of such Aircraft after delivery. Such
transaction shall not modify in any way Seller's rights
hereunder, or release Purchaser from any of its obligations
hereunder, or require Seller to divest itself of title to or
possession of such Aircraft, until delivery and payment thereof
as provided herein. Purchaser acknowledges that any purported
assignment of any rights pursuant to this Agreement without the
written consent of Seller shall be without legal force or
effect.
16.4 In the event of the resale, lease, transfer or other disposal
of any Aircraft by Purchaser with Seller's prior written consent,
Purchaser's rights pursuant to this Agreement shall inure to the
benefit of such purchaser, lessee or other transferee, as the case
may be, from the date of Seller's approval of such resale, lease,
transfer or other disposal provided the subsequent purchaser, lessee
or other transferee undertakes in writing to be bound by and comply
with all terms, conditions and limitations applicable to Purchaser
pursuant to this Agreement. Nothing contained herein shall preclude
Purchaser from reselling, leasing, transferring, or otherwise
disposing of its interest in an Aircraft subsequent to its delivery
without Seller's consent, provided that, in that instance, no rights
contained in this Agreement shall be assigned.
16.5. *******
ARTICLE 17 SELLER'S REPRESENTATIONS AND WARRANTIES
Seller represents that it:
(i) is a company duly organized and lawfully existing and in
good standing under the laws of the Federal Republic of
Germany and has the necessary power to own its property
and to carry on its business as is now being conducted,
(ii) has the full power and authority to execute, deliver and
perform its obligations under this Agreement, the same
having been duly authorized by all proper and necessary
corporate action, and no consent or approval of
stockholders or any other person or consent or approval
of, notice to, or filing with, any public authorities is
required as a condition to the validity of this Agreement,
(iii) this Agreement constitutes a valid and legally
binding obligation of Seller enforceable in accordance
with its terms,
(iv) no proceedings are pending or threatened against Seller
before any court or administrative agency, that, in the
reasonable opinion of Seller will materially adversely
affect the ability of Seller to perform its obligations
under this Agreement,
(v) there is no provision in the charter of by-laws of Seller
and no provision of any existing mortgage, debenture,
contract or agreement binding on Seller or affecting its
properties that conflicts with or, in any ways prevents
the execution, delivery or performance by Seller of this
Agreement, and
(vi) there is no governmental regulation, treaty or order that
shall be contravened by the execution, delivery and
performance of this Agreement by Seller.
ARTICLE 18 PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser represents that it:
(i) is a company duly organized and lawfully existing and in
good standing under the laws of the State of California,
United States of America, and has the necessary power to
own its property and to carry on its business as is now
being conducted,
(ii) has the full power and authority to execute, deliver and
perform its obligations under this Agreement, the same
having been duly authorized by all proper and necessary
corporate action, and no consent or approval of
stockholders or any other person or consent or approval
of, notice to, or filing with, any public authorities is
required as a condition to the validity of this Agreement,
(iii) this Agreement constitutes a valid and legally
binding obligation of Purchaser enforceable in accordance
with its terms,
(iv) no proceedings are pending or threatened against Purchaser
before any court or administrative agency, that, in the
reasonable opinion of Purchaser will materially adversely
affect the ability of Purchaser to perform its obligations
under this Agreement,
(v) there is no provision in the charter of by-laws of
Purchaser and no provision of any existing mortgage,
debenture, contract or agreement binding of Purchaser or
affecting its properties that conflicts with or, in any
ways prevents the execution, delivery or performance by
Purchaser of this Agreement, and
(vi) there is no governmental regulation, treaty or order that
shall be contravened by the execution, delivery and
performance of this Agreement by Purchaser.
ARTICLE 19 RESERVED
ARTICLE 20 **********20.1**********
20.2**********
A)**********
B)**********
i) **********
ii) **********iii) **********
**********
i) **********
ii) **********
i) D) **********
ii) **********
iii) **********
iv) **********
v) **********
E) **********
F) **********
20.3**********
A)**********
i) **********
ii) **********
iii) **********
iv) **********
v) **********
vi) **********
vii) **********
B)**********
i)**********
ii)**********
C) **********
i)**********
ii)**********
iii)**********
D) ***********
(i)**********
(ii)**********
(iii)**********
E) **********
F) **********
G) **********
H) **********
I)**********
20.4**********
20.5**********
a.**********
b.**********
20.6**********
20.7 **********
20.8 **********
20.9 **********
20.10**********
a.**********
b.**********
c.**********
d.**********
e.**********
ARTICLE 21 PA296 OPTION AIRCRAFT
21.1 Seller hereby grants Purchaser the option to purchase as many
as twenty-three (23) additional Aircraft (the "PA296 Option")
incorporating the Optional Equipment ("PA296 Option Aircraft").
PA296 Options not exercised prior to *************, will expire
on that date.
21.2 PA296 Option Aircraft may be exercised by Purchaser in blocks
of five (5) or more Aircraft. Timing and procedures for the
exercise of options for PA296 Option Aircraft in blocks of delivery
positions shall be as follows:
a. Not later than ****************prior to Purchaser's desired
delivery month of the first PA296 Option Aircraft in that block,
Purchaser shall give notice ("Preliminary Notice") to Seller of its
conditional intention to purchase PA296 Option Aircraft and
indicating its desired delivery month for the PA296 Option Aircraft
in that block.
b. During the **************** following the date of Preliminary
Notice, Seller and Purchaser will discuss and agree on available
delivery positions******.
c. Not later than *************************** prior to the first
day of the month in which a PA296 Option Aircraft is agreed to be
delivered pursuant to Article 21.2.b hereof, Purchaser shall give
notice ("Notice of Exercise") to Seller of its exercise of its
option to purchase the PA296 Option Aircraft in that block together
with a non-refundable cash deposit in the amount of US$****** per
PA296 Option Aircraft, at which time the PA296 Option Aircraft shall
become firm Aircraft. Unless Seller and Purchaser have otherwise
mutually agreed, if Purchaser has not given Notice of Exercise no
later than the date specified herein, the Preliminary Notice shall
expire, but Purchaser shall retain the same number of PA296 Options
as if Preliminary Notice had not been given.
21.3 a. The base price of each PA296 Option Aircraft is the
Aircraft Base Price as determined in accordance with and
set forth in Article 3.1 (except that the price for SCN
259F998 shall be reduced to US$******, increased by any
additional Optional Equipment selected by Purchaser not
listed in Exhibit II, Clause 2.2 ("PA296 Option Aircraft
Base Price").
b. **********
21.4 RESERVED
21.5 a. The Adjusted PA296 Option Aircraft Base Price is
based on January 1999 economic conditions and is subject
to adjustment from January 1999 to the month of PA296
Option Aircraft delivery in accordance with the Price
Adjustment Formula and the terms of this Agreement with
respect to the application of the Price Adjustment
Formula. The Adjusted PA296 Option Aircraft Base Price so
adjusted shall be referred to as the "PA296 Option
Aircraft Delivery Price."
b. Except as otherwise provided in this Article 21.5b, the
PA296 Option Aircraft Delivery Price is exclusive of any
Taxes, which shall be for the account of Purchaser. If
under the provision of any applicable law or regulation
such Taxes are to be paid by Seller, Purchaser shall
reimburse Seller accordingly. Seller hereby represents to
Purchaser that pursuant to current U.S. and German law,
German and U.S. Taxes are not applicable to aircraft sold
and exported from Germany into the United States. Should
there be a change in such law, Purchaser and Seller agree
to modify this Agreement on mutually acceptable terms
(which may include mutual termination). Purchaser shall,
in any case, not be responsible for any Taxes normally
borne by sellers of aircraft, including but not limited to
Taxes on Seller's gross or net income.
21.6 The PA296 Option Aircraft Delivery Price shall be payable by
Purchaser to Seller as follows:
a. Application of the deposit paid in accordance with Article
21.2.c. above, in the amount of US$********** (which when
paid shall be deemed a Deposit);
b. On **********
**********(which when paid shall be deemed a Progress
Payment); and
c. Upon delivery of each PA296 Option Aircraft, the balance
of the PA296 Option Aircraft Delivery Price.
21.7 **********
21.8 Seller shall submit an invoice to Purchaser for each payment
due pursuant to Article 21.6 above. The invoice for the
balance of the PA296 Option Aircraft Delivery Price shall
detail the price adjustment calculations pursuant to Article
21.5 above and the provisions of Article 4.4 above shall apply
to payments under this Article 21.
21.9**********
21.10 With respect to each PA296 Option Aircraft ordered by
Purchaser, Purchaser shall perform a technical inspection,
reinspection if necessary, and accept delivery of each PA296
Option Aircraft at the Delivery Location. The inspection,
acceptance, delivery and ferry of the PA296 Option Aircraft
shall be completed in accordance with Article 5 above.
******
21.12***********
21.13**********
ARTICLE 22 RESERVED
ARTICLE 23 **********
**********
ARTICLE 24 **********
24.1**********
24.2 **********
a. **********
b. **********
c. **********
d. **********
e. **********
24.3 **********
ARTICLE 25 RESERVED
ARTICLE 26 RESERVED
ARTICLE 27 RESERVED
ARTICLE 28 RESERVED
ARTICLE 29 **********29.1**********
29.2 a.**********
**********
(B). **********
(C). **********(D). **********
(i) **********
(ii) **********
(iii) **********
(E). **********
b. **********
c. **********
d. **********
29.3 a.**********
b.**********
c. **********
29.4 d.********************
ARTICLE 30 **********
30.1 **********
**********
30.3 **********
30.4 **********
30.5 **********
30.6 **********
ARTICLE 31 RESERVED
ARTICLE 32 RESERVED
ARTICLE 33 NOTICES, REQUESTS
33.1 All notices and requests required or authorized hereunder shall
be made in written form and served by certified mail (return
receipt requested) or by facsimile (with a confirming telephone
call), or delivered by an established overnight courier service
(with proof of delivery) addressed to the following addresses:
In the case of Seller to: In the case of the Purchaser to:
Xxxxxxxxx Dornier GmbH Atlantic Coast Airlines
x/x Xxxxxxxxx Xxxxxxx Xxxxxxxxxxx 00000 Business Court
Xxxxxxxxx Xxxxx XX, Xxxxxxx Xxxxx Xxxxxx, XX 00000
00000 Xxxxxxxxx Xxxxx X.X.X.
Xxxxxxx, XX 00000
U.S.A. Attn: General Counsel
Attention: Vice President, Contracts Fax Number:000-000-0000
Fax Number: 000-000-0000
33.2 All notices and requests required or authorized hereunder shall
be deemed to be effective upon receipt by the Parties at the
above addresses, unless the Parties otherwise notify each other
in writing of changes of address.
ARTICLE 34 APPLICABLE LAW, JURISDICTION
34.1 This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York. The
application of the UN Convention on Contracts for the
International Sale of Goods is expressly excluded.
34.2 The Parties agree to attempt in good faith to resolve any
controversy or claim arising out of or relating to this
Agreement by meetings between the senior management of both
Parties ("Consultation"). If the matter has not been resolved
pursuant to the aforesaid Consultation within forty-five (45)
days of the commencement of such Consultations (unless extended
by mutual agreement), or if a resolution satisfactory to both
Parties is not concluded, the Parties agree that the
controversy shall be settled by binding arbitration as the
exclusive method of dispute resolution in accordance with the
Commercial Rules of the American Arbitration Association by a
sole arbitrator ("Arbitration"). The arbitration shall be
governed by the Federal Arbitration Act, 9 U.S.C. et seq.,
and judgement upon the award rendered by the arbitrator may be
entered by any court having jurisdiction thereof. The place of
arbitration shall be a mutually agreed location in the
continental U.S. not served by Purchaser and not home to
Seller's or Purchaser's headquarters offices. The arbitrator
shall decide any dispute according to the terms of this
Agreement and governing law as specified in Article 34.1. The
arbitrator is not empowered to award damages in excess of the
amounts specified in this Agreement or otherwise in excess of
actual damages and no damages may be awarded for loss of
revenue or profit or any indirect, incidental, consequential or
punitive damages of any kind or nature. The Parties hereby
consent to the personal jurisdiction of the Federal courts of
Texas with respect to Seller and Virginia with respect to
Purchaser solely with respect to the enforcement of a judgement
of an award rendered by an arbitrator pursuant to this Article
34.2.
34.3 Seller and Purchaser shall each be responsible for their own
legal fees related to the negotiation and preparation of this
Agreement.
ARTICLE 35 MISCELLANEOUS
35.1 Confidentiality
a. This Agreement and the terms hereof, as well as all
information and data disclosed in connection with the
execution of this Agreement or disclosed as required by
this Agreement, are confidential and may not be disclosed
by either Party to any third party, except
(i) to associated companies, subsidiaries or affiliates
of the Parties;
(ii) to its advisors, counsel , financial advisors, and
accountants under confidentiality agreement;
(iii)as required by law or regulation;
(iv) as required to perform and enforce the terms hereof;
(v) upon receipt by the disclosing Party of prior written
consent of the other Party, which shall not be
unreasonably withheld; or
(vi) to assignees or transferees of either party.
b. The Parties acknowledge that should either Party breach
this Article 35.1 that such a default cannot be cured and
the cure period as provided in Article 13.1c. does not
apply in the case of such a default.
35.2 Year 2000 Readiness Disclosure
Seller and Purchaser acknowledge for the benefit of the other
that in order to comply with the terms of this Agreement, each
Party must become, in a timely manner, "Year 2000 Compliant"
(as defined below), both as to its products and services,
including the Aircraft, and as to its continuing ability to
meet in a timely manner its obligations under this Agreement.
Therefore, each Party covenants and agrees that it shall be, in
all material respects, Year 2000 Compliant and shall be able to
conduct its business and perform its obligations under this
Agreement notwithstanding the technological and other issues
revolving around the ability of computers and other data
processing systems to perform functions correctly which refer
to dates or time periods on and after January 01, 2000. "Year
2000 Compliant" shall mean (i) the Party is now planning and
taking action to implement and will continue to implement, in a
commercially reasonable manner, any and all measures to perform
this Agreement according to its terms, (ii) all the Party's
computers and data processing systems shall be upgraded,
replaced or adjusted as necessary to permit it to conduct its
business as usual and to comply with this Agreement regardless
of dates used in such programs or systems, on or after January
01, 2000, and (iii) all computer programs and data processing
systems of the Party shall be upgraded, replaced or adjusted,
as necessary, in a manner that resolves any ambiguities as to
the century in a defined, predetermined and appropriate manner.
Failure by either Party, or the Aircraft to be Year 2000
Compliant is not an Excusable Delay.
35.3 Waiver
The failure of either Party to enforce at any time any of the
provisions of this Agreement, or to require at any time the
performance by the other Party of any of the provisions hereof,
shall in no way be construed to be a waiver of such provisions,
nor in any way affect the validity of this Agreement or any
part thereof, or the right of said Party thereafter to enforce
each and every such provision. The express waiver by either
Party of any provision, condition or requirement of this
Agreement shall not constitute a waiver of any future
obligation to comply with such provision, condition or
requirement.
35.4 Severability
If any provision of this Agreement contravenes any law, such
provision shall be deemed not to be part of this Agreement and
the remainder of this Agreement shall be valid and binding as
though such provision was not included therein. To the extent
a provision of this Agreement would be enforceable under the
applicable law with modification to conform to the requirements
of such law, the Parties agree to negotiate in good faith for a
written amendment of this Agreement promptly upon discovery of
the nonconformity and to perform and accept performance of the
Agreement as modified to conform to the applicable law.
35.5 Data, Reproduction
a. Purchaser shall provide to Seller, as Seller may
reasonably request, all the necessary existing data
pertaining to the operation of the Aircraft for an
efficient and coordinated survey of all reliability,
maintainability, operational and cost data for the sole
purpose of improving the safety, availability and
operational costs of the Aircraft, provided such data are
of the type and in the form normally kept by Purchaser in
its operation, and provided further that any such
Purchaser data as it may be assembled or compiled by
Seller shall not be provided to any other party and such
data shall be treated as confidential by Seller. Seller
shall provide Purchaser at least one copy of any such
assembled or compiled information.
b. Nothing in this Agreement shall convey to Purchaser the
right to, and Purchaser shall not, reproduce or cause the
reproduction of an Aircraft, or part thereof, in a design
identical with or similar to that of the Aircraft, or
parts thereof, nor shall this Agreement grant to Purchaser
a license under any patents or other rights owned or
controlled by Seller or by any subsidiary, associated or
affiliated company of Seller or by any of their vendors or
subcontractors.
35.6 Payments
a. All payments due under this Agreement to either
Party, unless otherwise agreed, shall be effected in US
Dollars in immediately available US funds on the dates due
to the following bank accounts:
(i) For Seller:
**********
(ii) For Purchaser:
***********
The payments are deemed to have been made as soon as such
amounts have been credited to the above accounts. The
place of performance for Purchaser's payments shall be New
York, or such other place as may be designated by Seller.
The place of performance for Seller's payments shall be
Virginia, or such other place as may be designated by
Purchaser.
b. Any amounts payable to Seller under Article 4.1.c, 20, and
21.6 and any amounts payable to Purchaser under Articles
4.1.d, 11.4, 12.4, 20, 21.7, 21.12, and 29.2.a are
absolute net and without any deductions. Under no
circumstances shall the amounts payable to either Party be
subject to withholding, set-off, discount, counterclaim or
any other right unless undisputed or finally determined in
accordance with the terms of this Agreement.
35.7 Language
The Parties agree that this Agreement, all correspondence,
documents and any other written matters in connection with this
Agreement shall be in English.
35.8 Consideration
THE OBLIGATIONS AND LIABILITIES OF SELLER AND PURCHASER,
INCLUDING BUT NOT LIMITED TO THE WARRANTIES AND LIMITATION OF
WARRANTY AND LIABILITY SET FORTH IN ARTICLE 14 AND EXHIBIT VIII
AND IX HEREIN HAVE BEEN DISCUSSED, UNDERSTOOD AND AGREED TO
BETWEEN THE PARTIES AS FUNDAMENTAL CONSIDERATION OF THE
AIRCRAFT DELIVERY PRICE.
35.9 Entire Agreement
This Agreement, the Exhibits attached hereto, any related
agreements and the matters referred to herein constitute the
entire agreement between the Parties and supersede and cancel
all prior representations, negotiations, undertakings, letters,
acceptances, agreements, understandings, contracts and other
communications, whether verbal or written, between the Parties
or their agents or representatives, with respect to or in
connection with the subject matter of this Agreement and no
agreement or understanding arising after the execution of this
Agreement varying the terms and conditions hereof shall be
binding on either Party unless in written form and duly signed
by authorized representatives of both Parties. This
requirement of written form shall also apply with respect to
verbal waivers of such written form. In the event of any
inconsistencies between Articles 1 through 35 of this Agreement
and any of the Exhibits, the Specification or other documents
referred to herein, the provisions of Articles 1 through 35 of
this Agreement shall prevail.
35.10 Press Releases
The timing and content of any public announcement with respect
to this transaction will be subject to the mutual agreement of
the Parties.
35.11 Corporate Guarantee
***************
Purchaser's obligations hereunder to Seller shall be guaranteed
by Atlantic Coast Airlines Holdings, Inc***************
35.12 Execution, Effectiveness
This Agreement shall be effective upon its execution by both
Parties.
This Agreement and any supplements and amendments to this
Agreement may be executed in one or more counterparts. Each
such executed counterpart shall be deemed an original, but all
such executed counterparts together shall constitute one and
the same instrument.
[NEXT PAGE IS SIGNATURE PAGE]
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement
to be executed by their duly authorized representatives as of the
day and year first above written.
Atlantic Coast Airlines Xxxxxxxxx Dornier GmbH
(Purchaser) (Seller)
(signature) (signature)
(name) (name)
(title) (title)
EXHIBIT I
SPECIFICATION
I.1Aircraft Specification
The Aircraft specified in this Agreement is defined as the Dornier
model 328-300, twin-turbojet regional transport aircraft,
manufactured in accordance with the Specification AVS 001D 000 A0100
000D of October 1998 ("Specification"), which has been supplied to
Purchaser under separate cover and the receipt of which is deemed to
have been confirmed by Purchaser's execution of this Agreement.
I.2Aircraft Performance
The performance of the Aircraft built to the Specification is
defined in the Specification Appendix 1 AVS 001D 000 A1100 000D of
October 1998 as supplemented by the Aircraft Flight and Operations
Manuals.
EXHIBIT II
OPTIONAL EQUIPMENT
II.1 SPECIFICATION CHANGE NOTICES ("SCNs")
The Aircraft shall be configured with an APU, ground spoilers and a
suitable airline interior satisfactory to Purchaser.
Optional Equipment shall conform with the corresponding SCNs more
fully described in the Specification, Specification Change Notices
AVS 001D 000 A3100 000D dated October 1998 or as otherwise agreed
pursuant to the provisions of this Agreement. SCN prices are based
on January 1999 economic conditions.
II.2 SCN SELECTION
The Optional Equipment set forth in Clause II.2.2 below shall also
be installed in and delivered with each Aircraft.
II.2.1 Standard SCNs
SCN CODE TITLE PRICE
033F007 Maximum Gross Weight/Zero Fuel Weight **
Increase
235-001 3rd Audio Panel **
252-003 Pax Seats with moving aisle armrests **
344F022 Ground Proximity Warning System Mode 1 to **
7 with Windshear Detection
346F004 Traffic Alert and Collision Avoidance **
System II
II.2.2 Purchaser's Optional Equipment
SCN CODE TITLE PRICE
110J002 Placards and Markings in English **
111F070 United Airlines Paint Scheme **
212-001 Ground Connector for Air Conditioning **
233F012 Computerized Cabin Briefing System **
(PBS 250)*
234F003 2nd Cabin Handset for Standard Galley **
250F058 ACA/United Airlines Interior Design **
251F008 Checklist Holder for 328JET **
252-022 Pax Seat without ashtray (32 seats) **
252F049 Weatherproof Pax Door Curtain **
252K029 Leather Seat Covers - 32 seats **
253F040 Standard Galley with one set of
drawers and two coffee makers **
253F048 Two Ice Containers in Galley with **
Drawer Set
253F050 Xxxxx Xxxxx Separation Wall BH37 **
254F006 Wet Towel Dispenser in Lavatory **
259F173 Cabin Layout - No. of Pax 32 **
259F998 Cabin Shell Interior Color Change in **
Xxxxx Xxxxx
262F003 Cargo Compartment with Smoke
Detection and Fire Suppression System **
334-001 Logo Lights **
334K008 P-880 Honeywell Weather Radar **
345F023 ATC II System, Mode S, Diversity (two
ant.) 8.33/252 Hz separation **
345K018 Honeywell Global Positioning System **
with Non-Precision Approach
351F001 Three Puritan-Benitt Sweep-On 2000 **
Quick-Don Masks
353-001 Two additional Protective Breathing **
Equipment (one PBE std. in A/C)
251F012 L/H Avionics Rack Panel Removal **
"Pull" Sticker on Lav Door **
081K001 Ballast for Frame Station 1 **
252F055 Carpet Strip Replacement **
256F039 First Aid Kit and Flashlight mounting **
TOTAL US$**
- Price does not include programming cost.
EXHIBIT III
DELIVERY SCHEDULE
Number of Year
Aircraft
** **** ****
** **** ****
EXHIBIT IV
POWER OF ATTORNEY FORM
Atlantic Coast Airlines (the "Purchaser") authorizes herewith the
individuals listed below to inspect the Dornier Model 328-300
aircraft (the "Aircraft") and to participate in the acceptance tests
in order to evaluate the compliance of the Aircraft with the terms
and conditions of the Aircraft Purchase Agreement, dated December
20, 2000, between Purchaser and Xxxxxxxxx Dornier GmbH.
For the purpose of signing the Certificate of Technical Acceptance
and the Aircraft Receipt in connection with the technical acceptance
and delivery of the Aircraft, Purchaser authorizes herewith the
following individual(s) to act singly and individually on its
behalf:
Name Position
________________________ __________________
________________________ __________________
________________________ __________________
________________________ __________________
Atlantic Coast Airlines
By:
Name:
Title:
Date:
EXHIBIT V
CERTIFICATE OF FINAL ACCEPTANCE FORM
Atlantic Coast Airlines (the "Purchaser") hereby acknowledges final
acceptance this ...........day of ...................... at
Oberpfaffenhofen, Federal Republic of Germany, of one (1) Dornier
328-300 aircraft, bearing Serial Number ............ ("Aircraft").
Purchaser acknowledges that the Aircraft has been satisfactorily
inspected in accordance with the terms of the Aircraft Purchase
Agreement dated December 20, 2000 (the "Agreement") between
Purchaser and Xxxxxxxxx Dornier GmbH (the "Seller") and that on the
date set forth above Seller has transferred to Purchaser and
Purchaser has accepted from Seller, in compliance with the
Agreement, the risk of loss of and damage to the Aircraft described
above.
Atlantic Coast Airlines
By:
Name:
Title:
EXHIBIT VI
AIRCRAFT RECEIPT FORM
The undersigned authorized representative of Atlantic Coast Airlines
(the "Purchaser") hereby acknowledges
RECEIPT OF
Dornier 328-300
[Serial Number]
[Registration Number]
and the two (2) Engines
Model Number ________
Serial Numbers: _______ and _______
RECEIPT FROM
Xxxxxxxxx Dornier GmbH (hereinafter "Seller")
RECEIPT AT
Seller's facilities in Oberpfaffenhofen, Federal Republic of Germany
RECEIPT ON
Date:__________________________
Time:___________________
The foregoing described aircraft was this date delivered by Seller
to the undersigned in accordance with the provisions of the Aircraft
Purchase Agreement dated December 20, 2000, except as may have been
noted on the Certificate of Technical Acceptance as amended and
supplemented, between Purchaser and Seller.
Atlantic Coast Airlines
By:
Name:
Place and Date:
EXHIBIT VII
WARRANTY XXXX OF SALE FORM
KNOW ALL MEN BY THESE PRESENTS:
THAT Xxxxxxxxx Dornier GmbH ("Seller"), a corporation registered
under the laws of the Federal Republic of Germany, is the owner of
the full legal and beneficial title of the aircraft
Model: Dornier 328-300
Serial Number:
Registration:
and the two engines
Model:
Serial Number: Serial Number:
and all appliances, parts, instruments, appurtenances, accessories,
furnishings, or other equipment or property ("Parts") incorporated,
installed in or on or attached to said aircraft and engines
("Aircraft");
THAT for and in consideration of the sum of US$1.00 and other
valuable consideration, receipt of which is hereby acknowledged,
Seller does, on the date hereof, grant, convey, transfer, bargain
and sell, deliver and set over to Purchaser, its successors and
assignees all of its rights, title and interest in and to the above-
described Aircraft, engines and Parts, pursuant to and subject to
the terms and conditions of the Aircraft Purchase Agreement dated as
of December 20, 2000, to:
Atlantic Coast Airlines
00000 Xxxxxxxx Xxxxx
Xxxxxx, XX 00000 XXX
("Purchaser")
THAT Seller hereby warrants to Purchaser, its successors and
assigns, that there is hereby conveyed to Purchaser on the date
hereof, good and marketable title to the aforesaid Aircraft, engines
and Parts, free and clear of all liens, encumbrances and rights of
others of any nature whatsoever, and that Seller will warrant and
defend such title forever against all claims and demands whatsoever.
This Warranty Xxxx of Sale is governed by the laws of the State of
New York.
IN WITNESS WHEREOF, Seller has caused this instrument to be executed
by its duly authorized officer this ___ day of _________ ____.
Xxxxxxxxx Dornier GmbH
By:
Name:
Title:
EXHIBIT VIII
PRODUCT WARRANTIES
VIII.1 WARRANTY
VIII.1.1 Nature of Warranty
Subject to the limitations and conditions hereinafter set forth and
except as provided in Clause VIII.1.2 herein, Seller warrants to
Purchaser ("Warranty") that at the time of delivery, each Aircraft
and the Warranted Parts shall:
a. Conform to the Specification except as to those portions stated
to be estimates, approximations, design aims or design
criteria;
b. Be free from defects in material or workmanship (including
process of manufacture); and
c. Be free from defects in design including (i) selection of
materials and (ii) process of manufacture with respect to the
state of the art at the time of design.
VIII.1.2 Exceptions
The Warranty shall not apply to Purchaser furnished equipment or
engines, avionics, consumables (as defined in the World Aviation
Technical Operating Guide), or any other equipment, items or parts
supplied by other manufacturers that were not manufactured to
Seller's detailed drawings and design specifications and do not have
a Seller's part number ("Vendor Parts") provided, however, any
defect in Seller's workmanship in installing Vendor Parts and
Purchaser furnished equipment in the Aircraft, including a failure
to conform to installation provisions that invalidates any
applicable Vendor warranty, constitutes a defect in workmanship
which is covered by the Warranty provisions, and to defects
resulting from normal wear and tear. All Aircraft parts which are
not Purchaser furnished equipment or Vendor Parts are hereinafter
referred to as "Warranted Parts".
VIII.1.3 Warranty Period
a. The conformity Warranty set forth in Clause VIII.1.1.a above
expires on Acceptance for any non-conformity reasonably susceptible
of identification during Purchaser's inspection prior to Acceptance;
**********
b. The design, materials, process and workmanship Warranties set
forth in Clauses VIII.1.1 b. and c. above, are effective for a
period of **********following Acceptance of each Aircraft.
VIII.1.4 Seller's Obligations
a. Seller's obligations under the Warranty are expressly limited,
at its option, and sole expense, to the timely correction, repair,
replacement or rework, by Seller or Seller's authorized FAR 145
approved repair facility, in either case employing Seller's
maintenance procedures, of the defective Aircraft or Warranted Part.
Purchaser shall deliver such defective Aircraft and/or Warranted
Part to Seller's facility or to Seller's authorized facility subject
to the following:
(i) Seller shall bear the cost of delivery and return to Purchaser,
by reasonable transportation means, of a defective Warranted
Part;
(ii) Purchaser shall bear the cost of delivery and return to
Purchaser, by reasonable transportation means, of a defective
Warranted Part that is not accepted by Seller under the
Warranty, provided, however, should a Warranted Part, after
initial non-acceptance for "no fault found", continue to
display the same failure mode which Seller cannot determine to
be defective, Seller and Purchaser will discuss and mutually
agree on a course of action to identify the problem. If it is
subsequently determined that the defective Warranted Part is
covered by the Warranty, Seller shall reimburse Purchaser for
its cost for delivery, return, repair or replacement of such
defective Warranted Part; and
(iii) *****
b. During the initial six (6) month period after Purchaser's
acceptance of each Aircraft, Seller shall, in addition to its
obligations stated herein, credit Purchaser for labor costs
incurred only for:
(i) The removal from the Aircraft of the Warranted Part that is to
be corrected, repaired or replaced pursuant to this Warranty;
and
(ii) The reinstallation in the Aircraft of the reworked, repaired or
replacement Warranted Part.
c. Seller will compensate Purchaser for such direct labor costs
incurred pursuant to Clause VIII.1.4.b. in an amount which is
the product of:
(i) US$**** per hour (Seller agrees to perform any work under this
Clause at its Texas facility for USper hour), subject to
adjustment in accordance with Exhibit XI; multiplied by,
(ii) The number of direct man-hours determined by Seller's
maintenance documentation or based on Seller's reasonable
estimate of man-hours required to remove and replace such
Warranted Part, if the number of man-hours is not stipulated in
Seller's maintenance documentation.
d. The Warranty, the Service Life Policy (Clause VIII.2 below) and
Vendor Claims Assistance (Clause VIII 3.3 below) shall be
administered and implemented in accordance with the reasonable
provisions of the Warranty Administration Procedures set forth
in the then current Customer Support Manual ("Manual"), as may
be revised from time to time. If the terms of the Manual vary
from or are inconsistent with any relevant provision of this
Exhibit VIII, the terms of this Exhibit VIII shall apply. No
Manual provision shall operate so as to limit Purchaser's
rights and Seller's obligations as set forth in this Exhibit
VIII.
******
e. During the Warranty Period of each Aircraft and the Warranted
Parts, Seller shall provide to Purchaser *******
Notwithstanding the above, if the AD is, or the SB in (ii) or
(iii) above is the result of an AD which is, (A) applicable to
all aircraft in general or to aircraft in the same category as
the Aircraft, or (B) is imposed by the FAA as a result of
Purchaser's use or place of operation of the Aircraft, the
modification kits will be purchased by Purchaser at Seller's
then valid catalog prices.
f. Furthermore, during the Warranty Period, Seller shall *******
the AD is issued as, or the highly recommended SB is issued
pursuant to an AD which is, a result of Clause VIII.1.4.e.(A)
or (B) above. The amount to be reimbursed to Purchaser will be
based on Seller's reasonable determination of man-hours
required to perform such modification multiplied by US$****
(Seller agrees to perform any work under this Clause at its
Texas facility for US$**** per hour), subject to adjustment in
accordance with Exhibit XI.
g. **********
VIII.1.5 Purchaser's Compliance
Seller shall be relieved of its obligations and liability with
respect to any claim under the Warranty, if (a) the defect resulted
from normal wear and tear, or (b) Purchaser does not materially
comply with Seller's Warranty Administration Procedure, or (c) the
Aircraft or Warranted Part was:
i) Not operated, handled, maintained in compliance with Seller's
applicable technical publications and documentation;
ii)Not repaired, altered, modified or replaced in compliance with
Seller's applicable technical publications and documentation;
iii)Subject to negligence or suffered abuse;
iv)Involved in an accident and its repair was not made in
accordance with Seller's Structural Repair Manual or otherwise
approved by Seller; or
v) Not properly stored and protected against the elements when not
in use on a regular basis, unless Purchaser furnishes Seller
reasonable evidence that the events set forth in Clauses
VIII.1.5.c.i) through VIII.1.5.c.v) herein were not the cause of
a defect of the Aircraft or Warranted Part.
VIII.1.6 Repaired Part Warranty Period
Any replacement, correction, rework or repair of the Aircraft or the
Warranted Parts under the Warranty shall not extend the Warranty
Period set forth in Clause VIII.1.3.
VIII.1.7 Replaced Part Ownership
Any Warranted Part which is replaced by Seller under the Warranty
shall become the property of Seller.
VIII.1.8 Records
Purchaser's failure to maintain complete records of operations and
maintenance of Aircraft and its engines in accordance with the
applicable requirements of Purchaser's airworthiness authority to
support a warranty claim, and to make relevant records available for
Seller's or the respective Vendor's warranty claim evaluation
relieves Seller of its obligations under the Warranty with respect
to that claim.
VIII.1.9 Limitation
Where more than one remedy or corrective action applies under any
Warranty, Seller shall not be obligated to provide to Purchaser a
remedy or corrective action which duplicates coverage of any other
remedy or corrective action provided under such Warranty.
VIII.1.10 Product Improvement Protection
Whenever product improvements affecting the reliability or
maintainability of the Aircraft are incorporated into new Aircraft
after delivery to Purchaser of some of its Aircraft fleet, Seller
and Purchaser shall mutually agree, on a case-by-case basis, on
commercial terms and delivery schedule of such retrofit kits that
would be required by Purchaser to retrofit its Aircraft fleet to a
common specification.
VIII.2 SERVICE LIFE POLICY
VIII.2.1 Definitions and Scope
a. In addition to the warranties set forth in Clause VIII.1
herein, Seller agrees that should a Failure occur in any Item,
the provisions of this Clause VIII.2 "Service Life Policy"
shall apply. Where more than one remedy or corrective action
applies under the Service Life Policy, Seller shall not be
obligated to provide to Purchaser a remedy or corrective action
which duplicates coverage of any other remedy or corrective
action provided under such Service Life Policy.
b. For the purpose of this Clause VIII.2 the following definitions
shall apply:
(i) "Item" means any of Seller's equipment, components or parts,
installed in the Aircraft as set forth in Annex A to this
Exhibit VIII;
(ii) "Failure" means any breakage of or defect in an Item in the
Aircraft which materially impairs the usage or safety of the
Item.
VIII.2.2 Seller's Obligations
a. Seller agrees that if a Failure occurs in an Item within
**********after the delivery of each Aircraft to Purchaser, Seller
shall at its own discretion and as promptly as practicable either:
(i) Design and furnish to Purchaser a correction for such Item and
provide any parts required for such correction; or
(ii) Replace such Item.
b. Such correction or replacement shall be at Purchaser's cost and
expense, reduced by Seller's financial participation ("Seller's
Participation") as set forth in Clause VIII.2.3 herein, except
as provided in Clause VIII.2.4 a, b, and c.
VIII.2.3 Seller's Financial Participation
a. Seller's Participation shall be determined in accordance with
the following formula:
**************
where:
**********
**********
***********
VIII.2.4 Transportation and Other Costs
a. Transportation from Purchaser to Seller or Seller's authorized
facilities and return to Purchaser of any Item or part of the
Item to be corrected, repaired or replaced under the Service
Life Policy, shall be the responsibility of Seller, who shall
bear any related costs, except for any and all taxes, duties
and similar charges of any nature whatsoever levied in
Purchaser's country, which will be for Purchaser's account.
b. Should any repair, correction or replacement of an Item under
the Service Life Policy require the use of specific tooling by
Purchaser which is not available at Purchaser's facilities,
Seller shall assist Purchaser by making available such specific
tooling on a rent free basis for the purpose of performing such
repair, correction or replacement, provided that such tooling
is transportable, readily available or duplicable in due time.
c. Any cost resulting from removal and/or reinstallation of
Aircraft parts or of an Item which is the subject of a Failure
and reassembly and installation of the corrected or replacement
Item, shall be at Purchaser's expense.
VIII.2.5 Purchaser's Compliance
a. Purchaser's remedy and Seller's obligation and liability under
this Service Life Policy are subject to Purchaser having:
(i) Maintained complete records of operations and maintenance of
the Aircraft and its engines in accordance with the then
applicable requirements of Purchaser's airworthiness authority;
(ii) Informed Seller of any significant incidents relating to an
Aircraft that have occurred, which shall have been recorded in
the maintenance log books of Purchaser;
(iii)Complied with its obligations in respect of Seller's
Warranty;
(iv) Carried out the reasonable specific structural inspection
programs for monitoring purposes as may have been established
from time to time by Seller and communicated to Purchaser.
Such programs shall, as much as possible, be compatible with
Purchaser's operational requirements. Reports relating thereto
shall be made available to Seller; and
(v) Reported the Failure in writing to Seller within ninety (90)
days after such Failure has become apparent.
b. If Seller fails to notify Purchaser, within ninety (90) days
after receipt of Purchaser's report, that the reported breakage
is not accepted as a Failure, it shall be deemed to be a
Failure.
VIII.2.6 Limited Liability
a. NOTHING IN THIS SERVICE LIFE POLICY SHALL BE CONSTRUED AS A
WARRANTY OR REPRESENTATION THAT AN AIRCRAFT OR ANY ITEM WILL
OPERATE WITHOUT A FAILURE, OR AS AN AGREEMENT TO MODIFY THE
AIRCRAFT OR ANY COVERED ITEM TO CONFORM TO NEW DEVELOPMENTS IN
THE STATE OF DESIGN OR MANUFACTURING. SELLER'S SOLE OBLIGATION
HEREUNDER IS TO FURNISH CORRECTIONS OR REPLACEMENTS AND THE COST
SHARING FOR FAILED ITEMS AS PROVIDED IN THIS SERVICE LIFE
POLICY.
b. EXCEPT IN THE CASE OF SELLER'S GROSS NEGLIGENCE AND WILLFUL
MISCONDUCT, PURCHASER'S SOLE REMEDY AND RELIEF FOR THE NON-
PERFORMANCE OF ANY OBLIGATION OR LIABILITY OF SELLER ARISING
UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY SHALL BE IN
MONETARY COMPENSATION, LIMITED TO THE AMOUNT PURCHASER
REASONABLY EXPENDS IN PROCURING A CORRECTION OR REPLACEMENT FOR
ANY ITEM WHICH IS THE SUBJECT OF A FAILURE COVERED BY THIS
SERVICE LIFE POLICY AND TO WHICH SUCH NON-PERFORMANCE IS
RELATED.
VIII.3 VENDOR WARRANTIES
VIII.3.1 Definitions and Scope
Seller has obtained from all its suppliers other than P&WC, which
will provide its warranty directly to Purchaser ("Vendors"),
enforceable, assignable and transferable warranties for Vendor parts
for a period of at least ********** from the date of each Aircraft
delivery. Seller shall use its best efforts to obtain a **********
warranty period, beginning on the date of each Aircraft delivery,
for all Vendor parts. On delivery of each Aircraft, Seller shall
transfer to Purchaser such transferable Vendor warranties.
VIII.3.2 Seller's Assistance
In the event that any Vendor does not fulfill its warranty
obligations to Purchaser and Purchaser submits reasonable evidence
thereof to Seller, Seller shall use its best efforts to assist
Purchaser in obtaining the warranties provided by such Vendor.
**********
VIII.3.3 Claims Assistance
Upon Purchaser's request, Seller shall handle Vendor warranty claims
with the respective Vendor when Purchaser's own efforts to obtain
warranty claim response from the Vendor directly have been
unavailing. This support shall be performed in accordance with the
Warranty Administration Procedures contained in the then current
Customer Support Manual and in accordance with the relevant Vendor
Warranty Administration Procedures.
VIII.4 INTERFACE COMMITMENT
VIII.4.1 Definitions and Scope
a. If, during the Warranty Period, Purchaser experiences any
technical problem during the operation of the Aircraft or its
systems/subsystems due to the malfunction or failure of any
equipment, or part thereof, the cause of which, after due and
reasonable investigation, is not clearly identifiable by
Purchaser, but which Purchaser reasonably believes to be
attributable to the design characteristics of other components
of the Aircraft or the Aircraft ("Interface Problem"), Seller
shall, if requested by Purchaser, and without additional charge
to Purchaser, promptly conduct an investigation and analysis of
any such problem to determine the cause, and to furnish the
recommended solution to such problem.
b. Purchaser shall provide Seller with all relevant data and
information in Purchaser's possession relating to the Interface
Problem, and shall cooperate with Seller during Seller's
investigations and tests as may be required.
c. Seller shall (i) promptly advise Purchaser, in writing, of the
results of its investigation, and of Seller's opinion concerning
the cause or causes of the Interface Problem, and (ii) identify
the corrective actions to be taken by the responsible party.
VIII.4.2 Seller's Design Responsibility
If Seller determines that the Interface Problem is primarily
attributable to the design of any equipment, Aircraft component or
part for which Seller has the design responsibility, Seller shall,
if requested by Purchaser correct the design of such equipment or
part and implement such design correction, subject to prior mutual
agreement on commercial terms and conditions and on the
implementation schedule.
VIII.4.3 Vendor's Design Responsibility
a. If Seller determines that the Interface Problem is primarily
attributable to the design of any Vendor Part, Seller shall, if
requested by Purchaser, reasonably assist Purchaser in
processing any warranty claim Purchaser may have against the
Vendor of such Vendor Part. **********
b. Seller shall also make its best efforts to obtain an acceptable
solution to Purchaser's Interface Problem provided for under its
agreements with such Vendor.
VIII.4.4 Seller's and Vendor's Design Responsibility
If Seller determines that the Interface Problem is partially
attributable to the design of any equipment, Aircraft component or
part for which Seller has the design responsibility and partially to
the design of any Vendor Part, Seller shall, if requested by
Purchaser, promptly seek and implement a solution to the Interface
Problem through cooperative efforts of Seller and any Vendor
involved. Seller shall promptly advise Purchaser of such corrective
action as may be proposed by Seller and any such Vendor. Such
proposal shall be consistent with any then existing obligations of
Seller or any such Vendor hereunder.
EXHIBIT VIII
ANNEX A
SERVICE LIFE POLICY ITEMS
ITEM NO. ITEM
53 Fuselage
Structure of the pressurized fuselage region
530.1 Front and rear pressure bulkheads
530.2 Skins with doublers, stringers and frames from
the front pressure bulkhead to the rear pressure
bulkhead
530.3 Windows and windshields attachment structure,
but excluding windows and windshields
530.4 Xxxxx, excluding scuff plates, and upper beams
surrounding the door apertures
530.5 Pressurized floor and bulkheads surrounding the
main landing gear wheel well
530.6 Nose landing gear bay walls and panels
530.7 Cockpit floor structure and passenger cabin
floor substructure excluding floor panels and
seat rails
Structure of the unpressurized fuselage region
530.8 Attachment fittings for nose landing gear (part
of nose landing gear wheel well side wall)
530.9 Keel beam structure in the main landing gear
wheel well area
530.10 Skin with stringers and frames from frame 1 to
frame 3 and from frame 45 to frame 50 (Including
the Vertical Stabilizer (VS) attachment frames
with integral VS spars)
530.11 Attachment fittings for APU Installation
EXHIBIT VIII
ANNEX A
ITEM NO. ITEM
54 Engine Nacelle
540.1 ENG/Pylon complete
540.2 ENG/Pylon forward yoke
540.3 ENG/Pylon aft yoke isolator
540.4 Nacelle access cowls
540.5 Afterbody cowls
540.6 Attachment fittings at the wing rear spar
55 Stabilizers
551 Horizontal stabilizer main structural box
551.1 Front, center and rear spars
551.2 Upper and lower skin panels with integral
stringers
551.3 Ribs
551.4 Attachment fittings to the vertical stabilizer
box
551.5 Elevator support structure
553* Vertical stabilizer main structural box
553.1 Front spar including fuselage attachment fitting
(center and rear spars are integrated with the
VS attachment frames)
553.2 Left and right skin panels with integral
stringers
*Because of the high integration of the VS structure with the rear
fuselage all VS components have the rear fuselage code 536
(deviation from ATA).
EXHIBIT VIII
ANNEX A
ITEM NO. ITEM
553.3 Ribs
553.4 Attachment fittings to the horizontal stabilizer
box
553.5 Rudder support structure
57 Wing
571 Center wing main structural box
571.1 Front and rear spar
571.2 Upper and lower machined panel with integral
stringers and integral rib flanges
571.3 Ribs 0 to 11 left and right
571.4 Attachment fittings to the fuselage connecting
rods
571.5 Wing to fuselage connecting rods
571.6 Main structural box joint elements
571.7 Landing flap support structure
572 Outer wing main structural boxes
572.1 Front and rear spars (left and right)
572.2 Upper and lower machined panels with integral
stringers and integral rib flanges (left and
right)
572.3 Ribs 12 to 26 (left and right)
572.4 Landing flap support structure
572.5 Aileron support structure
EXHIBIT IX
RESERVED
EXHIBIT X
RESERVED
EXHIBIT XI
PRICE ADJUSTMENT FORMULA
XI.1 DETERMINATION OF THE AIRCRAFT DELIVERY PRICE
For the determination of the Aircraft Delivery Price or the
PA296 Option Aircraft Delivery Price, the Adjusted Aircraft
Base Price set forth in Article 3.1 ****** of this Agreement,
and for the purpose of adjusting other amounts pursuant to this
Agreement as the case may be, shall be adjusted in accordance
with the Price Adjustment Formula and the General Provisions as
set forth in this Exhibit XI.
XI.2 REFERENCE INDICES
XI.2.1 LU Index:
Average Hourly Earnings for Industry classification "Aircraft
and Parts," 1987 SIC Code 372, not seasonally adjusted; as it
appears in the periodical "Employment and Earnings," under the
section "Not Seasonally Adjusted," Monthly Establishment Data,
Hours and Earnings - National, in Table B-15. Average hours and
earnings of production and non-supervisory workers on private
non-farm payrolls by detailed industry; as published by the
Bureau of Labor Statistics of the U.S. Department of Labor and
obtained from the BLS website within one week of the delivery
of each Aircraft.
XI.2.2 MU Index:
Producer Price Index for Commodity group "Metals and Metal
Products," Commodity Code 10, not seasonally adjusted; as it
appears in the periodical "Producer Price Indexes" in Table 6.
Producer price indexes and percent changes for commodity
groupings and individual items (1982=100); as published by the
Bureau of Labor Statistics of the U.S. Department of Labor and
obtained from the BLS website within one week of the delivery
of each Aircraft.
XI.3 PRICE ADJUSTMENT FORMULA
*********** **********
********** **********where
***********************************
**********
XI.4 GENERAL PROVISIONS
XI.4.1 In determining the Aircraft Delivery Price, the
coefficients of the two ratios of the escalation formula shall
be calculated to the ten thousandth (4 decimals). If the next
succeeding place is five (5) or more, the preceding decimal
shall be raised to the next higher figure. The final factor to
be multiplied with (Pb), shall be rounded to the nearest ten
thousandth (4 decimals). The amount resulting therefrom shall
be then rounded to the nearest whole number (0.5 or more
rounded to 1) and then be fixed as the Aircraft Delivery Price.
XI.4.2 In the event that one or both of the indices referred to
herein above are discontinued, Seller shall use comparable
statistics on the cost of labor for aircraft workers or the
cost of materials for metals and metal products, as the case
may be, published by the statistical sources set forth in
Clause XI.2 herein. In the event that such sources shall no
longer maintain statistics on such costs of labor or cost of
materials for metals and metal products, Seller shall use
comparable statistics published by a respectable financial
periodical of a recognized authority. Any selection by Seller
of comparable statistics shall be binding upon Purchaser.
XI.4.3 If the U.S. Department of Labor alters the compilation of
the basket of available commodities or the selection of the
payroll reports as basis of valuation for any of the indices
used in the Price Adjustment Formula, Seller reserves the right
to compute the further development of the indices being
affected by such altered basis of valuation in such a manner as
would have been achieved by the use of the original basis of
valuation prior to the corresponding alteration decided by the
U.S. Department of Labor.
XI.4.4 Final values of the above referred indices shall be used
for the Aircraft Delivery Price calculation. If no "final"
value is published for any of the applicable months at the time
of invoicing at Aircraft delivery, then the published
preliminary figures shall be used for the computation of the
Aircraft Delivery Price.
EXHIBIT XII
RESERVED
EXHIBIT XIII
RESERVED
EXHIBIT XIV
*****
EXHIBIT XV
*************
EXHIBIT XVI - A
*****
EXHIBIT XVI - B
*****
EXHIBIT XVII
RESERVED
EXHIBIT XVIII
RESERVED
EXHIBIT XIX
328-300 AIRCRAFT RETURN CONDITIONS
EXHIBIT XX
CERTIFICATE OF TECHNICAL ACCEPTANCE FORM
Atlantic Coast Airlines (the "Purchaser") hereby acknowledges
technical acceptance this ...........day of ......................
at Oberpfaffenhofen, Federal Republic of Germany, of one (1) Dornier
_______ aircraft, bearing Serial Number ............ ("Aircraft").
Purchaser acknowledges that the Aircraft has been satisfactorily
inspected in accordance with the terms of the Aircraft Purchase
Agreement dated December 20,2000 (the "Agreement") between Purchaser
and Xxxxxxxxx Dornier GmbH (the "Seller") and that the Aircraft is
in complete conformity, except as to non-conformance with the
Specification that is not reasonably susceptible to identification
in accordance with Exhibit VIII, Clause 1.3.a., with the
specifications and the requirements of the Agreement without any
condition or reservation, except as noted below.
Atlantic Coast Airlines
By:
Name:
Title:
Exceptions:
SCHEDULE TO AGREEMENT PA295 AND PA296
This Schedule to Agreement PA295 and PA296 (this "Schedule") is made as
of this 20 day of December 2000 by and between Xxxxxxxxx Dornier GmbH
("Seller") and Atlantic Coast Airlines ("Purchaser").
A. PREAMBLE
WHEREAS, Seller and Purchaser have entered into Agreement PA295 dated
December 20, 2000, for the sale of thirty (30) Aircraft and Agreement
PA296 dated December 20, 2000, for the sale of thirty-two (32) Aircraft
with options for the sale of an additional twenty-three (23) Aircraft
(hereinafter collectively the "Agreements");
WHEREAS, this Schedule outlines certain customer support and other
inducements necessary to support the Agreements, and the Aircraft to be
sold in accordance with the Agreements and this Schedule are to be sold
by Seller to Purchaser on the terms and conditions of the Agreements and
this Schedule and any other documents and agreements entered into by both
parties in connection herewith;
WHEREAS, Seller and Purchaser agree that, with respect to this Schedule,
references to a "total number of Aircraft" or Aircraft numbers above
thirty (30) refer to combined fleets of Aircraft purchased under both
Agreements and references to the "first Aircraft" refer to the first
Aircraft delivered under Agreement PA295;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, Seller and Purchaser agree as follows:
B. SUMMARY OF DEFINITIONS
Unless the context otherwise requires, the following terms shall have the
following meanings. Capitalized terms used without definition in this
Schedule shall have the meaning ascribed to them in the Agreements.
AOG Spares Spare Parts required to return an
Aircraft grounded due to the lack of
an essential part to revenue
service. See Exhibit IX.3.7
ATA Air Transport Association of America
ATT Aircraft Technician Training. See
Exhibit IX.2.3
FAT Flight Attendant Training. See
Exhibit IX.2.4
Insurance Items High value Proprietary Parts held by
Seller purely as a precaution in
order to preclude undue scheduling
problems and/or economic hardship
which might otherwise occur should
the part be out of stock when
required. See Exhibit IX.3.2
Proprietary Parts Components, systems,
accessories, equipment and
parts manufactured to Seller's
detailed drawings and design
specifications and having
Seller's part number as listed
in the then current Illustrated
Parts Catalog. Any warranty
provisions, price discounts and
other economic benefits granted
to Purchaser under the
Agreements associated with
Proprietary Parts shall be
preserved for Purchaser should
any or all of such Proprietary
Parts become Vendor Parts after
execution of the Agreements.
See Exhibit IX.3.2
PTT Pilot Transition Training. See
Exhibit IX.2.2
Standard Parts Expendable parts and hardware items
normally manufactured to national
standards and available worldwide
from various supply sources. See
Exhibit IX.3.2
ARTICLE 1 **********
**********
ARTICLE 2 CUSTOMER SUPPORT/TRAINING PACKAGE
2.1 Seller shall provide Purchaser the customer support as
described in Exhibit IX attached hereto ("Customer Support").
This Customer Support is included in the Aircraft Delivery
Price at no additional cost to Purchaser, unless otherwise
specified in Exhibit IX.
2.2 Customer Support shall be subject to the reasonable provisions,
conditions and procedures contained in both the then current
Customer Support Manual ("Manual") and Seller's then applicable
general terms and conditions for sale of spare parts or repair
of parts and rental agreements ("Terms and Conditions") as
issued by Seller from time to time. Notwithstanding the
previous sentence, no term or provision of the Manual or Terms
and Conditions, as they may be issued or modified from time to
time, shall vary the terms of the Agreements and the Exhibits
thereto. No term or provision of any such Manual or Terms and
Conditions shall limit or be deemed to limit Purchaser's rights
or Seller's obligations for the provision of Customer Support.
2.3 Seller, its affiliate, or a third party selected by Seller, at
Seller's discretion, shall provide Purchaser certain FAA
approved initial and recurrent pilot, flight attendant,
maintenance, ground handling, general familiarization and
engine run-up training, as appropriate, as set forth in Exhibit
IX, attached hereto.
ARTICLE 3 OPTION AIRCRAFT
3.1 Seller hereby grants Purchaser the option to purchase as many
as sixty (60) additional Aircraft (the "Option") incorporating
the Optional Equipment ("Option Aircraft"). Options not
exercised prior to **********, will expire on that date.
3.2 Option Aircraft may be exercised by Purchaser in blocks of five
(5) or more Aircraft. Timing and procedures for the exercise
of options for Option Aircraft in blocks of delivery positions
shall be as follows:
d. Not later than ********** prior to Purchaser's desired delivery
month of the first Option Aircraft in that block, Purchaser shall
give notice ("Preliminary Notice") to Seller of its conditional
intention to purchase Option Aircraft and indicating its desired
delivery month for the Option Aircraft in that block.
e. During the ********** following the date of Preliminary Notice,
Seller and Purchaser will discuss and agree on available delivery
positions, **********
f. Not later than ********** prior to the first day of the month
in which an Option Aircraft is agreed to be delivered pursuant to
Article 3.2b hereof, Purchaser shall give notice ("Notice of
Exercise") to Seller of its exercise of its option to purchase the
Option Aircraft in that block together with a non-refundable cash
deposit in the amount of US$********** per Option Aircraft, at which
time the Option Aircraft shall become firm Aircraft. Unless Seller
and Purchaser have otherwise mutually agreed, if Purchaser has not
given Notice of Exercise no later than the date specified herein,
the Preliminary Notice shall expire, but Purchaser shall retain the
same number of Options as if Preliminary Notice had not been given.
3.3 a. The base price of each Option Aircraft is the
Aircraft Base Price as determined in accordance with and
set forth in Article 3.1 of Agreement PA295, except that
the price for SCN 259F998 shall be reduced to US$*****, as
adjusted for any additional Optional Equipment selected by
Purchaser not listed in Exhibit II, Clause 2.2 of
Agreement PA295 ("Option Aircraft Base Price").
b. **********
3.4 RESERVED
3.5 a. The Adjusted Option Aircraft Base Price is based on
January 1999 economic conditions and is subject to
adjustment from January 1999 to the month of Option
Aircraft delivery in accordance with the Price Adjustment
Formula as set forth in Agreement PA295 and the terms of
Agreement PA295 with respect to the application of the
Price Adjustment Formula. The Adjusted Option Aircraft
Base Price so adjusted shall be referred to as the "Option
Aircraft Delivery Price."
b. Except as otherwise provided in this Article 3.5b, the
Option Aircraft Delivery Price is exclusive of any Taxes,
which shall be for the account of Purchaser. If under the
provision of any applicable law or regulation such Taxes
are to be paid by Seller, Purchaser shall reimburse Seller
accordingly. Seller hereby represents to Purchaser that
pursuant to current U.S. and German law, German and U.S.
Taxes are not applicable to aircraft sold and exported
from Germany into the United States. Should there be a
change in such law, Purchaser and Seller agree to modify
the Agreements on mutually acceptable terms (which may
include mutual termination). Purchaser shall, in any
case, not be responsible for any Taxes normally borne by
sellers of aircraft, including but not limited to Taxes on
Seller's gross or net income.
3.6 The Option Aircraft Delivery Price shall be payable by Purchaser to
Seller as follows:
a. Application of the deposit paid in accordance with Article
3.2c. above, in the amount of US$ ************ (which when paid
shall be deemed a Deposit);
b. On ************ (which when paid shall be deemed a Progress
Payment); and
c. Upon delivery of each Option Aircraft, the balance of the
Option Aircraft Delivery Price.
3.7 **********
3.8 Seller shall submit an invoice to Purchaser for each payment
due pursuant to Article 3.6 above. The invoice for the balance
of the Option Aircraft Delivery Price shall detail the price
adjustment calculations pursuant to Article 3.5 above and the
provisions of Article 4.4 of Agreement PA295 shall apply to
payments under this Article 3.
3.9 **********
3.10 With respect to each Option Aircraft ordered by Purchaser,
Purchaser shall perform a technical inspection, reinspection if
necessary, and accept delivery of each Option Aircraft at the
Delivery Location. The inspection, acceptance, delivery and
ferry of the Option Aircraft shall be completed in accordance
with Article 5 of Agreement PA295.
3.11 *******
******
3.12 **********
3.13 **********
3.14 Any amounts payable to Seller under Article 3.6 above, and any
amounts payable to Purchaser under Article 3.7 above are
absolute net and without any deductions. Under no
circumstances shall the amounts payable to either Party be
subject to withholding, set-off, discount, counterclaim or any
other right unless undisputed or finally determined in
accordance with the terms of the Agreements.
ARTICLE 4 *******
4.1 **********
4.2 **********
ARTICLE 5 COMPLETION AND RELIABILITY
Seller shall provide to Purchaser the terms of Exhibit XII, attached
hereto.
ARTICLE 6 ********
6.1 **********
6.2 **********
6.3 **********
ARTICLE 7 MAINTENANCE COST
7.1 As more fully defined in Exhibit XIII attached hereto, Seller
will guarantee that the cost to repair, replace, overhaul and
restore the Aircraft and components thereof, except Excluded
Items, as that term is defined in Exhibit XIII, to a
serviceable condition shall not exceed a fleet average of
US$********** per flight hour during the first ********** after
delivery of the first Aircraft. Maintenance performed on the
Aircraft must be done in the most economical manner possible,
including the use of overhauled, restored or repaired parts,
when appropriate, consistent with sound U.S. commercial airline
practice. This guaranteed amount:
a. excludes Purchaser's labor;
b. is based on January 1999 economic conditions and is subject to
adjustment annually from January 1999 in accordance with the
price adjustment provisions set forth in Exhibit XI of
Agreement PA295, and
c. assumes (i) a fleet size of sixty-two (62) Aircraft delivered
in accordance with the Delivery Schedule, (ii) a **********
flight hour to cycle ratio, and (iii) an annual utilization of
********** flight hours, in the continental United States and
Canada.
7.2 RESERVED
ARTICLE 8 *******
**********
ARTICLE 9 VERTICAL NAVIGATION
9.1 Purchaser desires to have installed in each Aircraft delivered
on or after December 31, 2001, the Honeywell approved
capability for full vertical navigation ("LOC-VNAV
Installation"). The non-recurring costs of Honeywell and
Seller associated with developing the LOC-VNAV Installation are
estimated to be US$**********. Should Purchaser elect to
proceed with the LOC-VNAV Installation, the Parties agree
**********. In the event the non-recurring costs exceed
US$**********, Seller and Purchaser shall meet promptly to
define the basis, if any, under which the LOC-VNAV Installation
will be continued.
9.2 Prior to March 31, 2001, Seller will establish implementation
dates for installation of the LOC-VNAV Installation
("Implementation Date") on newly delivered Aircraft, and for
retrofit of previously delivered Aircraft, which date will be
mutually agreed by the parties, and which will conform to
Purchaser's reasonable requirements as to timeliness of
implementation, and to Seller's reasonable timing requirements
for development, certification, and implementation, giving due
consideration to cooperation required from third party vendors.
Prior to March 31, 2001, Seller will also develop an SCN price
for the installation of the LOC-VNAV Installation in each
Aircraft delivered after the Implementation Date and a retrofit
price for the installation of the LOC-VNAV Installation in
those Aircraft delivered to Purchaser without the LOC-VNAV
Installation. Such prices shall be developed by Seller and
agreed to by the Parties. Until such agreement, Purchaser and
Seller shall not incur any nonrecurring costs to develop the
LOC-VNAV Installation.
(NEXT PAGE IS SIGNATURE PAGE)
IN WITNESS WHEREOF, Seller and Purchaser have caused this Schedule
to Agreement PA295 and PA296 to be executed by their duly authorized
representatives as of the day and year first above written.
Atlantic Coast Airlines Xxxxxxxxx Dornier GmbH
(Purchaser) (Seller)
(signature) (signature)
(name) (name)
(title) (title)
EXHIBITS I - VIII
[Intentionally Left Blank]
EXHIBIT IX
CUSTOMER SUPPORT
IX.1 TECHNICAL PUBLICATIONS AND DOCUMENTATION
IX.1.1 General
Seller will provide, at no cost to Purchaser, the manuals
(operational, maintenance, repair, illustrated parts catalog, vendor
manuals and all other manuals required to operate the Aircraft), in
the quantities and media form set forth in Annex A to this Exhibit
IX, attached hereto ("Technical Publications and Documentation").
Seller will also provide at no cost to Purchaser, as part of the
maintenance documentation, (i) a complete set of Job Instruction
Cards and at such time as the total number of Aircraft on firm order
is at least 56, a second set of Job Instruction Cards, and (ii)
appropriate engineering drawings as necessary for maintenance or
repair. The Technical Publications and Documentation and Job
Instruction Cards will be provided to Purchaser not less than sixty
(60) days in advance of delivery of the first Aircraft. Seller's
Technical Publications and Documentation, as noted in Annex A, will
be made available on CD-ROM within twenty-four (24) months after
delivery of the first Aircraft. At such time as the total number of
Aircraft on firm order is at least 56, Seller will double the
quantity of Seller's Technical Publications and Documentation to be
delivered to Purchaser in accordance with Annex A, except for those
Technical Publications and Documentation identified in Annex A to be
provided on a per-Aircraft basis. Any additional Technical
Publications and Documentation and revisions thereto are to be
purchased by Purchaser at Seller's then valid catalog price for such
item.
IX.1.2 Compliance with ATA
Technical Publications and Documentation related to the Aircraft,
shall be prepared in general accordance with the applicable
provisions of ATA Specification 100. Technical Publications and
Documentation related to Vendor Parts shall be delivered according
to the general standard of the specific Vendor. Where applicable,
such publications shall include details concerning software if the
Vendor intends to supply such software.
IX.1.3 Language
The Technical Publications and Documentation will be supplied in the
English language.
IX.1.4 Revision Service
a. Seller: Revisions to Technical Publications and Documentation
shall be issued by Seller as required from time to time
("Seller's Revisions").
b. Vendor: Seller shall ensure that revisions to the Vendor
Technical Publications and Documentation listed in Annex A
hereto ("Vendor's Revisions") shall be provided by the
respective Vendor.
c. Unless otherwise agreed between Purchaser and Seller, or the
respective Vendor, as the case may be, revisions shall be
prepared and supplied in the same format and quantity as the
original documentation.
d. Revisions to Seller's Technical Publications and Documentation
will be provided for ********** from delivery of the first
Aircraft. At such time as Aircraft number ********** is
delivered to Purchaser, revisions to Seller's Technical
Publications and Documentation will be extended to **********
from delivery of the first Aircraft. Thereafter, all revisions
to Seller's Technical Publications and Documentation will be
purchased by Purchaser at Seller's then valid catalog price for
such revision service. Notwithstanding the above, Seller shall
provide revisions to Seller's Technical Publications and
Documentation for all documentation modified by a service
bulletin issued by Seller for matters requiring urgent attention
and generally limited to items affecting safety ("Alert Service
Bulletin"), and those which Purchaser's certification authority
requires to maintain following certification.
e. Purchaser may reproduce all Technical Publications and
Documentation for Purchaser's exclusive use, or for such other
use subject to Seller's approval, which will not be unreasonably
withheld. Technical Publications and Documentation reproduced
by Purchaser will not be subject to Seller's revision service.
f. Seller warrants the accuracy and completeness of Seller's
Technical Publications and Documentation. Seller's sole
responsibility or liability to Purchaser for breach of this
warranty shall be to correct any publication found to contain an
error within thirty (30) days after Seller has been notified of
such error. Such correction shall be accomplished in a temporary
revision.
IX.1.5 Delivery
On delivery of the initial issue of and revisions to the Technical
Publications and Documentation, Purchaser shall provide Seller a
receipt evidencing delivery of such publications and/or revisions.
IX.1.6 Proprietary Rights
All of the publications, data, drawings or other documentation or
information described in this Exhibit IX or in the Specification are
proprietary to Seller and/or Vendors and all copyrights and other
proprietary rights, if any, are the Seller's and/or Vendors'
property.
IX.1.7 Non Disclosure of Data and Documents
a. Purchaser covenants that the data or documents furnished by
Seller under the terms of this Clause IX.1 or copies thereof, or
otherwise acquired by Purchaser, shall not be disclosed to any
person, firm or corporation, or to any government or
governmental department or agency without Seller's written
consent, except as may be necessary for the full use and
enjoyment of the Aircraft by Purchaser. For the avoidance of
doubt, Purchaser may make such data and documents available to
(i) the FAA if requested to do so or otherwise as necessary to
insure its compliance with FAA rules and regulations, and (ii)
Purchaser's outside maintenance provider and consultants if
necessary for the full use and enjoyment of the Aircraft, on the
basis that such provider or consultants may not further disclose
the data or documents to another third party.
b. Purchaser shall inform Seller of any subsequent purchaser,
operator, owner, assignee or transferee of the Aircraft and
Purchaser may provide the new operator with any Aircraft
specific Manuals.
c. A violation by Purchaser of Seller's rights pursuant to Clause
IX.1.6 and/or a violation of Purchaser's obligations under
Clauses IX.1.7 shall be deemed to be a material breach of
Purchaser's obligations under the Agreements and entitles
Seller, in addition to any other rights and remedies it may have
by law or otherwise, to suspend its performance under this
Clause IX.1 without notice.
IX.2 TRAINING
IX.2.1 General
a. Seller, its affiliate or an FAA-approved third party selected by
Seller, at Seller's discretion, will provide type specific
training for the Aircraft, consisting of:
(i)Aircraft Technician Training (ATT); and
(ii)Flight Attendant Training (FAT).
b. All training will meet the standards required by Purchaser's
civil aviation authority having jurisdiction over it and will be
conducted and directed by experienced instructors at third party
training facilities in Hoofddorp, Netherlands, in Dallas, Texas,
at Seller's training facilities, at another Seller designated
location or at other locations specified herein. Seller will
provide Purchaser first priority on available training in the
U.S., subject to adequate advance notice of at least six (6)
months. Personnel assigned for such training shall be required
to have command of the English language as all training shall be
conducted in the English language. Purchaser's personnel
expenses including, but not limited to, transportation,
accommodation, insurance, living and incidental expenses shall
be borne by Purchaser. Purchaser is entitled to the training
program set forth in this Exhibit IX for up to twelve (12)
months after delivery of each Aircraft. In the event that a
trainee is unable during the courses or at the end of such
courses to perform to the minimum levels required by the course
requirements, Seller shall discuss with Purchaser the remedies
to assist trainee in satisfying such course requirements. In the
event the performance of the trainee continues to be
insufficient, the corresponding course shall be terminated for
such trainee without replacement.
c. Any additional training and related expenses for such training
services beyond the content and duration of the corresponding
standard programs as required by the FAA are for the account of
Purchaser.
IX.2.2 Pilot Training
a. Seller will provide a site license for an FAA-approved pilot
Computer Based Training program at Purchaser's Dulles, Virginia
area facilities. The qualification requirements for pilot
training will be established during a training planning
conference to be held in advance of training.
b. Seller shall issue a credit to Purchaser for pilot training
calculated on the basis of $********* for each Aircraft.
Against this credit Seller will apply training related services
performed for Purchaser by third parties or Seller for services
consisting of pilot instructors at a rate of $********** per
hour plus reasonable travel related expenses, if any; and/or
use of the Seller's 328JET aircraft or other Seller arranged
328JET aircraft for in-flight pilot training at a rate of
$********** per flight hour, plus fuel at the then applicable
rate, if the use of the training aircraft is required due to the
unavailability of 328JET simulator time, subject to timely
booking of such 328JET simulator time by Purchaser, or
$********** per flight hour, plus fuel at the then applicable
rate, if the training aircraft is required solely for the
convenience of Purchaser to provide such training. Seller's
obligation to provide or cause to provide these services is
subject to the limit of the cash equivalent value of all pilot
training for all Aircraft. Purchaser shall be entitled to cause
any service provider to direct xxxx Seller for the provision of
any training related services. Purchaser shall have the right
to audit service provider invoices and direct Seller not to pay
any disputed amounts.
c. RESERVED
d. In the event of non-availability of any 328JET simulator, and
subject to timely booking of the 328JET simulator by Purchaser,
and pilot training is conducted in Purchaser's Aircraft , Seller
shall reimburse Purchaser for the cost of operation and
maintenance of such Aircraft. If Purchaser chooses not to train
in the Aircraft, it may, without regard to any provision of the
Agreements concerning Purchaser's delay in accepting an
Aircraft, delay delivery of the Aircraft at no penalty.
e. Each student pilot will receive, and may retain, training
documentation . Such documentation is for training purposes
only and shall not be subject to revision.
f. Purchaser will, at its discretion, have the right to submit
whatever training course it deems appropriate to the FAA for
approval.
g. Simulators
(i) Seller will cause its pilot training vendor, Friendship
Simulation Company ("FSC"), to provide Purchaser with "dry"
simulator time at a guaranteed hourly rate of US$*******.
Seller shall cause FSC to accept payment for the use of its
simulators directly from Seller. If Purchaser does not use the
FSC facility for pilot training, Purchaser shall be entitled to
cause its own 328Jet simulator provider to direct xxxx Seller
for any pilot training and Seller shall pay for such training,
or shall reimburse Purchaser for training amounts paid by
Purchaser, up to the total of the cash equivalent value for
pilot training for all Aircraft. Purchaser shall have the right
to audit simulator provider invoices and direct Seller not to
pay any disputed amounts.
(ii) **********
(iii) **********.
(iv) **********.
**********.
IX.2.3 Aircraft Technician Training (ATT)
All ATT trainees must have qualifications that meet the FAA's
standard aircraft maintenance requirements. The qualifications for
technician training will be established during a training planning
conference to be held in advance of the start of training. The ATT
course for at least one (1) mechanic for Aircraft ferry purposes
should be completed prior to delivery of the first Aircraft.
Purchaser will receive the training documentation necessary for the
ATT. Such documentation is for training purposes only and shall not
be subject to revision.
a. Seller's ATT
To assist Purchaser in establishing its own in-house technician
training capabilities, Seller shall train an initial cadre of
********** technicians, ********** of which will be trained to
technician training instructor level, at Seller's maintenance
training site in San Antonio, Texas. Seller, at no cost to
Purchaser, shall provide a reasonable quantity of maintenance
training and instruction materials, including but not limited to non-
mechanical training aids, slides and training and instruction
manuals, which Purchaser may reproduce for its exclusive employee
use or for a third party for use in exclusively training Purchaser's
employees. Seller will cooperate with Purchaser to make available
mechanical training aids to support FAA-approved training courses on
terms and conditions to be agreed. The courses described below are
designed in general accordance with the ATA 104 Specification
"Guidelines for Aircraft Maintenance Training." Purchaser may
submit whatever training course it deems appropriate to the FAA for
approval. Each ATT candidate may attend only one of the following
line/base maintenance courses:
(i)Airframe/Power Plant System
A fifteen (15) day course to include a detailed description
of the operation, component location, component removal and
installation and test procedures of the airframe and power
plant systems in accordance with Seller's Maintenance Manual.
Engine operation and engine run-up training may be provided
in the simulator. In addition, a general familiarization on
electrical and avionic systems shall be provided.
(ii) Electrical and Avionic System
A fifteen (15) day course to include a general
familiarization of airframe and power plant system and a
detailed description of the operation, component location,
component removal and installation and test procedures on the
electrical and avionic systems in accordance with Seller's
Maintenance Manual. Trainees for this course shall have a
basic knowledge of avionic bus systems and display
techniques.
b. Engine Manufacturer ATT
In addition to the Seller's ATT course for Airframe/Power Plant
System, Purchaser's personnel attending such course shall be
instructed in a line maintenance course on the Aircraft engine.
Such course, free of charge to Purchaser, shall take place at
the engine manufacturer's site in Xx. Xxxxxx, Xxxxxx, Xxxxxx,
covering general engine familiarization, line maintenance, and
hot section inspection and heavy maintenance. Purchaser's
personnel expenses will be for Purchaser's account.
c. Avionics Manufacturer ATT
Honeywell or Seller shall provide, free of charge, at its
facilities, avionics training for Purchaser's avionics
technicians. Purchaser's personnel expenses will be for
Purchaser's account.
d. Other Vendor ATT
Upon Purchaser's request, Seller will assist Purchaser in
arranging additional training with other Vendors. Purchaser's
personnel expenses will be for Purchaser's account.
e. Ground Handling Training
Seller shall provide a ground handling training course for
********** of Purchaser's personnel at Purchaser's facility.
The course duration shall be at least three (3) working days and
consistent with Purchaser's training needs.
f. General Familiarization Training
Seller will provide a general familiarization training course
for ********** of Purchaser's qualified personnel at Purchaser's
facility. The course duration shall be three (3) working days
and consistent with Purchaser's training needs.
g. Engine Run-Up Training
Seller will provide an engine run-up training course for
********** of Purchaser's qualified personnel at Purchaser's
facility and/or at the FFS facility. The course duration shall
be two (2) working days.
IX.2.4 Flight Attendant Training (FAT)
Seller shall provide Purchaser training for *******flight attendants
in accordance with Seller's standard training program. Such
training shall be provided at Purchaser's facility on Purchaser's
Aircraft.
IX.2.5Trainee Allocation
Each course will have a reasonably determined minimum capacity.
Seller reserves the right to combine Purchaser's trainees in courses
with those of other customers.
IX.2.6 Training Planning Conference
A training planning conference has taken place at Seller's Texas
facility or a third party's premises in the United States at which
Seller or a third party, as the case may be, has provided and
discussed with Purchaser a detailed description and schedule of the
training courses herein. Prior to the training planning conference,
Purchaser provided Seller in writing with the number of attendees
participating in the training courses set forth in Clause IX.2
herein. Purchaser will provide the names of attendees one (1) month
prior to the commencement of the training course, subject to
overseas travel documentation requirements, Purchaser may substitute
trainees from the attendee list at any time. In the event Purchaser
reschedules the training courses after the training conference,
Purchaser shall bear the corresponding cancellation and rescheduling
fees.
IX.2.7 Training Approval by Aviation Authority
Purchaser is fully responsible, with Seller's or third party
training provider's reasonable assistance, for obtaining local
approvals of all training requirements, instructor personnel and
related training aids by the respective aviation authority having
jurisdiction prior to the start of training.
IX.2.8 Training Aids
**********.
IX.2.9 Unused Training Credits
**********
IX.2.10 Insurance
a. While training is being provided pursuant to this
Clause IX.2, Purchaser shall maintain (i) aviation
liability insurance with coverage for bodily injury,
property damage, passenger liability and public liability
insurance with a minimum amount of not less than
US$************* or equivalent for any one (1)
accident/occurrence and (ii) commercial liability
insurance covering the liability of Purchaser for bodily
and property damages with a minimum amount of not less
than US$********** for any one (1) accident/occurrence.
b. Purchaser shall cause Seller, its subsidiary or
affiliated companies, their officers, agents, employees
and representatives to be named as additional insured
under such liability insurances as set forth in this
Clause IX.2.10 herein.
c. If Purchaser maintains hull insurance in respect to
the Aircraft, such insurance shall contain a waiver of
subrogation in favor of Seller, its subsidiary or
affiliated companies, their officers, agents, employees
and representatives. In the event a deductible is
included in such hull insurance, Purchaser shall bear the
cost of such deductible.
d. Purchaser shall, not later than ten (10) days prior to
the scheduled start of the corresponding training, furnish
to Seller for its approval, a certificate from the
Purchaser's insurer evidencing compliance with the
provisions of this Clause IX.2.10 showing that Seller has
been so named as an additional insured, stating that the
coverage is in accordance with this Schedule and providing
that such Aircraft insurance policy shall not be cancelled
or materially altered by the insurer unless thirty (30)
days' prior written notice thereof has been provided to
Seller.
IX.2.11 Cabin Training Device
**********
IX.3. SPARE PARTS SERVICES
IX.3.1 Definitions
The terms used in this Exhibit IX.3 shall have the meanings ascribed
to them in Article B. "Summary of Definitions".
IX.3.2 Scope of Material Support
The material support provided hereunder covers Seller's supply,
repair and modification of and documentation for all Proprietary
Parts and the lease of Insurance Items. Supply, repair and
modification of and documentation for Vendor Parts shall be provided
by the respective Vendor in accordance with the Vendor Information
Manual. Back-up support for Vendor Parts and Standard Parts shall be
provided by Seller as may be deemed necessary in Seller's opinion to
enhance the availability of such parts. If the terms of the Vendor
Information Manual vary from or are inconsistent with any relevant
provision of this Exhibit IX, the terms of this Exhibit IX shall
apply. No Vendor Information Manual provision shall operate so as to
limit Purchaser's rights and Seller's obligations as set forth in
this Exhibit IX.
IX.3.3 Support Period
So long as a minimum of five (5) aircraft of the type purchased
hereunder are regularly operated in scheduled commercial revenue
service worldwide, accumulating a total of not less than five
thousand (5000) flying hours each calendar year, Seller shall
manufacture or procure and sell to Purchaser Proprietary Parts to
meet Purchaser's reasonable requirements for such parts in
connection with its normal operation of the Aircraft. The support
periods for Vendor Parts are defined in the Vendor Information
Manual.
IX.3.4 Consignment Inventory
a. **********
b. **********
c. **********
d. **********
IX.3.5 Spares Facility
a. **********
b. **********
c. **********
d. **********
e. **********.
f. **********
IX.3.6 Spare Parts Credit
**********
IX.3.7 Expedite Service
Seller shall maintain a twenty-four (24) hours-a-day, seven (7) days-
a-week AOG Service for the supply of AOG Spares. Such service is
operated in general accordance with the "World Airlines & Suppliers
Guide."
a. So long as Purchaser continues to operate its
Aircraft fleet, Seller is committed to meeting the
following response and dispatch times to spare parts
requests from Purchaser:
Service Level Response time Dispatch time
AOG 2 hours 4 hours
Critical (imminent AOG 2 hours 24 hours
or work stoppage)
Expedite 24 hours Per customer
request
Routine 48 hours 7 days
b. Seller will use production parts to support Purchaser
in AOG cases when necessary. In the event Seller is
unable to meet the above spare parts dispatch times for a
part, Seller agrees to pay freight delivery charges for
such part.
IX.3.8 Sales Conditions
a. Except as otherwise provided in the Agreements or
this Schedule, Spare Parts shall be quoted, ordered, sold
and delivered in accordance with Seller's General Terms
and Conditions for the Sale of Spare Parts, published from
time to time in the Seller's Spare Parts Price List, and
in accordance with the then current Customer Support
Manual.
b. **********.
c. All international freight charges and duties, if any,
for spare parts ordered by Purchaser through Seller will
be paid by Seller, provided, however, international
freight charges and duties, if any, for AOG Non-Stock
Spare Parts will be paid by Purchaser. AOG Non-Stock
Spare Parts, as used herein, means those spare parts that
have not been requisitioned by any operator two or more
times during the previous twelve (12) months.
IX.3.9 Warranty for Spare Parts
a. The warranty period for Spare Parts shall expire when
twenty-four (24) months have elapsed from the date of
delivery of such Spare Part to Purchaser.
b.The warranty, procedures and administration of Spare Parts
shall be in accordance with the then current Customer
Support Manual. If the terms of the Manual vary from or
are inconsistent with any relevant provision of this
Exhibit IX, the terms of this Exhibit IX shall apply. No
Manual provision shall operate so as to limit Purchaser's
rights and Seller's obligations as set forth in this
Exhibit IX.
IX.4 PERSONNEL DELEGATION
a. Seller shall assign one qualified (1) technical
representative ("Tech Rep") for a total period of
********** beginning with delivery of the first Aircraft
to Purchaser's primary maintenance facility, or such other
location as may be mutually agreed, for advisory services.
The period of assignment will be ******** for each
Aircraft ******* delivered to Purchaser. The period of
assignment will be ********** for each Option Aircraft or
PA296 Option Aircraft delivered to Purchaser. The
advisory services and the procedures under which such
services shall be provided shall be consistent with the
services and procedures as set forth in the then current
Customer Support Manual.
b. The Tech Rep delegated to Purchaser hereunder shall
be and shall remain the employee of Seller. The salary
and benefits paid to the Tech Rep shall be the sole
responsibility of the Seller. Such Tech Rep shall work in
an advisory capacity and perform such services as
reasonably requested by Purchaser, which shall have no
authority to govern the conduct or to supervise the Tech
Rep. Purchaser will consult and coordinate with Seller in
all matters relating to Tech Rep activities during the
period of delegation. The Tech Rep shall be used for
civil operations only.
c. The scope of advisory services to be provided by the
Tech Rep shall be as follows:
- provide advice for Purchaser's personnel in the
performance of maintenance and inspection procedures;
- establish and maintain effective communication between
Seller's Customer Support Department and Purchaser's
appropriate management;
- observe and investigate maintenance and operational
procedures in order to identify potential technical
problems and to recommend solutions to correct the
source of problems;
- provide on-the-job training instructions in the
performance of maintenance, overhaul and
troubleshooting procedures;
- interpret technical publications and specifications as
required to assist Purchaser's maintenance personnel;
- oversee mechanical and structural repairs in the field;
and
- compile reports and technical data pertaining to, or
requiring, service changes and improvements (S.B.'s or
E.O.'s).
d. Purchaser shall arrange for emergency medical
treatment for the Tech Rep, if necessary, during such
period of delegation. Medical insurance coverage for the
Tech Rep shall be at Seller's cost.
e. Sick leave for the Tech Rep shall be granted only for
valid medical reasons confirmed by a doctor appointed by
Purchaser or Seller. In either case a medical certificate
shall be submitted to both Purchaser and Seller. In case
of disability of the Tech Rep longer than ten (10) working
days, the Parties shall agree as to the temporary
replacement of the personnel concerned.
f. Purchaser will provide transportation and per diem
expense reimbursement only in the event the Tech Rep is
temporarily based at locations other than Purchaser's main
base, if so required and directed by Purchaser.
g. Seller shall provide the Tech Rep's transportation to
Purchaser's main base and return to Tech Rep's home base.
If Purchaser requires the Tech Rep to accompany
Purchaser's crew on the ferry flight of the Aircraft to
Purchaser's main base, Purchaser shall provide the Tech
Rep with duly paid flight tickets from Purchaser's main
base to Munich.
h. Seller shall be responsible for obtaining in sufficient
time any visas, permits and other authorizations required
for the Tech Rep. Purchaser shall assist Seller in
obtaining such documents.
i. Purchaser shall, at its expense, provide the Tech Rep
with suitable office space, facilities and office
equipment including a desk, file cabinets, two telephone
lines, access to facsimile and photocopy equipment, while
on assignment at Purchaser's facility. All other expenses
of the Tech Rep will be the responsibility of Seller.
j. **********.
IX.5 SERVICE ENGINEERING
a. **********
b. **********
EXHIBIT IX
ANNEX A
TECHNICAL PUBLICATIONS AND DOCUMENTATION
IX.A.1 IDENTIFICATIONS
1) FORMAT
P = Printed hard copy in general accordance with ATA 100,
Chapter 1-1-1.
CD = Electronic Data Carrier - on request
F = Microfiche, in general accordance with ATA 100, Chapter
1-1-1.
2) VERSION
C = Customized as per ATA 100
A = Non-customized
3) SUPPLY
EA = Per Aircraft, upon Delivery
FL = Delivered for the entire fleet of Aircraft
4) REVISIONS PER YEAR
1 = one revision
2 = two revisions
AR = as required
NA = not applicable
5) REMARKS
OEM = Issued and delivered by Seller
VEN = Issued by the respective Vendor and initially delivered
by Seller
6) VENDOR TECHNICAL DOCUMENTATION
* = Revision Service provided by the respective Vendor
EXHIBIT IX
ANNEX A
IX.A.2 TECHNICAL PUBLICATIONS AND DOCUMENTATION TO BE DELIVERED
Title Abbrev Vers Format Qty Rev/ Remarks
Supply Year
1. Operational Tech Pubs
Aircraft Flight Manual (AFM) C P ***** AR OEM
Flight Crew Operating (FCOM) C P ***** AR OEM
Manual
Master Minimum Equipment (MMEL) A P ***** AR OEM
List
Rescue Manual (RM) A P ***** AR OEM
2. Maintenance Tech
Pubs/Doc
Aircraft Maintenance (AMM) C CD/P ***** 2 OEM
Manual
Maintenance Review Board (MRB) A P ***** AR OEM
Report
Maintenance Planning (MPD) A P ***** AR OEM
Document
Airworthiness Limitations (ALD) A P ***** AR OEM
Doc.
System Schematics Manual (SSM) C CD/P ***** AR OEM
Fault Isolation Manual (FIM) C CD/P ***** 1 OEM
Wiring Manual (WM) C CD/P ***** 2 OEM
Structural Repair Manual (SRM) A CD/P ***** AR OEM
Corrosion Prevention and (CPCPM) A P ***** AR OEM
Control Program Manual
Consumable Material List (CML) A P ***** AR OEM
Weight and Balance Manual (WBM) C P ***** AR OEM
Power Plant Build-up (PPBM) A CD/P ***** AR OEM
Manual
Component Maintenance (CMM-M) A CD/P ***** AR OEM
Manuals-Aircraft
Manufacturer
*Component Maintenance (CMM- A CD/P ***** AR OEM/VEN
Manuals-Vendors (Standard V)
Documentation as per PI)
*Honeywell System (SMM) C P ***** AR VEN
Maintenance Manual
Illustrated Tool and (ITEM) A CD\P ***** AR OEM
Equipment Manual
Non-Destructive Testing (NDTM) A CD/P ***** AR OEM
Manual
3. Material Tech Pubs/Doc
Aircraft Illustrated Parts (AIPC) C CD/P ***** 2 OEM
Catalog
*Engine Illustrated Parts (EIPC) A P ***** AR VEN
Catalog
Title Abbrev Vers Format Qty Rev/ Remarks
Supply Year
4. Service Tech Pubs/Doc
Customer Support Manual (CSM) A P ***** AR OEM
Vendor Information Manual (VIM) A P ***** AR OEM
Publications Index (PI) A P ***** 12 OEM
Service Bulletins (SB) C/A P ***** NA OEM
Service Information (SI) A P ***** NA OEM
Letters
All Operators Telex (AOT) A P ***** NA OEM
Aircraft Life Record (ALR) C P ***** NA OEM
Aircraft Log Book (ALB) C P ***** NA OEM
Engine Log Book (ELB) C P ***** NA OEM
5. Standard Vendor
Documentation
* Set of standard Vendor ----- A P ***** AR OEM/VEN
Documentation available
from Seller as per PI and
related to Vendor
equipment installed in the
Aircraft
EXHIBIT X
X.1 328-300 AIRCRAFT PERFORMANCE
**********
EXHIBIT XII
SCHEDULE COMPLETION
XII.1 GENERAL
Seller shall provide Purchaser a Revenue Service Schedule Completion
Rate Guarantee for the Aircraft, covering a period of *****following
the date of entry into service of the first Aircraft. This Revenue
Service Schedule Completion Rate Guarantee is effective during the
Guarantee Term, defined below, so long as *****of Purchaser's
Scheduled Revenue Service Flights originate or terminate at its main
maintenance base, or line maintenance base which shall have levels
of spares and maintenance technician support to be agreed during the
initial provisioning conference.
XII.2 DEFINITIONS
In this Revenue Service Schedule Completion Rate Guarantee:
"Cancelled Flight" means a Scheduled Revenue Service Flight that is
cancelled or diverts from its intended destination because of
technical reasons inherent in the Aircraft and the flight is not an
Excluded Flight.
"Excluded Flight" means flight cancellation or diversions caused by
the reasons set forth in Appendix 1, attached hereto;
"Guarantee Term" means a term commencing with the date of entry into
service of the first Aircraft and terminating on a date *****later.
The "Revenue Service Schedule Completion Rate Guarantee Percentage"
shall be a *****moving average (expressed as a percentage) which
shall be calculated using the following formula:
*****;
"Scheduled Revenue Service Flight" means an Aircraft operation
available for the transportation of revenue passengers;
XII.3 REVENUE SERVICE SCHEDULE COMPLETION RATE GUARANTEE
PERCENTAGES
At the end of each month, Purchaser shall perform the calculation
required to determine the Revenue Service Schedule Completion Rate
Guarantee Percentage. Input data will be drawn from Purchaser's
official logs and utilization reports as submitted to its regulatory
authorities. Seller guarantees such Revenue Service Schedule
Completion Rate Guarantee Percentage shall not be less than:
Period Guarantee Percentage
(%)
*****
Satisfaction of the guarantee for the first *****shall be evaluated
immediately following the *****. In the event the Aircraft fleet's
Guarantee Percentage equals or exceeds **********following delivery
of the first Aircraft, the Revenue Service Schedule Completion Rate
Guarantee ******* to Purchaser under this Revenue Service Schedule
Completion Rate Guarantee.
XII.4 In the event the Aircraft fleet fails to meet the Revenue
Service Schedule Completion Rate Guarantee, Seller and
Purchaser agree as follows:
a. Purchaser shall notify Seller in writing of a failure to
meet the Revenue Service Schedule Completion Rate
Guarantee and provide Seller with detailed substantiating
information concerning such failure. Purchaser will
provide data in a format to be mutually agreed upon.
b. In those instances where, on the basis of reports
furnished to Seller, engine-related causes are shown to be
a significant contributor to the failure to meet the
Revenue Service Schedule Completion Rate Guarantee, P&WC
will conduct investigations to determine root causes, and
together with Seller, will generate a corrective action
plan on a case-by-case basis.
c. *****
d. *****
e. *****
XII.5 PURCHASER'S OBLIGATIONS
Seller's Revenue Service Schedule Completion Rate Guarantee is
subject to Purchaser complying with the following:
a. Purchaser shall provide to Seller all data pertaining to
the operation of the Aircraft reasonably deemed necessary
and requested by Seller to enable Seller to conduct an
efficient and coordinated audit of all reliability,
maintainability, operational and cost data, with the
objective of improving the safety, availability and
operational costs of the Aircraft, provided that such data
are of the type and in the form normally accumulated by
Purchaser in its operation. Seller shall enter into an
appropriate confidentiality agreement with respect to
Purchaser's data, and in any event will not be entitled to
data not relevant to the Aircraft.
b. Purchaser shall submit a Cancelled Flight report within
thirty (30) days after the end of each calendar month,
beginning with the month Purchaser places the first
Aircraft in service. Purchaser and Seller shall agree,
prior to delivery of the first Aircraft, upon the final
content and lay-out of such reports, which shall include,
among other data, ATA Chapter, Subchapter, Aircraft, date,
discrepancy and action taken.
c. Purchaser shall subscribe fully to a FAA-accepted
maintenance training program and shall have sufficient
trained technicians on site at its aircraft maintenance
facilities. Purchaser agrees to provide, at its expense,
mutually agreed supplementary training for Purchaser's
personnel in areas where additional training would
reasonably be expected to enhance Aircraft reliability and
maintainability.
d. During the first *****after entry into service of the
first Aircraft delivered, Purchaser shall participate in
Seller's quarterly reliability review meetings to be held
at Purchaser's maintenance base to identify possible
deficiencies. During *****entry into service of the first
Aircraft delivered, reliability review meetings will be
held on an annual basis unless mutually agreed otherwise.
e. If during the Guarantee Term guarantee levels are not
achieved, Seller shall have the right to perform a
reasonable review during normal business hours of
Purchaser's maintenance and flight operations departments'
procedures related to the failure to meet the guarantee in
Purchaser's operation of the Aircraft. Purchaser's
maintenance and operations personnel shall cooperate in
the conduct of the review. This review will be performed
by employees of Seller provided an appropriate
confidentiality agreement has been executed. Purchaser
shall be given access to any information gathered during
such review.
EXHIBIT XII
APPENDIX 1
REVENUE SERVICE SCHEDULE COMPLETION RATE GUARANTEE EXCLUSIONS
Negligence of Purchaser's personnel or personnel under contract to
the Purchaser;
Force Majeure (including, but not limited to, lightning strikes,
foreign object damage, bird strikes, enroute weather, and ATC
diversions);
Crew refusal of systems or components that are within specified
limits;
Non-availability of spares (as recommended by and included in
Seller's IP list), equipment documentation or trained personnel due
to fault of Purchaser;
Acts of third parties (other than acts of any affiliate, agent or
employee of Seller or its Vendors;
Incorrect routine servicing of engine oil, hydraulic fluid, or
oxygen refilling or recharging;
Navigation routing software data base updating of on-board
navigation computers;
Tire/wheel assembly change due to cuts, wear or dry nitrogen/air
pressure servicing;
Wheel and brake changes due to wear;
Recurrences of technical delays within three (3) days, with or
without corrective action, which are caused by incorrect crew
reporting, maintenance or servicing;
Failure to correct technical faults when Purchaser has a maintenance
opportunity to correct such fault;
Malfunction of equipment provided by Purchaser;
Extended maintenance or late release from maintenance due to work
scheduling of Purchaser, except for discrepancies found during
scheduled maintenance;
Malfunction of any galley equipment except the fixed galley
structure;
Malfunction or absence of any loose or portable emergency equipment;
Evidence for cancellations for which supporting information and/or
documentation are not available;
Failure to maintain, overhaul, repair and operate the Aircraft, and
failure to maintain, overhaul, repair, and operate any equipment,
any accessory, any component, and any part, in accordance with
Purchaser's maintenance programs;
Malfunctions caused by components not manufactured by Vendors listed
in the Aircraft Illustrated Parts Catalog or authorized by Seller;
and
Cancelled Flights caused by inherent or non-corrected malfunctions
which could have been avoided by operation in accordance with all of
the provisions of the Minimum-Equipment List as approved by the FAA
for the operation of the Aircraft, unless precluded by Purchaser's
Flight Operations Manual for the Aircraft.
EXHIBIT XIII
MAINTENANCE COST
XIII.1 GENERAL
Subject to the provisions of Seller's Maintenance Cost Guarantee set
forth below, Seller guarantees that the cost to repair, replace,
overhaul and restore the Aircraft and components thereof, except
Excluded Items as defined below, to a serviceable condition shall
not exceed a guaranteed amount per flight hour/cycle during a
specified period of Aircraft operations, provided however, that the
maintenance is performed in the most economical manner, which
includes the use of overhauled, restored or repaired parts, when
authorized and appropriate.
XIII.2 DEFINITIONS
In this Maintenance Cost Guarantee ("MCG"):
"Eligible Aircraft" means the fleet of sixty-two (62) Aircraft plus
any Option Aircraft or PA296 Option Aircraft acquired during the MCG
Term by Purchaser pursuant to the Agreements or this Schedule;
"Eligible Aircraft Total Cost" means for the Eligible Aircraft, the
Eligible Costs accumulated by the Purchaser during the MCG Term for
such Aircraft;
"Eligible Cost" means the cost of Eligible Parts and associated shop
labor;
"Eligible Part" means any part, component or equipment installed in
or part of the Eligible Aircraft excluding the Excluded Items;
"Excluded Items" means those items excluded from the Maintenance
Cost Guarantee which are:
a. Parts, systems or components which are:
1) Subject to an insurance claim;
2) Damaged by misuse, or damaged either directly or
indirectly as the result of failure to properly
maintain other parts or components in accordance with
Seller's Maintenance Planning Document ("MPD")
standards;
3) Damaged or malfunction due to components not
manufactured by vendors listed in the Aircraft
Illustrated Parts Catalog or authorized by the
Seller;
4) Sent out for repair when no repair is required or
performed, excluding repetitive failure on individual
serialized components;
5) Not maintained in accordance with approved
documentation, including the MPD; and
6) Damaged as a result of foreign object ingestion or
impact (FOD), lightning strikes, or acts of God.
b. Standard parts including, but not limited to AN, MS, NAS,
AGS designated hardware as used for any type of aircraft
line maintenance;
c. Interior carpets, passenger seats (except seat frames),
seat covers, trim panels, galley equipment (except coffee
makers), etc., subject to normal wear and tear, and loose
safety equipment;
d. Exterior Aircraft paint;
e. Purchaser furnished equipment;
f. Petroleum oil and lubricants, and chemicals and adhesives;
or
g. Expendables with a value of less than US$*******.
"Guaranteed Amount" shall mean *****.
*****
"MCG Term" means for the Eligible Aircraft, a term commencing on the
day immediately following delivery of the first Aircraft and
terminating on the *****anniversary of the date of delivery of the
first Aircraft.
"Guaranteed Reconciliation Period Amount" shall mean the US$/Flight
Hour amount for the associated Reconciliation Period as set forth
below:
Fleet Average Single Aircraft Reconciliation Period
US$/Flight Hour* US$/Flight Hour Months
**** **** *****
**** **** *****
**** **** *****
**** **** *****
**** **** *****
**** **** *****
**** **** *****
**** **** *****
**** **** *****
**** **** *****
* **********
The Guaranteed Reconciliation Period Amount excludes the hourly
maintenance cost of the engines, APU, and Honeywell avionics suite.
XIII.3 REPORTING AND PAYMENT CALCULATIONS
a. During the MCG Term, Purchaser shall, not later than
thirty (30) days after the last day of each quarter,
provide Seller with documentation, in a format acceptable
to Seller, supporting the total of the Eligible Costs
accumulated for each Eligible Aircraft during the
preceding quarter, and a total of the flight hours and
cycles accumulated for each Eligible Aircraft during the
preceding quarter, as recorded in the Eligible Aircraft
records.
b. During the MCG Term, Seller shall, every twelve (12)
months, beginning with the twelfth (12th) month after
delivery of the first Aircraft ("Reconciliation Period")
provide Purchaser with a statement which is the positive
or negative result of a calculation which is the sum of
the Eligible Aircraft Total Cost less the sum of the
product of the flight hours multiplied by the hourly
Guaranteed Reconciliation Period Amount, from the date of
delivery of each Eligible Aircraft.
c. **********
d. Seller's liability under this MCG is expressly limited to
the provision of the aforementioned Spare Parts Credit.
Seller's obligations hereunder shall terminate in the
event that Purchaser is unable to provide Seller with
documentation as requested pursuant to Clause XIII.3a
above if Purchaser is in default under this or any other
agreement with Seller or a subsidiary of Seller, Seller's
obligation to make payment hereunder shall be suspended.
e. In the event that, during the MCG Term, an Eligible
Aircraft does not meet the MCG Guaranteed Amount, Seller
shall provide Purchaser with cost-reduction related
Service Bulletin instructions, parts and materials free of
charge. Such Service Bulletin parts and materials shall
be incorporated as soon as practicable following receipt
by Purchaser of instructions, parts and materials, if
applicable. Should Purchaser not incorporate and/or
install such Service Bulletin, parts and materials and/or
modifications, as soon as practicable, the Spare Parts
Credit to be provided to Purchaser shall be reduced by an
amount attributable to the delay in incorporation of such
Service Bulletin.
