*	CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY WITH 
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL 
TREATMENT REQUEST.



BOMBARDIER REGIONAL AIRCRAFT DIVISION


PURCHASE AGREEMENT


RJ-0350




BETWEEN


BOMBARDIER INC.



AND



ATLANTIC COAST AIRLINES

Relating to the Purchase of 
Twelve (12) Canadair Regional Jet aircraft 

Including related Customer Support Services




TABLE OF CONTENTS
	
ARTICLE
		1	INTERPRETATION
		2	SUBJECT MATTER OF SALE
		3	CUSTOMER SUPPORT SERVICES AND WARRANTY	
		4	PRICE
		5	PAYMENT
		6	DELIVERY PROGRAM
		7	BUYER INFORMATION
		8	CERTIFICATION/FOR EXPORT/
		9	ACCEPTANCE PROCEDURE
		10	TITLE AND RISK
		11	CHANGES
		12	BUYER'S REPRESENTATIVES AT MANUFACTURE SITE
		13	EXCUSABLE DELAY
		14	NON-EXCUSABLE DELAY
		15	LOSS OR DAMAGE
		16	TERMINATION
		17	NOTICES
		18	INDEMNITY AGAINST PATENT INFRINGEMENT			
		19	LIMITATION OF LIABILITY
		20	ASSIGNMENT
		21	SUCCESSORS
		22	APPLICABLE LAWS
		23	CONFIDENTIAL NATURE OF AGREEMENT
		24	AGREEMENT
		25	DISPUTES

	APPENDIX	
		I		ECONOMIC ADJUSTMENT FORMULA	
		II		DELIVERY SCHEDULE		
		III	SPECIFICATION
		IV	BUYER SELECTED OPTIONAL FEATURES 		




	EXHIBIT
		I		CERTIFICATE OF ACCEPTANCE
		II		BILL OF SALE
		III	CERTIFICATE OF RECEIPT OF AIRCRAFT
		IV	CHANGE ORDER


	ANNEX A			CUSTOMER SUPPORT SERVICES
	ANNEX B			WARRANTY AND SERVICE LIFE POLICY




LETTER AGREEMENTS


B96-7701-RJTL-RJ0350-001		Credit Memorandum

B96-7701-RJTL-RJ0350-002		Conditions Precedent
		
B96-7701-RJTL-RJ0350-003		Option Aircraft

B96-7701-RJTL-RJ0350-004		Options

B96-7701-RJTL-RJ0350-005		FIPP

B96-7701-RJTL-RJ0350-006		Operational Restrictions

B96-7701-RJTL-RJ0350-007		Financing

B96-7701-RJTL-RJ0350-008		Schedule Completion Rate

B96-7701-RJTL-RJ0350-009		Airframe Direct Maintenance Cost

B96-7701-RJTL-RJ0350-010		Additional Customer Support

B96-7701-RJTL-RJ0350-011		Spares
	
B96-7701-RJTL-RJ0350-012		Marketing Support

B96-7701-RJTL-RJ0350-013		Spares Credit

B96-7701-RJTL-RJ0350-014		Taxes, Duties and Licenses

B96-7701-RJTL-RJ0350-015		Airworthiness Directives

B96-7701-RJTL-RJ0350-016		Reconciliation




This Agreement is made on the 8th day of  January 1997.


BY AND BETWEEN:	BOMBARDIER INC., a Canadian Corporation represented by 
its BOMBARDIER REGIONAL AIRCRAFT DIVISION ("BRAD") 
having an office at 123 Garratt Boulevard, Downsview, 
Ontario, Canada.



AND:	ATLANTIC COAST AIRLINES, a California Company, having 
offices at 1 Export Drive, Sterling , Virginia 20164, 
U.S.A.

	("Buyer")


WHEREAS	Bombardier Inc. through its Canadair Manufacturing 
Division, is engaged in the manufacture of the 
Canadair Regional Jet aircraft products; and

 	BRAD has been created for the purpose of providing 
marketing, sales and customer support services for the 
Canadair Regional Jet aircraft and related products;

WHEREAS	Buyer desires to purchase twelve (12) Aircraft (as 
later defined) and related data, documents, and 
services under this Agreement (as later defined), and 
BRAD desires to arrange the sale of such Aircraft, 
data, documents and services to Buyer,

WHEREAS	Atlantic Coast Airlines Inc., a Delaware Corporation, 
the parent of Buyer, is prepared to provide a 
guarantee of Buyer's obligations hereunder, in a form 
acceptable to the parties and the financiers.




NOW THEREFORE, in consideration of the mutual covenants herein contained, 
Buyer and BRAD agree as follows:



ARTICLE 1.	INTERPRETATION

1.1	The recitals above have been inserted for convenience only and do not 
form part of the agreement. 

1.2	The headings in this agreement are included for convenience only and 
shall not be used in the construction and interpretation of this 
agreement. 

1.3	In this agreement, unless otherwise expressly provided, the singular 
includes the plural and vice-versa. 

1.4	In this agreement the following expressions shall, unless otherwise 
expressly provided, mean: 

	(a)	"Acceptance Period" shall have the meaning attributed to it in 
Article 9.3;

	(b)	"Acceptance Date" shall have the meaning attributed to it in 
Article 9.7.(a);

	(c)	"Agreement" means this Agreement, including its Exhibits, 
Annexes, Appendices and Letter Agreements, if any, attached 
hereto (each of which is incorporated in the Agreement by this 
reference), as they may be amended pursuant to the provisions 
of the Agreement;

	(d)	"Aircraft" shall have the meaning attributed to it in Article 
2.1;
	
	(e)	"Aircraft Purchase Price" shall have the meaning attributed to 
it in Article 	4.2;

	(f)	"Base Price" shall have the meaning attributed to it in Article 
4.1;

	(g)	"Bill of Sale" shall have the meaning attributed to it in 
Article 9.7 (c);

	(h)	"BFE"  shall have the meaning attributed to it in Article 11.1;

	(h.1)	"Bombardier Group"  shall have the meaning attributed to it in 
Article 24.3;

	(h.2)	*
	

	(i)	"Buyer Selected Optional Features" shall have the meaning 
attributed to it 	in Article 2.1;

	(j)	"Delivery Date" shall have the meaning attributed to it in 
Article 9.7.(c);

	(k)	"Economic Adjustment Formula" shall have the meaning attributed 
to it in 	Article 4.2;

	(l)	"Excusable Delay" shall have the meaning attributed to it in 
Article 13.1;

	(m)	"FAA"  shall have the meaning attributed to it in Article 8.1;

	(m.1)	"Grace Period" shall have the meaning attributed to it in 
Article 14.1;

	(n)	"Non-Excusable Delay" shall have the meaning attributed to it 
in Article 	14.1;

	(o)	"Notice" shall have the meaning attributed to it in Article 
17.1;

	( p)	"Other Patents" shall have the meaning attributed to it in 
Article 18.1;

	( q)	"Permitted Change" shall have the meaning attributed to it in 
Article 11.2;

	( r)	"Readiness Date" shall have the meaning attributed to it in 
Article 9.1;

	( s)	"Regulatory Change" shall have the meaning attributed to it in 
Article 8.4;

	( t)	"Scheduled Delivery Dates" shall have the meaning attributed to 
it in 	Article 6;
 
	( u)	"Specification" shall have the meaning attributed to it in 
Article 2.1;

	( v)	"Taxes" shall have the meaning attributed to it in Article 
4.3.;

	( w)	"TC"  shall have the meaning attributed to it in Article 8.1;

	( x)	"Net Aircraft Purchase Price" shall have the meaning attributed 
to it in 
	Article 5.3.;

	( y)	*


	( z)	"Deposit" shall have the meaning attributed to it in Article 
5.2.1.;

	(z.1)	"Technical Data" shall have the meaning attributed to it in 
Annex A Article 	4.1;

	(z.2)	"Total Deposit)" shall have the meaning attributed to it in 
	Article 5.2.1.b); and


1.5	All dollar amounts in this Agreement are in United States Dollars.


ARTICLE 2 - SUBJECT MATTER OF SALE

2.1	Subject to the provisions of this Agreement, BRAD will sell and Buyer 
will purchase twelve (12) Canadair Regional Jet aircraft model CL600-
2B19 Version 200ER, manufactured pursuant to specification Number 
RAD-601R-146 Issue NC dated November 18, 1996, attached hereto as 
Appendix III, as that specification may be modified from time to time 
in accordance with this Agreement (the "Specification"), as 
supplemented to reflect the incorporation of the Buyer selected 
optional features ("Buyer Selected Optional Features") set forth in 
Appendix IV hereto (collectively the "Aircraft").





ARTICLE 3 - CUSTOMER SUPPORT SERVICES AND WARRANTY

3.1	BRAD shall provide to Buyer the customer support services pursuant to 
the provisions of Annex A attached hereto.

3.2	BRAD shall provide to Buyer the warranty and the service life policy 
described in Annex B attached hereto.

3.3	Unless expressly stated otherwise, the services referred to in 3.1 
and 3.2 above are incidental to the sale of the Aircraft and are 
included in the Aircraft Purchase Price.



ARTICLE 4  -  PRICE

4.1	(a)	The base price for each of the Aircraft (excluding the Buyer 
Selected Optional Features) Ex Works (Incoterms 1990) BRAD's 
offices or premises in Montreal, Province of Quebec, Canada, 
is *
                                    expressed in July 1, 1995 
dollars.
	
	(b)	The base price of the Buyer Selected Optional Features is  *

           expressed in July 1, 1995 dollars.

	The Aircraft base price shall be the base price for the Aircraft as 
stated in paragraph (a), plus the base price of the Buyer Selected 
Optional Features as stated in paragraph (b) ("Base Price").

4.2	The price of the Aircraft (the "Aircraft Purchase Price") shall be 
the Base Price adjusted to the date of delivery to reflect economic 
fluctuations during the period from July 1, 1995 to the respective 
delivery date of the Aircraft.  Such adjustments shall be based on 
the formula as found in Appendix I ("Economic Adjustment Formula").  
*




 
 
*



*


*





















4.3	Upon the occurrence of events as described in this paragraph 4.3, 
there will be adjustments as follows:

4.3.1	In the event that BRAD and Buyer agree to any changes in the 
Specification or selected optional features, or should changes 
in the Specification or selected optional features be made 
pursuant to Article 11.1 or as a result of any Regulatory 
Changes pursuant to Article 8.4 which are chargeable to Buyer 
pursuant to Article 8.5, or in the event that BRAD and Buyer 
agree to any 
*




4.3.2	*



4.3.3	The Credit Memorandum adjustment shall be in accordance with 
the terms of Letter Agreement No. 1. 

4.3.4	*


above, but with Buyer and BRAD splitting 50/50 the economic 
fluctuation during the delay period, as described in Article 
13.2.(b) hereof.

4.3.5	In the event of a Non-Excusable Delay, the provisions of 
Article 14.2 shall apply.


4.4	The Aircraft Purchase Price does not include any taxes, fees or 
duties including, but not limited to, sales, use, value added 
(including the Canadian Goods and Services Tax), personal property, 
gross receipts, franchise, excise taxes, assessments or duties 
("Taxes") which are or may be imposed by law upon BRAD, any affiliate 
of BRAD, Buyer or the Aircraft whether or not there is an obligation 
for BRAD to collect same from Buyer, by any taxing authority or 
jurisdiction occasioned by, relating to or as a result of the 
execution of this Agreement or the sale, lease, delivery, storage, 
use or other consumption of any Aircraft, BFE or any other matter, 
good or service provided under or in connection with this Agreement.

4.5	If any Taxes (other than income taxes charged on the income of 
Bombardier Group) are imposed upon Buyer or become due or are to be 
collected from Bombardier Group by any taxing authority resulting 
from, relating to or in connection with the execution of this 
Agreement, the sale, lease, delivery, storage, use or other 
consumption of any Aircraft, BFE or any other matter, goods or 
services provided for under this Agreement, BRAD shall notify Buyer 
and Buyer shall promptly, but no later than ten (10) working days 
after receiving such notice, pay such Taxes directly to the taxing 
authority, or reimburse BRAD for such Taxes, as the case may be, 
including interest and penalties.  Buyer shall only reimburse BRAD 
for interest and penalties if BRAD notifies Buyer in writing of the 
imposition of these Taxes within ten (10) working days of the member 
of Bombardier Group receiving written notification of such Taxes. 

4.6	Upon BRAD's request, Buyer shall execute and deliver to BRAD any 
documents that BRAD deems necessary or desirable in connection with 
any exemption from or reduction of or the contestation of or the 
defense against any imposition of Taxes.

4.7	Upon Buyer's request, BRAD shall execute and deliver to Buyer any 
documents that Buyer deems necessary or desirable in connection with 
any exemption from or reduction of or the contestation of or the 
defense against any imposition of Taxes.


ARTICLE 5  -  PAYMENT

5.1	Intentionally left blank.

5.2	Deposit

	5.2.1	The deposit for the Aircraft (the "Deposit") will be paid as follows:

	a)	*


	b)	*


	










	













	*









5.3	Payment Terms

	*






5.4	Subject to the provisions of Article 9.9 hereof, should Buyer fail to 
make any of the aforementioned Deposit payments on or before the 
stipulated date and Buyer does not correct the default within a 
period of thirty (30) days thereafter, this Agreement shall 
automatically terminate and BRAD shall have no further obligation to 
Buyer under this Agreement, including the obligation to proceed 
further with the manufacture of the Aircraft on behalf of Buyer or 
the sale and/or delivery of the Aircraft to Buyer.  BRAD shall have 
the option (but not the obligation) of waiving such termination 
should Buyer make arrangements satisfactory to BRAD for such payment 
and all future payments within ten (10) calendar days of Buyer's 
default.

5.5	Buyer shall pay BRAD daily interest on late payments, from the date 
that any payment becomes due up to and including the day prior to 
receipt of payment, at a rate of two per cent (2 %) per annum over 
the U.S. prime rate charged by the Chase Manhattan Bank, New York 
Branch, or its successor,, from time to time, calculated and 
compounded monthly. BRAD's right to receive such interest is in 
addition to any other right or remedy BRAD has at law as a result of 
Buyer's failure to make payments when due.

5.6	If under any terms of the Agreement BRAD is obligated to return the 
Deposit or make other payments if applicable to Buyer, with or 
without interest as provided for herein, BRAD shall do so within five 
(5) working days , and if BRAD fails to do so, BRAD shall pay Buyer 
daily interest on late payments from the date any payment becomes due 
up to and including the day prior to receipt of payment, at a rate of 
two per cent 


(2 %) per annum over the U.S. prime rate charged from time to time by 
the Chase Manhattan Bank, New York Branch, or its successor, 
calculated and compounded monthly.  The five (5) days grace period 
mentioned above shall not apply to return of Deposits coincident with 
the return of the last six (6) Aircraft.

5.7	Buyer shall make all payments due under this Agreement in immediately 
available funds by deposit on or before the due date to BRAD's 
account in the following manner:

	*



	











	BRAD shall make all payments due under this Agreement in immediately 
available funds by deposit on or before the due date to Buyer's 
account as specified below:

*










5.8	All other amounts due with respect to each Aircraft shall be paid on 
or prior to the Delivery Date of the respective Aircraft.

5.9	All payments provided for under this Agreement to either party shall 
be made so as to be received in immediately available funds on or 
before the dates stipulated herein.  Neither party shall incur 
interest charges for any delay which occurs after provision of a 
proof of transfer from that party's bank.

5.10	BRAD, or its affiliate to whom the Aircraft may have been sold, shall 
remain the exclusive owner of the Aircraft, free and clear of all 
rights, liens, charges or encumbrances created by or through Buyer, 
until such time as all payments referred to in this Article 5 have 
been made.




ARTICLE 6  -  DELIVERY PROGRAM

6.1	The Aircraft shall be offered for inspection and acceptance to Buyer 
at BRAD's facility in Montreal, Quebec during the months set forth in 
Appendix II attached hereto (the "Scheduled Delivery Dates").




ARTICLE 7  -  BUYER INFORMATION

7.1	During the manufacture of the Aircraft, Buyer shall provide to BRAD 
on or before the date required by BRAD, all information as BRAD may 
reasonably request to manufacture the Aircraft including, without 
limitation, the selection of furnishings, internal and external 
colour schemes.

	On or before January 31, 1997, Buyer will:

	(a)	provide BRAD with an external paint scheme agreed on by the 
parties; and

	(b)	select interior colours (from BRAD's standard colours). 

	Failure of Buyer to substantially comply with these requirements may 
result in a reasonable increase in price, as applicable, a delay in 
delivery of the Aircraft, or both.



ARTICLE 8  -  CERTIFICATION FOR EXPORT

8.1	BRAD has obtained and will continue to have on each Delivery Date 
from Transport Canada ("TC"), a valid TC Type Approval  (Transport 
Category) and from the Federal Aviation Administration of the United 
States ("FAA") an FAA Type Certificate for the type of aircraft 
purchased under this Agreement.

8.2	BRAD shall provide to Buyer a TC Certificate of Airworthiness 
(Transport Category) for export, on or before the Delivery Date with 
respect to each Aircraft.

8.3	The obtaining of any import license or authority required to import 
or operate the Aircraft into any country outside of Canada shall be 
the responsibility of Buyer. BRAD will, assist Buyer in obtaining 
import permits and licenses.  BRAD shall,  with Buyer's assistance, 
obtain the issuance of a Canadian export license to enable Buyer to 
export the Aircraft from Canada, subject to prevailing export control 
regulations in effect on the Delivery Date.  Except as provided in 
Articles 8.1, 8.2 and 8.3 BRAD shall not be obligated to obtain any 
other certificates or approvals as part of this Agreement.

8.4	If any addition or change to, or modification or testing of the 
Aircraft is required or will be required by the passage of time by 
any law or governmental regulation or requirement or interpretation 
thereof by any governmental agency having jurisdiction subsequent to 
the date of this Agreement but prior to the Delivery Date in order to 
meet the requirements of Article 8.2 (a "Regulatory Change"), such 
Regulatory Change shall be made to the Aircraft prior to Delivery 
Date, or at such other time after the Delivery Date as the parties 
may agree upon taking into account the terminating action deadline.

8.5	The Regulatory Change shall be made without additional charge to 
Buyer unless such Regulatory Change is:

	(a)	necessary to comply with any requirement of the United States, 
the country of import, which varies from or is in addition to its 
regulation, requirement or interpretation in effect on the date 
hereof for the issuance of a Certificate of Airworthiness in said 
country of import (unless such requirement has been imposed to 
correct a defect specific to the Aircraft or to the Canadair 
Regional Jet fleet of aircraft), in which case Buyer shall pay 
BRAD's reasonable charges for such Regulatory Change, or

	(b)	required by any governmental law or regulations or interpretation 
thereof promulgated by TC or the FAA which is effective 
subsequent to the date of this Agreement but before the Delivery 
Date and which is applicable to all aircraft in general or to all 
aircraft of the same category as the Aircraft, in which case 
Buyer shall pay BRAD's reasonable charges for such Regulatory 
Change incorporated in any such Aircraft.

8.6	*






8.7	BRAD shall issue a Change Order, reflecting any Regulatory Change 
required to be made under this Article 8, which shall set forth in 
detail the particular changes to be made and the effect, if any, of 
such changes on design, performance, weight, balance, time of 
delivery, 
*                                                                 

                                               .  Any Change Orders 
issued pursuant to this Article shall be effective and binding upon 
the date of BRAD's transmittal of such Change Order, all in 
accordance with this Agreement.  
*                                    



8.8	If the use of any of the certificates identified in this Article 8 
are discontinued during the performance of this Agreement, reference 
to such discontinued certificate shall be deemed a reference to any 
other certificate or instrument which corresponds to such certificate 
or, if there should not be any such other certificate or instrument, 
then BRAD shall be deemed to have obtained such discontinued 
certificate(s) upon demonstrating that the Aircraft complies 
substantially with the Specification.



ARTICLE 9  -  ACCEPTANCE PROCEDURE

9.1	*



	BRAD shall give Buyer at least *                    advance notice, 
by facsimile or telegraphic communication or other expeditious means, 
of the projected date of readiness of each Aircraft for inspection 
and delivery.  *                                    


	BRAD shall give Buyer at least *                               
advance notice, by facsimile or telegraphic communication or other 
expeditious means, of the date on which an Aircraft will be ready for 
Buyer's inspection, flight test and acceptance (the "Readiness 
Date"), 
*


9.2	Within two (2) days following receipt by Buyer of the notice of 
Readiness Date Buyer shall:

	(a)	provide notice to BRAD as to the source and method of payment of 
the 	balance of the Aircraft Purchase Price;

	(b)	identify to BRAD the names of Buyer's representatives who will 
participate 	in the inspection, flight test and acceptance; and 

	(c)	provide evidence of the authority of the designated persons to 
execute the 	Certificate of Acceptance and other delivery 
documents on behalf of Buyer. 
	
9.3	Buyer shall have three (3) consecutive working days commencing on the 
Readiness Date in which to complete the inspection and flight test 
(such three (3) working day period being the "Acceptance Period").  
This three (3) day period may be extended in the event of any delay 
by BRAD in making the Aircraft available for inspection and flight 
test.

9.4	Up to four (4) representatives of Buyer may participate in Buyer's 
ground inspection of the Aircraft and two (2) representatives of 
Buyer may participate in the flight test.  BRAD shall, if requested 
by Buyer, perform an acceptance flight of not less than one (1) and 
not more than three (3) hours duration.  Ground inspection, in 
accordance with procedures to be mutually agreed to, and flight test 
shall be conducted in accordance with BRAD's acceptance procedures (a 
copy of which shall be provided to Buyer at least 30 days prior to 
the Scheduled Delivery Date of the First Aircraft hereunder), as may 
be amended by mutual agreement of Buyer and BRAD, and at BRAD's 
expense. At all times during ground inspection and flight test, BRAD 
shall retain control over the Aircraft.

9.5	If no Aircraft defect or discrepancy is revealed during the ground 
inspection or flight test, Buyer shall accept the Aircraft on or 
before the last day of the Acceptance Period in accordance with the 
provisions of Article 9.7.

9.6	If any material defect or discrepancy in the Aircraft is revealed by 
Buyer's ground inspection or flight test, the defect or discrepancy 
will promptly be corrected by BRAD, at no cost to Buyer, which 
correction may occur during or after the Acceptance Period depending 
on the nature of the defect or discrepancy and of the time required 
for correction.  To the extent necessary to verify such correction, 
BRAD shall perform one (1) or more further acceptance flights or 
ground inspections as applicable.  
*




9.7	Upon completion of the ground inspection and acceptance flight of the 
Aircraft and correction of any defects or discrepancies:

	(a)	Buyer will sign a Certificate of Acceptance (in the form of 
Exhibit I hereto) for the Aircraft. Execution of the 
Certificate of Acceptance by or on behalf of Buyer shall be 
evidence of Buyer having examined the Aircraft and found it in 
accordance with the provisions of this Agreement.  The date of 
signature of the Certificate of Acceptance shall be the 
"Acceptance Date";

	(b)	BRAD will supply a TC Certificate of Airworthiness for Export; 
and

	(c)	Buyer shall pay BRAD the balance of 
*                                  any
other amounts due, at which time BRAD shall issue an FAA bill 
of sale and a warranty bill of sale in a form acceptable to 
BRAD and financiers (substantially in accordance with the forms 
attached as Exhibit II(a) and Exhibit II(b) hereto), passing to 
Buyer, or approved assignee pursuant to Article 20, good title 
to the Aircraft free and clear of all liens, claims, charges 
and encumbrances except for those liens, charges or 
encumbrances created by or claimed through Buyer (the "Bill of 
Sale").  The date on which BRAD delivers the Bill of Sale and 
Buyer takes delivery of the Aircraft shall be the "Delivery 
Date".

	Delivery of the Aircraft shall be evidenced by the execution and 
delivery of the Bill of Sale and of the Certificate of Receipt of 
Aircraft (in the form of Exhibit III hereto).

9.8	Provided that BRAD has met all of its obligations under this Article 
9, should Buyer not accept, pay for *                                
and take delivery of any of the
Aircraft within ten (10) calendar days after the end of the 
Acceptance Period of such Aircraft, Buyer shall be deemed to be in 
default of the terms of this Agreement *

	*

9.9	Should the Buyer be in default pursuant to Article 9.8 hereof, Buyer 
shall promptly, upon demand, reimburse BRAD for all costs and 
expenses reasonably incurred by BRAD as a result of such Buyer's 
failure to accept or take delivery of the Aircraft, including but not 
limited to reasonable amounts for storage, insurance, taxes, 
preservation or protection of the Aircraft, and provided that BRAD 
has met all of its obligations under this Article 9, should Buyer not 
accept, pay for and/or take delivery of any one of the Aircraft 
within *                                      following the end of 
the Acceptance Period, BRAD may, at its option, terminate the present 
Agreement with respect to any of the undelivered Aircraft.  BRAD 
shall however, have the option (but not the obligation) of waiving 
such termination should Buyer, within ten (10) calendar days 
following such termination, make arrangements satisfactory to BRAD to 
accept delivery and provide payment for all amounts owing or to 
become due pursuant to this Agreement.




ARTICLE 10  -  TITLE AND RISK

10.1	Title to the Aircraft and risk of loss of or damage to the Aircraft 
passes to Buyer when BRAD presents the Bill of Sale to Buyer on the 
Delivery Date. 

10.2	If, after transfer of title on the Delivery Date, the Aircraft 
remains in or is returned to the care, custody or control of BRAD, 
Buyer shall retain risk of loss of, or damage to the Aircraft and for 
itself and on behalf of its insurer(s) hereby waives and renounces 
to, and releases BRAD and any of BRAD's affiliates from any claim, 
whether direct, indirect or by way of subrogation, for damages to or 
loss of the Aircraft arising out of, or related to, or by reason of 
such care, custody or control *                          



ARTICLE 11  -  CHANGES

11.1	Other than a Permitted Change as described in Article 11.2, or a 
Regulatory Change as described in Article 8.4, any change to this 
Agreement (including without limitation the Specification) or any 
features or Buyer Furnished Equipment ("BFE"), if any, changing the 
Aircraft from that described in the Specification attached hereto, 
and as may be mutually agreed upon by the parties hereto, shall be 
made using a change order ("Change Order") substantially in the 
format of Exhibit IV hereto.  Should Buyer request a change, BRAD 
shall advise Buyer,  to the extent reasonably practical, of the 
effect, if any, of such change request on:

	(a)	the Scheduled Delivery Date;

	(b)	the price and payment terms applicable to the Change Order; and

	(c)	any other material provisions of this Agreement which will be 
affected by the 	Change Order.

	Such Change Order shall become effective and binding on the parties 
hereto when signed by a duly authorized representative of each party.

11.2	BRAD, prior to the Delivery Date and without a Change Order or 
Buyer's consent, may:

	(a)	substitute the kind, type or source of any material, part, 
accessory or 	equipment with any other material, part, accessory 
or equipment of like, 	equivalent or better kind or type; or

	(b)	make such change or modification to the Specification as it deems 
appropriate to:

		1)	improve the Aircraft, its maintainability or appearance, or
		2)	to prevent delays in manufacture or delivery, or
	3)	to meet the requirements of Articles 2 and 8, other than for a 
Regulatory Change to which the provisions of Articles 8.4 and 
8.5 shall apply,

	provided that such substitution, change or modification shall not 
affect the Aircraft Purchase Price or materially affect the Scheduled 
Delivery Date, *                     

                                                              Any 
change made in 
accordance with the provisions of this Article 11.2 shall be deemed 
to be a "Permitted Change" and the cost thereof shall be borne by 
BRAD.


ARTICLE 12  -  BUYER'S REPRESENTATIVES AT MANUFACTURE SITE

12.1	From time to time, commencing with the date of this Agreement and 
ending with the Delivery Date of the last Aircraft purchased 
hereunder, BRAD shall furnish, without charge, office space at BRAD's 
facility for one (1) representative of Buyer.  Buyer shall be 
responsible for all expenses of its representative and shall notify 
BRAD at least thirty (30) calendar days prior to the first scheduled 
visit of such representative and three (3) days for each subsequent 
visit.

12.2	BRAD's and BRAD's affiliates facilities shall be accessible to 
Buyer's representative during normal working hours.  Buyer's 
representative shall have the right to periodically observe the work 
at BRAD's or BRAD's affiliates' facilities where the work is being 
carried out provided there shall be no disruption in the performance 
of the work.

12.3	BRAD shall advise Buyer's representative of BRAD's or BRAD's 
affiliates' rules and regulations applicable at the facilities being 
visited and Buyer's representative shall conform to such rules and 
regulations.

12.4	At any time prior to delivery of the Aircraft, Buyer's representative 
may request, in writing, correction of parts or materials which they 
reasonably believe are not in accordance with the Specification.  
BRAD shall provide a written response to any such request. 
Communication between Buyer's representative and BRAD shall be solely 
through BRAD's Contract Department or its designate.

12.5	BUYER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD 
HARMLESS BRAD, ITS ASSIGNEES AND AFFILIATES AND THEIR OFFICERS, 
DIRECTORS, AGENTS, EMPLOYEES AND CONTRACTORS FROM AND AGAINST ALL 
LIABILITIES, DAMAGES, LOSSES, COSTS AND EXPENSES RESULTING FROM 
INJURIES TO OR DEATH OF BUYER'S REPRESENTATIVES WHILE AT BRAD'S OR 
BRAD'S AFFILIATES OR SUBCONTRACTOR'S FACILITIES AND/OR DURING 
INSPECTION, FLIGHT TEST OR ACCEPTANCE OF THE AIRCRAFT, WHETHER OR NOT 
CAUSED BY THE ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE OR STRICT 
PRODUCTS LIABILITY OF BRAD, ITS ASSIGNEES, AFFILIATES OR THEIR 
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES OR CONTRACTORS 
*                                            



12.6	


*



ARTICLE 13  -  EXCUSABLE DELAY

13.1.1	In the event of a delay on the part of BRAD in the performance 
of its obligations or responsibilities under the provisions of this 
Agreement due directly or indirectly to a cause which is beyond the 
reasonable control or without the fault or negligence of BRAD (an 
"Excusable Delay"), BRAD shall not be liable for, nor be deemed to be 
in default under this Agreement on account of such delay in delivery 
of the Aircraft or other performance hereunder and the time fixed or 
required for the performance of any obligation or responsibility in 
this Agreement shall be extended for a period equal to the period 
during which any such cause or the effect thereof persist.  Excusable 
Delay shall be deemed to include, without limitation, delays 
occasioned by the following causes:

	(a)	force majeure or acts of God;
	(b)	war, warlike operations, act of the enemy, armed aggression, 
civil commotion, insurrection, riot or embargo;
	(c)	fire, explosion, earthquake, lightning, flood, draught, windstorm 
or other action of the elements or other catastrophic or serious 
accidents;
	(d)	epidemic or quarantine restrictions;
	(e)	any legislation, act, order, directive or regulation of any 
governmental or other duly constituted authority;
	(f)	strikes, lock-out, walk-out, and/or other labour troubles causing 
cessation, slow-down or interruption of work;	
	(g)	lack or shortage or delay in delivery of supplies, materials, 
accessories, equipment, tools or parts, *
	(h)	*                                                 , delay or 
failure of carriers, 
subcontractors or suppliers for any reason whatsoever; or
	(i)	delay in obtaining any airworthiness approval or certificate, or 
any equivalent approval or certification, by reason of any law or 
governmental order, directive or regulation or any change 
thereto, or interpretation thereof, by a governmental agency, the 
effective date of which is subsequent to the date of this 
Agreement, or by reason of any change or addition made by BRAD or 
its affiliates or requested by a governmental agency to the 
compliance program of BRAD or of its affiliate, or any part 
thereof, as same may have been approved by TC, or change to the 
interpretation thereof to obtain any such airworthiness approval 
or certificate; or
	(j)	*

13.1.2	


*

	










13.2	(a) 	If BRAD concludes, based on its appraisal of the facts and normal 
scheduling procedures, that due to Excusable Delay it can be 
reasonably anticipated that delivery of the Aircraft will be 
delayed, BRAD shall give prompt written notice to Buyer of such 
delay.  *                                                       


	(b)	*







	(c)	In the event of an Excusable Delay *                           , 
or an anticipated Excusable Delay 
*                                              shall conduct an 
appraisal of the facts and normal scheduling procedures, and if 
it concludes that delivery of one or more of the Aircraft will be 
delayed *                           
            after the originally Scheduled Delivery Date or any 
revised date agreed to in writing by the parties, 
*                                                       
                                          may then terminate this 
Agreement with 
respect to such delayed Aircraft by giving written notice 
*                          


	(d)	If, due to Excusable Delay *                             , 
delivery of any Aircraft is delayed for 
*                              after the Scheduled Delivery Date, 
either 
party may terminate this Agreement with respect to  such Aircraft 
by giving written notice to the other within fifteen (15) 
business days after the expiration of such 
*                        period.



13.3	Termination under Article 13.2 shall discharge all obligations and 
liabilities of Buyer and BRAD hereunder with respect to such delayed 
Aircraft and all related undelivered items and services, 
*                                                              
                                   BRAD shall, 
within*                         of
such termination, repay to Buyer, and BRAD's sole liability and 
responsibility shall be limited to the repayment to Buyer, of all 
deposits for such Aircraft received by BRAD less any amount due by 
Buyer to BRAD.

13.4	The termination rights set forth in Article 13.2 are in substitution 
for any and all other rights of termination or contract lapse arising 
by operation of law in connection with Excusable Delays.




ARTICLE 14  -  NON-EXCUSABLE DELAY

14.1	If delivery of the Aircraft is delayed beyond the end of the 
Scheduled Delivery Date, by causes not excused under Article 13.1, 
this shall constitute a non-excusable delay (a "Non-Excusable 
Delay").

14.2	If as a result of an Non-Excusable Delay, delivery of the Aircraft 
will be delayed to a date beyond the originally Scheduled Delivery 
Date or any revised date previously agreed to in writing by the 
parties, the Aircraft Purchase Price of the Aircraft at delivery, 
*                                                                    
     







ARTICLE 15  -  LOSS OR DAMAGE

15.1	In the event that prior to the Delivery Date of any Aircraft, the 
Aircraft is lost, destroyed or damaged beyond repair due to any 
cause, BRAD shall promptly notify Buyer in writing.  Such notice 
shall specify the earliest date reasonably possible, consistent with 
BRAD's other contractual commitments and production schedule, by 
which BRAD estimates it would be able to deliver a replacement for 
the lost, destroyed or damaged Aircraft.  This Agreement shall 
automatically terminate as to such Aircraft unless Buyer gives BRAD 
written notice, within thirty (30) days of BRAD's notice, that Buyer 
desires a replacement for such Aircraft.  If Buyer gives such notice 
to BRAD, the parties shall execute an amendment to this Agreement 
which shall set forth the Delivery Date for such replacement aircraft 
and corresponding new replacement Aircraft Purchase Price; provided, 
however, that nothing herein shall obligate BRAD to manufacture and 
deliver such replacement aircraft if it would require the 
reactivation or acceleration of its production line for the model of 
aircraft purchased hereunder.  The terms and conditions of this 
Agreement applicable to the replaced Aircraft shall apply to the 
replacement aircraft.

15.2	*




ARTICLE 16  -  TERMINATION 

16.1	This Agreement may be terminated, in whole or in part, with respect 
to any or all of the Aircraft before the Delivery Date by BRAD or 
Buyer by notice of termination to the other party upon the occurrence 
of any of the following events:

	(a)	a party makes an assignment for the benefit of creditors or 
admits in writing its inability to pay its debts or generally 
does not pay its debts as they become due; or

	(b)	a receiver or trustee is appointed for a party or for 
substantially all of such party's assets and, if appointed 
without such party's consent, such appointment is not discharged 
or stayed within *                     thereafter; or

	(c)	proceedings or action under any law relating to bankruptcy, 
insolvency or the reorganization or relief of debtors are 
instituted by or against a party, and, if contested by such 
party, are not dismissed or stayed within*                   
       thereafter, or

	(d)	any writ of attachment or execution or any similar process is 
issued or levied against a party or any significant part of its 
property and is not released, stayed, bonded or vacated within 
*                    after its issue or levy. 

16.2	In addition, this Agreement may be terminated, with respect to any or 
all undelivered Aircraft, in whole or in part, before the Delivery 
Date

	(a)	as otherwise provided in this Agreement; and

	(b)	by BRAD *                         default or breach of any 
material term 
or condition of this Agreement and such party does not cure such 
default or breach within forty-five (45) calendar days after 
receipt of Notice from BRAD *                              
specifying such default or breach.



16.3	In case of termination of this Agreement under Articles 5.4, 9.9, 
16.1 or 16.2:

	(a)	all rights (including property rights), if any, which Buyer or 
its assignee may have or may have had in or to (i) this Agreement 
or portion thereof with respect to the undelivered Aircraft, or 
(ii) any or all of the undelivered Aircraft, shall become null 
and void with immediate effect;

	(b)	BRAD may sell, lease or otherwise dispose of such Aircraft to 
another party free of any claim by Buyer;

	(c)	*                                   , all amounts paid by Buyer 
with respect to 
the applicable undelivered Aircraft shall be retained by BRAD and 
shall be applied against the costs, expenses, losses and damages 
incurred by BRAD as a result of Buyer's default and/or the 
termination of this Agreement, to which BRAD shall be entitled 
*                                                                
    

                   and

	(d)	*



16.4	Notwithstanding the foregoing, nothing herein contained shall, in the 
event of termination of this Agreement, limit                   
ongoing rights and obligations
with respect to Aircraft delivered prior to the termination date, 
such as the after sale support obligations described in Annex A, the 
warranty provisions and Service Life Policy of Annex B and the 
obligation contained in Letters of Agrement where it is expressly 
provided that said obligations (or part thereof) shall survive 
termination, subject to any adjustments of said rights or obligations 
required to reflect the number of Aircraft in service, if applicable.

16.5	*




ARTICLE 17  -  NOTICES

17.1	Any notice, request, approval, permission, consent or other 
communication ("Notice"), to be given or required under this 
Agreement shall be provided in writing, by registered mail, 
facsimile, courier, telegraphic or other electronic communication 
providing reasonable proof of transmission, except that no notice 
shall be sent by mail if disruption of postal service exists or is 
threatened either in the country of origin or of destination, by the 
party giving the Notice and shall be addressed as follows until 
changed by notice in writing:

	(a)	Notice to BRAD shall be addressed to:

					Bombardier Inc.
		Bombardier Regional Aircraft Division
	123 Garratt Boulevard
	Downsview, Ontario
	Canada
	M3K 1Y5
	Attention:  Director Contracts

				Telephone:	   (416)375-4052
		Telex:	06-22128
			Facsimile:	(416) 375-4533

	(b)	Notice to Buyer shall be addressed to:

		ATLANTIC COAST AIRLINES
		1 Export Drive, 
		Sterling , Virginia 
		20164
		U.S.A.


				Attention:    General Counsel

					Telephone:   703-406-6500

					Facsimile:    703-406-7471





17.2	Notice given in accordance with Article 17.1 shall be deemed 
sufficiently given to and received by the addressees:

	(a)	if delivered by hand, on the day when the same shall have been so 
delivered; 	or

	(b)	if mailed or sent by courier on the day indicated on the 
corresponding 	acknowledgment of receipt; or

	(c)	if sent by telex or facsimile on the day indicated by the 
acknowledgment or the answer back of the receiver in provable 
form.


ARTICLE 18  -  INDEMNITY AGAINST PATENT INFRINGEMENT

18.1	In the case of any actual or alleged infringement of any Canadian or 
United States patent or, subject to the conditions and exceptions set 
forth below, any patent issued under the laws of any other country in 
which Buyer from time to time may lawfully operate the Aircraft 
("Other Patents"), by the Aircraft, or by any system, accessory, 
equipment or part installed in such Aircraft at the time title to 
such Aircraft passes to Buyer, BRAD shall indemnify, protect, hold 
harmless and defend (subject to applicable court procedures) Buyer 
from and against all claims, suits, actions, liabilities, damages 
*                                                                    
             
                                                                 
resulting from the 
infringement, excluding any incidental or consequential damages 
(which include without limitation loss of revenue or loss of profit) 
and BRAD shall and as promptly as possible under the circumstances, 
at its option and expense:

	(a)	procure for Buyer the right under such patent to  use such 
system, accessory, equipment or part; or

	(b)	replace such system, accessory, equipment or part with one of the 
similar nature and quality that is non-infringing; or 

	(c)	modify such system, accessory, equipment or part to make same 
non-infringing in a manner such as to keep it otherwise in 
compliance with the requirements of this Agreement.

	BRAD's obligation hereunder shall extend to Other Patents only if 
from the time of design of the Aircraft, system, accessory, equipment 
or part until the alleged infringement claims are resolved:

	(d)	such other country and the country in which the Aircraft is 
permanently registered have ratified and adhered to and are at 
the time of the actual or alleged infringement contracting 
parties to the Chicago Convention on International Civil Aviation 
of December 7, 1944 and are fully entitled to all benefits of 
Article 27 thereof; and 

	(e)	such other country and the country of registration shall each 
have been a party to the International Convention for the 
Protection of Industrial Property (Paris Convention) or have 
enacted patent laws which recognize and give adequate protection 
to inventions made by the nationals of other countries which have 
ratified, adhered to and are contracting parties to either of the 
foregoing conventions.



18.2	The foregoing indemnity does not apply to BFE, or to avionics, 
engines or any system, accessory, equipment or part that was not 
manufactured to BRAD's detailed design or to any system, accessory, 
equipment or part manufactured by a third party to BRAD's detailed 
design without BRAD's authorization.  
*                                     




18.3	Buyer's remedy and BRAD's obligation and liability under this Article 
are conditional upon (i) Buyer giving BRAD written notice within ten 
(10) days after Buyer receives notice of a suit or action against 
Buyer alleging infringement or within twenty (20) days after Buyer 
receives any other written claim of infringement (ii) Buyer uses 
reasonable efforts in full cooperation with BRAD to reduce or 
mitigate any such expenses, damages, costs or royalties involved, and 
(iii) Buyer furnishes promptly to BRAD all data, papers and records 
in its possession or control necessary or useful to resist and defend 
against such claim or suit.  BRAD may at its option conduct 
negotiations with any party claiming infringement and may intervene 
in any suit or action.  Whether or not BRAD intervenes, BRAD shall be 
entitled at any stage of the proceedings to assume or control the 
defense.  Buyer's remedy and BRAD's obligation and liability are 
further conditional upon BRAD's prior approval of Buyer's payment or 
assumption of any liabilities, expenses, damages, royalties or costs 
for which BRAD may be held liable or responsible.

18.4	THE INDEMNITY, OBLIGATIONS AND LIABILITIES OF BRAD AND REMEDIES OF 
BUYER SET OUT IN THIS ARTICLE ARE EXCLUSIVE AND ACCEPTED BY BUYER TO 
BE IN LIEU OF AND IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, 
RELEASES AND RENOUNCES, ALL OTHER INDEMNITIES, OBLIGATIONS AND 
LIABILITIES OF BRAD AND OF ITS AFFILIATES AND ALL OTHER RIGHTS, 
REMEDIES AND CLAIMS, INCLUDING CLAIMS FOR DAMAGES, DIRECT, INCIDENTAL 
OR CONSEQUENTIAL, OF BUYER AGAINST BRAD AND ITS AFFILIATES EXPRESS OR 
IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY ACTUAL OR 
ALLEGED PATENT INFRINGEMENT BY THE AIRCRAFT OR ANY INSTALLED SYSTEM, 
ACCESSORY, EQUIPMENT OR PART.


ARTICLE 19  -  LIMITATION OF LIABILITY AND INDEMNIFICATION



19.1	ANNEX B, EXCEPT AS OTHERWISE PROVIDED IN LETTERS OF AGREEMENT NO. 6, 
8, 9 AND 15 HERETO, EXCLUSIVELY SETS FORTH BRAD'S OBLIGATIONS WITH 
RESPECT TO ANY NON-CONFORMANCE OF THE AIRCRAFT WITH THE SPECIFICATION 
OR ANY DEFECT IN THE AIRCRAFT AND THE OBLIGATIONS AND LIABILITIES OF 
BRAD UNDER THE AFORESAID ARE ACCEPTED BY BUYER TO BE EXCLUSIVE AND IN 
LIEU OF, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER 
REMEDIES, WARRANTIES, GUARANTEES, OBLIGATIONS, REPRESENTATIONS OR 
LIABILITIES, EXPRESS OR IMPLIED, OF BRAD AND ITS AFFILIATES WITH 
RESPECT TO DEFECTS IN EACH AIRCRAFT OR PART THEREOF, PRODUCT, 
DOCUMENT OR SERVICE DELIVERED OR PROVIDED UNDER THIS AGREEMENT, 
ARISING IN FACT, IN LAW, IN CONTRACT, IN TORT, OR OTHERWISE, 
INCLUDING, WITHOUT LIMITATION, 

		A.	ANY IMPLIED WARRANTY OF CONDITION OR MERCHANTABILITY OR 
FITNESS;

		B.	ANY IMPLIED WARRANTY OR CONDITION ARISING FROM COURSE OF 
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;

		C.	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, 
WHETHER OR NOT ARISING FROM THE ACTIVE, PASSIVE OR IMPUTED 
NEGLIGENCE OR STRICT PRODUCTS LIABILITY OF BRAD OR ITS 
AFFILIATES, BY REASON OF THE DESIGN, MANUFACTURE, SALE, 
REPAIR, LEASE OR USE OF THE AIRCRAFT OR PRODUCT AND SERVICES 
DELIVERED HEREUNDER; AND

D.	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS 
OF OR DAMAGE TO ANY AIRCRAFT OR PART THEREOF, ANY BRAD 
PARTS, ANY POWER PLANT PARTS, ANY VENDOR PARTS, ANY SPARE 
PARTS OR ANY TECHNICAL DATA.



19.2	BUYER HEREBY RELEASES AND AGREES TO DEFEND, INDEMNIFY AND HOLD 
HARMLESS BRAD, ITS SUBSIDIARIES, AFFILIATES, SUBCONTRACTORS AND 
LESSORS, AND THEIR RESPECTIVE EMPLOYEES, DIRECTORS, OFFICERS AND 
AGENTS, AND EACH OF THEM (THE "INDEMNIFIED PARTIES"), FROM AND 
AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, COSTS AND EXPENSES 
FOR LOSS OF OR DAMAGE TO PROPERTY INCLUDING ANY AIRCRAFT, AND LOSS OF 
USE THEREOF, OR INJURIES TO OR DEATH OF ANY AND ALL PERSONS 
(INCLUDING BUYER'S DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES BUT 
EXCLUDING BRAD'S DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES), ARISING 
DIRECTLY OR INDIRECTLY OUT OF OR IN CONNECTION WITH ANY SERVICE 
PROVIDED UNDER ANNEX A WHETHER OR NOT CAUSED BY THE ACTIVE, PASSIVE 
OR IMPUTED NEGLIGENCE OR STRICT PRODUCTS LIABILITY OF THE INDEMNIFIED 
PARTIES.  THE FOREGOING SHALL NOT APPLY WHERE SUCH LOSSES OR DAMAGES 
ARE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE 
INDEMNIFIED PARTIES.

19.3	NOTHING CONTAINED IN ARTICLE 19.1 OR 19.2 ABOVE SHALL CONSTITUTE A 
WAIVER OR RELEASE OR RENUNCIATION OF, OR INDEMNITY FOR, ANY LOSSES, 
DAMAGES OR CLAIMS, BY BUYER AGAINST BRAD FOR CONTRIBUTION TOWARD 
THIRD-PARTY BODILY INJURY OR PROPERTY DAMAGE CLAIMS BASED ON PRODUCT 
LIABILITY THEORIES TO THE EXTENT OF BRAD'S RELATIVE PERCENTAGE OF THE 
TOTAL FAULT OR OTHER LEGAL RESPONSIBILITY OF PERSONS CAUSING SUCH 
BODILY INJURY OR PROPERTY DAMAGE.

19.4	IN THE EVENT OF ANY LOSSES OR DAMAGES SUFFERED BY ANYONE FOR OR 
ARISING OUT OF  (i) ANY LACK OR LOSS OF USE OF ANY AIRCRAFT, 
EQUIPMENT, BRAD PARTS, VENDOR PARTS, SPARE PARTS, GROUND SUPPORT 
EQUIPMENT, TECHNICAL PUBLICATIONS OR DATA OR  (ii) ANY SERVICES TO BE 
PROVIDED HEREUNDER, OR  (iii) FOR ANY FAILURE TO PERFORM ANY 
OBLIGATIONS HEREUNDER, NEITHER PARTY SHALL HAVE ANY OBLIGATION FOR 
LIABILITY TO THE OTHER (AT LAW OR IN EQUITY), WHETHER ARISING IN 
CONTRACT (INCLUDING WITHOUT LIMITATION, WARRANTY), IN TORT (INCLUDING 
THE ACTIVE, PASSIVE OR IMPUTED NEGLIGENCE OR STRICT PRODUCTS 
LIABILITY OF BRAD OR ITS AFFILIATES), OR OTHERWISE, FOR LOSS OF USE, 
REVENUE OR PROFIT OR FOR ANY OTHER INDIRECT, INCIDENTAL, 
CONSEQUENTIAL OR PUNITIVE DAMAGES OF ANY KIND OR NATURE.



ARTICLE 20  -  ASSIGNMENT  

This Agreement may be assigned only as follows:

20.1	Either party may assign, sell, transfer or dispose of (in whole or in 
part) any of its rights and obligations hereunder to a wholly owned 
subsidiary or affiliate provided that there is no increase to the 
liability and/or responsibility of the non-assigning party and that 
the assigning party remains jointly and severally liable with any 
assignee for the performance of its obligation under this Agreement.

20.2	*











20.3	*











20.4	Except as provided in Articles 20.1, 20.2 and 20.3, Buyer shall not 
assign, sell, transfer or dispose of (in whole or in part) any of its 
rights or obligations hereunder without BRAD's prior written consent, 
such consent not to be unreasonably withheld.  In the event of such 
assignment, sale, transfer or disposition Buyer shall remain jointly 
and severally liable with any assignee for the performance of all and 
any of Buyer's obligations under this Agreement and BRAD reserves the 
right as a condition of its consent to amend one or more of the terms 
and conditions of this Agreement.



20.5	*












20.6	BRAD may assign any of its rights to receive money hereunder without 
the prior consent of Buyer.

20.7	Notwithstanding the other provisions of this Article 20, BRAD shall, 
at Buyer's cost and expense, if so requested in writing by Buyer, 
take any action reasonably required for the purpose of causing any of 
the Aircraft to be subjected (i) to, at or after the Delivery Date, 
an equipment trust, conditional sale or lien, leases and mortgages, 
or (ii) to another arrangement for the financing of the Aircraft by 
Buyer, providing, however, there shall be no increase to the 
liability and/or responsibility of BRAD arising through such 
financing.




ARTICLE 21  -  SUCCESSORS

21.1	This Agreement shall inure to the benefit of and be binding upon each 
of BRAD and Buyer and their respective successors and permitted 
assignees.

21.2	As used herein, reference to an airworthiness authority such as 
Transport Canada and the FAA, to a regulation or directive issued by 
such airworthiness authority or other governmental authority, shall 
include any successor to such authority then responsible for the 
duties of such authority and regulation or directive covering the 
same subject matters.





ARTICLE 22  -  APPLICABLE LAWS

22.1	THIS AGREEMENT SHALL BE SUBJECT TO AND CONSTRUED IN ACCORDANCE WITH 
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY THE DOMESTIC LAWS 
OF THE STATE OF NEW YORK, U.S.A., EXCLUDING THE CHOICE OF LAW RULES, 
AND THE PARTIES HAVE AGREED THAT THE APPLICATION OF THE UNITED 
NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS 
IS HEREBY EXCLUDED.

22.2	Each of Buyer and BRAD agrees that any legal action or proceeding 
with respect to this Agreement may be brought in the Federal Courts 
of the United States of America in the Southern District Courts of 
New York or in the Supreme Courts of the State of New York in the 
County of New York and by the execution and delivery of this 
Agreement irrevocably consents and submits to the nonexclusive 
jurisdiction of each of the aforesaid court in personam with respect 
to any such action or proceeding and irrevocably waive any objection 
either party may have as to venue or any such suit, action or 
procedure brought in such court or that such court is an inconvenient 
forum.  Nothing in this paragraph shall affect the right of any party 
hereto or their successors or assigns to bring any action or 
proceeding against the other party hereto or their property in the 
courts of other jurisdictions.







ARTICLE 23  -  CONFIDENTIAL NATURE OF AGREEMENT

23.1	This Agreement is confidential between the parties and shall not, 
without the prior written consent of the other party, be disclosed by 
either party in whole or in part to any other person or body except:

i)	as may be necessary for either party to carry out its 
obligations under this Agreement or other agreements related 
to this Agreement to which it is a party, and 

ii)	as may be required by law, and

iii)	*














23.2	Except as may be reasonably required for the operation, maintenance, 
overhaul, modification, storage and repair of the Aircraft by Buyer 
or any third party, Buyer shall hold confidential all Technical Data 
and other proprietary information (and so marked by BRAD) supplied by 
or on behalf of BRAD, and shall not reproduce any such Technical Data 
or proprietary information or divulge the same to any third party 
unless such disclosure requires the third party to hold same in 
confidence and use it only for the purposes stated above.

23.3	Either party may announce the signing of this Agreement by means of a 
notice to the press provided that the content and date of the notice 
has been agreed to by the other party.

23.4	*



ARTICLE 24  -  AGREEMENT


24.1	This Agreement and the matters referred to herein constitute the 
entire Agreement between BRAD and Buyer and supersede and cancel all 
prior representations, brochures, alleged warranties, statements, 
negotiations, undertakings, letters, memoranda of agreement, 
acceptances, agreements, understandings, contracts and 
communications, whether oral or written, between BRAD and Buyer or 
their respective agents, with respect to or in connection with the 
subject matter of this Agreement and no agreement or understanding 
varying the terms and conditions hereof shall be binding on either 
BRAD or Buyer hereto unless an amendment to this Agreement is issued 
and duly signed by their respective authorized representatives 
pursuant to the provisions of this Article hereof.  In the event of 
any inconsistencies between any provisions of this Agreement and 
those of any Letter Agreements, the provisions of the Letter 
Agreements shall prevail.

24.2	If any of the provisions of this Agreement are for any reason 
declared by judgment of a court of competent jurisdiction to be 
unenforceable or ineffective, those provisions shall be deemed 
severable from the other provisions of this Agreement and the 
remainder of this Agreement shall remain in full force and effect.

24.3	THE BENEFIT OF THE WAIVER, LIMITATION, RELEASE, RENUNCIATION AND/OR 
EXCLUSION OF LIABILITY CONTAINED IN THIS AGREEMENT  EXTENDS TO THE 
OTHER DIVISIONS, OTHER SUBSIDIARIES, AND OTHER AFFILIATES OF 
BOMBARDIER INC., INCLUDING DE HAVILLAND INC. (COLLECTIVELY THE 
"BOMBARDIER GROUP") AND TO THE OFFICERS, DIRECTORS, EMPLOYEES AND 
REPRESENTATIVES OF THE BOMBARDIER GROUP, ON WHOSE BEHALF AND FOR 
WHOSE BENEFIT BRAD IS, FOR PURPOSES OF THIS ARTICLE 24.3, ACTING AS 
AGENT AND TRUSTEE.

	*






24.4	Buyer and BRAD agree that this Agreement has been the subject of 
discussion and negotiation and is fully understood by the parties 
hereto and that the price of the Aircraft and the other mutual 
agreements of the parties set forth herein were arrived at in 
consideration of the limitation provisions contained in Article 19 
and the other similar provisions contained in this Agreement.


ARTICLE 25 - DISPUTES

25.1	Any dispute, difference, controversy or claim arising out of or relating
to 
this Agreement, the breach, or non-performance thereof shall first be 
attempted to be resolved by BRAD and Buyer through mutual negotiations, 
consultation and discussions.

25.2	Should the parties hereto be unable to settle their differences or
 disputes 
which may arise between them with respect to the interpretation or 
application of this Agreement (a "Dispute"), by mutual agreement as 
provided in Article 25.1 above, the parties agree to each appoint two (2) 
representatives to constitute a joint commission (the "Joint Commission") 
to jointly hear the representations of each party regarding the Dispute.  
One representative will be appointed as chair of the Joint Commission on an 
alternate basis.  At least one (1) representative of each party shall have 
knowledge in technical or contractual matters depending on the nature of 
the Dispute.  The Joint Commission shall, following representations by each 
party, issue non-binding written recommendations to the parties as to how 
best settle the Dispute.  If the representatives do not agree on joint 
recommendations, the representatives of each party shall issue their own 
recommendations.

25.3	Either party may request the formation of the Joint Commission if a
 dispute 
is not settled within forty-five (45) days following a written notice from 
either party to the other detailing the nature of the Dispute and the 
resolution sought.  The request for a Joint Commission shall be made in 
writing and shall contain the names of the representatives appointed by the 
party requesting its formation.  The other party shall then provide the 
names of its representatives within thirty (30) days following the receipt 
of the request for a Joint Commission.

25.4	The Joint Commission shall have forty-five (45) days from its formation to 
agree on the procedure to be followed, including the place of hearing, if 
any.  The Joint Commission shall have sixty (60) days from the completion 
of the representations by each party to issue its recommendations.

25.5	If, despite the recommendations of the Joint Commission, the parties are 
unable to resolve the Dispute, either party may, except where the remedies 
sought include termination of the Agreement in whole or in part or 
injunctive relief, or other controversy involving an amount claimed in good 
faith in excess of Five Million United States Dollars ( $5,000,000 U.S.) 
unless otherwise agreed, request by sixty (60) days prior notice that the 
Dispute be settled by arbitration in accordance with arbitration rules to 
be agreed upon before delivery of the first Aircraft.

25.6	Within thirty (30) days of the demand to refer the Dispute to arbitration, 
each party shall appoint one (1) arbitrator, who in turn will appoint the 
third arbitrator, within thirty (30) days of their appointments.  This 
third arbitrator shall act as the chairman of the Arbitral Tribunal so 
constituted.

25.7	The venue of arbitration shall be Toronto, Ontario, New York City, or 
Washington, DC, U.S.A., as agreed between the parties.

25.8	The arbitrators shall not act as "Amiable Compositeur" and shall decide 
according to the terms of the agreement and to the laws of New York.

25.9	The award of the arbitration shall be final and shall not be called in 
question in any court or tribunal.

25.10	It is expressly agreed that any statement, representation or document
 made 
or produced to or in connection with, or as a result of the formation of a 
Joint Commission shall be without prejudice and without admission of 
liability by either party and shall not be used as such by the other party.

25.11	Each party shall be responsible for its own costs and expenses incurred
as a result of, or in connection with the Joint Commission and arbitration 
including the cost, fees and expenses of its own representatives.






In witness whereof this Agreement was signed on the date written hereof:




For and on behalf of	For an on behalf of




Atlantic Coast Airlines:	Bombardier Inc.:





_______________________	______________________

James B. Glennon					   Michel Bourgeois
Sr. Vice President and C.F.O.				   Vice President, 
Contracts





APPENDIX I

REGIONAL JET AIRCRAFT
ECONOMIC ADJUSTMENT FORMULA

Pursuant to the provision of Article 4 of the Agreement, economic 
adjustment will be calculated using the lesser amount of those generated by 
the following two calculations:

        (i)	The Economic Adjustment Formula:

	PP	=	PO (0.28  LD + 0.35  ED + 0.20  CD + 0.15  MD + 0.02  FD)
				LO	EO	CO	MO	FO

 *







Where:

PP  =	Aircraft Purchase Price;

PO  =	Base Price;

LD  =	the Canadian labour index based upon the indices for the last full 
month preceding the month of delivery of the relevant Aircraft;

LO  =	the Canadian labour index which, as at 1 July 1995, is 19.69;

ED  =	the U.S. labour index based upon the indices for the last full month 
preceding the month of delivery of the relevant Aircraft;

EO  =	the U.S. labor index which, as at 1 July 1995, is 18.07;

CD  =	the Industrial Commodities index based upon the indices for the last 
full month preceding the month of delivery of the relevant Aircraft;

CO  =	the Industrial Commodities index which, as at 1 July 1995, is 126.6;

MD  =	the material index based upon the indices for the last full month 
preceding the month of delivery of the relevant Aircraft;

MO  =	the material index which, as at 1 July 1995, is 134.8;

FD  =	the fuel index based on the indices for the last full month preceding 
the month of delivery of the relevant Aircraft; and

FO  =	the fuel index which, as at 1 July 1995, is 81.0.

For the purpose of the Economic Adjustment Formula and the calculation of the 
economic adjustment:

(a)	the Canadian labour index shall be the index provided in the Standard 
Industrial Classification (S.I.C.) Code 321 for Average Hourly 
Earnings for the Aircraft and Parts Industry (Canada) published by 
Statistics Canada in "Employment Earnings and Hours" Table 3.1.

(b)	the U.S. labour index shall be the index provided in the Bureau of 
Labor Statistics (B.L.S.) Code 372 Gross Hourly Earnings of 
production and non-supervisory workers in the Aircraft and Aircraft 
Parts Industry as published by the U.S. Department of Labor, Bureau 
of Labor Statistics in "Employment and Earnings" Table C-2.

(c)	the Industrial Commodities index shall be the index provided in the 
Producer Price Index as Industrial Commodities as published by the 
U.S. Department of Labor, Bureau of Labor Statistics in "Producer 
Prices and Price Indexes" Table 6.

(d)	the material index shall be the index provided in the Producer Price 
Index for Code 10 Metals and Metals Products as published by the U.S. 
Department of Labor, Bureau of Labor Statistics in "Producer Prices 
and Price Indexes" Table 6.

(e)	the fuel index shall be the index provided in the Bureau of Labor 
Statistics (B.L.S.) Code 5 "Fuel and Related Products and Power" 
Table 6 as published by the U.S. Department of Labor.

(f)	in the event that BRAD shall be prevented from calculating the 
Aircraft Purchase Price of each Aircraft due to any delay in the 
publication of the required indices, BRAD shall use the last 
provisionally published indices, and in the event that provisional 
indices are not available, BRAD shall extrapolate from the last three 
(3) months of published indices and where the balance of the Aircraft 
Purchase Price payable is calculated on the provisionally published 
indices, and/or extrapolation, BRAD will amend such installment on 
publication of the final indices and will submit supplementary claims 
or provide credit notes in respect of any adjustment so caused.

	Notwithstanding the foregoing, it is the intention of the parties to 
finalize the Aircraft Purchase Price within twelve (12) months 
following the Aircraft delivery date.  Accordingly, at the end of 
each calendar quarter the parties shall review and finalize by mutual 
agreement the Aircraft Purchase Price of the Aircraft delivered more


than twelve months prior to such review, using the best data and 
information available at that time.
 
(g)	the indices used in the Economic Adjustment Formula and the weighting 
assigned to them, as well as the various indices as of July 1st, 1995 
quoted here, are based on the information known to date and represent 
the projection by BRAD of the manner in which BRAD will incur cost in 
the production of the Aircraft.  In the event there is a change in 
the indices published or in circumstances which materially affects 
the indices chosen or the weighting assigned to them, the indices 
and/or the weighting shall be amended accordingly by mutual agreement 
of the parties.  The change in circumstances referred to above shall 
include but not be limited to:

1)	Any material change in the basis upon which the chosen indices have 
been calculated or if any of said indices are discontinued or 
withdrawn from publication,

2)	Any change in manufacturing plan involving the letting of a new sub-
contract or the termination of an existing sub-contract, and

3)	Any change in the escalation or Economic Adjustment Formula used in a 
Vendor or sub-contractor contract with BRAD; and

In the calculation of the Aircraft Purchase Price the following guidelines in 
respect of decimal places shall apply:

(a)	All indices in the Economic Adjustment Formula shall be rounded to 
the second decimal place,

(b)	The Economic Adjustment Formula shall be calculated and rounded to 
four decimal places, and

(c)	The Aircraft Purchase Price resulting from the Economic Adjustment 
Formula shall be rounded to the nearest dollar.





APPENDIX II

DELIVERY SCHEDULE
		


First Aircraft	*
Second Aircraft	*
Third Aircraft	*
Fourth Aircraft	*
Fifth Aircraft	*
Sixth Aircraft	*
Seventh Aircraft	*
Eighth Aircraft	*
Ninth Aircraft	*
Tenth Aircraft	*
Eleventh Aircraft	*
Twelfth Aircraft	*





APPENDIX III

SPECIFICATION


TYPE SPECIFICATION

*



APPENDIX IV

BUYER SELECTED OPTIONAL FEATURES

Description	      Price
	(in Jul 1, 1995
	     US$)

Higher Design Weights (51,000 lbs MTOW) - ER
*

Centre Wing Fuel Tank
*

FAA Collins Strapping
*

Provision for Collins ACARS
*

F/A Call Annunciation Lights
*

Interior - Universal North American
*

Class C Baggage Compartment minus temperature 
control
*

Leather Seat Covers
*

Reduced V2 Vref Speed
*

Red Anti-Ice Warning Light (FAA)
*

Logo Lights (includes Cargo Door Light)
*

Red Beacon Lights
*

Altimeter Reset Auto Flash
*

Single Collins FMS 4100*
*

EROS Magic Mask - Provisions Only
*

GE CF34-3B1 Engine - Series 200
*

Additional Flap Setting
*

Exterior Paint Scheme *
*


Total Technical Features	

All prices listed above are expressed in July 1, 1995 US dollars, and are
subject to economic adjustment as provided in the Agreement.

*



CUSTOMER SUPPORT SERVICES


ANNEX A - 	TECHNICAL SUPPORT, SPARE PARTS, TRAINING AND 
		TECHNICAL DATA


The following Customer Support Services are those services to which 
reference is made in Article 3 of the Agreement. 

ARTICLE 1 - TECHNICAL SUPPORT

1.1	Factory Service

	BRAD agrees to maintain or cause to be maintained the capability to 
respond to Buyer's technical inquiries, to conduct investigations 
concerning maintenance problems and to issue findings and recommend 
action thereon.  This service shall be provided for as long as ten 
(10) CL-600-2B19 aircraft remain in commercial air transport service.

1.2	Field Service Representative
	
	1.2.1	Services

	BRAD shall assign one (1) Field Service Representative ("FSR") 
to Buyer's main base of operation or other location as may be 
mutually agreed.  

1.2.2	Term	
	
	Such assignment shall be for 
*                                   and shall commence 
approximately one (1) month prior to the Delivery Date of the 
first Aircraft.  The FSR assignment may be extended on terms 
and conditions to be mutually agreed.

1.2.3 	Responsibility

	The FSR's responsibility shall be to provide technical advice 
to Buyer for the line maintenance and operation of the Aircraft 
systems and troubleshooting during scheduled and unscheduled 
maintenance by Buyer's designated personnel ("FSR Services").


1.2.4	Travel

	If requested by Buyer, the FSR may, at Buyer's expense, travel 
to another location to provide technical advice to Buyer.  The 
FSR must fly on Buyer's airline, if such service is available.

1.2.5	Office Facilities

	Buyer shall furnish the FSR, at no charge to BRAD, suitable and 
private office facilities *                 and related 
equipment including desk, file cabinet,  access to two 
telephone lines, facsimile and photocopy equipment conveniently 
located at Buyer's main base of operation or other location as 
may be mutually agreed.

	1.2.6	Additional Expenses

	Buyer shall reimburse BRAD (net of any additional taxes on such 
reimbursement) the amount of any and all taxes (except Canadian 
taxes on the income of the FSR) and fees of whatever nature, 
including any customs duties, withholding taxes or fees 
together with any penalties or interest thereon, paid or 
incurred by BRAD or the FSR or other BRAD employee as a result 
of or in connection with the rendering of the services.

1.2.7 	Right to Stop Work

	BRAD shall not be required to commence or continue the FSR 
Services when:

	a.)	there is a labour dispute or work stoppage in progress at 
Buyer's 	facilities;

	b.)	there exist war, risk of war or warlike operations, riots 
or 	insurrections;

	c.) 	there exist conditions that are dangerous to the safety 
or health of 	the FSR or other BRAD employee; or

	d.)	the Government of the country where Buyer's facilities 
are located 	or where Buyer desires the FSR to 
travel refuses the BRAD 	employee permission to 
enter said country or Buyer's base of 	operations.




1.2.8	Work Permits and Clearances

	Buyer shall assist in arranging for all necessary airport 
security clearances required for the FSR or other BRAD employee 
to permit timely accomplishment of the FSR services.


1.3	Maintenance Planning Support

1.3.1	Scheduled Maintenance Task Cards

	As described in Annex A Attachment A, BRAD shall provide Buyer 
BRAD's standard format scheduled maintenance task cards that 
shall conform to the Aircraft at the Delivery Date.  At Buyer's 
request BRAD shall provide a proposal for task cards produced 
to Buyer's format.

1.3.2	In-Service Maintenance Data

	Buyer agrees to provide to BRAD in-service maintenance data in 
order to provide updates to BRAD's recommended maintenance 
program.  Buyer and BRAD shall agree on standards and frequency 
for communication of such data.

1.4	Additional Services

	At Buyer's request BRAD shall provide a proposal to provide such 
additional support services as the parties may agree upon, which may 
include special investigations, maintenance and repair of the 
Aircraft.



ARTICLE 2 - SPARE PARTS, GSE, TOOLS AND TEST EQUIPMENT

2.1.1	Definitions

a.	"BRAD Parts":

	any spare parts, ground support equipment, tools and test 
equipment which bear an inhouse Cage Code number in the BRAD 
Provisioning Files (as that expression is defined in ATA 
Specification 2000).

b.	"Power Plant Parts":

	any power plant or power plant part or assembly carrying the power 
plant manufacturer's part number or any part furnished by the 
power plant manufacturer for incorporation on the Aircraft.

c.	"Vendor Parts":

	any spare parts, ground support equipment, tools and test 
equipment for the Aircraft which are not BRAD Parts or Power Plant 
Parts.

d.	"Spare Parts":

	all materials, spare parts, assemblies, special tools and items of 
equipment, including ground support equipment, ordered for the 
Aircraft by Buyer from BRAD.  The term Spare Parts includes BRAD 
Parts, Power Plant Part and Vendor Parts.

e.	"Order":

	any order for Spare Parts issued by Buyer to BRAD; and

f.	"Technical Data":

	shall have the meaning attributed to it in Annex A Article 4.1.

2.1	Term and Applicability

	The term of this Annex A Article 2 shall become effective on the date 
hereof and shall remain in full force and effect with respect to the 
purchase and sale of Spare Parts for each Aircraft so long as at 
least ten (10) of the CL-600-2B19 aircraft remain  in commercial air 
transport service.  The provisions of Annex A Articles 2.2, 2.6.5, 
2.24 and Annex B Article 5.0 shall survive expiration or termination 
of this Agreement.



2.2	Order Terms

	Terms and conditions hereof shall apply to all Orders placed by Buyer 
with BRAD in lieu of any terms and conditions in Buyer's purchase 
orders.

2.3	Purchase and Sale of Spare Parts

2.3.1	Agreement to Manufacture and Sell

	BRAD shall manufacture, or procure, and make available for sale 
to Buyer suitable Spare Parts in quantities sufficient to meet 
the reasonably anticipated needs of Buyer for normal 
maintenance and normal spares inventory replacement for each 
Aircraft.  During the term specified in Annex A Article 2.1 
above, BRAD shall also maintain, or cause to be maintained, a 
shelf stock of certain BRAD Parts selected by BRAD to ensure 
reasonable re-order lead times and emergency support.  BRAD 
shall maintain, or cause to be maintained, a reasonable 
quantity of BRAD insurance parts at a U.S. distribution centre.  
Insurance parts as used herein shall include, but not be 
limited to, dispatch-essential parts such as major flight 
control surfaces.

2.4	Agreement to Purchase BRAD Parts

2.4.1	*




2.4.2	Buyer's Right to Purchase, Redesign or Manufacture

	*
                                                               
shall not be 
construed as a granting of a license by BRAD and shall not 
obligate BRAD to disclose to anyone Technical Data or other 
information nor to the payment of any license fee or royalty or 
create any obligation whatsoever to BRAD and BRAD shall be 
relieved of any obligation or liability with respect to patent 
infringement in connection with any such redesigned part.  
Buyer shall be responsible for obtaining all regulatory 
authority approvals required by Buyer to repair the Aircraft 
using redesigned or manufactured BRAD Parts as described in the 
preceding Article.  Any such redesigned part shall be 
identified with Buyer's part number only.



2.4.3	Notice to BRAD of Redesigned Parts

	BRAD reserves the right to negotiate with Buyer the access to 
redesigned parts, drawings and the non-exclusive manufacturing 
rights of the redesigned part, if Buyer redesigns or has had 
any BRAD parts redesigned.

2.5	Purchase of Vendor Parts & Power Plant Parts

	BRAD shall not be obligated to maintain a stock of Power Plant Parts.  
BRAD maintains a spares stock of selected Vendor Parts at its own 
discretion to support provisioning and replenishment sales.  BRAD 
agrees to use all reasonable efforts to require its vendors to comply 
with the terms and conditions of this Annex A Article 2 as they apply 
to Vendor Parts.  Vendor Parts shall be delivered in accordance with 
the vendor's quoted lead time plus BRAD's internal processing time.



2.6	Spare Parts Pricing

2.6.1	Spare Parts Price Catalogue

	Prices for commonly used BRAD Parts stocked by BRAD shall be 
published in the spare parts price catalogue ("Spare Parts 
Price Catalogue").  BRAD shall hold the published prices firm 
for catalogue stock class items for a period of twelve (12) 
months and shall provide at least ninety (90) calendar days 
notice prior to changing the published price.

2.6.2	BRAD prices for Vendor Parts

	If Buyer orders Vendor Parts from BRAD, the price shall be as 
published in the Spare Parts Price Catalogue. 

2.6.3	Quotations

	Price and delivery quotations for items not included in the 
Spare Parts Price Catalogue shall be provided at Buyer's 
request by BRAD.  Price quotations will be held firm for a 
period of ninety (90) calendar days or as otherwise specified 
by BRAD.  Responses to quotation requests will be provided 
within ten (10) calendar days.





2.6.4	Currency and Taxes

	All Spare Parts Price Catalogue and quotation prices shall be 
in U.S. dollars and exclusive of transportation, taxes, duties 
and licenses.

Buyer shall pay to BRAD upon demand the amount of any sales, 
use, value-added, excise or similar taxes imposed by any 
federal, provincial or local taxing authority within Canada, 
and the amount of all taxes imposed by any taxing authority 
outside Canada, required to be paid by BRAD as a result of any 
sale, use, delivery, storage or transfer of any Spare Parts.  
If BRAD has reason to believe that any such tax is applicable, 
BRAD shall separately state the amount of such tax in its 
invoice.  If a claim is made against BRAD for any such tax, 
BRAD shall promptly notify Buyer.

	In addition, Buyer shall pay to BRAD on demand the amount of 
any customs duties required to be paid by BRAD with respect to 
the importation by Buyer of any Spare Parts.

2.6.5	Vendor Pricing

	BRAD shall use reasonable efforts to require its major vendors 
to maintain any published price for their parts for a period of 
at least twelve (12) months with a ninety (90) calendar day 
notice period prior to changing a published price.


2.7	Provisioning

2.7.1	Pre-provisioning/Provisioning Conference

	Pre-provisioning and provisioning conferences shall be convened 
on dates to be mutually agreed between Buyer and BRAD in order 
to:

(i)	discuss the operational parameters  to be provided by 
Buyer to BRAD which BRAD considers necessary for preparing 
its quantity recommendations for initial provisioning of 
Spare Parts to be purchased from BRAD or vendors 
("Provisioning Items");

(ii)	review Buyer's ground support equipment and special tool 
requirements for the Aircraft;

(iii) discuss the format of the provisioning documentation to 
be provided to Buyer from BRAD for the selection of 
Provisioning Items; and

(iv)	arrive at a schedule of events for the initial 
provisioning process, including the establishment of a date 
for the initial provisioning conference ("Initial 
Provisioning Conference") which shall be scheduled where 
possible at least six (6) months prior to delivery of the 
first Aircraft.

	The time and location of the pre-provisioning conference shall 
be mutually agreed upon between the parties; however, BRAD and 
Buyer shall use their best efforts to convene such meeting 
within thirty (30) days after execution of the Agreement.


2.8	Initial Provisioning Documentation

	Initial provisioning documentation for BRAD Parts and Vendor Parts 
shall be provided by BRAD as follows:

a)	BRAD shall provide, as applicable to Buyer, no later than six (6) 
months prior to the Scheduled Delivery Date of the first Aircraft, 
or as may be mutually agreed, the initial issue of provisioning 
files.
	Revisions to this provisioning data shall be issued by BRAD every 
ninety (90) calendar days until ninety (90) calendar days 
following the Delivery Date of the last Aircraft or as may be 
mutually agreed; and

b)	the Illustrated Parts Catalogue designed to support provisioning 
shall be issued concurrently with provisioning data files and 
revised at ninety (90) calendar day intervals.

2.8.1	Obligation to Substitute Obsolete Spare Parts

	In the event that, prior to delivery of the first Aircraft, any 
Spare Part purchased by Buyer from BRAD is rendered obsolete or 
unusable due to the redesign of the Aircraft or of any 
accessory, equipment or part thereto (other than a redesign at 
Buyer's request), BRAD shall deliver to Buyer new and usable 
Spare Parts in substitution for such obsolete or unusable Spare 
Parts upon return of such Spare Parts to BRAD by Buyer.  BRAD 
shall credit Buyer's account with the price paid by Buyer for 
any such obsolete or unusable Spare Part and shall invoice 
Buyer for the purchase price of any such substitute Spare Part 
delivered to Buyer.



2.8.2	Delivery of Obsolete Spare Parts and Substitutes 

	Obsolete or unusable Spare Parts returned by Buyer pursuant to 
Annex A Article 2.8.1. shall be delivered to BRAD at its plant 
in Ontario or Quebec, or such other destination as BRAD may 
reasonably designate.  Spare Parts substituted for such 
returned obsolete or unusable Spare Parts shall be delivered to 
Buyer from BRAD's plant in  Ontario or Quebec, or such other 
BRAD shipping point as BRAD may reasonably designate.  BRAD 
shall pay the freight charges for the shipment from Buyer to 
BRAD of any such obsolete or unusable Spare Part and for the 
shipment from BRAD to Buyer of any such substitute Spare Part.


2.8.3	Obligation to Repurchase Surplus Provisioning Items

	During a period 
*                                                          
                                                               
      BRAD 
shall, upon receipt of Buyer's written request and subject to 
the exceptions in Annex A Article 2.8.4, repurchase unused and 
undamaged Provisioning Items which: (i) were recommended by 
BRAD as initial provisioning for the Aircraft, (ii) were 
purchased by Buyer from BRAD or Vendor at BRAD's 
recommendation, and (iii) are surplus to Buyer's needs.


2.8.4	Exceptions

	BRAD shall not be obligated under Annex A Article 2.8.3 to 
repurchase any of the following:  (i) quantities of 
Provisioning Items in excess of those quantities recommended by 
BRAD in its Recommended Spare Parts List ("RSPL")  for the 
Aircraft, (ii) Power Plant Parts, QEC Kits, standard hardware, 
bulk and raw materials, ground support equipment and special 
tools, (iii) Provisioning Items which have become obsolete or 
have been replaced by other Provisioning Items as a result of 
Buyer's modification of the Aircraft and (iv) Provisioning 
Items which become surplus as a result of a change in Buyer's 
operating parameters provided to BRAD pursuant to Annex A 
Article 2.7, which were the basis of BRAD's initial 
provisioning recommendations for the Aircraft.




2.8.5	Notification and Format

	Buyer shall notify BRAD, in writing, when Buyer desires to 
return Provisioning Items which Buyer's review indicates are 
eligible for repurchase by BRAD under the provisions of  Annex 
A Article 2.8.3.  Buyer's notification shall include a detailed 
summary, in part number sequence, of the Provisioning Items 
Buyer desires to return.  Such summary shall be in the form of 
listings as may be mutually agreed between BRAD and Buyer, and 
shall include part number, nomenclature, purchase order number, 
purchase order date and quantity to be returned.

	Within sixty (60) calendar days after receipt of Buyer's 
notification and detailed summary BRAD shall complete the 
review of such summary.

2.8.6	Review and Acceptance by BRAD

	Upon completion of BRAD's review of any detailed summary 
submitted by Buyer pursuant to Annex A Article 2.8.5., BRAD 
shall within sixty calendar days issue to Buyer a Material 
Return Authorization notice ("MRA") for those Provisioning 
Items BRAD agrees are eligible for repurchase in accordance 
with Annex A Article 2.8.3.  BRAD will advise Buyer of the 
reason that any Provisioning Items included in Buyer's detailed 
summary are not eligible for return.  The MRA notice shall 
state the date by which Provisioning Items listed in the MRA 
notice must be redelivered to BRAD as agreed between the 
parties, and Buyer shall arrange for shipment of such 
Provisioning Items accordingly, to the U.S. distribution 
centre.

2.8.7	Price and Payment

	The price of each Provisioning Item repurchased by BRAD 
pursuant to Annex A Article 2.8.6 will be the original invoice 
price thereof.  BRAD shall pay the repurchase price by issuing 
a credit memorandum in favour of Buyer which may be applied 
against amounts due BRAD for the purchase of Spare Parts and 
services.

2.8.8	Return of Surplus Provisioning Items

	Provisioning Items repurchased by BRAD pursuant to Annex A 
Article 2.8.6 shall be delivered to BRAD *



2.8.9	Obsolete Spare Parts and Surplus Provisioning Items - Title and 
Risk of Loss

	Title to and risk of loss of any obsolete or unusable Spare 
Parts returned to BRAD pursuant to Annex A Article 2.8.8 shall 
pass to BRAD upon delivery thereof to BRAD.  Title to and risk 
of loss of any Spare Parts substituted for an obsolete or 
unusable Spare Part pursuant to Annex A Article 2.8.1 shall 
pass to Buyer upon delivery thereof to Buyer.  Title to and 
risk of loss of any Provisioning Items repurchased by BRAD 
pursuant to Annex A Article 2.8.3 shall pass to BRAD upon 
delivery thereof to BRAD.

	With respect to the obsolete or unusable Spare Parts which may 
be returned to BRAD and the Spare Parts substituted therefor, 
pursuant to Annex A Article 2.8.1, and the Provisioning Items 
which may be repurchased by BRAD, pursuant to Annex A Article 
2.8.3, the party which has the risk of loss of any such Spare 
Part or Provisioning Item shall have the responsibility of 
providing any insurance coverage thereon desired by such party.

2.9	Procedure for Ordering Spare Parts

	Orders for Spare Parts may be placed by Buyer to BRAD by any method 
of order placement (including but not limited to SITA, ARINC, 
telecopier, letter, telex, facsimile, telephone or hard copy purchase 
order).

	2.9.1	Requirements

	Orders shall include at a minimum order number, part number, 
nomenclature, quantity, delivery schedule requested, shipping 
instructions and BRAD's price, if available.

	2.9.2	Processing of Orders

	Upon acceptance of any Order, unless otherwise directed by 
Buyer, BRAD shall, if the Spare Parts are in stock, proceed 
immediately to prepare the Spare Parts for shipment to Buyer.  
If BRAD does not have the Spare Parts in stock, BRAD shall 
proceed immediately to acquire or manufacture the Spare Parts.  
Purchase order status and actions related to the shipment of 
Spare Parts shall be generally consistent with the provisions 
of the World Airline Suppliers Guide, as applicable to Buyer.


	2.9.3	Changes

	BRAD reserves the right, without Buyer's consent, to make any 
necessary corrections or changes in the design, part number and 
nomenclature of Spare Parts covered by an Order, to substitute 
Spare Parts and to adjust prices accordingly, provided that 
interchangeability is not affected and the unit  price is not 
increased by more than 10% or $50.00, whichever is less, unless 
Buyer's order specifically and reasonably prohibits such 
substitution.  BRAD shall promptly give Buyer written notice of 
corrections, changes, substitutions and consequent price 
adjustments.  Corrections, changes, substitutions and price 
adjustments which affect interchangeability or exceed the price 
limitations set forth above may be made only with Buyer's 
written consent, which consent shall conclusively be deemed to 
have been given unless Buyer gives BRAD written notice of 
objection within thirty (30) calendar  days after receipt of 
BRAD's notice.  In case of any objection, the affected Spare 
Part will be deemed to be deleted from Buyer's Order.

2.10	Packing

	All Spare Parts ordered shall receive standard commercial packing 
suitable for export shipment via air freight.  Such standard packing 
will generally be to ATA 300 standards as amended from time to time.  
All AOG orders will be handled, processed, packed and shipped 
separately.

2.11	Packing List

	BRAD shall insert in each shipment a packing list/release note 
itemized to show:

(i)	the contents of the shipment,
(ii)	the approved signature of BRAD's TC authority attesting to the 
airworthiness of the Spare Parts.
(iii)	value of the shipment for customs clearance if required. 

2.12	Container Marks

	Upon Buyer's request each container shall be marked with shipping 
marks as specified on the Order.  In addition BRAD shall, upon 
request, include in the markings:  gross weight and cubic 
measurements.




2.13	Delivery, Title and Risk of Loss

2.13.1	Delivery Point

	Spare Parts, other than AOG and Critical Orders, shall be 
delivered to Buyer FOB BRAD's U.S. distribution centre.  AOG 
and Critical Orders shall be delivered FOB point of origin.

2.13.2 Delivery Time

	BRAD shall use reasonable efforts so that shipment of BRAD 
Parts to Buyer be as follows:

a)	AOG Orders

	Ship AOG Orders within four (4) hours of receipt of Order.  
Buyer's affected Aircraft factory production number shall be 
required on AOG Orders;

b)	Critical Orders (A1)

	Ship critical Orders within twenty-four (24) hours of order 
receipt;

c)	Expedite Orders (A2)

	Ship expedite Orders within seven (7) calendar days of order 
receipt;

d)	Initial Provisioning Orders

	Prior to the Delivery Date of the first Aircraft or as may 
be mutually agreed; and

e.)	Other Orders

	Shipment of stock items shall be approximately thirty (30) 
calendar days after BRAD's receipt of Buyer's Order.   
Shipment of non-stock items shall be in accordance with 
quoted lead times or lead times published in the current 
Spare Parts Price Catalogue, procurement data, or 
provisioning data.



2.14	Collect Shipments

	Where collect shipments are not deemed practicable by BRAD, charges 
for shipment, insurance, prepaid freight charges and all other costs 
paid by BRAD shall be paid by Buyer promptly upon presentation to 
Buyer of invoices covering the same.

2.15	Freight Forwarder

	If Buyer elects to use the services of a freight forwarder for the 
onward movement of Spare Parts, Buyer agrees to release BRAD from and 
indemnify it for any liability for any fines or seizures of Spare 
Parts imposed under any governmental Goods in Transit regulations.  
Any such fines levied against BRAD will be invoiced to Buyer and any 
Spare Parts seized under such regulations will be deemed to be 
received, inspected, and accepted by Buyer at the time of seizure.

2.16	Intentionally Left Blank


2.17	Title and Risk of Loss

	Property and title to the Spare Parts will pass to Buyer upon payment 
for the Spare Parts in full.  Until payment in full for Spare Parts, 
(a) title to them will not pass to Buyer, and (b) BRAD maintains a 
purchase money security interest in them.  Risk of loss of the Spare 
Parts will pass to the Buyer upon delivery by BRAD.  With respect to 
Spare Parts rejected by Buyer pursuant to Annex A Article 2.19, risk 
of loss shall remain with Buyer until such Spare Parts are re-
delivered to BRAD .

	BRAD agrees to notify Buyer when material is shipped and shall 
provide carrier's reference information (i.e., waybill number).

2.18	Inspection and Acceptance

	All Spare Parts shall be subject to  inspection by Buyer at 
destination. Use of Spare Parts or failure of Buyer to give notice of 
rejection within forty-five (45) days after receipt shall constitute 
acceptance.  Acceptance shall be final and Buyer waives the right to 
revoke acceptance for any reason, whether or not known to Buyer at 
the time of acceptance.  Buyer's remedies for defects discovered 
before acceptance are exclusively provided for in Annex A Article 
2.19 herein.



2.19	Rejection

	Any notice of rejection referred to in Annex A Article 2.18 shall 
specify the reasons for rejection.  If BRAD concurs with a rejection, 
BRAD shall, at its option, either correct, repair or replace the 
rejected Spare Parts.  Buyer shall, upon receipt of BRAD's written 
instructions and Material Return Authorization ("MRA") number, which 
BRAD shall issue in a timely manner, return the rejected Spare Parts 
to BRAD at its specified plant, or other destination as may be 
mutually agreeable.  The return of the rejected Spare Parts to BRAD 
and the return or delivery of a corrected or repaired rejected Spare 
Part or any replacement for any such Spare Part to Buyer shall be at 
BRAD's expense.  Any corrected, repaired or replacement Spare Parts 
shall be subject to the provisions of this Agreement.

2.20	Payment

	Except as provided in Annex A Article 2.22 below, payment terms shall 
be net thirty (30) calendar days of invoice date for established open 
accounts.  Any overdue amount shall bear interest from the due date 
until actual payment is received by BRAD at an annual rate of 
interest equal to the U.S. prime interest rate as established from 
time to time by the Chase Manhattan Bank, New York Branch, or its 
successor,,, plus two percent (2%) calculated and compounded monthly.

2.21	Payment for Provisioning Items

	Payment for Provisioning Items purchased by Buyer as contemplated by 
Paragraph 2.7.1(i) shall be made by Buyer as follows:

a)	a deposit of 35% of the total price of the Provisioning Items as 
selected by Buyer, upon signature of the spares provisioning 
document; and

b)	the balance of the total price of Provisioning Items upon their 
delivery.

2.22	Modified Terms of Payment

	BRAD reserves the right to alter the terms of payment without 
prior notice if Buyer fails to pay when due an amount Buyer owes 
under any agreement with BRAD, unless such failure relates to a 
good faith dispute of an invoice.

2.23	Regulations

	Buyer shall comply with all applicable monetary and exchange control 
regulations and shall obtain any necessary authority from the 
governmental agencies administering such regulations to enable Buyer 
to make payments at the time and place and in the manner specified 
herein.

2.24	Warranty

The warranty applicable to Spare Parts is set forth in Annex B 
hereto.  



2.25	Cancellation of Orders

	Except as otherwise may apply to initial provisioning, if Buyer 
cancels an Order, BRAD, at its option, shall be entitled to recover 
actual damages, but not less than the following cancellation charges 
or more than the purchase price of the Spare Parts covered by the 
Order:

a)	if work accomplished on the Order has been limited to BRAD Spares 
Department, or the part has been identified as "shelf stock" in 
the Spare Parts Price Catalogue, no cancellation charges shall be 
made;

b)	if production planning has been completed on the Order and shop 
orders have been written, but no shop time or material charges 
have been made against the Order, the cancellation charge shall be 
10% of the price but not to exceed $100 per unit;

c)	if shop time or material charges have been made against the Order, 
the cancellation charge shall be based on the cost of such time 
and materials, plus overhead; and

d)	if the Spare Parts covered by the Order can be absorbed into 
BRAD's inventory without increasing  BRAD's normal maximum stock 
level, no cancellation charges shall be made.

2.26	Lease

	BRAD shall select and make available certain parts for lease, subject 
to availability Buyer has the option to negotiate a lease agreement 
with BRAD separate from this Agreement.

2.27	Additional Terms and Conditions

	BRAD's conditions of sale are deemed to incorporate the terms and 
conditions stated herein.  Additional terms and conditions applicable 
at time of receipt of each order from Buyer may be added providing 
such terms and conditions do not conflict with the terms and 
conditions provided herein.  Such additional terms and conditions 
shall be provided to Buyer at least ninety (90) calendar days prior 
to their effective date.



ARTICLE 3 - TRAINING

3.1	General Terms

3.1.1 	The objective of the training programs (the "Programs"), 
as described herein, shall be to familiarize and assist Buyer's 
personnel in the introduction, operation, and maintenance of 
the Aircraft.

	BRAD shall offer to the Buyer the Programs in the English 
language at a BRAD designated facility.

	*







3.1.2 	Buyer shall be responsible for all travel and living 
expenses, including local transportation, of Buyer's personnel 
incurred in connection with the Programs.

3.1.3 	The Programs shall be designed to reflect the model 
and/or configuration of the Aircraft and may include 
differences training to identify such configuration or model.  
Manuals which are provided during the Programs exclude revision 
service.

3.1.4 	A training conference shall be held where possible no 
later than six (6) months prior to the Scheduled Delivery Date 
of the first Aircraft to the Buyer, or as may be otherwise 
agreed, to establish the Programs' content and schedule.


3.2	Flight Crew Training

3.2.1	Flight Crew Ground Training 

	At no additional charge, BRAD will provide with each delivered 
Aircraft, a TC or FAA approved transition training for one (1) 
of Buyer's crews (two (2) pilots) who meet the minimum entry 
requirement provided in the applicable training manual.  Each 
course shall consist of up to eighty (80) hours of classroom 
instruction which may include part task trainer, Computer Based 
Training (CBT), and/or Flight Training Device (FTD).  BRAD 
shall furnish each of Buyer's licensed pilots attending the 
course one copy of the Flight Crew Operating Manual.

3.2.2	Pilot Simulator Training

	BRAD shall provide access at Buyer's expense to a TC or FAA 
approved flight simulator for the crew trained under Annex A 
Article 3.2.1.  BRAD shall provide a simulator instructor for 
eight (8) missions for the crew trained on BRAD's designated 
simulator in Montreal; each mission shall consist of four (4) 
hours in the simulator and required briefing/debriefing 
sessions.

3.2.3	In-flight Training

	Should Buyer require aircraft flight training, such training 
shall be conducted in Buyer's Aircraft after the Delivery Date 
for up to a maximum of four (4) of Buyer's pilots.  BRAD shall 
provide an instructor pilot at no additional charge; Buyer 
shall be responsible for the cost of fuel, oil, landing fees, 
taxes, insurance, maintenance, and other associated operating 
expenses required for the Aircraft during such training.

3.2.4	Flight Attendant Course

	A familiarization course for up to two (2) of Buyer's flight 
attendant personnel shall be conducted.  Each course shall be 
for a maximum of five (5) working days duration.  This course 
shall present general information on the Aircraft and detailed 
information on the operation of the passenger safety equipment 
and emergency equipment.  BRAD shall furnish for each 
participant in this course one (1) copy of the Flight Attendant 
Training Guide which shall not be revised.  Buyer shall assist 
BRAD in the development of the Flight Attendant Training Guide 
to incorporate Buyer's specific equipment and procedures.

3.2.5	Flight Dispatcher Course

	A course for up to two (2) of Buyer's flight dispatch personnel 
shall be conducted.  Each course shall be for a maximum of five 
(5) working days duration.  The course shall consist of 
classroom instruction covering general Aircraft 
familiarization, coverage of performance, flight planning, 
weight and balance and the Minimum Equipment List.  BRAD shall 
furnish for each participant in this course one (1) copy of the 
Flight Crew Operating Manual which shall not be revised.




3.2.6	Recurrent Pilot Training

	BRAD shall, upon Buyer's request, provide a proposal for a TC 
or FAA approved course for type rated pilots, customized in 
content to meet the recurrent training of Buyer's pilots.

3.2.7	Course Training Material

	BRAD shall, upon Buyer's request, present a proposal to provide 
one (1) set  of the materials (without revision service) used 
to conduct the Flight Crew Ground Training course, as follows:

i)	35 mm slides;
ii)	Instructional Narrative and/or Instruction Guides;
iii)	Overhead Projection Transparencies;
iv)	Motion picture and/or Video tapes; and
v)	Audio cassettes tapes.

3.3	Maintenance Training 

3.3.1	Airframe and Powerplant Systems Maintenance Course

	BRAD shall, at no additional charge, train up to two (2) of 
Buyer's qualified personnel.  This course shall emphasize 
detailed systems description, operation, and routine line 
maintenance practices.  The course material shall be 
principally mechanical with electrical and avionics information 
for overall systems comprehension.  The course duration shall 
be for a maximum  of twenty-five (25) working days.

3.3.2	Electrical and Avionics Systems Maintenance Course

	BRAD shall, at no additional charge, train up to two (2) of 
Buyer's qualified personnel. The course shall emphasis detailed 
systems description, operation and routine line maintenance 
practices.  The course material shall be principally electrical 
and avionic but shall include mechanical information for 
overall systems comprehension.  The course duration shall be 
for a maximum of twenty-five (25) working days.

3.3.3	Ground Handling Course

	BRAD shall, at no additional charge, train up to two (2) of 
Buyer's qualified personnel.  This course shall provide ramp 
service personnel with training to be able to tow and park 
Aircraft and perform routine ramp servicing tasks.  Such 
training shall be conducted in class with a practical 
demonstration on Buyer's Aircraft after acceptance.  The course 
duration shall be a maximum of five (5) working days and the 
practical demonstration shall not exceed two (2) working days.

3.3.4	General Familiarization Course

	BRAD shall, at no additional charge, train up to *        of 
Buyer's personnel.  
The course shall generally describe the Aircraft, the systems 
and the maintenance and support requirements.  This course is 
primarily designed for Buyer's facilities planning, parts 
provisioning and aircraft management personnel.  The course 
duration is for a maximum of five (5) working days.

3.3.5	Engine Run-up Course

	BRAD shall provide an Engine Run-up course, at no additional 
charge, for up to              of Buyer's qualified personnel.  
This course enables Buyer's personnel to gain proficiency in 
engine and APU runs, cockpit management procedures , 
malfunctions and exceedences.  A prerequisite for this course 
is satisfactory completion of the Airframe and Powerplant 
Systems Maintenance course.  The course duration shall be for a 
maximum of two (2) working days.

3.3.6	Specialist Courses

	At Buyer's request, BRAD shall make a proposal for specialist 
courses which will be derived from BRAD's standard courses 
detailed herein.

3.3.7	Recurrent Training

	At Buyer's request, BRAD shall make a proposal for a Regulatory 
Authority  approved training plan for maintenance recurrent 
training.

3.3.8	Vendor Training

	At Buyer's request, BRAD shall assist Buyer to obtain vendor 
maintenance training.



3.3.9	Course Training Material

	BRAD, upon Buyer's request, shall present a proposal to provide 
one (1) set of the training materials (without revision 
service) used to conduct BRAD's standard training as detailed 
herein:

i)	35 mm slides;
ii)	Lesson Guides;
iii)	Overhead Projection Transparencies;
iv)	Motion picture and/or Video tapes; and
v)	Audio cassettes tapes.


3.4	Insurance

	3.4.1	Buyer shall at all times during flight training in 
Buyer's Aircraft 	secure and maintain in effect, at its own 
expense, insurance policies 	covering the Aircraft including 
without limitation:

		a)	liability insurance covering public liability, 
passenger, crew, 			property and cargo damage in 
amounts *                        



		b)	all risk aircraft hull and engine insurance for an 
amount which is 		not less than its then fair market 
value.

	3.4.2	The liability policy shall name BRAD (and its affiliates) 
as additional insured.  The hull policy shall contain a 
waiver of subrogation in favour of BRAD (and its 
affiliates); *                                       
                                                         
     .  All 
insurance policies shall provide for payments despite any 
misrepresentations or breach of warranty by any 
		person (other than the assured receiving payments) and 
shall not be subject to any offset by any other insurance 
carried by BRAD except that Buyer shall not be required 
to provide insurance with respect to the manufacturing, 
repair and maintenance activities of BRAD (and of its 
affiliates) and the related potential liability (product 
or otherwise) arising therefrom.




ARTICLE 4 - TECHNICAL DATA

4.1	Technical Data Provided

	BRAD shall furnish to Buyer the Technical Data described in 
Attachment A hereto (the "Technical Data").  The Technical Data shall 
be in the English language and shall provide information on items 
manufactured according to BRAD's detailed design and in those units 
of measures used in the Specification or as may otherwise be required 
to reflect Aircraft instrumentation as may be mutually agreed.

4.2	Shipment

	All Technical Data provided hereunder shall be delivered to Buyer 
Free Carrier (Incoterms) BRAD's designated facilities and at the time 
indicated in Attachment A.

4.3	Proprietary Technical Data

	It is understood and Buyer acknowledges that the Technical Data 
provided herein is proprietary to BRAD and all rights to copyright 
belong to BRAD and the Technical Data shall be kept confidential by 
Buyer.  Buyer agrees to use the Technical Data solely to maintain, 
operate, overhaul or repair the Aircraft or to make installation or 
alteration thereto allowed by BRAD.

	Technical Data shall not be disclosed to third parties or used by 
Buyer or furnished by Buyer for the design or manufacture of any 
aircraft or Spare Parts  including BRAD Parts or items of equipment, 
except when manufacture or redesign is permitted under the provisions 
Article 23.2 of the Agreement or of Annex A Article 2.4 hereof and 
then only to the extent and for the purposes expressly permitted 
therein.




*
THREE PAGE ATTACHMENT OMITTED


ANNEX B - WARRANTY AND SERVICE LIFE POLICY

ARTICLE 1 - WARRANTY

The following warranty is that to which reference is made in Article 3 
of the Agreement.

1.1	Warranty

1.1.1	Subject to Annex B Articles 1.9, 1.10, and 2, BRAD warrants 
that, at the date of delivery of the Aircraft or BRAD Part, 
as applicable :

a)	the Aircraft shall conform to the Specification, except 
that any matter stated in the Specification as type 
characteristics, estimates or approximations is excluded 
from this Warranty;

b)	the Aircraft shall be free from defects caused by the 
failure of BRAD to install a Vendor Part or Powerplant 
Part in accordance with reasonable instructions of the 
vendor;

c)	the Aircraft, excluding however Vendor Parts and 
Powerplant Parts which shall be governed by Article 2 
hereof, shall be free from defects in material or 
workmanship *                                 and

d.)	the Aircraft, excluding however Vendor Parts and 
Powerplant Parts which shall be governed by Article 2 
hereof, shall be free from defects in design, having 
regard to the state of the art as of the date of such 
design.

1.1.2	The Warranty set forth in Annex B Article 1.1.1 (c) and (d) 
above shall also be applicable to BRAD Parts purchased as 
Spare Parts.

1.1.3	BRAD further warrants that, at the time of delivery, the 
Technical Data shall be free from error.

1.2	Warranty Period

1.2.1	The Warranty set forth in Annex B Article 1.1 shall remain 
in effect for any defect covered by the Warranty (a 
"Defect") becoming apparent during the following periods 
(individually, the "Warranty Period"):

a)	for failure to conform to the Specification and in the 
installation referred to in Annex B Article 1.1.1 (a) and 
1.1.1 (b), thirty-six (36) months from the Delivery Date;

b)	for those Defects in material or workmanship referred to 
in Annex B Article 1.1.1 (c) and 1.1.2, thirty-six (36) 
months from the date of delivery of the Aircraft or BRAD 
Parts, as applicable;

c)	for those Defects in design referred to in Annex B 
Article 1.1.1 (d), thirty-six (36) months from the date 
of delivery of the Aircraft or BRAD Parts, as applicable; 
and

d)	for errors in the Technical Data referred to in Annex B 
Article 1.1.3, twelve (12) months from the date of 
delivery of the applicable Technical Data.

1.3	Repair, Replacement or Rework

	As to each matter covered by this Warranty BRAD's sole obligation 
and liability under this Warranty is expressly limited to, at 
BRAD's election, correction by the repair, replacement or rework 
of the defective part or item of Technical Data.  The repaired, 
replaced or reworked part or item of Technical Data which is the 
subject of the Warranty claim shall then be warranted under the 
same terms and conditions for the then unexpired portion of the 
Warranty Period.

	In the case of a Defect relating to non-conformance with the 
Specification, BRAD shall correct that Defect in the equipment 
item or part in which the Defect appears, except that BRAD will 
not be obligated to correct any Defect which has no material 
adverse effect on the maintenance, use or operation of the 
Aircraft or the image of Buyer as a reputable airline operator.

1.4	Claims Information

	BRAD's obligations hereunder are subject to a Warranty claim to be 
submitted in writing to BRAD's warranty administrator, which claim 
shall include but not be limited to the following information:

a)	the identity of the part or item involved, including the  Part 
number, serial number if applicable nomenclature and the 
quantity claimed to be defective;

b)	the manufacturer's serial number of the Aircraft from which the 
part was removed;

c)	the date the claimed Defect became apparent to Buyer;

d)	the total flight hours (and cycles if applicable) accrued on 
the part at the time the claimed Defect became apparent to 
Buyer; and

e)	a description of the claimed Defect and the circumstances 
pertaining thereto.

1.5	Intentionally Left Blank .

1.6	Timely Corrections

	BRAD shall make the repair, replacement or rework, following 
receipt of the defective part or item, with reasonable care and 
dispatch.

	*





1.7	Labour Reimbursement

	For correction of Defects BRAD shall establish a reasonable 
estimate for the labour hours required for the repair, replacement 
or rework of the defective BRAD Part and, if the repair, 
replacement or rework is performed by Buyer or by third party on 
behalf of Buyer, BRAD shall reimburse Buyer for BRAD estimated 
hours or for Buyer's or third party's actual labour hours, 
whichever is less, for the repair, replacement or rework of the 
defective BRAD Part excluding any work necessary to gain access to 
said BRAD Part.  Such reimbursement shall be based upon Buyer's 
direct labour rate per manhour plus burden rate of fifty percent 
(50%), subject to annual review and adjustment of such labour rate 
as mutually agreed; provided, however, that this amount shall not 
exceed fifty percent (50%) of the BRAD published selling labour 
rate.

1.8	Approval, Audit, Transportation and Waiver

	All Warranty claims shall be subject to audit and approval by 
BRAD.  BRAD will use reasonable efforts to advise in writing the 
disposition of Buyer's Warranty claim within thirty (30) days 
following the receipt of the claim and (if requested) return of 
the defective BRAD Part to BRAD's designated facility.  BRAD shall 
notify Buyer of BRAD's disposition of each claim.  

	Buyer shall pay all costs of transportation of the defective part 
from Buyer to BRAD's U.S. distribution centre and BRAD shall pay 
all costs of transportation of the repaired, corrected or 
replacement parts back to Buyer.



1.9	Limitations

1.9.1	BRAD shall be relieved of and shall have no obligation or 
liability under this Warranty if:

a)	the Aircraft was operated with any products or parts not 
specifically approved by BRAD, unless Buyer furnishes 
reasonable evidence acceptable to BRAD that such products 
or parts were not a cause of the Defect; or

b)	the Aircraft was not operated or maintained in accordance 
with the Technical Data listed in Attachment A of Annex A 
and the manufacturer's documentation furnished to Buyer 
(including Service Bulletins and airworthiness 
directives) unless Buyer furnishes reasonable evidence 
acceptable to BRAD that such operation or maintenance was 
not a cause of the Defect; or

c)	the Aircraft was not operated under normal airline use, 
unless Buyer furnishes reasonable evidence acceptable to 
BRAD that such operation was not a cause of the Defect; 
or

d)	Buyer does not

1)	report the Defect in writing to BRAD's Warranty 
administrator within forty-five (45) calendar days 
following such Defect becoming apparent, and

2)	retain the BRAD Part claimed to be defective until 
advised by BRAD to return such BRAD Part to BRAD's 
designated facility in order for BRAD to finalize its 
evaluation of the Warranty claim or to otherwise 
dispose of such BRAD Part; or

e)	Buyer does not submit reasonable demonstration to BRAD 
within forty-five (45) calendar days after the Defect 
becomes apparent that the Defect is due to a matter 
covered within this Warranty; or

f)	Buyer does not allow BRAD reasonable opportunity (taking 
into account Buyer's wish to replace Aircraft back in 
service) to be present during the disassembly and 
inspection of the BRAD Part claimed to be defective.

1.9.2	The above warranties do not apply to Buyer Furnished 
Equipment.



1.10	Normal Usage

	Normal wear and tear and the need for regular maintenance and 
overhaul shall not constitute a Defect or failure under this 
Warranty.

1.11	Overhaul of Warranty Parts

	BRAD's liability for a BRAD Part which has a Defect and is 
overhauled by Buyer within the Warranty Period shall be limited 
only to that portion of the labour and material replacement 
related to the Defect.

1.12	No Fault Found

	In the event that a BRAD Part returned under a Warranty claim is 
subsequently established to be serviceable then BRAD shall be 
entitled to charge and recover from Buyer any reasonable 
inspection, transportation, repair and other costs of a similar 
nature incurred by BRAD in connection with such Warranty claim.  
Providing, however, in the event that repetitive in-service 
failure occurs on the particular BRAD Part which is subsequently 
identified by BRAD on a repeated basis to be "no fault found," 
then BRAD and Buyer shall discuss and mutually agree a course of 
further action to help identify the problem.  In the event the 
fault is ultimately confirmed to be a legitimate Warranty claim 
then the above mentioned costs, if incurred by BRAD will be borne 
by BRAD, and any such costs already paid by Buyer will be 
reimbursed by BRAD.




ARTICLE 2 - VENDOR WARRANTIES

2.1	Warranties from Vendors

	The Warranty provisions of this Annex B apply to BRAD Parts only.  
However, BRAD has made or shall make reasonable efforts to obtain 
favourable warranties from vendors, with respect to Vendor Parts 
and Power Plant Parts.  Except as specifically provided under this 
Annex B Article 2, BRAD shall have no liability or responsibility 
for any such Vendor Parts and Power Plant Parts and the warranties 
for those Vendor Parts and Power Plant Parts shall be the 
responsibility of the vendor and a matter as between Buyer and 
vendor.

2.2	Vendor Warranty Backstop

	For those Vendor Parts installed on the Aircraft at the Delivery 
Date or subsequently purchased through BRAD, excluding the 
Powerplant or the Power Plant Parts, in the event the parties 
agree that a vendor is in default in the performance of any 
material obligation under any applicable warranty obtained by BRAD 
from such vendor pursuant to Annex B Article 2.1 above, the 
warranties and all other terms and conditions of Annex B Article 1 
shall become applicable as if the Vendor Parts had been a BRAD 
Part, except that the warranty period shall be the Warranty Period 
as set forth herein or by the vendor's warranty, whichever is 
shorter.

2.3	BRAD's Interface Commitment

	In the event of a dispute in the application of a Vendor Part 
warranty, at Buyer's request addressed to BRAD's warranty 
administrator, BRAD shall, without charge, conduct an 
investigation and analysis of any such dispute resulting from a 
technical interface problem to determine, if possible, the cause 
of the interface problem and then recommend feasible corrective 
action.  Buyer shall furnish to BRAD all data and information in 
Buyer's possession relevant to the interface problem and shall 
cooperate with BRAD in the conduct of its investigation and such 
tests as may be required.  BRAD, at the conclusion of its 
investigation, shall advise Buyer in writing of BRAD's opinion as 
to the cause of the problem and BRAD's recommended corrective 
action.




ARTICLE 3 - SERVICE LIFE POLICY

3.1	Applicability

	The Service Life Policy ("SLP") described in this Annex B Article 
3 shall apply if *                                in any Covered 
Component which is defined in Annex B Article 3.7 below.

3.2	Term

3.2.1	Should such failures occur in any Covered Component within 
one hundred and forty-four (144) months following delivery 
of the Aircraft containing such Covered Component, BRAD 
shall, as promptly as practicable and at its option;

a)	design and/or furnish a correction for such failed 
Covered Component; or

b)	furnish a replacement Covered Component (exclusive of 
standard parts such as bearings, bushings, nuts, bolts, 
consumables and similar low value items).

3.3	Price

	Any Covered Component which BRAD is required to furnish under this 
SLP shall be provided for at a price calculated in accordance with 
the following formula:

P	=	C x T
144

Where:

P	=	Price of Covered Component to Buyer;
C	=	BRAD's then current price for the Covered Component;
T	=	The total time to the nearest month since the Aircraft 
containing the Covered Component, 
*                                                
was delivered by BRAD



3.4	Conditions and Limitations

3.4.1	The following general conditions and limitations shall apply 
to the SLP:

a)	the transportation cost for the return to BRAD's 
designated facility, if practicable, of any failed 
Covered Component necessary for failure investigation or 
redesigning studies shall be borne by BRAD but Buyer 
agrees to use reasonable efforts to ship the Covered 
Component on Buyer's aircraft to a scheduled destination 
closest to Canadair's designated facility at no cost to 
BRAD;

b)	BRAD's obligations under this SLP are conditional upon 
the submission of reasonable proof acceptable to BRAD 
that the failure is covered hereby;

c)	Buyer shall report any failure of a Covered Component in 
writing to BRAD`s Warranty administrator within two (2) 
months after such failure becomes evident 
*                        .  Failure to give this 
required notice shall excuse BRAD from all obligations 
with respect to such failure;

d)	the provisions of Annex B Article 1.9 of the Warranty 
(except for subparagraphs (d) and (e) thereof) are 
incorporated by this reference and shall condition BRAD's 
obligations under this SLP with respect to any Covered 
Component;

e)	BRAD's obligations under this SLP shall not apply to any 
Aircraft which has not been correctly modified in 
accordance with the specifications or instructions 
contained in the relevant Service Bulletins which are 
furnished to Buyer prior to receipt by BRAD from Buyer of 
any notice of an occurrence which constitutes a failure 
in a Covered Component, subject to Buyer having had 
reasonable time to i) obtain parts required for the 
installation of the Service Bulletin and ii) incorporate 
the Service Bulletin into the Aircraft.  The provisions 
of this subparagraph shall not apply in the event that 
Buyer furnishes reasonable evidence acceptable to BRAD 
that such failure was not caused by Buyer's failure to so 
modify the Aircraft;

f)	this SLP shall not apply to a failure of a Covered 
Component if BRAD determines that such failure may not 
reasonably be expected to occur on a repetitive basis 
unless subsequently demonstrated to be; and



g)	this SLP shall not apply to a Covered Component where the 
failure results from an accident, abuse, misuse, 
degradation, except for normal wear and tear, negligence 
or wrongful act or omission, unauthorized repair or 
modification adversely affecting a Covered Component, 
impact or foreign object damage, to any Covered 
Component.

3.5	Coverage

	This SLP is neither a warranty, performance guarantee nor an 
agreement to modify the Aircraft to conform to new developments in 
design and manufacturing art.  BRAD's obligation is only to 
provide correction instructions to correct a Covered Component or 
furnish replacement at a reduced price as provided in this SLP.

3.6	Covered Component

	Only those items or part thereof listed in Attachment A to this 
Annex B shall be deemed to be a Covered Component, and subject to 
the provisions of this SLP.




ARTICLE 4 - GENERAL

4.1	It is agreed that BRAD shall not be obligated to provide to Buyer 
any remedy 	which is a duplicate of any other remedy which has been 
provided to Buyer under 	any other part of this Annex B.





Atlantic Coast Airlines	1				

Initials

Buyer ________    BRAD ________

c-36
Atlantic Coast Airlines				
	
Initials

Buyer ________    BRAD ________