EXHIBIT 10.5

 

GE ENGINE SERVICES

 

CFM56-7

MAINTENANCE COST PER HOURSM (“MCPHSM”)

ENGINE SERVICE AGREEMENT

 

Between

 

AirTran Airways

 

And

 

GE Engine Services, Inc.

 

Reference Number ESI-03-0096D

Dated August 6, 2003

 

PROPRIETARY INFORMATION NOTICE

 

The information contained in this document is GE Engine Services, Inc. (“GE”)
Proprietary Information and is disclosed in confidence. It is the property of GE
and shall not be used, disclosed to others or reproduced without the express
written consent of GE. If consent is given for reproduction in whole or in part,
this notice and the notice set forth on each page of this document shall appear
in any such reproduction. U.S. export control laws may also control the
information contained in this document. Unauthorized export or re-export is
prohibited.

 

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TABLE OF CONTENTS

 

Article

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Subject

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   Page

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1

   Definitions    3

2

   Term    7

3

   MCPH Program Procedures    8

4

   Supplemental Work    11

5

   Customer Obligations    12

6

   Delivery, Redelivery, and Governmental Authorization    14

7

   Parts Replacement Procedures    15

8

   Repair Stations and Subcontracted Services    16

9

   Pricing    16

10

   Invoices and Payment    16

11

   Limitation of Liability    18

12

   Excusable Delay    18

13

   Notices    19

14

   Taxes and Other Charges    19

15

   Dispute Resolution, Arbitration    19

16

   Termination    20

17

   Non Disclosure of Proprietary Data    21

18

   Warranty    22

19

   General Provisions    23      Signatures    25 Exhibits

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Exhibit A

   Pricing    26

Schedule 1

   Fixed Price Labor Schedule    31

Schedule 2

   Bench Stock    32

Exhibit B

   Repair Stations    33

Exhibit C

   Aircraft and Engine Serial Numbers/Aircraft Delivery Schedule    34

Exhibit D

   Pricing Sensitivity Matrix    35

Exhibit E

   Warranty Assignment Letter    36

Exhibit F

   Line Replaceable Units    37

 

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CFM56-7 MAINTENANCE COST PER HOURSM (“MCPHSM”)

ENGINE SERVICE AGREEMENT

 

THIS ENGINE MAINTENANCE AGREEMENT is made as of this      day of             ,
2003 (“Effective Date”), by and between AirTran Airways, having its principal
place of business at 9955Airtran Boulevard, Orlando, FL 32827 (“Customer”) and
GE Engine Services, Inc., having its principal place of business at One Neumann
Way, Cincinnati, OH 45215 (“GE”).

 

RECITALS

 

WHEREAS, GE maintains and operates Repair Stations for the servicing, repair,
maintenance, and functional testing of aircraft engines, and engine modules,
assemblies, subassemblies, controls and accessories, and parts thereof;

 

WHEREAS, Customer requires repair, overhaul or servicing of CFM56-7 series
aircraft engines, and engine modules, assemblies, subassemblies, controls and
accessories, and parts thereof; and

 

WHEREAS, GE agrees to provide certain Services on Customer’s Equipment, as
defined below, subject to the terms of this Agreement.

 

NOW, THEREFORE, and in consideration of the mutual promises and covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE 1 DEFINITIONS

 

Definitions. Capitalized terms used in the recitals and elsewhere in the
Agreement but not otherwise defined in this Agreement shall have the following
meanings:

 

“Agreement” shall mean this Engine Service Agreement, as the same may be amended
or supplemented from time to time.

 

“Aircraft Accident” means an occurrence associated with the operation of an
aircraft which takes place between the time any person boards the aircraft with
the intention of flight until such time as all such persons have disembarked,
and in which any person suffers a fatal injury or serious injury as a result of
being in or upon the aircraft or by direct contact with the aircraft or anything
attached to the aircraft, or in which the aircraft receives substantial damage.

 

“Aircraft Incident” means an occurrence, other than an Aircraft Accident,
associated with the operation of an aircraft that affects or could affect the
safety of operations and that is investigated and reported.

 

“Airworthiness Directive” or “AD” shall mean a document issued by the Approved
Aviation Authority having jurisdiction over the Engines, identifying an unsafe
condition relating to such Engines and, as appropriate, prescribing inspections
and the conditions and limitations, if any, under which the Engines may continue
to operate.

 

“Approved Aviation Authority” shall mean, as applicable, the Federal Aviation
Administration of the United States (“FAA”).

 

“Base Price” shall mean an MCPH Rate stated in Base Year Dollars.

 

3

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“Base Year” shall mean the calendar year in which the Base Price is applicable
and is the baseline from which adjustment for fluctuation in the economy is
made.

 

“Bench Stock” shall mean those expendable or consumable items routinely replaced
during the inspection, repair or maintenance of Equipment, whether or not such
items have been damaged, and other items that are customarily replaced at each
inspection or maintenance period.

 

“Beyond Economic Repair” shall mean that the cost to restore Equipment to the
requirements of the Repair Specification, when calculated on a time and
materials basis, exceeds *** of the CLP for a comparable item of Serviceable
Equipment.

 

“CLP” shall mean the manufacturer’s current catalog or manufacturer’s current
list price pertaining to a new part or new item of Equipment. The term “current”
as used in this definition means as of the time of the applicable Service.

 

“Current” shall mean as of the time of the applicable Service or determination.

 

“Customer’s Fleet” shall mean all of Customer’s Boeing 737-700 and 737-800
aircraft, as identified by serial number in Exhibit “C”, operated by Customer
and powered by CFM56-7 Engines. Exhibit C may be amended by the Parties from
time to time.

 

“Day” shall mean calendar day unless expressly stated otherwise in writing. If
performance is due on a recognized public holiday, performance shall be
postponed until the next business day.

 

“Delivery” shall mean, in respect of any item of Equipment, the occurrence of
the arrival of the Engine, together with all applicable records and required
data (as described in Section 5.1.8 below), *** to the Designated Repair Station
pursuant to the International Chamber of Commerce “Incoterms” (2000 Edition),
whereby Customer shall fulfill the obligations of seller and GE of buyer.
“Deliver” shall mean the act by which Customer accomplishes Delivery.

 

“Designated Repair Station” shall mean, for CFM56-7 Engines, the Repair Station
located at Strother Field, Arkansas City, Kansas, 67005, more specifically
described in Exhibit B, hereto. Changes of the Designated Repair Station shall
be mutually agreed.

 

“Dollars” and “$” shall mean the lawful currency of the United States of
America.

 

“Engine” shall mean, each bare engine assembly, identified by serial number in
Exhibit C including its essential controls, accessories, and parts as described
in the engine manufacturer’s specification manuals. Exhibit C, shall be amended
in writing by both parties to reflect any engines added to or deleted from this
Agreement, or any change in the delivery schedule of aircraft with installed
Engines and spare Engines.

 

“Equipment” shall mean an individual or collective reference, in the proper
context, to Engines, Engine modules, Engine assemblies and sub-assemblies,
Engine mounted controls and accessories, LRU’s and components and parts of any
of those items of Equipment.

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*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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“Foreign Object Damage” or “FOD” shall mean damage to any portion of the Engine
caused by impact or ingestion of an outside object such as birds, stones, hail,
or other debris. FOD shall be further defined as follows:

 

“Major FOD” shall mean Foreign Object Damage which creates an out of limit
condition per the Aircraft Maintenance Manual, and which requires the Engine to
be removed from service or prevents the reinstallation of the Engine.

 

“Other FOD” shall mean Foreign Object Damage which is determined to be FOD other
than Major FOD.

 

“Life Limited Part” or “LLP” shall mean a part with an approved limitation on
use in cumulative hours or cycles, established by the OEM or the Approved
Aviation Authority.

 

“Line Replaceable Unit” or “LRU” shall mean one or more major accessories of the
external portion of an Engine when it is received attached to Engine per 3.4.3.

 

“MCPH Program” shall mean the program consisting of the repair, maintenance, and
management of the Equipment provided to Customer by GE on a maintenance cost per
hour (“MCPH”) fixed rate basis, pursuant to the terms hereof.

 

“MCPH Shop Visit(s)” shall mean a Repair Station visit (scheduled or
unscheduled) during which off-wing repair and maintenance covered under the MCPH
fixed rate pricing is performed on Equipment that meets the MCPH eligibility
requirements of Clause 3.2.2 below.

 

“Original Equipment Manufacturer” or “OEM” shall mean the original manufacturer
of any item of Equipment.

 

“Performance Restoration” shall mean that the Services performed during an
Engine shop visit in which, at a minimum, the compressor, combuster and high
pressure turbine are exposed and subsequently refurbished, consistent with the
workscope utilized for MCPH.

 

“Qualifying Shop Visit” shall mean the Repair Station visit during which the
initial Performance Restoration required for any Engine that does not meet the
MCPH eligibility requirements, as set forth in Clause 3.1.1, is performed on the
Engine. The Qualifying Shop Visit shall be performed at Customer’s expense in
accordance with the Supplemental Work pricing set forth in Exhibit A.

 

“Procedure Manual” shall mean the document based upon the requirements of this
Agreement which provides detailed procedures and guidance for the administration
of the MCPH program. In case of conflict between the Procedure Manual and the
Agreement, the Agreement will prevail.

 

“Redelivery” shall mean the occurrence of the return of the Engine for
Customer’s acceptance ***, pursuant to the International Chamber of Commerce
“Incoterms” (2000 Edition), whereby Customer shall fulfill the obligations of
buyer and GE of seller. “Redeliver” shall mean the act by which GE accomplishes
Redelivery.

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*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

5

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“Removal Schedule (“RS”)” shall mean the schedule jointly developed by GE and
Customer for Engine removals for Services or removal from operation.

 

“Repair Station” shall mean one or more of the repair facilities owned by GE or
its affiliates, now or in the future, which are certified by the Approved
Aviation Authority to perform the applicable Service hereunder. A list of repair
facilities owned by GE or its affiliates, as of the Effective Date, is set forth
in Exhibit B hereto. Customer may object to the use of any Repair Station listed
in Exhibit B provided it is in good faith, and Customer reasonably and validly
believes its capabilities are inadequate.

 

“Repair Specification” shall mean Customer repair specification number     ,
dated             , which shall identify the minimum baseline to which
Customer’s Engine will be inspected, repaired, modified, reassembled and tested
hereunder. Such Repair Specification shall meet or exceed the recommendations of
the OEM’s operational specifications and applicable Engine maintenance or
overhaul manuals, and Customer’s maintenance plan approved by the Approved
Aviation Authority.

 

“Repairable” shall mean capable of being made Serviceable.

 

“Rotable Part” shall mean a new or used Serviceable part drawn from a common
pool of parts used to support multiple customers, which replaces a like part
requiring repair for which the actual repair time impedes the specified Turn
Time.

 

“Scrapped Parts” shall mean those parts determined by GE to be unrepairable or
BER for reliability, performance or economic reasons.

 

“Service” or “Services” shall mean, with respect to any item of Equipment, all
or any part of those maintenance, repair and overhaul Services under this
Agreement and the furnishing of parts, materials, labor, facilities, tooling,
painting, plating and testing. “Serviced” shall be construed accordingly.

 

“Service Bulletin” or “SB” shall mean the document issued by an OEM to notify
the operator of modifications, substitution of parts, special inspections,
special checks, amendment of existing life limits or establishment of first time
life limits, or conversion of an Engine from one model to another.

 

“Serviceable” shall mean meeting all OEM and Approved Aviation Authority
specified standards for airworthiness.

 

“Supplemental Work” shall mean any Service provided hereunder which is not
covered under the MCPH Program fixed rate per Engine flying hour. All
Supplemental Work shall be at Customer’s expense, in accordance with the pricing
set forth in Exhibit A, unless otherwise mutually agreed by the parties.

 

“Termination” shall mean the ending of this Agreement before the expiration of
its Initial Term or extension.

 

“Turn Time” shall mean the number of Days between Delivery and Redelivery of
Customer’s Engine, exclusive of public holidays observed by the Designated
Repair Station and Excusable Delay as defined in Article 12.

 

“Unserviceable” shall mean not Serviceable.

 

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“Workscope” shall mean the document written by GE’s engineering staff and
approved by Customer describing the prescribed repair or approach to repair of
identified Engine or Equipment to meet the requirements of the Repair
Specification for the Engine or Equipment.

 

ARTICLE 2 – TERM

 

2.1 Term of Agreement. This Agreement shall commence upon the Effective Date
and, unless sooner terminated pursuant to Article 16 herein, shall remain in
effect for each Engine for a period of *** (the “Initial Term”).

 

2.2 ***

 

2.3 Renewal Beyond Initial Term. If Customer desires to extend the term of this
Agreement beyond the Initial Term, Customer shall give GE written notice of its
desire to extend at least one hundred eighty (180) Days prior to the expiration
date of the Initial Term. Within thirty (30) Days of receipt of such notice, GE
shall, at its option, submit a proposal to Customer which shall specify the
extended term and any amendment to pricing and other terms and conditions.
Customer and GE shall endeavour to renew the Agreement a minimum of ninety (90)
Days prior to the expiration date of the Initial Term. Any further extension
shall be subject to the same process.

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*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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ARTICLE 3 – MAINTENANCE COST PER HOUR PROGRAM PROCEDURES

 

3.1 Maintenance Cost Per Hour (“MCPH”) Eligibility. Commencing on the Effective
Date, GE shall provide maintenance Services, as further described in this
Article 3, and Customer shall pay the MCPH Rate, for all of Customer’s Engines
listed by Engine serial number in Exhibit C on a MCPH basis upon eligibility of
each Engine as follows:

 

  3.1.1 New Engines (Serviceable Engines with less than *** operating hours
since manufacture) shall be eligible for MCPH coverage as of the Effective Date
and shall be subject the Base Price Per Engine Flying Hour (“EFH”) as set forth
in Exhibit A. “Used” Engines are Serviceable Engines with *** operating hours.

 

  3.1.2 Used Engines shall be subject to the Base Price Per EFH as set forth in
Exhibit A as of the mutually agreed start date.

 

  3.1.3 Additions. After the Effective Date, Customer may add additional Engines
(which may be new or used, eligible or ineligible, at the time of such addition)
to this Agreement for the remaining term hereunder as specified in Exhibit A
hereto. Upon meeting the eligibility requirements, which may require completing
a Qualifying Shop Visit, the added Engine shall be eligible for MCPH Shop Visits
and all other MCPH Services subject to the payment of the applicable MCPH Rate
and in accordance with the Current terms and conditions. Any such addition shall
be documented by amending Exhibit C accordingly.

 

3.2   Scope of MCPH

 

  3.2.1 Qualifying Shop Visits. Customer will Deliver all used Engines added to
this Agreement to GE at a U.S. domestic repair station for a Qualifying Shop
Visit on a Supplemental Work basis. Following such Qualifying Shop Visit, a used
Engine will enter the MCPH program in accordance with Section 3.1.3 above and
Section 1.3.1 of Exhibit A attached.

 

  3.2.2 MCPH Shop Visits. Customer’s Engines that are removed on or after the
Effective Date which require maintenance that cannot be performed on-wing and
that meet any of the following criteria shall be eligible for Services on an
MCPH basis (“MCPH Shop Visit”) if the shop visit is necessary:

 

  3.2.2.1 To correct a known defect or performance deterioration which has
created an Unserviceable condition.

 

  3.2.2.2 To replace LLP for life expiration (unless the LLP installed at the
last shop visit prior to the Effective Date did not conform to the minimum build
requirement in the Repair Specification).

 

  3.2.2.3 To comply with a written recommendation of GE’s Program Manager which
requires a shop visit.

 

  3.2.2.4 Because troubleshooting in accordance with the applicable Engine
maintenance manual by Customer on-wing could not resolve the problem and the
required maintenance could not reasonably have been accomplished on wing as
described in the Procedures Manual, as reasonably confirmed by GE.

 

  3.2.3 Engine Trend Monitoring Services. GE shall provide monitoring services
using ADEPT or SAGE or an equivalent trend monitoring program as set forth
below.

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*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

8

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  3.2.3.1   Remote Diagnostics (“RD”) Tier 1 Service Elements:

 

  1) Base Service Elements

 

***

 

  2) Technical Support. GE will provide technical support RD services for
initial program set-up as follows:

 

  a) Identify a Service integration team leader to provide initial program
set-up for RD services specified in this Agreement for Customer’s Engines.

 

  b) Provide technical support necessary to assist the Customer in meeting
Customer obligations specified in Sections 3.2.4, 5.1.11, and 5.1.12 below and
in other portions of this Agreement related to Remote Diagnostics.

 

  3) Data Review. As a part of the above RD services, GE shall review data and
messages delivered by Customer. GE shall not review all data received by it, but
rather only that portion of the data needed to perform the RD services.

 

  4) Advisory Information. GE and Customer agree that any information provided
to Customer by GE for use in trending, performance analysis, troubleshooting,
and managing operations is advisory only. It is a fundamental principal of the
RD Service program that GE is not obligated nor shall GE be liable to Customer
in any way for line or other maintenance actions resulting from such advice. GE
will use commercially reasonable efforts to identify and notify Customer of
Engine fault data. GE and Customer agree that this allocation of obligations and
liability is reflected in the price of the RD services.

 

  3.2.4 Customer’s Responsibility Under the Remote Diagnostics Program

 

  3.2.4.1 During the term of this Agreement Customer (or Customer’s operator by
delegation of this responsibility) shall:

 

  1) No later than the first Engine delivery, provide GE all information and
records as are requested by GE, which are necessary for GE to establish and
provide the RD services. Such information and records include, but are not
limited to:

 

  a) Applicable avionics specifications for installed aircraft equipment
necessary to provide the specified RD services; and

 

  b) Historical information including but not limited to Engine on-wing
performance, aircraft and Engine maintenance history and operational procedures.

 

  2) Access RD reports via the GE Extranet. A web browser, an Internet service
provider, and a user id/password (supplied by GE) is required.

 

  3) Pay for communications costs associated with delivering the necessary data
to the site designated by GE.

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*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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3.3 Workscope and Repair Specification. Upon input of Engines for repair GE
shall prepare a Workscope which specifies inspections, upgrades, improvements,
and repairs required to return the Engine to service in Serviceable Condition
and provide a copy of such Workscope to Customer. Such Workscope may include
reliability and performance enhancements and Approved Aviation Authority
approved repairs. GE shall repair Customer’s Engines and, as applicable, LRU’s
in accordance with the Repair Specification and Approved Aviation Authority
regulations. GE may amend the Repair Specification during the term hereof to
improve reliability, enhance Engine operating characteristics, and incorporate
Designated Engineering Representative approved repairs or repairs not contained
in the OEM manual, subject to Customer’s approval, which approval shall not be
unreasonably withheld, conditioned or delayed. Any changes or amendments
requested by Customer or requested or made by any regulatory agency to the
Repair Specifications shall be mutually agreed by the parties hereto and may be
subject to an adjustment in the pricing described in Exhibit A to reflect the
price charged by GE to accomplish such amended Repair Specification as
reasonably demonstrated by GE. The Procedures Manual will delineate the
procedures to be followed when processing Customer’s Engines in the Designated
Repair Station.

 

3.4 MCPH Program Services Provided. Services to be provided by GE for MCPH Shop
Visits and other MCPH support are:

 

***

 

  3.4.9       Engineering Support. GE will provide engineering support Services
for Engines as follows:

 

***

 

  3.4.10     Documentation. GE shall provide Customer with a records package as
described below in connection with Services performed on the Engine, and GE
shall retain a copy of such records. Additional records or data beyond that
described below may be provided by mutual agreement of the Parties

 

  3.4.10.1     At Redelivery, such records shall include:

 

  3.4.10.1.1 Major Repair/Alteration Certification FAA No. 337 (or equivalent
foreign agency equivalent) including AD compliance;

 

  3.4.10.1.2 FAA Form 8130-3 (or Approved Aviation Authority equivalent) for
accessories;

 

  3.4.10.1.3 Cycle limited parts log;

 

  3.4.10.1.4 Serviceable tag for Serviceable Equipment; and,

 

  3.4.10.1.5 Original records and related documentation furnished by Customer.

 

  3.4.10.2     GE shall provide the following records to Customer within fifteen
(15) calendar Days after Redelivery and shall retain a copy of such records:

 

  3.4.10.2.1 Incoming inspection report;

 

  3.4.10.2.2 Off/On log; and,

 

  3.4.10.2.3 Service Bulletin status report.

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*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

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  3.4.10.3 All documentation shall be available to Customer in electronic
format.

 

  3.4.11 Turn Time

 

  3.4.11.1 Turn Time for a MCPH Shop Visit shall be ***.

 

  3.4.11.2 Periods of Excusable Delay shall not count as Turn Time.

 

***

 

  3.4.12 All LLPs that are replaced under the MCPH Program shall be new and
Serviceable unless otherwise agreed by Customer.

 

  3.5 ***

 

  3.6 FOD Coverage. ***.

 

  3.7. EGT Margin. GE agrees to target a minimum average EGT margin upon
Redelivery of an Engine following a full Performance Restoration shop visit,
calculated on a rolling ten (10) Engine basis as indicated immediately below. No
Engine will be Redelivered from a full Performance Restoration shop visit with
less EGT margin than indicated in the table immediately below° without
concurrence from Customer.

 

***

 

ARTICLE 4 – SUPPLEMENTAL WORK

 

4.1 Supplemental Work At Shop Visits. Any and all Services not included in the
MCPH Program pursuant to Section 3.4, above shall be performed by GE in
accordance with the Supplemental Work pricing provisions of Exhibit A.
Supplemental Work shall include, but not be limited to:

 

***

 

  4.1.2.2. Major FOD to the extent not specifically covered in section 3.6.

 

***

  4.1 Work Accomplished at Customer’s Facility. Except as permitted under
Subsection 3.4.5, Customer shall be responsible for all repairs that are
customarily accomplished without a MCPH Shop Visit, consistent with CFM56
worldwide fleet historical maintenance practices.

 

  4.3 On-Wing Support. GE shall provide, at Customer’s request, twenty four (24)
hour field service support for on-wing Services.

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*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

11

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  4.4 Additional/Changed Engine Removals. Should Customer elect to remove an
Engine notwithstanding advice to the contrary from GE’s onsite Service
Representative (Reference Section 3.2.2.4 above) which advice is consistent with
CFM56 worldwide fleet historical maintenance practices, then such shop visit
shall be deemed Supplemental Work.

 

  4.5 Pre-Existing Warranty. Customer agrees that any requested Engine,
accessory, or component repairs that are covered under a warranty from an person
other than GE shall be performed directly by that person at no expense to GE or,
if GE elects, at its option to perform such warranty work, such warranties as it
relates to such Services performed shall be assigned to GE to the extent
assignable. A list of such Equipment under pre-existing warranties shall be
provided to GE by Customer within thirty (30) calendar Days of execution of this
Agreement. Customer agrees to execute the warranty assignment letter, attached
hereto as Exhibit E, as required by Section 5.1.7 below.

 

ARTICLE 5 – CUSTOMER OBLIGATIONS

 

5.1 During the term of this Agreement, Customer shall:

 

  5.1.1 Provide to GE’s authorized personnel reasonable access to Customer’s
Engine when such Engine is in Customer’s possession, as well as to all operating
and maintenance records related to Customer’s Engine which are maintained by
Customer, but no such access shall be provided at times which will interfere
with Customer’s operations.

 

  5.1.2 Make every reasonable effort to provide incoming transportation
information in writing to GE within at least three (3) calendar Days prior to
Delivery of Customer’s Engine at GE’s facility.

 

  5.1.3 Designate in writing one (1) or more of its employees as a
representative during the term of this Agreement. Such representative(s) shall
represent Customer hereunder.

 

  5.1.4 Provide a forecast of operational and maintenance program schedules,
fleet operational status, Engine/aircraft flying hours and cycles, scheduled
Engine or Engine module removals, and any other relevant information which will
allow both Parties to manage their respective resources to accomplish the
forecasted workload. The forecast will be provided in a mutually agreeable
format quarterly on a rolling annual basis unless the Parties agree otherwise.

 

  5.1.5 Provide all line maintenance and line station support which Customer has
historically performed subject to GE’s election of its option under Section
3.4.5 above.

 

  5.1.6 Customer shall use best efforts to troubleshoot in accordance with the
Engine’s OEM or aircraft maintenance manuals, as applicable. Customer shall,
with GE’s concurrence, determine whether any Engine requires off-wing repairs
prior to its removal from the aircraft, as described in the Procedures Manual.

 

  5.1.7 Execute the Warranty Assignment Letter, attached hereto as Exhibit E
stating that the benefits of CFM *** set forth in the CFM/Customer General Terms
Agreement CFM-03-

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*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

12

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0017), other OEM or third party warranties and guarantees applicable to the
Customer’s Equipment which in each case relates to the Services performed
hereunder, covered by and during the term of this Agreement, are assigned to GE.
Notwithstanding the above, GE will accept a purchase agreement for the time and
material repair of such item from that agency or Customer. Such Assignment
Letter shall be terminated automatically when this Agreement is terminated.

 

  5.1.8     No later than the time of Delivery of the Engine, provide GE all
information and records necessary for GE to establish the nature and extent of
the Services required to be performed on the Engine and to perform such
Services. Such information and records include, but are not limited to:

 

  5.1.8.1       The cause of Engine removal (reason for this shop visit);

 

  5.1.8.2       Applicable Engine log books detailing work performed at last
shop visit, any reported defects or incidents during operation since last shop
visit, with description of action taken, and significant operational
characteristics experienced during last flight prior to shop visit;

 

  5.1.8.3       SB and AD status/requirements;

 

  5.1.8.4       Total engine operating time since new (“TSN”) for each Engine;

 

  5.1.8.5       Time since last shop visit (“TSLV”) for each Engine, module,
component and accessory;

 

  5.1.8.6       Flight cycles since new (“CSN”);

 

  5.1.8.7       Flight cycles since last visit (“CSLV”);

 

  5.1.8.8       Record of change of parts during operating period prior to this
shop visit (including, without limitation, all LRU’s removed and replaced by
Customer), and reason for removal;

 

  5.1.8.9       TSN, CSN,TSLV, CSLV time since overhaul (“TSO”) and cycles since
overhaul (“CSO”) for each thrust rating utilized on all LLP;

 

  5.1.8.10     Back to birth history certificate indicating history from zero
TSN/CSN on all LLPs;

 

  5.1.8.11     Customer inventory of Equipment “as shipped”, including (when
applicable) a description of the external Engine configuration;

 

  5.1.8.12     Engine oil used (for Engines);

 

  5.1.8.13     Historical log (for parts and accessories);

 

  5.1.8.14     Module log cards (if applicable); and

 

  5.1.8.15     Engine on-wing performance data shall be provided in accordance
with item 5.1.13 below.

 

  5.1.8.16     Record of any non-OEM approved parts or repairs installed;

 

  5.1.8.17     ATA form 106, Non-Incident Statement, or equivalent; and

 

  5.1.8.18     Engine owner’s or lessor’s name and address if Engine is not
owned by Customer.

 

Customer’s failure to furnish any reasonably material portion of the required
information and records in a timely manner may delay induction of the Engine for
Service, delay the specified Turn Time, and may result in premature LLP
replacement as described in Subsection 7.2.2, below, at Customer’s expense.
However, prior to replacing such LLP, GE will first advise Customer that certain
records are missing and allow Customer ten (10) working days to acknowledge and
forward such records to Customer.

 

  5.1.9 Provide to GE an external Equipment configuration specification for
Engine to be Delivered for Service.

 

13

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  5.1.10     Ensure that adequate office space, parking, telephone, facsimile
and computer equipment is available for the GE technical representative assigned
to the Customer facility, as applicable.

 

  5.1.11     With the aid of GE, develop an automated method to transfer
operational and maintenance data from in-flight data acquisition systems and/or
ground based computer systems by which the parties may evaluate technologies
necessary to streamline the automated process of data transfer. If the Customer
chooses to supply such data by means of a dedicated link to the site designated
by GE, Customer shall pay for the dedicated link.

 

  5.1.12     Make available to GE data which is used in the monitoring and
diagnostics of the engines under contract. GE will therefore receive access to
operational and maintenance data from in-flight data acquisition systems and/or
ground based computer systems as available. Preferably, if the aircraft is
equipped with air-to-ground Equipment such as ACARS, the airline will forward
the data directly to the GE SITA/ARINC address. If air-ground Equipment is not
available, an alternate electronic means of providing this data shall be
devised. GE will work with the airline to establish this alternate means such
that the data is provided with minimal manual effort and expense.

 

  5.1.13     Each party shall be obligated for all packaging, labeling and
associated documentation of the Equipment at Delivery or Redelivery, in
accordance with the International Civil Aviation Organisations (ICAO) Technical
Instructions for the Safe Transport of Dangerous Goods by Air, and if the
Equipment is to be transported over the United States of America, the US
Department of Transport Regulations 49 CFR 171-180 (together referred to as
“Transport Regulations”). Each party, when required by law, shall further
provide applicable material safety data sheets to the other at Delivery or
Redelivery of the Equipment indicating any substances contained within the
Equipment to be consigned. Each party shall indemnify, defend and hold harmless
the other from all or any claims, liabilities, damages, judgments, costs,
penalties, fines or any punitive damages imposed, alleged, or assessed by any
third party against the other and caused by and to the extent of the
indemnifying party’s non compliance with the Transportation Regulations.

 

ARTICLE 6 – DELIVERY, REDELIVERY AND GOVERNMENTAL AUTHORIZATION

 

6.1 Delivery. All Engines from Customer’s fleet of CFM56-7 Engines, as specified
in Exhibit C, to be Serviced shall be Delivered *** by Customer to GE at a U.S.
domestic location. Such Engines shall be shipped within forty eight (48) hours
following removal from the aircraft. However, GE shall have the option to
perform Repairs with a field team at other locations.

 

6.2 Redelivery. After completion of Services, GE shall Redeliver the Engine to
Customer. In the event Redelivery of an Engine cannot occur due to any cause
referred to in Article 12, “Excusable Delay” below, GE may place such Engine
into storage (which may be at a Repair Station). In such event, GE shall notify
Customer of such storage, GE’s Redelivery obligations shall be deemed fulfilled,
all risk of loss or damage to the Engine shall thereupon pass to Customer, and
any amounts payable to GE upon Redelivery shall be payable upon presentation of
GE’s invoice. Customer shall reimburse GE for all expenses incurred by GE, such
as, but not limited to, preparation for and placement into

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

14

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storage, handling, inspections, preservation, and insurance of the Engine. Upon
payment of all amounts due hereunder, GE shall assist and cooperate with
Customer in the removal of the Engine placed in storage.

 

6.3 Governmental Authorization. Customer shall be the importer and/or exporter
of record but GE shall be responsible for timely obtaining any import license,
export license, exchange permit, or other required governmental authorization
relating to the Equipment. However, if Customer has requested an import or
export of an Engine or Equipment for Service, then Customer shall assume all
expenses for such licenses, permits, or authorizations and shall be responsible
for obtaining same. At GE’s request and expense, Customer shall assist GE in its
application for any required U.S. export licenses. GE will not be liable if any
authorization is not renewed or is delayed, denied, revoked, or restricted, and
Customer shall not thereby be relieved of its obligation to pay for Services
performed by GE. All items and Equipment delivered hereunder shall at all times
be subject to the U.S. Export Administration Regulations and/or International
Traffic in Arms Regulations of the U.S.A. and any amendments thereto. Customer
agrees not to dispose of U.S. origin items provided by GE other than in and to
the country of ultimate destination specified in Customer’s purchase order
and/or approved government license or authorization, except as said laws and
regulations may permit.

 

ARTICLE 7 – PARTS REPLACEMENT PROCEDURES

 

7.1 Missing or Damaged Parts. GE shall notify Customer of any (A) components or
line replaceable units missing from Engines when received at the Designated
Repair Station and (B) parts found to have been damaged during transportation of
the Engine to GE. GE shall replace such missing or damaged items at Customer’s
expense unless Customer notifies GE in writing within five (5) business days of
receiving GE’s notice that Customer wishes to furnish such missing or damaged
items within a period of time specified by GE. Customer removed LRU’s shall not
be deemed missing pursuant to this provision, if Engines are delivered by
Customer at the Designated Repair Station with LRU’s removed. However, Customer
shall be obligated to provide GE with a Serviceable replacement LRU in time to
meet the established production schedule for such Engine.

 

7.2 Parts Replacement. GE shall determine which parts are required to accomplish
the Services and shall provide all parts and materials required to accomplish
the Services.

 

  7.2.1 Rotable Parts. GE may issue compatible parts from GE’s Rotable Parts
inventory to replace Customer’s parts requiring repair. Customer agrees to
accept compatible Rotable Parts that that meets or exceeds the Customer Repair
Specification requirements. Repairable parts removed from the Engine and
replaced by GE’s Rotable Parts inventory will be repaired by GE or a third
party, at GE’s option, and at GE’s expense when in conjunction with a covered
MCPH Shop Visit.

 

  7.2.2 Life Limited Parts. LLP received by GE without the necessary records
required in Paragraph 5.1.8 above, shall be replaced by GE at Customer’s expense
as stated therein.

 

7.3 Title to Parts. GE furnished parts and material incorporated into Customer’s
Engines shall be deemed to have been sold to Customer and title to such GE
furnished parts and material shall pass to Customer upon incorporation into such
Engines. Risk of loss or damage to such parts and material shall pass to
Customer upon Redelivery of the Engine. Title to any parts removed from the
Engine, which are replaced by other parts at GE’s expense when in conjunction
with a covered MCPH Shop Visit, shall pass to GE upon incorporation into
Customer’s Engines of the replacement part.

 

15

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7.4 Scrapped Parts. GE shall, at its sole expense and without any further
adjustment to Customer, dispose of all Scrapped Parts.

 

ARTICLE 8 – REPAIR STATIONS AND SUBCONTRACTED SERVICES

 

GE Repair Stations. GE has the right to assign or subcontract any Services to:
(A) any of the Repair Stations specified in Exhibit B; (B) any of GE’s
affiliates; or (C) any subcontractor selected by GE or GE’s affiliates, as long
as such facility, affiliate or subcontractor is properly certified and rated by
the Approved Airworthiness Authority to perform the required Services and
approved by Customer. If GE does subcontract, the Customer obligations under
this Agreement, including, without limitation, transportation expense, will be
no greater than if such Services were performed at the Designated Repair
Station.

 

Any subcontracted Services shall be performed in accordance with the
requirements of the Workscope and the applicable Approved Aviation Authority
directives. Customer shall, at its sole expense, have the right to review GE’s
audit report(s) for such subcontractor(s). Subcontracting of any Services
hereunder shall not relieve GE of its performance obligations set forth in this
Agreement.

 

ARTICLE 9 – PRICING

 

Pricing. In consideration of Services provided under this Agreement, Customer
agrees to pay GE for labor, material, subcontractor Services, testing, and all
other Services furnished hereunder in accordance with the prices set forth in
Exhibit A. All prices are stated in 2003 United States Dollars, and are subject
to adjustment as described in Exhibit A

 

ARTICLE 10 – INVOICES AND PAYMENT

 

10.1 ***

 

10.2 ***

 

10.3 Supplemental Work Payments.

 

  10.3.1 GE may issue one interim invoice following induction of Engines into
GE’s Designated Repair Station which interim invoice shall include charges
accumulated to the date of invoice preparation.

 

  10.3.2 Final Invoice. GE shall issue a final invoice for Services as soon as
practicable following Redelivery of the Engine. The final invoice shall reflect
the total charges owed by Customer and credits due Customer based on actual
charges to complete the Services. Such invoice shall be reconciled with any
interim invoice.

 

  10.3.2 Payment Terms. Customer shall pay, in full, the unpaid balance of any
interim invoice for Services prior to Redelivery of the Engine. Customer shall
pay the final invoice within ***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

16

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Days of receipt. If any payment date falls on a day that is not a business day,
the payment that is otherwise due shall instead be due the next business day.

 

  10.3.3     All MCPH charges paid by Customer for an ineligible Engine, to the
point such Engine qualifies under the MCPH Program’s eligibility requirements in
3.1.2 above, shall be credited up to the Supplemental Work charges for the
Qualifying Shop Visit.

 

  10.3.4     If a shop visit is required as a result of one or more of the items
listed in Article 4, the supplemental charges shall be limited to the prices for
the labor, material and Lost LLP Life, if applicable, necessary in repairing all
of the direct and resultant damage related to such item. All other labor and
material charges incurred at the same Shop Visit shall be invoiced as a MCPH
Shop Visit.

 

At such shop visit, Customer shall pay the applicable LLP Rate for all EFH since
the last MCPH shop visit. Additionally, Customer shall pay GE for Lost LLP Life
per paragraph 10.3.5 below.

 

  10.3.5     Lost LLP Life shall be calculated using the CFM56 Spare Parts
Catalog (“CLP”) as follows:

 

***

 

  10.3.6     Lost LLP Life shall be defined as the cycles remaining on a life
limited part when it is determined to be non-repairable or has insufficient
cycles remaining for reinstallation after premature removal

 

10.4 GE may establish different payment terms in the event Customer consistently
fails to make payments according to the terms set forth above.

 

10.5 ***

 

10.6 Payment Instruction. All payments under this Agreement shall be made by
Customer in United States Dollars, immediately available for use. via wire
transfer by Customer to the bank account and address designated below:

 

***

 

Either party shall be entitled, at all times, to set off any outstanding
obligation and amounts that are due and owing in connection with this Agreement
against any amount payable by either party in connection with this Agreement.

 

10.7 ***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

17

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ARTICLE 11 – LIMITATION OF LIABILITY

 

11.1 Total Liability. The total liability of GE for any and all claims, whether
in contract, warranty, tort (including negligence but excluding willful
misconduct or recklessness), product liability, patent infringement, or
otherwise for any damages arising out of, connected with, or resulting from the
performance or non-performance of any Service or Services provided hereunder or
from the manufacture, sale, Redelivery, resale, repair, overhaul, replacement or
use of the Engine or any item or part thereof, shall not exceed the price
allocable to the Service or Services which gives rise to the claim.

 

11.2 Damages. In no event, whether as a result of breach of contract, warranty,
tort (including negligence but excluding willful misconduct or recklessness),
product liability, patent infringement, or otherwise, shall GE be liable for any
special, consequential, incidental, resultant, indirect, punitive or exemplary
damages (including, without limitation, loss of use, loss of profit or loss of
revenue in connection with the Engine).

 

11.3 Definition. For the purpose of this Article 11, the term “GE” is deemed to
include GE and its affiliated companies, the subcontractors and suppliers of any
Services furnished hereunder, and the directors, officers, employees, servants,
and representatives of each.

 

ARTICLE 12 – EXCUSABLE DELAY

 

12.1 Excusable Delays. Either Party shall be excused from, and shall not be
liable for, any delays in performance or failure to perform hereunder, except
for the obligation to pay money or credit or debit an account which will not be
excused hereunder, and shall not be deemed to be in default for any delay in or
failure of performance hereunder due to causes beyond its reasonable control.
Such causes shall be conclusively deemed to include, but not be limited to, acts
of God, acts (or failure to act) of the other Party, acts (or failure to act) of
civil or military authority, government priorities, fires, strikes, labor
disputes, work stoppage, floods and other natural catastrophe(s), epidemics, war
(declared or undeclared), riot, or delays in transportation or inability to
obtain on a timely basis necessary labor, materials, or components due to causes
beyond its reasonable control. In the event of any such delay, the time of
performance shall be extended for a period equal to the time lost by reason of
the delay.

 

12.2 Continuing Obligations. Section 12.1 shall not, however, relieve either
Party from using its best commercial efforts to avoid or remove such causes of
delay and continue performance with reasonable dispatch when such causes are
removed. During the period of an excusable delay, GE shall have the right to
invoice Customer for Services performed, and Customer shall pay all such
invoices net thirty (30) Days.

 

12.3 Extended Delay — Termination. If delay resulting from any of the foregoing
causes extends for more than six (6) months and the Parties have not agreed upon
a revised basis for continuing the Services, including any adjustment of the
price, then Customer (but not GE), upon thirty (30) Days written notice to GE,
may terminate the performance of Services with respect to the Engine for which
Services were delayed, ***.

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

18

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ARTICLE 13 – NOTICES

 

13.1 Acknowledgment. All notices required or permitted under this Agreement
shall be in writing and shall be delivered personally, via first class mail,
return receipt requested, facsimile, sent by courier service, or express mail,
addressed as follows or such other address as either party may designate in
writing to the other party from time to time:

 

GE:

   Customer:

GE Engine Services, Inc.

   AirTran Airways

One Neumann Way

Cincinnati, OH 45215

  

9955 Airtran Boulevard

Orlando, FL 32827

Attn: CFM56 Platform Manager

   Attn: Richard Magurno

Phone: ***

   Phone: ***

Fax: ***

   Fax: ***

 

13.2 Effect of Notices. Notices shall be effective and shall be deemed to have
been given when received by the recipient (A) if sent by courier, express mail,
or delivered personally, upon delivery; (B) if sent by facsimile, upon receipt;
and (C) in the case of a letter sent prepaid first class mail, on the fifth
(5th) business day after posting (or on actual receipt, if earlier).

 

ARTICLE 14 – TAXES AND OTHER CHARGES

 

14.1 Taxes, Duties or Charges. ***

 

14.2 Right To Protest/Refund. If claim is made against GE for any such Taxes, GE
shall immediately notify Customer and, if requested by Customer, GE shall not
pay except under protest, and if payment be made, GE shall use all reasonable
efforts to obtain a refund thereof. If all or any part of any such Taxes be
refunded, GE shall repay to Customer such part thereof as Customer shall have
paid. Customer shall pay to GE, upon demand, all expenses (including penalties,
interest and attorney’s fees) incurred by GE in protesting payment and in
endeavoring to obtain such refund.

 

ARTICLE 15 – DISPUTE RESOLUTION, ARBITRATION

 

15.1 Resolution by Senior Management. If a dispute arises relating to the
Agreement and related damages, if any, (the “Dispute”) either party shall give
written notice to the other party requesting that senior management attempt to
resolve the Dispute. Within fifteen (15) Days after receipt of such notice, the
receiving party shall submit a written response. The notice and the response
shall include a statement of the applicable party’s position and a summary of
reasons supporting that position. The parties shall cause senior management to
meet within forty-five (45) calendar Days after delivery of the notice, at a
mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, to use commercially reasonable efforts to resolve the Dispute.

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

19

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15.2 Arbitration. If the parties’ senior management do not resolve the Dispute
by means of the process described above within one hundred twenty (120) Days
after delivery of the disputing party’s notice, then either party may request
that the Dispute be settled and finally determined by binding arbitration, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) then in effect, in Atlanta, Georgia, USA, or any other
location the parties may agree.

 

15.3 Arbitration Procedure. A single arbitrator chosen by agreement of the
parties will conduct the arbitration. In the event that they are unable to reach
agreement within thirty (30) Days of the demand for arbitration, the parties may
request the AAA to appoint a neutral arbitrator. The arbitrator may hold
pre-hearing conferences or adopt other procedures. The Agreement shall be
interpreted and applied in accordance with the substantive laws of the State of
New York, without giving effect to its conflict of law provisions, rules or
procedures (except to the extent that the validity, perfection, or creation of
any lien or security interest hereunder and the exercise of rights or remedies
with respect of such lien or security interest for a particular item of
Equipment are governed by the laws of a jurisdiction other than New York).
Reasonable examination of opposing witnesses in oral hearing will be permitted.
Each party will bear its own cost of presenting or defending its position in the
arbitration. The award of the arbitrator shall be final, binding and
non-appealable and judgment may be entered thereon in any court having
jurisdiction thereof.

 

15.4 Exclusivity, Confidentiality. Each of the parties intends that the dispute
resolution process set forth in this Article 15 shall be the parties’ exclusive
remedy for any Dispute. All statements made in connection with the dispute
resolution process set forth in this Article 15 shall not be disclosed to any
third party except as required by law or subpoena.

 

15.5 Exception. Either party may at any time, without inconsistency with this
Article 15, seek from a court of competent jurisdiction any equitable, interim,
or provisional relief to avoid irreparable harm or injury. This Article 15 shall
not be construed to modify or displace the ability of the parties to effectuate
any termination contemplated in Article 16 below.

 

ARTICLE 16 – TERMINATION

 

16.1 Failure to Pay/Insolvency. GE may, at its option, immediately terminate all
or any portion of this Agreement if Customer: (A) fails to make any of the
required payments within *** Days from the date when due; (B) makes any written
agreement with substantially all of its creditors due to its inability to make
timely payments of its debts; (C) enters into bankruptcy or liquidation whether
compulsory or voluntary which is not dismissed within one hundred twenty (120)
days; (D) becomes insolvent; or, (E) becomes subject to the appointment of a
receiver of the whole or substantial part of its assets. If such termination
should occur, Customer shall not be relieved of its payment obligation for
Services rendered hereunder.

 

16.2 Material Provisions. Without limiting the provisions of Section 16.1 above
and excluding any other remedies provided elsewhere in this Agreement, either
party may terminate this Agreement upon *** Days written notice to the other for
failure to comply with any material provision of this Agreement, unless the
failure shall have been cured or the party in breach has substantially effected
all acts required to cure the failure prior to such *** Days.

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

20

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16.3 Work in Process. Upon the termination or expiration of this Agreement, GE
shall complete, and Customer shall pay GE for, all work in process in a diligent
manner under the terms of this Agreement provided that Customer (a) has paid for
the estimated charges for all such work, in accordance with the prices set forth
in Exhibit A, plus all costs, fees, and charges, incurred by GE in providing
support, Services and material under this Agreement including, but not limited
to, any Leased Engines and (b) has returned all Leased Engines to GE.

 

16.4 Redelivery of Customer Equipment. In the event this Agreement is terminated
or expires, GE shall, upon receipt of Customer’s written request, promptly
Redeliver all Customer’s Engines, parts and related documentation to Customer
provided that Customer has fulfilled all payment obligations under this
Agreement and has returned all Leased Engines.

 

16.5 Payment for Services; Reconciliation of MCPH Payments. In the event of
termination of this Agreement for any reason whether for GE’s fault or not,
Customer shall pay GE, for all completed Services related to Equipment delivered
to Customer or work performed by GE up to the time of such termination under the
applicable terms and prices of this Agreement including, but not limited to all
costs, fees, and charges incurred by GE in providing support and material under
this Agreement. In addition, the terms of the reconciliation of MCPH payments
under the Removal of Engines provisions of Exhibit A, Section 1.3.2 shall apply.

 

ARTICLE 17 – NONDISCLOSURE OF PROPRIETARY DATA

 

17.1 General. Any knowledge or information which either party has disclosed or
may hereafter disclose to the other incident to the Service of Engines shall be
deemed to be confidential and proprietary information and, accordingly, shall be
held in strict confidence by recipient. In addition, any Proprietary Information
or data disclosed or received by GE under this Agreement may be disclosed by GE
for purposes of this Agreement, on a need to know basis, to GE’s: corporate
parent, affiliate, or subsidiary, or joint venture participant (as presently or
hereafter constituted) and their directors, officers, agents and employees;
engineering service provider; or consultants provided that such entities,
persons, service providers or consultants are subject to obligations of
confidentiality substantially similar to the terms hereunder.

 

17.2 Non-Disclosure. The existence of this Agreement and its general purpose may
be stated to others by either of the parties without approval from the other. ,
However, all proprietary and confidential information shall not be reproduced,
used or disclosed to others by the recipient without the disclosing party’s
prior written consent, except to the extent required by government agencies and
courts for official purposes. Disclosure to such

government agencies and courts shall be made only (A) upon thirty (30) calendar
Days advance written notice to the disclosing party of such disclosure, so as to
provide the ability to obtain appropriate protective orders, and (B) with a
suitable restrictive legend limiting further disclosure.

 

17.3 Exceptions. The preceding Sections 17.1 and 17.2 shall not apply to
information which (A) is or becomes part of the general public knowledge or
literature otherwise than as a result of breach of Customer’s or GE’s
obligations hereunder, or (B) was, as shown by written records, known to
Customer or GE prior to receipt from GE or Customer, as the case may be, or (C)
is disclosed without restriction to Customer or GE by a third party having the
right to do so.

 

17.4 Intellectual Property. Nothing contained in this Agreement shall convey to
either party the right to use the trademarks of the other, or convey or grant to
Customer any license under any patent owned or controlled by GE.

 

21

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ARTICLE 18 – WARRANTY

 

18.1 MCPH Warranty. The parties agree that, notwithstanding the extended
workmanship warranty provided for certain Services as set forth in Section 18.2
below, the warranty for Equipment Serviced pursuant to the provisions of this
Agreement shall be continuation of coverage under this Agreement for the balance
of the term of the Agreement.

 

18.2 Workmanship Warranty – End of Program. The Parties agree that with respect
to Customer’s Equipment repaired and Redelivered within *** calendar months
preceding expiration of this Agreement, if Customer claims a defect in
workmanship within *** following Redelivery, whichever comes first, and A)
Customer provides written notice to GE of such defect within *** days of its
discovery, B) Customer ships the defective part or component to GE at a U.S.
domestic location, or, in cases where shipment is commercially impracticable,
makes such part or component reasonably available to GE’s personnel, and C) GE
reasonably establishes that Customer’s claim is correct, GE shall repair or
replace such defective workmanship using its own forces or a subcontractor or,
upon prior written approval from GE, GE shall pay Customer’s reasonable, direct
costs for such repairs but in no event more than GE’s cost of repair. The
warranty period for the repaired or replaced workmanship shall be the remainder
of the original warranty period. . In no event shall GE’s liability for any such
warranty claim exceed GE’s costs of the repair or replacement of the defective
workmanship. THE FOREGOING WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, WHETHER WRITTEN, ORAL, EXPRESSED, IMPLIED OR STATUTORY (INCLUDING,
WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY AND FITNESS FOR PARTICULAR
PURPOSE).

 

18.3 Warranty Limitations. This warranty is not assignable without the prior
written consent of GE and is applicable only if, following Redelivery, the
Engine (A) has been transported, stored, installed, operated, handled,
maintained, and repaired in accordance with all applicable AD’s and the then
current recommendations of the OEM as stated in its manuals, SB’s, or other
written instructions, (B) has not been altered, modified or repaired by anyone
other than GE, and (C) has not been subjected to foreign object damage, (“FOD”),
accident, misuse, abuse or neglect. GE’s liability in connection with the
Service of Engines is expressly limited to workmanship. Any warranty for
Engines, parts and material will be the warranty, if any, of the manufacturer of
such Engines, parts and material.

 

18.4 Sole Remedy. The foregoing shall constitute the sole remedy of Customer and
the sole liability of GE for repair of defective workmanship, relative to
Customer’s Equipment covered by this Article 18. The liability of GE connected
with or resulting from the foregoing warranty shall not in any case exceed the
cost of correcting the defect as provided in Section 18.2 above, and, upon the
expiration of the shortest period described therein, all such liability shall
terminate. In no event shall GE be liable for any special, consequential,
incidental, resultant, indirect, punitive or exemplary damages (including,
without limitation, loss of use, loss of profit or loss of revenue in connection
with the Engines). Nothing herein shall affect any guarantees, or warranties
provided by CFM under any agreements signed concurrently herewith.

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

22

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ARTICLE 19 – GENERAL PROVISIONS

 

19.1 Assignment. The assignment of all or any portion of this Agreement or any
purchase order or any right or obligation hereunder, by either party, without
the prior written consent of the other party, shall be void; except that
Customer’s consent shall not be required for the substitution of an affiliated
company of GE, only if such company has a similar technical capability and
industry reputation to perform the Services hereunder, in place of GE as the
contracting party and/or the recipient of payments pertaining to all or any
portion of this Agreement or any purchase order in connection with this
Agreement. In the event of any such substitution, Customer shall be so advised
in writing.

 

19.2 Governing Law, Waiver of Immunity. The Agreement shall be interpreted and
applied in accordance with the substantive laws of the State of New York,
without giving effect to its conflict of law provisions, rules or procedures
(except to the extent that the validity, perfection, or creation of any lien or
security interest hereunder and the exercise of rights or remedies with respect
of such lien or security interest for a particular item of Equipment are
governed by the laws of a jurisdiction other than New York). With respect to any
party who is incorporated or based outside the United States, to the extent that
such party or any of its property becomes entitled at any time to any immunity
on the grounds of sovereignty or otherwise from any legal action, suit, or
proceeding of any nature, such party hereby irrevocably waives the application
of such immunity and particularly, the U.S. Foreign Sovereign Immunities Act, 28
U.S.C. 1602, et. seq. insofar as such immunity relates to Customer’s rights and
obligations in connection with this Agreement.

 

19.3 Savings Clause. If any portion of this Agreement shall be determined to be
a violation of or contrary to any controlling law, rule or regulation issued by
a court of competent jurisdiction, then that portion shall be unenforceable and
deleted from this Agreement. However, the balance of this Agreement shall remain
in full force and effect.

 

19.4 Beneficiaries. Except as herein expressly provided to the contrary, the
provisions of the document are for the benefit of the parties hereto and not for
the benefit of any third party.

 

19.5 Controlling Language. The English language shall be used in the
interpretation and performance of this Agreement. All correspondence and
documentation arising out of or connected with this Agreement and any related
purchase order(s), including but not limited to Engine records and Engine logs
shall be in the English language.

 

19.6 Non-Waiver of Rights and Remedies. Any failure or delay in the exercise of
rights or remedies hereunder shall not operate to waive or impair such rights or
remedies. Any waiver given shall not be construed to require future or further
waivers.

 

19.7 Titles/Subtitles. The titles and subtitles given to the sections of the
Agreement are for convenience only and shall not in any manner be deemed to
limit or restrict the context of the article or section to which they relate.
The words “herein”, “hereof”, “hereunder”, “herewith”, and similar terms are not
to be deemed restrictive and refer to the entire Agreement, including all
Exhibits.

 

19.8 Currency Judgment. This is an international transaction in which the
specification of United States Dollars is of the essence. No payments required
to be made under this Agreement shall be discharged by payments in any currency
other than United States Dollars, whether pursuant to a judgment, arbitration
award, or otherwise.

 

23

--------------------------------------------------------------------------------

19.9 No Agency Fees. Customer represents and warrants that no officer, employee,
representative, or agent of Customer has been or will be paid a fee or otherwise
has received or will receive any personal compensation or consideration by or
from GE in connection with the obtaining, arranging or negotiation of this
Agreement or other documents entered into or executed in connection herewith.

 

19.10 On-Site Representative. Subject to the following conditions, GE agrees to
permit one Designated Representative, from time to time during the term of this
Agreement, to enter onto its premises at the Designated Repair Station for the
purpose of effecting the Services on Engines. GE shall furnish such Designated
Representative the use of a non-exclusive work space, including the use of a
local telephone line and parking accommodations. Costs incurred by such
Designated Representative, including without limitation, long distance telephone
charges, fax, or computer charges, shall be the responsibility of Customer, and
if charged to GE in the first instance, shall be invoiced to Customer.

 

19.11 No Agency. Nothing in this Agreement shall be interpreted or construed to
create a partnership, agency, or joint venture between GE and Customer.

 

19.12 Entire Agreement. This Agreement, together with Exhibits A through F, as
well as other agreements executed concurrently by the parties with this
Agreement contains and constitutes the entire understanding and agreement
between the parties hereto respecting the subject matter hereof, and supersedes
and cancels all previous negotiations, agreements, commitments, and writings in
connection herewith. This Agreement may not be released, discharged, abandoned,
supplemented, changed, modified or waived, in whole or in part, in any manner,
orally or otherwise, except by a writing of concurrent or subsequent date signed
and delivered by a duly authorized officer or representative of each of the
parties hereto making specific reference to this Agreement and the provisions
hereof being released, discharged, abandoned, supplemented, changed, modified or
waived.

 

19.13 Counterparts. This Agreement may be executed in one or more counterparts,
all of which counterparts shall be treated as the same binding agreement, which
shall be effective as of the date set forth on the first page hereof, upon
execution and delivery by each party hereto to the other party of one or more
such counterparts.

 

24

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officer or representatives who represent to each other and
both parties that each is employed in the capacity indicated below and has the
unequivocal authority to execute and deliver this Agreement, which shall be
effective as of the date first above written.

 

GE Engine Services, Inc.    AirTran Airways

By: /s/ Daniel C. Heintzelman

   By: /s/ Guy Borowski

Printed Name: Daniel C. Heintzelman

   Printed Name: Guy Borowski

Title: President, GEES

   Title: V.P. M&E

Date: August 13, 2003

   Date: August 13, 2003

 

25

--------------------------------------------------------------------------------

EXHIBIT A

PRICING

 

1 MCPH Pricing. The Base Year for all prices specified in this Agreement is
***All Base Prices(s) are stated in United States Dollars per EFH.

 

  1.1 MCPH Rates. MCPH Rates are applicable on all EFH commencing with
acceptance of aircraft by Customer (or commencing the month following a thrust
upgrade, if applicable) and are as follows:

 

***

 

  1.2 MCPH Parameters. The MCPH Rate is predicated on the parameters set forth
below:

 

  1.2.1 A fleet consisting of *** Boeing 737-700 and 737-800 aircraft, powered
by CFM56-7 Engines, identified by serial number, operated by Customer.

 

  1.2.2 ***

 

  1.2.3 ***

 

  1.2.4 ***

 

  1.2.5 Line Maintenance performed by Customer or its contractors.

 

  1.2.6 Spare Engine quantity as set forth in Exhibit C.

 

  1.2.7 ***

 

  1.2.8 The ambient temperature is *** degrees Fahrenheit. The city pairs
identified in Section 1.2.9 below were used in the determination of this ambient
temperature.

 

  1.2.9 City pairs used in the ambient temperature calculations:

 

***

 

Should GE determine that Customer has deviated from the parameters specified
above, the MCPH Pricing per EFH shall be adjusted as agreed by the parties to
reflect the actual increase or decrease in cost to GE to perform its obligations
hereunder. Customer shall provide information, in a mutually agreed upon format,
regarding the above parameters. Such information shall be provided to GE
monthly. For the avoidance of doubt, in order to quantify the effect of changes
in Flight Hour to Cycle Ratio and Derate percentage only, Exhibit D is provided
for use in such adjustments in the MCPH Pricing per EFH. GE agrees to amend this
Agreement, at Customer’s request, to include a modified Exhibit D, MCPH Pricing
Sensitivity Matrix, that more closely reflects the expected operational flight
leg of the CFM56-7B24 and CFM56-7B26 engines, hereafter owned or leased and
operated by Customer, using the same methodology as contained herein.

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

26

--------------------------------------------------------------------------------

  1.3 Addition or Removal of Engines from the Agreement

 

  1.3.1 Addition of Engines to the Agreement shall be subject to the following
provisions.

 

  1.3.1.1 At Customers request and GE’s mutual agreement, new Engines shall be
added to this Agreement if acquired by Customer. Such Engine(s) shall enter the
MCPH Program for the full Initial Term of this Agreement or for an adjusted term
at an adjusted, mutually agreed MCPH Rate.

 

  1.3.1.2 Used Engines may be added to this Agreement by mutual written
agreement of the Parties. Upon such mutual agreement, a used Engine will be
covered by the MCPH Program as follows:

 

  a. Customer shall provide Engine serial number, aircraft identification
(including previous owner), TSN, TSLV, CSN, CSLV and thrust rating to be used
for the added Engine(s). Customer shall provide available additional information
as required.

 

  b. For an Engine that has not undergone an Engine shop visit, GE shall review
all of the available Engine data, including, but not limited to time in cycles
and flight hours since new, take-off derate data, and age in years from original
delivery from the OEM, to calculate an overall hour / cycle ratio and take-off
derate information for that Engine. Should Customer be unable to furnish the
take-off derate information, and GE does not otherwise have such data available
to it, GE shall assume the take-off derate to be ***%. The resulting hour/cycle
ratio and take-off derate information shall be plotted against the severity
table identified in Exhibit D of this Agreement for the determination of the
equivalent severity adjustment factor for the Engine to be included in the MCPH
Program, multiplied by the Current MCPH Rate for those hours incurred prior to
the addition of the Engine into the MCPH program. The resulting amount shall be
accrued for future payment by Customer to GE for such Engines’ MCPH Shop Visits,
which shall be included in the EFH calculation required by Section 1.1 of
Exhibit A, above. At the time of Engine’s acceptance into the MCPH program,
Customer shall commence paying the Monthly Collection Rate and FOD Rate should
Customer select optional FOD Coverage as contained within 10.1, above.

 

  c. For an Engine that has undergone an Engine shop visit, such Engine will, if
reasonably determined by GE, be required to undergo a Qualifying Shop Visit,
which will be priced on a Supplemental Work basis. GE in exercising its
determination described above, shall take into account available Engine data, by
way of example, the number of flight hours and cycles of such Engine since last
Engine shop visit, the nature and extent of the maintenance, repair and overhaul
Services provided at the last Engine shop visit, including but not limited to,
Engine hardware configuration and number of repairs performed, the reputation of
the third party who performed the Engine shop visit, an inspection of the
Engine, which may include an Engine borescope, and full review of all available
technical records

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

27

--------------------------------------------------------------------------------

 

and data concerning the Engine. At the time of Engine’s acceptance into the MCPH
program, Customer shall commence paying the applicable Monthly Collection Rate
and FOD Rate should Customer select optional FOD Coverage.

 

  d. Following the addition of an Engine to this MCPH program, GE shall evaluate
such Engine’s addition to the Current MCPH Rate and adjust such rate if
necessary, providing written notice to Customer of such MCPH Rate adjustment
when determined by GE. Customer shall facilitate such determination by
submitting to GE, upon GE’s request, any information requested by GE in order to
facilitate GE’s determination.

 

  1.3.2 Removal of Engines from the Agreement shall be subject to the following
provisions.

 

  1.3.2.1 Subject to the conditions 1. and 2. immediately below, Customer may
remove Engines from this Agreement only for the following reasons:

 

  a. Bona fide sale or other bona fide transfer to an unaffiliated third party
and in which Customer ceases to operate the Engine;

 

  b. Removal from Service; or

 

  c. The Engine is reasonably determined to be BER.

 

Conditions:

 

  1. Customer must give advance written notice of such removals to GE; and

 

  2. Customer shall not remove more than a cumulative total of *** of the
highest number of Engines covered under this Agreement at any point in time
during the term of this Agreement. Removal of more than *** shall be deemed a
material breach of this Agreement.

 

  1.3.2.2 In the event that Customer desires to remove Engines which exceed the
*** threshold or which do not fall into categories a.-c. above, Customer shall
obtain GE’s prior written consent for such removals.

 

  1.3.2.3 In all cases of Engine removal, GE and Customer must mutually agree on
which Engine shall be removed, unless Customer’s Lessor dictates a particular
removal. Any Engine removal shall be subject to the reconciliation provisions of
Section 1.3.2.4 or 1.3.2.5. GE shall evaluate the effect of any Engine’s removal
on the applicable MCPH Rate, adjusted and escalated in accordance with Exhibit
A, and adjust the MCPH Rate per mutual agreement of Customer, which agreement
shall not be unreasonably withheld. Customer shall begin paying the MCPH Rate,
as adjusted for such removal, for all EFH incurred on and after the date of such
removal. However, if there are other specific terms herein providing for
liquidated damages or amounts owed to GE upon Engine removal or termination of
this Agreement shall also apply.

 

  1.3.2.4 ***

 

  1.3.2.5 ***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

28

--------------------------------------------------------------------------------

  1.3.2.6 Following the removal of an Engine from this Agreement, GE shall
evaluate the effect of such removal on the Current MCPH Rate and revenue
expectations and equitably adjust the MCPH Rate, providing written notice to
Customer of such MCPH Rate adjustment. Customer shall facilitate such
determination by submitting to GE, upon GE’s request, any information requested
by GE.

 

  1.3.2.7 Termination; Reconciliation of MCPH Payments. In the event of
termination of this Agreement for any reason other than GE’s default, the terms
of the reconciliation of MCPH payments under the removal of Engines provisions
of this Exhibit A, above, shall apply, in addition to any other remedy allowable
under this Agreement.

 

  1.3.3 If Customer selects GE to perform the work solely to meet the return
conditions of Customer’s lease from a third party, then Customer will pay GE for
any Service required to meet lease return conditions for an Engine removed from
the Agreement on a Supplemental Work basis.

 

  1.4 Economic Price Adjustment. The Base Prices shall be adjusted for
fluctuation of the economy as described below.

 

***

 

2. Supplemental Work Price. Supplemental Work shall be charged as follows:

 

  2.1 Labor

 

  2.1.1 Direct Labor (on-site):

 

  2.1.1.1 Fixed Rate Pricing: Direct labor shall be charged at the pricing set
forth in Schedule 1.

 

  2.1.1.2 Other Pricing: For all Services not specified in Schedule 1, direct
labor shall be charged on a time and material basis as follows:

 

***

Direct Labor Rate:

 

  2.2 Parts and Material

 

  2.2.1 GE Furnished Parts and Materials. GE furnished parts and material shall
be charged as follows ***:

 

***

 

  2.2.2 ***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

29

--------------------------------------------------------------------------------

  2.3 GE Furnished Rotable Parts

 

  2.3.1 When Customer’s part is removed from the Engine during repair and
replaced with a corresponding Rotable Part, Customer shall pay a fee ***. If the
removed part is a LLP with greater than *** percent (***%) of the then-current
Approved Aviation Authority approved life limits remaining, the provisions of
Section 2.3.3 of this Exhibit A, will apply.

 

  2.3.2 If Customer’s removed part is Scrapped after a Rotable Part has been
installed in the Engine, the fee for such removed part specified in Clause 2.3.1
of this Exhibit A above will be canceled and the replacement part will be
charged to Customer in accordance with Sections 2.2 of this Exhibit A.

 

  2.3.3 Life Cycle Adjustment. ***

 

  2.4 ***

 

  2.5 Engine Test

 

***

 

  2.6 Component Repair. Part repairs shall be charged in accordance with the
then-current applicable component repair directory ***, or if there is no
applicable component repair directory, then in accordance with Sections 2.1
through 2.4, of this Exhibit A.

 

  2.7 Annual Adjustment

 

  2.7.1 Labor rates, Material Fees, Test Cell Fees. Labor rates, and test cell
fees shown herein are valid through ***. At that time, and each January 1st
thereafter, hourly labor charges, fixed labor charges, and test cell charges
shall be adjusted by an amount equal to the actual percentage changes in the
average of the ***.

 

  2.7.2 Material Caps. Charges for material caps shown herein are valid through
***. At that time, and each January 1st thereafter, GE reserves the right to
increase such charges by an amount which is proportionate to any increase to the
manufacturer’s parts price book increase. Such increase shall be effective as to
Services performed on or after the relevant change date.

 

  2.8 Base Year. Unless otherwise stated herein, all prices set forth in this
Exhibit A are stated in 2003 United States Dollars.

 

  2.9 ***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

30

--------------------------------------------------------------------------------

SCHEDULE 1

to

EXHIBIT A

 

CFM567B FIXED PRICE LABOR SCHEDULE

 

***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

31

--------------------------------------------------------------------------------

SCHEDULE 2

to

EXHIBIT A

 

CFM56-7 BENCH STOCK

 

***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

32

--------------------------------------------------------------------------------

EXHIBIT B

 

Exhibit B – GE Repair Stations

 

***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

33

--------------------------------------------------------------------------------

EXHIBIT C

 

ENGINE SERIAL NUMBERS, AIRCRAFT DELIVERY SCHEDULE AND MINIMUM SPARE  ENGINE
REQUIREMENTS

 

Aircraft and Engine Delivery Schedule

 

Firm Deliveries

--------------------------------------------------------------------------------

 

Option Deliveries

--------------------------------------------------------------------------------

Date

--------------------------------------------------------------------------------

 

Qty of

Engines

--------------------------------------------------------------------------------

 

Date

--------------------------------------------------------------------------------

 

Qty of

Engines

--------------------------------------------------------------------------------

 

Date

--------------------------------------------------------------------------------

 

Qty of

Engines

--------------------------------------------------------------------------------

 

Date

--------------------------------------------------------------------------------

 

Qty of

Engines

--------------------------------------------------------------------------------

             

July-04

  2   August-06   2   TBD   2   TBD   2

August-04

  2   September-06   2   TBD   2   TBD   2

September-04

  2   October-06   2   TBD   2   TBD   2

October-04

  2   November-06   2   TBD   2   TBD   2

November-04

  2   December-06   2   TBD   2   TBD   2

December-04

  2   January-07   2   TBD   2   TBD   2

January-05

  2   February-07   2   TBD   2   TBD   2

February-05

  2   March-07   2   TBD   2   TBD   2

March-05

  2   April-07   2   TBD   2   TBD   2

April-05

  2   May-07   2   TBD   2   TBD   2

May-05

  2   June-07   2   TBD   2   TBD   2

June-05

  2   July-07   2   TBD   2   TBD   2

July-05

  2   August-07   2   TBD   2   TBD   2

August-05

  2   September-07   2   TBD   2   TBD   2

September-05

  2   October-07   2   TBD   2   TBD   2

October-05

  2   November-07   2   TBD   2   TBD   2

November-05

  2   December-07   2   TBD   2   TBD   2

December-05

  2   January-08   2   TBD   2   TBD   2

January-06

  2   February-08   2   TBD   2   TBD   2

February-06

  2   March-08   2   TBD   2   TBD   2

March-06

  2   April-08   2   TBD   2   TBD   2

April-06

  2   May-08   2   TBD   2   TBD   2

May-06

  2   June-08   2   TBD   2   TBD   2

June-06

  2   July-08   2   TBD   2   TBD   2

July-06

  2   August-08   2   TBD   2   TBD   2

 

Engine Serial Numbers

 

TBD

 

Minimum Spare Engine Requirements

 

Customer is required to maintain a minimum spare engine level as outlined in the
General Terms Agreement among Customer and CFM, an Affiliate of GE.

 

34

--------------------------------------------------------------------------------

EXHIBIT D

 

MCPH PRICING SENSITIVITY MATRIX

 

***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

35

--------------------------------------------------------------------------------

EXHIBIT E

 

WARRANTY ASSIGNMENT LETTER

(Customer Letterhead)

 

(Date)

 

(Name and Address of Original Engine Manufacturer)

 

Attn:

 

Re: Assignment of Third Party Warranty

 

Dear (Sir/Madam):

 

(Customer) and the (Original Engine Manufacturer) entered into Agreement Number
         dated                 , 19    , wherein (Customer) agreed to purchase a
specified number of              aircraft engines and (Original Engine
Manufacturer) agreed to provide certain warranties and guarantees with regard to
said engines to (Customer). This Assignment shall be terminated immediately upon
termination of such agreement.

 

(Customer) and [GE Name] have now entered into a separate Engine Maintenance
Agreement Number GE-9_-         dated                  19    , (“Maintenance
Agreement”) for the maintenance, repair and overhaul of said engines. The
Agreement specifies that (Customer) shall, during the term of the Agreement,
assign to [GE Name] the benefit of all of Customers assignable rights to the
(Original Engine Manufacturer) warranties and guarantees applicable to the
Services to be performed regarding the Engines covered by the Maintenance
Agreement.

 

This Letter is intended to serve as official notification to (Original Engine
Manufacturer) of its intent to so assign the applicable warranties and
guarantees under the engine purchase agreement and to [GE Name] of (Customer)’s
fulfillment of this obligation under the Maintenance Agreement.

 

(Original Engine Manufacturer), please indicate your concurrence with said
assignment by signing in the space provided below and returning a copy of this
letter to the undersigned.

 

(Signature Block)

 

36

--------------------------------------------------------------------------------

EXHIBIT F

 

LINE REPLACEABLE UNITS

 

***

--------------------------------------------------------------------------------

*** Represents material which has been redacted and filed separately with the
Commission pursuant to a request for confidential treatment pursuant to Rule
24b-2 of the Securities Exchange Act of 1934, as amended.

 

37