Exhibit 10.10

Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

CONVERSION AGREEMENT

Dated August 3, 2010

PRIVATE & CONFIDENTIAL

CONVERSION AGREEMENT

CARGO AIRCRAFT MANAGEMENT, INC.

and

M&B CONVERSIONS LIMITED

and

ISRAEL AEROSPACE INDUSTRIES LTD.,

BEDEK AVIATION GROUP, AIRCRAFT DIVISION

M&B Conversions Limited Contract reference [l]

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

TABLE OF CONTENTS

 

CLAUSE 1.    DEFINITIONS AND INTERPRETATION CLAUSE 2.    EFFECTIVE DATE CLAUSE
3.    SCOPE OF STC SERVICES CLAUSE 4.    SERVICES AND EXTRA WORK CLAUSE 5.   
DELIVERIES CLAUSE 6.    CHANGES TO THE SERVICES CLAUSE 7.    FUNCTIONAL CHECK
FLIGHTS, ACCEPTANCE AND REDELIVERY CLAUSE 8.    WEIGHT CHANGE CLAUSE 9.   
INFORMATION AND DOCUMENTATION TO BE PROVIDED BY SUPPLIER CLAUSE 10.   
SUPPLEMENTARY TYPE CERTIFICATION OF AIRCRAFT CONVERSION CLAUSE 11.    PRICES AND
TERMS OF PAYMENT CLAUSE 12.    TIME AND EXCUSABLE DELAY CLAUSE 13.    WARRANTIES
CLAUSE 14.    AFTER SALES SUPPORT SERVICES CLAUSE 15.    LIABILITIES AND
INDEMNITIES CLAUSE 16.    INSURANCE OBLIGATIONS CLAUSE 17.    DISPUTE RESOLUTION
CLAUSE 18.    CONFIDENTIAL INFORMATION CLAUSE 19.    TERMINATION CLAUSE 20.   
MISCELLANEOUS

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

CLAUSE 21.    GOVERNING LAW    SCHEDULE 1    AIRCRAFT DESCRIPTION AND PROGRAM
SCHEDULE      65    SCHEDULE 2    SPECIFICATION      1    SCHEDULE 3    CUSTOMER
FURNISHED DOCUMENTATION AND EQUIPMENT      1    SCHEDULE 4    SUPPLIER FURNISHED
DOCUMENTATION AND EQUIPMENT      5    SCHEDULE 5    FORM OF CERTIFICATE OF
DELIVERY      6    SCHEDULE 6    FORM OF CERTIFICATE OF REDELIVERY      9   
SCHEDULE 7    PRICES AND PAYMENT TERMS      11    SCHEDULE 8    WARRANTY      14
   SCHEDULE 9    VARIATION PARTICULARS FORM      22    SCHEDULE 10    EXTRA WORK
FORM      26    SCHEDULE 11    AIRCRAFT STATUS REPORT   

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

CONVERSION AGREEMENT

THIS AGREEMENT is made on August 3, 2010

BETWEEN:

 

(1) CARGO AIRCRAFT MANAGEMENT, INC., a company organized under the laws of the
State of Florida, United States (“Customer”);

 

(2) M&B CONVERSIONS LIMITED, a private company limited by shares registered in
Ireland whose company registration number is 438873 and whose registered office
is at unit 6, The Forum, 29/31 Glasthule Road, Glasthule Co. Dublin, Ireland
(“M&B”); and

 

(3) ISRAEL AEROSPACE INDUSTRIES LTD., BEDEK AVIATION GROUP, AIRCRAFT DIVISION, a
company registered in the State of Israel with company registration number
52-002719-4 whose registered office is at Ben Gurion International Airport,
70100 Israel, as M&B’s prime sub-contractor (“Supplier”).

WHEREAS, M&B has contracted with Supplier for the development of, and Supplier
has developed for M&B, certain FAA and EASA approved supplementary type
certificates for the conversion of Boeing 767-300 passenger Aircraft to Special
Freighter Configuration in conformance with the Specification; and

WHEREAS, Customer owns the Aircraft described in Schedule 1 (the “Firm
Aircraft”) which it desires to have converted to Special Freighter Configuration
and may in the future own up to seven more Aircraft (the “Option Aircraft”)
which it may desire to have converted to Special Freighter Configuration
pursuant to the provisions of this Agreement; and

WHEREAS, M&B is willing and able to provide conversion of such Aircraft under
the terms and conditions contained in this Agreement; and

WHEREAS, Supplier is the holder of FAA and EASA repair station licences; and

WHEREAS, M&B desires to procure on behalf of Customer, and Supplier desires to
perform as prime sub-contractor to M&B, conversion services, weight upgrades and
after sales support services, all in relation to the Contract Aircraft under the
terms and conditions contained in this Agreement.

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

NOW THEREFORE, Customer, M&B, and Supplier (individually, a “Party”, and
together, the “Parties”) agree as follows:

SECTION 1 DEFINITIONS AND INTERPRETATION

 

1.1 Capitalised terms used in this Agreement, and not specifically defined as so
used, shall have the meanings given to them in this Clause 1.1:

“After Sales Support Services” shall have the meaning provided in Clause 14;

“Agreement” shall mean the recitals and Clauses of this agreement together with
the Schedules annexes and appendices to it and any documents referred to in or
attached to it;

“Aircraft” shall mean any Boeing 767-300ER wing series 5 aircraft;

“Aircraft Condition Cause” shall have the meaning provided at Clause 6.3(b)(ii);

“Aircraft Operator” shall mean the operator of a Contract Aircraft;

“Aircraft Parking Charge” shall mean Supplier’s or the operator of a Designated
Site’s, as applicable, charge per day or part thereof for the parking of a
Contract Aircraft at the Supplier Site, or another Designated Site, as
applicable;

“Aircraft Status Report” shall have the meaning provided at Clause 4.7;

“Airworthiness Directive” or “AD” shall mean an airworthiness directive issued
by the FAA or such equivalent requirement of the agreed Civil Aviation
Authorities;

“AOG Desk” shall have the meaning provided at Clause 14.4(b);

“BASA” shall mean the agreement between the Government of the United States of
America and the Government of Israel for the Promotion of Aviation Safety, dated
December 19, 2000, also known as the Bilateral Aviation Safety Agreement, or
“BASA executive agreement”, as amended from time to time;

“BASA IPA” shall mean the FAA / CAAI implementation procedures authorised by
Article III of the BASA, as amended from time to time;

“Bay Day Rate” shall mean Supplier’s or the operator of a Designated Site’s, as
applicable, charge per day or part thereof for the occupation of an Aircraft of
a bay within its hangar at Supplier Site, or at another Designated Site, as
applicable;

“Business Day” shall mean, in respect of determinations at the Supplier Site,
Sunday to Thursday, 8:00 am to 5:00 pm (local time at Supplier’s premises) in
any week and in respect of all other determinations, Monday to Friday, 8:00 am
to 5:00 pm in any week in each case with the exception of national statutory
holidays as observed by the Parties;

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

“CAAI” shall mean the Civil Aviation Authority of Israel or any agency
succeeding to the power and authority thereof;

“Cargo Loading System” or “CLS” shall mean the Cargo Loading System certified by
Supplier’s subcontractor for Conversion Aircraft, as described in the
Specification;

“Civil Aviation Authorities” shall mean the FAA, CAAI, and/or EASA including any
agency succeeding to the power and authority thereof, as agreed between
Supplier, Customer and M&B;

“Confidential Information” shall mean all information of a commercially or
operationally sensitive nature, including this Agreement, the certification
data, specifications, drawings, data, software, circuit diagrams, tapes, discs
and other computer-readable media, documents, policies, procedures, techniques,
trade secrets and know-how in any medium or format (including, without
limitation, verbal) which are disclosed by one Party to another for use in or in
connection with the Conversion or this Agreement;

“Contract Aircraft” shall mean one or all (as the context requires) of the
Aircraft, which are the subject of this Agreement and that upon identification
by Customer in accordance with Clause 5.1, shall be detailed respectively in
Schedule 1, paragraph 1.1 and paragraph 2, or any replacement Aircraft
substituted in accordance with this Agreement;

“Conversion” shall mean the conversion of a Contract Aircraft from passenger to
Special Freighter Configuration. For the avoidance of doubt “Conversion” shall
not include Extra Work;

“Conversion Payment” shall mean a Conversion Payment detailed at Schedule 7;

“Conversion Price” shall mean the price as set out in Schedule 7 for the
Conversion Services;

“Conversion Services” shall mean the services detailed at Clause 4.2 undertaken
in order to perform the Conversion;

“Conversion Slot” shall mean a Conversion Slot described in Clause 5.10 and
detailed in the Program Schedule at Schedule 1, paragraphs 1 and 2 by reference
to a either a particular line number and slot number or a particular Scheduled
Delivery Date;

“CSDD” shall mean the latest edition from time to time of the Common Support
Data Dictionary published by the Air Transport Association;

“Customer Furnished Documentation” consists of the documents listed in Schedule
3;

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

“Customer Furnished Equipment” consists of the equipment listed in Schedule 3;

“CFI” or “Customer Furnished Items” shall consist of Customer Furnished
Equipment and Customer Furnished Documentation;

“Customer Representative” shall mean the on-site representative and point of
contact provided and nominated by Customer in accordance with Clause 20.1;

“Customer Variation” shall have the meaning provided at Clause 6.2(b);

“Customer Variation Price” shall have the meaning provided at Clause 6.4(d)

“Delivery” shall have the meaning provided at Clause 5.6;

“Delivery Condition” shall have the meaning provided at Clause 5.4;

“Delivery Inspection” shall have the meaning provided at Clause 5.5(b);

“Designated Site” shall mean the Supplier Site and, subject to Customer’s
consent, which shall not be unreasonably withheld, any other third party site
which has all of the appropriate licences for operating as, and otherwise
qualifies under Supplier’s qualification guidelines to serve as, a conversion
facility and which Supplier agrees to support and oversee;

“Dollars” or “$” shall mean the currency of the United States of America;

“EASA” shall mean the European Aviation Safety Agency or any agency succeeding
to the power and authority thereof;

“EASA Implementing Rules” (“IRs”), “Alternate Means of Compliance” (“AMOCs”) and
“Certification Specifications” (“CSs”) shall mean the rules, regulations and
policies promulgated by the EASA, in the case of IRs, through Conversion
Regulations, and, in the case of AMOCs and CSs, by Agency decision;

“Effective Date” shall have the meaning set out in Clause 2.1;

“Encumbrances” shall mean any security interest, mortgage, charge, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise) or interest in property to secure payment of a debt or performance of
an obligation or other priority or preferential arrangement of any kind or
nature whatsoever;

“Encumbrancer” shall mean the party which has the benefit of an Encumbrance;

“Excusable Delay” shall have the meaning provided at Clause 12 (Excusable
Delay);

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

“Existing Customer(s)” shall mean [*].

“Extra Work” shall have the meaning provided at Clause 4.4;

“Extra Work Form” shall mean a document, in substantially the form of Schedule
10, and executed on behalf of both Supplier and Customer, used in accordance
with Clause 6 to authorise and record any Extra Work, change to the Scheduled
Redelivery Date, changes in pricing and payment provisions or addition or
deletion of Services originally requested to be performed on a Contract
Aircraft;

“FAA” shall mean the United States of America Federal Aviation Administration,
or any agency succeeding to the power and authority thereof;

“Free Parking Period” shall have the meaning provided at Clause 5.2(d) of this
Agreement;

“Functional Check Flight” shall have the meaning provided at Clause 7.1(a)(i);

“Governing Authority” shall mean any national, supra-national (including the
European Union) state or local government, any political subdivision thereof or
any governmental, quasi-governmental, judicial, public or statutory
instrumentality, administrative agency, authority, body or other similar entity
and includes the Civil Aviation Authorities;

“Herein”, “hereof”, “hereunder” and like terms shall refer to this Agreement, as
it may be amended or supplemented from time to time;

“IP Indemnity” shall have the meaning provided at Clause 15.7;

“LIBOR” shall mean the rate per annum quoted in the “Money Rates” column of the
Wall Street Journal on the day on which such rate is to be determined for the
purposes of this Agreement for deposits in US Dollars for a period of one
(1) month; provided that, if, on the relevant date no such quotation is shown in
the Wall Street Journal, LIBOR shall be deemed to be the rate at which the
principal London office of Bank of Tokyo-Mitsubishi, offers prime banks in the
London market for US Dollar deposits for a period of three (3) months;

“M&B Representative” shall mean the person provided and nominated by M&B in
accordance with Clause 20.1;

“Manhour” shall mean the exclusive allocation of one direct employee to any
specific task for an elapsed time of one hour or pro-rata part thereof measured
in tenths of an hour;

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

“Materials” shall mean individually or collectively, any of the following used
to perform Conversion Services:

(a) “Consumables” – generally, bulk type materials such as lubricants, cements,
compounds, paints (not including the paint kit for the exterior painting in
relation to the strip and paint of the Aircraft, if any), chemicals, dyes,
splices, tape and patches called for in maintenance and repair procedures for a
Contract Aircraft, equipment and component end items;

(b) “Expendable” – a part for which no authorised repair procedure exists or for
which the cost of repair would be uneconomical, including all fasteners;

(c) “Kit” – a defined package of parts required for modification, airworthiness
directives and service bulletins, including drawings and all fasteners needed to
install a Kit on an Aircraft;

(d) “Repairable” – a part which is continually reworked to a fully serviceable
condition using authorised repair procedures in the appropriate component repair
manual until such rework becomes uneconomical; and

(e) “Rotable” – a serially numbered part having a life expectancy through
repetitive overhaul and under normal operating conditions, approximating to the
life of the flight equipment to which it is related;

“MSN” shall mean Manufacturer’s Serial Number;

“Needed Part” shall have the meaning provided in Schedule 3 paragraph 3.2(b)(i);

“OEM” shall mean Original Equipment Manufacturer;

“Option Aircraft” shall have the meaning provided in the second Whereas clause;

“Parts Manufacturer Approval” or “PMA” shall mean the necessary approvals from
the CAAI under the terms of BASA IPA or to the extent the terms of the BASA IPA
do not permit the CAAI to issue an approval acceptable to the FAA, direct from
the FAA, for Supplier to manufacture parts for the Conversion;

“Pre-Acceptance Flight” shall have the meaning provided in Clause 7.1(b);

“Price Adjustment Formula” shall mean the formula as set out in Schedule 7,
paragraph 4;

“Program Schedule” shall mean the program for the Conversions detailed in
Schedule 1;

“Redelivery” shall have the meaning provided in Clause 7.2;

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

“Redelivery Condition” shall mean with respect to a Contract Aircraft, having
all Services and Extra Work completed and duly performed in accordance with the
terms of this Agreement and being free and clear of any Encumbrances created by
or through Supplier or M&B;

“Scheduled Delivery Date” shall mean the scheduled date for input of a Contract
Aircraft into the Conversion program as set out in Schedule 1 for the Firm
Aircraft and as defined in Section 5.1 for the Option Aircraft;

“Scheduled Redelivery Date” shall mean the scheduled date for Redelivery of a
Contract Aircraft as set out in Schedule 1, as it may be extended by the terms
of this Agreement;

“Service Bulletin” or “SB” shall mean technical information regarding advisory
changes/repairs to be done on an airplane, issued and identified as a service
bulletin from time to time by the OEM, M&B or Supplier;

“Services” shall mean the Conversion Services;

“SFE” shall mean Supplier Furnished Equipment which is listed as Supplier
Furnished Equipment and the Parties agreed to be provided by Supplier at the
prices in accordance with Schedule 4;

“Special Freighter Configuration” or “SF” shall mean the configuration of an
Aircraft as a Boeing 767-300 special freighter aircraft in conformance with the
Specification;

“Specification” shall have the meaning provided at Schedule 2;

“STC” shall mean the supplementary type certificates as defined in Clause 3.1

“STC Services” shall have the meaning provided in Clause 3;

“Supplier Representative” shall mean the person provided and nominated by
Supplier in accordance with Clauses 20.1;

“Supplier Site” shall mean Supplier’s premises located in Israel;

“Supplier Variation(s)” shall have the meaning provided at Clause 6.2(a);

“Term” shall mean that period from the date of this Agreement until the date
which is ten (10) years from the date of this Agreement.

“US” or “USA” or “United States” shall mean the United States of America;

“Variation” shall have the meaning provided at Clause 6.2;

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

“VPF” or “Variation Particulars Form” shall mean a variation particulars form,
in the form set out in Schedule 9, duly signed by Supplier and Customer and
pursuant to which all amendments to, deletions from and changes to, the
Specification shall be controlled and effected;

“Verification Flight” shall have the meaning provided at Clause 7.1(a)(ii);

“Warranty” shall mean the warranty set out in Schedule 8;

“Weight Upgrade(s)” shall mean supplements or amendments to the aircraft
technical data (including Flight Manuals and Weight and Balance Manuals) as
required to increase the maximum taxi weight, the maximum takeoff weight, the
maximum zero fuel weight, and the maximum landing weight of the Contract
Aircraft to FAA and EASA approved limits as set out in Schedule 2.

 

1.2 Unless otherwise stated any reference in this Agreement to a Clause,
Schedule, Annex or Appendix is to a Clause of, or Schedule, Annex or Appendix to
this Agreement.

 

1.3 In this Agreement where the context requires words importing the singular
shall include the plural and vice-versa and words importing any gender shall
include all genders.

 

1.4 In this Agreement references to persons or parties may include individuals,
partnerships, firms, corporations, associations, companies, unincorporated
organisations, joint ventures, trusts and other entities and all governmental
authorities as the context so requires.

 

1.5 In this Agreement the headings to Clauses, Schedules, Annexes and Appendices
are for convenience only and shall not affect the construction of the Clauses,
Schedules, Annexes and Appendices.

 

1.6 References in this Agreement to a “day”, “month”, and “year” shall, unless
the context states otherwise, refer to calendar days, months and years,
respectively.

 

1.7 Any reference in any Schedule, Annex or Appendix to this Agreement to a
document to be incorporated by reference into such Schedule, Annex or Appendix
shall mean that such document is incorporated by reference into this Agreement.

 

1.8 A reference to any Schedule, Annex, Appendix or other document includes that
Schedule, Appendix, or other document as amended, varied, novated or
supplemented from time to time.

 

1.9 Any Aircraft related technical expression used in this Agreement and not
defined herein shall, where the context so admits, have the meaning specified in
the CSDD.

 

1.10

A reference to a law includes, without limitation, any (1) statute, decree,
constitution, regulation, order, judgment or directive of any Governing
Authority, (2) treaty, pact or other agreement to

 

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which any Governing Authority is a signatory or party, and/or (3) judicial or
administrative interpretation or application thereof and, in each such case, is
a reference to the same as amended, substituted or re-enacted from time to time.

 

1.11 The words and phrases “other”, “including” and “in particular” shall not
limit the generality of any preceding words or be construed as being limited to
the same class as any preceding words where a wider construction is possible.

 

1.12 A reference to a document in the “agreed form” is a reference to a document
in a form approved and for the purposes of identification initialled by or on
behalf of each Party to this Agreement.

SECTION 2 EFFECTIVE DATE

 

2.1 This Agreement shall become effective on the date of execution of this
Agreement by all Parties (the “Effective Date”), and shall terminate, subject to
the terms of this Agreement, on the fulfilment of the Parties’ obligations as
set out herein.

SECTION 3 SCOPE OF STC SERVICES

 

3.1 Definition of STC

“STC” shall mean the Supplemental Type Certificate for conversion of B767-300ER
aircraft from passenger configuration to Special Freighter Configuration issued
by the CAAI (CAAI STC No. SA218 and validated by the FAA (FAA STC No. ST02040SE)
and by EASA (EASA STC No. 10028430).

It is acknowledged that in respect of the STC, supplemental type certificates
for third party supplier furnished items, which may include, without limitation,
the CLS, galleys and window plugs, will be obtained by such third party
suppliers and Supplier shall obtain supplementary type certificate approval only
for the interface between such item and the Contract Aircraft.

 

3.2 STC Services

Supplier shall provide the following services in respect of the STC (the “STC
Services”):

a) Supplier shall maintain the STC to enable Customer to operate each converted
Contract Aircraft under the authority of the FAA, CAAI, EASA.

(b) [*]

(c) Supplier shall obtain approval of the Conversion of each Contract Aircraft
in respect of the STC, in accordance with Clause 10.

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
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(d) Customer shall be responsible to obtain any required validations for the CLS
STC from civil aviation authorities, other than the CAAI, FAA and EASA.

SECTION 4 SERVICES AND EXTRA WORK

 

4.1 Customer hereby agrees to purchase, and M&B through its prime
sub-contractor, Supplier, hereby undertakes to perform on each Contract
Aircraft, following Delivery of a Contract Aircraft to its Designated Site, the
Services in accordance with this Agreement (and Customer acknowledges and agrees
that Supplier alone, not M&B, shall be responsible for performing the Services
and each of the obligations stated to be Supplier’s in this Agreement).

 

4.2 Supplier, as M&B prime sub-contractor, shall perform for the Contract
Aircraft at the Designated Site the Conversion Services, which shall include:

 

  (i) the Conversion of the Contract Aircraft to Special Freighter Configuration
in accordance with the Specification;

 

  (ii) the STC Services;

 

  (iii) the Weight Upgrades;

 

  (iv) the After Sales Support Services;

 

  (v) airframe modifications related to Phase 1.5 of the weight-CG envelope
upgrade, as defined in the Specification;

 

  (vi) preparation and furnishing of the documents and data described in this
Agreement with respect to such Conversion, as set out in the Specification;

 

  (vii) providing Customer with information obtained during the Conversion
together with other Customer provided information, required so that Customer may
procure an FAA Export Certificate of Airworthiness for each converted Contract
Aircraft, if required;

 

  (viii) all necessary return to service checks, including tests, functions and
engine runs;

 

  (ix) receipt, storage and handling of CFI

 

  (x) removal and installation of insulation blankets to ensure FAA AD
2008-23-09 compliance to be completed in accordance with Job Card
#EA25000008-001 and relating to the lower (primary) cargo and main deck cargo
areas; however, Customer shall provide all Materials for the removal and the
reinstallation of the blankets;

 

CAM Conversion Agreement

 

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and shall not include the services detailed at Clause 4.3,

all in accordance with the Scheduled Delivery Date and Scheduled Redelivery Date
described in Schedule 1, and in accordance with all the other terms and
conditions of this Agreement.

 

4.3 Unless otherwise specified in this Agreement the Conversion Services
provided for the Conversion Price shall not include:

 

  (a) Extra Work;

 

  (b) maintenance services;

 

  (c) the provision of Customer Furnished Items;

 

  (d) the procurement and provision of the Cargo Loading System;

 

  (e) customization services;

 

  (f) overhaul/repair of the cabin interior, as provided in the Specification

 

  (g) removal and installation of insulation blankets to ensure FAA AD
2008-02-16 compliance relating to the cockpit area, including Customer’s
responsibility to provide all Materials for the removal and reinstallation of
the blankets; and

 

  (h) strip and paint of Aircraft.

 

4.4 Supplier will, during the performance of the Services, at Customer’s request
or upon approval by Customer of a Supplier proposal, perform additional services
on a Contract Aircraft (“Extra Work”). Extra Work may consist of work which is
not within the scope of the Conversion Price which may consist of:

 

  (i) repair or replacement of non-serviceable parts or other aspects of a
Contract Aircraft, the necessity for which repair or replacement is discovered
during Supplier’s performance of the Services or other Extra Work;

 

  (ii) the matters listed as excluded from the Conversion Price at Clause 4.3;

 

  (iii) Variations, the payment for which is the responsibility of Customer
under the terms of Clause 6 (below);

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
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  (iv) airworthiness directives and service bulletins, to the extent not
required to be performed as part of the Conversion Services;

 

  (v) SFE options under Schedule 4;

 

  (vi) Work needed to conform an Aircraft to the necessary Delivery Condition;

 

  (vii) overhaul and/or repair of the cabin interior

 

  (viii) registration of the converted Contract Aircraft by a civil aviation
authority other than the CAAI, FAA, EASA, [*]; and

 

  (ix) where Customer elects not to have a Contract Aircraft stripped, the
painting of the area affected by the Conversion in accordance with Customer’s
requirements.

 

4.5 All requests for Extra Work and/or proposals for Extra Work shall comply
with Clause 6.

 

4.6 Performance of Services

 

  (a) The Services and any Extra Work shall be performed by Supplier in
accordance with all of the following that are applicable (and in the following
order of priority):

 

  (i) FAA standards, directives and regulations which would permit certification
of the Contract Aircraft under FAR Part 121 or equivalent;

 

  (ii) manufacturer’s modification, repair and overhaul standards,
recommendations, instructions and licence requirements in effect during the
performance of the Services and any Extra Work on a Contract Aircraft;

 

  (iii) the requirements of Schedule 2;

 

  (iv) Supplier shop practices and procedures in accordance with Supplier’s FAR
Part 145 certifications or any other FAA approved procedures for transport
aircraft, as applicable, to the extent not inconsistent with Clauses 4.6(a)(i)
to 4.6(a)(iii);

 

  (v) shop practices and procedures of the Designated Site to the extent not
inconsistent with the above; and

 

  (vi) Customer’s specified general maintenance manual, policies and procedures,
to the extent not inconsistent with the above.

 

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  (b) Subject to an event of Excusable Delay Supplier shall:

 

  (i) commence performance of the Services on a Contract Aircraft on the
applicable Scheduled Delivery Date of a Contract Aircraft.

 

  (ii) have completed the Services and any Extra Work by the applicable
Scheduled Redelivery Date.

 

4.7 Supplier’s Reports

 

  (a) In order for Customer to monitor the status of the Services and any Extra
Work, Supplier shall provide to Customer, and to M&B upon written request from
M&B, an “Aircraft Status Report” with respect to the status of the Services and
Extra Work performed / to be performed on the Contract Aircraft, in
substantially the form provided at Schedule 11, to be provided once a week
beginning one week following Delivery.

SECTION 5 DELIVERIES

 

5.1 Exercise of Option Aircraft

 

  (a) From time to time during the Term of this Agreement, Customer may provide
written notice to M&B and Supplier of the exercise of its option regarding one
or more Option Aircraft, which written notice shall include the information
required in Schedule 1, paragraphs 1.1 and 2, including the MSN and tail number.
Upon receipt of such written notice, Supplier shall respond to such notice with
identification of the first available Conversion Slot, which shall not be later
than twelve (12) months following the date of Customer’s notice, and the Parties
will discuss in good faith any additional Conversion Slot requirements. The
pricing in Schedule 7, as applicable, shall apply to the Option Aircraft. Upon
an agreement as to the applicable Conversion Slot, the Parties shall promptly
revise Schedules 1 and 2 to add such Option Aircraft thereto, whereupon such
Option Aircraft shall become Contract Aircraft.

 

  (b) If, after advising M&B and Supplier of an Aircraft MSN and tail number
under Clause 5.1(a), Customer requests to change such Option Aircraft’s MSN (to
an Aircraft of the same type), such change shall be treated as a Customer
Variation under the terms of Clause 6.4.

 

5.2 Delivery of the Contract Aircraft

 

  (a)

At least one hundred twenty (120) days prior to the Scheduled Delivery Date of a
Contract Aircraft, Customer shall provide written notice to Supplier of such
Contract Aircraft’s (i) Incoming Weights (as required in Schedule 2), (ii) Extra
Work package, if any, desired (including detailed work package requested),
whether such Contract Aircraft will be painted (and, if so, a detailed drawing
of the livery to be applied). As promptly as

 

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reasonably practicable, Customer shall provide Supplier with the results of any
modifications to such Option Aircraft or its documentation since receipt by
Supplier of the applicable Customer-Furnished Documentation, necessary to
complete the Conversion of such Option Aircraft.

 

  (b) Customer shall, at its sole expense and responsibility, deliver to
Supplier each Contract Aircraft at its Designated Site, together with such
Contract Aircraft’s Customer-Furnished Equipment, as may be required in
accordance with Schedule 3, in the Delivery Condition, as confirmed by the
Parties by completion of a Certificate of Delivery in substantially the form of
Schedule 5.

 

  (c) Customer may request that Supplier provide the flight crew to deliver the
applicable Contract Aircraft on behalf of Customer. In such case, Customer shall
be responsible for Supplier’s charges for such flight crew members.

 

  (d) Customer shall deliver the applicable Contract Aircraft by the applicable
Scheduled Delivery Date. Customer shall use all reasonable endeavours to deliver
the applicable Contract Aircraft two (2) days prior to the applicable Scheduled
Delivery Date to enable Supplier to complete the necessary checks and processes
prior to induction into the conversion program.

 

  (e) Subject to Clause 5.2(c), Delivery may be made by Customer, or by Supplier
on behalf of Customer, within the Free Parking Period (as that term is defined
below, and subject to Clause 5.2(c)) prior to its Scheduled Delivery Date,
without obtaining M&B or Supplier’s prior written consent, but only upon not
less than fifteen (15) days prior written notice. “Free Parking Period” shall
mean an aggregate of fifteen (15) Business Days to be allocated between early
Delivery and post-Redelivery removal, as Customer determines. During the Free
Parking Period, Customer shall maintain in force all of the insurance coverage
it is required to maintain under Clause 16.1 and be required to pay for any
services required to maintain the aircraft during such period.

 

5.3 Remedies for Delayed Delivery

 

  (a) If Delivery of a Contract Aircraft is not effected by Customer (or deemed
not to be effected as provided in the last sentence of Clause 5.4 or Clause
5.5(d)) on or before the day which is [*] days after its Scheduled Delivery
Date, except as a consequence of an Excusable Delay, then Customer shall pay the
sum of [*] for each day of delay, as liquidated damages. Such remedies shall be
in addition to the remedies as may be available to M&B and Supplier under Clause
5.3(b).

 

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  (b) If such delay under Clause 5.3(a) above shall be more than [*] Business
Days, at Supplier’s discretion, and effective upon Customer’s receipt of notice
from Supplier, Customer shall lose all of its rights to the applicable
Conversion Slot; provided, however, that Supplier may not cause Customer to lose
its rights to any such Conversion Slot during the three (3) day period prior to
a date on which Customer has notified Supplier that it will deliver the relevant
Contract Aircraft, so long as Customer does in fact deliver the aircraft on that
date. If Supplier elects to cause Customer to lose its rights to the applicable
Conversion Slot, then the liquidated damages set forth under Clause 5.3(a) shall
cease to accrue on the date the loss of the Conversion Slot becomes effective.

 

  (c) In the event of termination of the applicable Conversion Slot under this
Clause 5.3:

 

  (i) M&B and/or Supplier shall refund any and all amounts paid by Customer in
respect of such Contract Aircraft as of the date of termination provided that
Customer first pays:

 

  (A) the amount of Supplier’s and M&B’s verifiable costs incurred as of the
date of termination in preparation for induction of such Contract Aircraft (such
costs to exclude any amount for kits or other Materials that can be re-used for
another conversion other than carrying costs);

 

  (B) liquidated damages in accordance with the termination provisions in Clause
19.3; and,

 

  (C) the liquidated damages for delay under 5.3(a);

 

  (ii) Subject to payment by Customer of the amounts owed by it under this
Clause 5.3 and other provisions of this Agreement, Supplier shall redeliver to
Customer, or permit Customer to obtain, all Customer Furnished Items with
respect to such Contract Aircraft, at Customer’s expense; and,

 

  (iii) other than as provided in 5.3(a), 5.3(c)(i) and (ii) above, no Party
shall have any further liability to any other Party under this Agreement or
otherwise with respect to such Contract Aircraft. However, Customer may resubmit
that Aircraft to M&B and Supplier for conversion as an Option Aircraft.

 

  (d)

If a Contract Aircraft is Delivered after the Scheduled Delivery Date, any
impact on the Scheduled Redelivery Date of the applicable Contract Aircraft and
Contract Aircraft with subsequent Scheduled Delivery Dates shall be subject to
equitable adjustment of such Scheduled Redelivery Date which shall be treated by
Supplier as a Customer Variation in

 

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accordance with Clause 6.4 (except that Customer will not be entitled to
withdraw the Variation as provided therein, and except that there shall be no
additional charge to Customer for the Variation beyond the liquidated damages
payable under Clause 5.3(a) above) under which Supplier will advise Customer of
any impact on the applicable Scheduled Redelivery Dates.

 

  (e) The remedy set out in Clause 5.3(a) above shall not be deemed to be a
penalty but shall be deemed liquidated damages to account for losses incurred by
M&B and Supplier in the event of delayed Delivery, which are not capable of
being measured at this time.

 

5.4 Delivery Condition

At the time of Delivery, subject to contrary advance written agreement between
the Parties, each Contract Aircraft shall upon completion of the Delivery
Inspection, conform to the following (“Delivery Condition”):

 

  (a) a Contract Aircraft shall be serviceable;

 

  (b) a Contract Aircraft shall have a certificate of airworthiness issued by
the FAA (“CoA”) or, if a CoA has lapsed or is not effective due to past due
maintenance work, or required inspections or modifications, then a ferry permit
issued by the FAA or Civil Aviation Authority, as required by applicable
regulation;

 

  (c) if only a ferry permit can be obtained for the Contract Aircraft, Customer
shall provide to Supplier a detailed listing of the past due maintenance work,
inspections and modifications applicable to such Contract Aircraft at least
sixty (60) days prior to the Scheduled Delivery Date of the affected Contract
Aircraft;

 

  (d) all mandatory modifications, ADs and SBs, in each case, applicable to the
Conversion, shall be up to date and incorporated into a Contract Aircraft except
as expressly identified and agreed in writing to the contrary by Customer and
Supplier;

 

  (e) all Contract Aircraft shall be Aircraft holding a type certificate issued
by the FAA or Civil Aviation Authorities certifying that aircraft of that type
are fit for the issue of an FAA certificate of airworthiness, public transport
(passenger) category;

 

  (f) all Contract Aircraft shall conform to the requirements of the
Specifications for the aircraft configuration; and,

 

  (g)

all Contract Aircraft must be registered on the United States N register or,
where the Parties have agreed that the Contract Aircraft shall not be registered
on the United States N register,

 

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such register as required by the applicable Civil Aviation Authorities and
agreed in writing by the Parties. For any Contract Aircraft that is not so
registered, Customer, no later than two days prior to the Scheduled Delivery
Date of a Contract Aircraft, shall deregister such Contract Aircraft from its
existing register, re-register such Contract Aircraft on the United States N
Register, or applicable register, and provide to M&B and Supplier satisfactory
evidence of such re-registration.

Where a Contract Aircraft does not meet the Delivery Condition, Delivery shall
be deemed not to have occurred, Clause 5.5(d) shall apply and the remedies
available under Clause 5.3 shall apply as applicable.

 

5.5 Delivery Inspection

 

  (a) Supplier shall have the right to have a reasonable number of Supplier
employees on board a Contract Aircraft during its ferry flight to its Designated
Site for the purpose of monitoring the performance of the Contract Aircraft. A
reasonable number shall be construed subject to applicable regulatory
restraints, which may include requirements that only essential crew be on board
an Aircraft during a maintenance ferry flight.

 

  (b) Upon Delivery of a Contract Aircraft, Supplier and Customer shall carry
out a limited routine inspection of such Contract Aircraft which shall include a
walk around and external and internal general visual inspection of such Contract
Aircraft (a “Delivery Inspection”).

 

  (c) Customer acknowledges and agrees that any such Delivery Inspection will
necessarily be restricted in scope and will not reveal defects (including
corrosion) which will only be apparent upon an in-depth inspection and/or
inspection following cutting through the Contract Aircraft surfaces.

 

  (d) Discovery of faults revealed by such inspection which would prevent the
Contract Aircraft from materially conforming to the Delivery Condition, shall be
deemed to be a failure on the part of Customer to deliver a Contract Aircraft in
Delivery Condition and shall be subject to Clause 5.3 unless (i) Customer
requests that such faults be rectified as Extra Work and Supplier agrees to
perform such Extra Work, in each case in accordance with Clause 6.5 and
(ii) Customer agrees to pay for the delay caused by such faults as set out at
Clause 5.3(a);

 

5.6 Certificate of Delivery

Upon delivery to the Designated Site, duly authorised representatives of M&B,
Customer and Supplier shall complete, agree upon and sign a form of Certificate
of Delivery as set out in Schedule 5 which shall confirm that the Contract
Aircraft is in the Delivery Condition (subject to Clause 5.5(c)) and may be
inputted into the conversion program (“Delivery”).

 

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5.7 Outstanding Amounts on Delivery and Suspension of Work

 

  (a) Notwithstanding any provisions to the contrary contained in this
Agreement, neither M&B nor Supplier shall have any obligation to Customer to
commence or continue work on the Conversion if, any sum in excess of [*], is due
and outstanding for more than two Business Days, after a written notice to
Customer, pursuant to this Agreement on such Contract Aircraft or on any other
Contract Aircraft.

 

  (b) If the Scheduled Redelivery Date of a Contract Aircraft changes as a
result of a delay to performance of the Services as a result of a delay in
payment, such delay shall not exceed the number of days of work stoppage
pursuant to clause (a) above, and shall be treated as a Customer Variation in
accordance with Clause 6.4 under which Supplier will advise Customer of any
impact on the Scheduled Redelivery Date and the Conversion Price and the costs
(which shall not exceed [*] per day), if any, associated therewith (except that
Customer cannot withdraw the Variation unless agreed by Supplier).
Notwithstanding the provisions of Clause 6.4, Customer shall pay M&B and
Supplier for all costs associated with any such delay.

 

  (c) If, pursuant to the terms of this Agreement M&B and/or Supplier becomes
entitled to, and elects to, cease the performance of this Agreement Supplier
shall, at Customer’s cost and expense as set forth below, take all reasonable
measures to store, preserve and protect any Contract Aircraft which are located
on the Supplier Site or another Designated Site and have yet to be Redelivered.

 

  (d) In consideration of the measures in Clause 5.7(c) above being taken,
Customer shall reimburse to Supplier its reasonable costs incurred in so doing,
including the demobilisation costs incurred by Supplier, reimbursement of
Supplier’s overhead costs by way of Supplier’s Bay Day Rate and Aircraft Parking
Charge, and any costs of remobilising incurred by Supplier in resuming the
performance of this Agreement following the rectification of the event causing
the cessation of such performance. In the event of [*] consecutive days of any
such delay on any Contract Aircraft (beyond any applicable notice period), M&B
and Supplier shall be entitled to terminate this Agreement by notice in writing
to Customer, so long as Customer has not then paid any overdue amounts giving
rise to such delay. In the event of such termination Clause 19.4 shall apply.

 

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5.8 Delivery of Customer Furnished Items

 

  (a) In order to enable Supplier to perform the Services on a Contract
Aircraft, Customer undertakes, at Customer’s expense, to deliver to such
Contract Aircraft’s Designated Site all of the Customer Furnished Items in
respect of such Contract Aircraft in accordance with Schedule 3.

 

  (b) All Customer Furnished Items shall be:

 

  (i) serviceable in accordance with FAA standards and, if the applicable
Contract Aircraft is registered in a jurisdiction other than the United States
of America, the applicable Other Civil Aviation Authorities accompanied by
substantiating documentation; and,

 

  (ii) supplied in accordance with Supplier’s specifications, if applicable;

 

  (iii) in factory serviceable condition, complete and with all required
installation documentation.

 

  (c) In the event that Customer fails to deliver any of the Customer Furnished
Items in the condition required by Clause 5.8(b) and on the dates set out in
Schedule 3 or as may otherwise be agreed between Customer and Supplier in
advance in writing, such delay shall be treated by Supplier as a Customer
Variation in accordance with Clause 6.4 (except that Customer cannot withdraw
the Variation unless agreed by Supplier) under which Supplier will advise
Customer of any impact on the Scheduled Redelivery Date, the Conversion Price
and the cost, if any, associated therewith.

 

5.9 Title to Parts Removed

Components and materials due to be removed by Supplier from a Contract Aircraft
and not reinstalled or required to be reinstalled in such Contract Aircraft in
the course of the Conversion (“Excess Material”) shall be designated by Customer
as either Excess Material to be scrapped (“Scrap”) or Excess Material to be
returned to Customer (“Salvaged Materials”). Title to Scrap shall pass to
Supplier upon their designation as Scrap and such materials may be disposed of
by Supplier in Supplier’s sole discretion with no charge or credit to Customer,
provided that Customer shall cooperate with Supplier in any efforts to minimize
taxes or dues payable to any Governing Authority as a result of such disposal.
Title to Salvaged Materials will remain with Customer and Supplier shall be
obligated to store such Salvaged Material with reasonable care at a facility on
the Designated Site at no cost to Customer until no later than thirty (30) days
following Redelivery of the relevant Contract Aircraft. Salvaged Materials,
which shall not exceed twelve (12) parts total per Contract Aircraft, will be
packaged by Supplier for shipment to Customer, with “as removed” or
identification tags issued under Supplier’s repair station certification, but
without FAA 8130 tags.

 

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Such Salvaged Materials shall be shipped to Customer either on the Contract
Aircraft at its Redelivery or separately no later than thirty (30) days
following Redelivery of such Contract Aircraft, with such shipment to be
arranged by Customer and at Customer’s expense.

 

5.10 Conversion Slots

The Parties acknowledge that the Conversion Slots, as detailed in Schedule 1,
paragraph 2 (the “Conversion Slots”), have been reserved for the benefit of
Customer and Supplier has specifically relied on such reservation.

SECTION 6 CHANGES TO THE SERVICES

 

6.1 Except as provided in the next sentence of this Clause 6.1, a change to the
Services (including requests or proposals for Extra Work), Scheduled Redelivery
Date, and prices in respect of the Agreement shall be documented, agreed between
Customer, M&B and Supplier and approved by the completion by the Parties of an
Extra Work Form, in substantially the form at Schedule 10 in accordance with
Clause 6.5. A change to the Specification shall be documented and approved
through the use of the Variation Particulars Form substantially in the form at
Schedule 9 in accordance with Clause 6.2.

 

6.2 Variations to the Specification

The Parties acknowledge that the Specification may be varied (a “Variation”)
which may be:

 

  (a) proposed by Supplier and agreed by Customer in accordance with Clause 6.3
(“Supplier Variation(s)”); or,

 

  (b) proposed by Customer and agreed by Supplier in accordance with Clause 6.4
(“Customer Variation(s)”); and,

the Parties agree to follow the procedure set out in Clauses 6.3 and 6.4 below
in relation to any Supplier Variation and/or Customer Variation respectively,
prior to Redelivery.

 

6.3 Supplier Variations

 

  (a) Supplier may at any time submit written details to Customer
Representative, in the form set out at Schedule 9 (Variation Particulars Form),
of any Supplier Variation, signed by a Supplier Representative, and including
details of the proposed change to the Specification, the effect (if any) of
incorporating such Supplier Variation on the Scheduled Redelivery Date or
downtime in relation to the Conversion and the cost to Customer (if any) in
sufficient detail for the Supplier Variation to be fully evaluated by Customer,
and shall provide Customer with such further information in relation thereto as
Customer may reasonably request.

 

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  (b) Supplier will not introduce any Supplier Variation that will have an
adverse operational effect (including weight, range or payload performance) on
the Contract Aircraft unless:

 

  (i) the Supplier Variation is mandated by the Civil Aviation Authorities, by
the issue or proposed issue of an AD, for the purposes of complying with the STC
(a “Mandated Change”); or,

 

  (ii) such Supplier Variation is generated by material differences between the
configuration or structure of a Contract Aircraft and either the Specification
or the standard configuration of Aircraft which were not foreseeable by Supplier
(an “Aircraft Condition Cause”);

Supplier shall promptly notify Customer of any such Mandated Change or Aircraft
Condition Cause upon learning thereof.

 

  (c) All Supplier Variations, except for Mandated Changes, which are dealt with
at Clause 6.3(b)(i), shall be subject to the consent of Customer. Customer
Representative shall consider a Supplier Variation and shall notify to Supplier
(i) its consent to the incorporation of a Supplier Variation, to any impact on
the Scheduled Redelivery Date or downtime in relation to the Conversion and the
cost to Customer, if any (such consent not to be unreasonably delayed,
conditioned or withheld) by signing the relevant Variation Particulars Form or
(ii) its decision not to consent to a Supplier Variation, in each case within
three (3) Business Days of the date of the submission of the final details
requested by Customer of a Supplier Variation to Customer Representative.

 

  (d) The Parties agree that Customer may reasonably withhold consent to any
Supplier Variation which requires an amendment or revision to the STC, other
than a Mandated Change. Customer will not withhold its consent if any Supplier
Variation has no negative impact on performance (weight, range or payload
performance), cost and time schedule, cargo and personnel accommodation and
configuration, operating empty weight and appearance criteria.

 

  (e) If Customer does not consent to a Supplier Variation as provided in Clause
6.3(d), and Supplier does not withdraw its Supplier Variation, then Customer
shall be entitled to terminate this Agreement with respect to the Contract
Aircraft by giving written notice of termination to Supplier or, at Customer’s
option, Supplier shall complete the Conversion Services in accordance with the
agreement without such Supplier Variation. In the event of such termination,
Clause 19.4 shall apply.

 

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  (f) Delayed responses by Customer beyond three (3) Business Days shall be
treated as Excusable Delays in accordance with Clause 12.

 

  (g) The cost of the incorporation of a Supplier Variation in relation to the
Conversion of any Contract Aircraft shall be borne by Supplier, except for a
Supplier Variation based on an Aircraft Condition Cause, which shall be paid for
by Customer.

 

6.4 Customer Variations

 

  (a) Customer Representative may at any time submit written details of any
Customer Variation, in the form set out at Schedule 9 (Variation Particulars
Form) to Supplier for consideration.

 

  (b) Customer Variations shall be subject to the consent of Supplier. Supplier
shall only be entitled to withhold consent in circumstances where, in its
reasonable opinion, a Customer Variation would preclude the ability of Supplier
to add the subject Contract Aircraft to the STC or, where the total Customer
Variations would delay the Scheduled Redelivery Date by a total of more than
thirty (30) Business Days.

 

  (c) Any refusal by Supplier to consent to incorporation of a Customer
Variation and the reason for such refusal shall be notified to the Customer
Representative within ten (10) Business Days of receipt of the details of such
Customer Variation by Supplier.

 

  (d) Supplier, within five (5) Business Days of Supplier’s receipt of a
Variation Particulars Form from Customer, shall notify Customer Representative
of the date when it will submit the relevant Variation Particulars Form signed
by Supplier Representative with full details of:

 

  (i) the cost of a Customer Variation (the “Customer Variation Price”);

 

  (ii) whether a Customer Variation has or is likely to have, in Supplier’s
opinion, an adverse effect on the operation or performance of the Contract
Aircraft and the degree of such effect; and

 

  (iii) any impact on the Specification including the Scheduled Redelivery Date
or downtime;

 

  (e) Within five (5) Business Days of the receipt by Customer Representative of
a duly completed Variation Particulars Form, Customer may either withdraw the
proposal for the applicable Customer Variation or countersign such Variation
Particulars Form, agreeing to the Customer Variation Price and/or any impact on
the Scheduled Redelivery Date and downtime specified therein.

 

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  (f) M&B shall be entitled to issue invoices to Customer in respect of the
price of a Customer Variation, such sum shall be payable in full by Customer to
M&B in respect of the Contract Aircraft to which such Customer Variation refers.

 

  (g) If a Customer Variation affects the Scheduled Redelivery Date or downtime
or any other operational impact notified by Supplier to Customer under Clause
6.4(d) above, then Customer expressly agrees to such postponement of Redelivery
as specified in a Variation Particulars Form submitted by Customer and agrees
not to make a claim to M&B and/or Supplier in respect thereof.

 

  (h) If, following incorporation of a Customer Variation in the Conversion of a
Contract Aircraft, Supplier is unsuccessful in obtaining such further
supplemental type certificate approval from the Civil Aviation Authorities for
incorporation of such Customer Variation, always provided that Supplier shall
have employed its reasonable endeavours to obtain such approval (an “Unapproved
Customer Variation”), if there is a need for such Civil Aviation Authority
approval, Supplier shall remove such Customer Variation and return the Contract
Aircraft to a condition that meets the Specification prior to the incorporation
of such Customer Variation and Supplier shall retain the Customer Variation
Price it received in respect of such Customer Variation in consideration of its
incorporation of, and removal of, such Unapproved Customer Variation. In such
case, Customer shall accept Redelivery of such Contract Aircraft without such
Unapproved Customer Variation being installed.

 

6.5 Extra Work Request Procedure

 

  (a) Any proposal by Supplier or request by Customer for Extra Work shall be
submitted by completion of an Extra Work Form substantially in the form attached
at Schedule 10. The proposal shall include the information described in Clause
6.5(d).

 

  (b) For the avoidance of doubt, in accordance with Clause 6.1, where any
requested or proposed work, including Extra Work, would have as its effect a
change to the Specification, the applicable Party shall only submit a Variation
Particulars Form.

 

  (c) In the case of an Extra Work proposal by Supplier, the Customer
Representative shall use all reasonable endeavours to respond promptly, and in
any event within three (3) Business Days.

 

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  (d) Following receipt of an Extra Work Form from Customer, Supplier shall
notify Customer Representative in writing with full details of:

 

  (i) the price of the Extra Work (the “Extra Work Price”);

 

  (ii) impact on the Scheduled Redelivery Date; and

 

  (iii) whether the Extra Work has or is likely to have, in Supplier’s opinion,
an adverse effect on the operation or performance of the Contract Aircraft and
the degree of such effect,

within three (3) Business Days of Supplier’s receipt of an Extra Work Form.

 

  (e) Within two (2) Business Days of the receipt by Customer Representative of
notification under Clause 6.5(d), Customer may either withdraw the proposal for
the applicable Extra Work or countersign such notification, agreeing to the
Extra Work Price and/or any adverse impact on the operation or performance of
the Contract Aircraft.

 

  (f) Supplier, through M&B, shall be entitled to issue invoices to Customer in
respect of the Extra Work Price, such sum shall be payable in full in accordance
with Schedule 7 by Customer to Supplier, through M&B, in respect of the Contract
Aircraft to which such Extra Work Price refers.

 

6.6 Center of Gravity Envelope Improvements.

 

  (a) [*]

 

  (b) [*]

SECTION 7 FUNCTIONAL CHECK FLIGHTS, ACCEPTANCE AND REDELIVERY

 

7.1 Functional Check Flights and Pre-Acceptance Flights

 

  (a) Following the performance by Supplier of the Services, and Extra Work, if
any, upon a Contract Aircraft, Supplier:

 

  (i) Shall, with at least ten (10) days prior written notice to Customer,
perform one or more Functional Check flights, as it determines to be necessary,
of such Contract Aircraft (a “Functional Check Flight”); and

 

  (ii)

shall, as a follow-up to any such Functional Check Flight or any Pre-Acceptance
Flight (as that term is defined below) perform any subsequent Functional Check

 

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flights that may be required to verify the correctness of repair work
necessitated as a result of discrepancies or defects detected on any Functional
Check Flight or Pre-Acceptance Flight, as applicable (a “Verification Flight”);
provided, however, in the event such discrepancy or defect relates to a part of
a Contract Aircraft that was not affected by the Services performed by Supplier,
such Verification Flight shall be treated as a Pre-Acceptance Flight in
accordance with Clause 7.1(f)(ii). If any Verification Flight is scheduled to
take place within 72 hours of the original Functional Check Flight, Supplier
shall give Customer as much notice of such Verification Flight as practicable.
In all other circumstances, Supplier shall provide Customer with at least three
(3) days advance notice of each Verification Flight.

 

  (b) Customer, at its option, may perform one or more pre-acceptance flights of
a Contract Aircraft (each, a “Pre-Acceptance Flight”).

 

  (c) Supplier shall provide the flight crew to operate a Contract Aircraft
during each Functional Check Flight, Verification Flight, and Pre-Acceptance
Flight. Customer shall pay the cost of providing such flight crew for any
Pre-Acceptance Flight in accordance with Supplier’s price for flight crew
provision set out in Schedule 7.

 

  (d) A reasonable number of Customer’s personnel shall have the right to
participate in any Functional Check Flight or Verification Flight as observers,
it being agreed and understood that such participation by Customer’s personnel
shall be at the sole risk of Customer and such Customer personnel.

 

  (e) A reasonable number of Supplier’s personnel shall have the right to
participate in any Pre-Acceptance Flight as observers, it being agreed and
understood that such participation by Supplier’s personnel shall be at the sole
risk of Supplier and such Supplier personnel.

 

  (f) The following provisions shall apply in relation to Functional Check
Flights, Verification Flights and Pre-Acceptance Flights, respectively:

 

  (i) in respect of Functional Check Flights and Verification Flights:

 

  (A) All costs and expenses of Customer’s personnel participating in Functional
Check Flights and/or Verification Flights (inclusive of travel costs, salaries,
living expenses and insurance) shall be borne by Customer;

 

  (B) Supplier shall bear the cost of line maintenance, landing fees, air
navigation charges and all other costs and expenses for each such Functional
Check Flight and Verification Flight (other than the cost of fuel), but not a
Verification Flight treated as a Pre-Acceptance flight under Clause 7.1(a)(ii);

 

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  (C) Supplier shall bear the risk of loss of or damage to a Contract Aircraft
(including engines) during a Functional Check Flight and/or Verification Flight,
but not a Verification Flight treated as a Pre-Acceptance Flight under Clause
7.1(a)(ii), and Supplier shall provide and bear the cost of hull and liability
insurance for each Functional Check Flight in accordance with the requirements
of Clause 16.1 provided, however, that Supplier’s responsibility for loss of or
damage to a Contract Aircraft in respect of such Functional Check Flights and/or
Verification Flights shall be limited to the insurance cover which Supplier is
obliged to maintain in respect of such Contract Aircraft under this Agreement
(but with Supplier being responsible for paying to Customer an amount equal to
any deductible that may be applicable to any payment by insurers).

 

  (D) In all such Functional Check and Verification Flights cost of fuel shall
be borne by Customer.

 

  (ii) In respect of Pre-Acceptance Flights:

 

  (A) All costs and expenses of Supplier’s personnel participation in
Pre-Acceptance Flights (inclusive of travel costs, salaries, living expenses and
insurance) shall be borne by Supplier, other than with respect to Supplier
provided crew members at the request of Customer, where all such costs shall be
borne by Customer;

 

  (B) Customer shall bear the cost of fuel, line maintenance, landing fees, air
navigation charges and all other costs and expenses for each such Pre-Acceptance
Flight, including Verification Flights treated as Pre-Acceptance Flights under
Clause 7.1(a)(ii); and

 

  (C) Customer shall bear the risk of loss or damage to an Aircraft (including
engines) during each Pre-Acceptance Flight and Customer shall provide and bear
the cost of hull and liability insurance for each Pre-Acceptance Flight in
accordance with the requirements of Clause 16.1.

 

  (g)

Customer shall arrange for the carrying out of any Pre-Acceptance Flights which
Customer has requested for a Contract Aircraft within such thirty (30) day
notice period of Redelivery, detailed at sub-clause 7.2(c); provided, however,
that in no event shall a

 

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Pre-Acceptance Flight be performed before all Functional Check Flights and
Verification Flights have been conducted on such Contract Aircraft by Supplier;
and provided further that if Customer provides notice to Supplier that Customer
wishes Supplier to conduct a Pre-Acceptance Flight together with a Functional
Check Flight or Verification Flight (a “Combined Functional Check Flight”),
then:

 

  (i) such Combined Functional Check Flight shall be conducted by a Supplier
flight crew;

 

  (ii) Customer may have one of its pilots, at Customer’s cost and risk, in the
cockpit as an observer; and

 

  (iii) such Combined Functional Check Flight shall be treated as a Functional
Check Flight under Clause 7.1(f)(i).

 

  (h) Upon completion of a Functional Check Flight, Verification Flight or any
Pre-Acceptance Flight, if any, of a Contract Aircraft, Supplier shall provide
Customer with a completed report detailing relevant findings and, if
appropriate, recommendations (an “Acceptance Flight Report”).

 

7.2 Redelivery

 

  (a) Subject to any Variations to the Conversion, Supplier shall redeliver each
Contract Aircraft to Customer or its nominee at its Designated Site, together
with a Form of Certificate of Redelivery, substantially in the form appearing in
Schedule 6 and in the Redelivery Condition, and with the MSN of the relevant
Contract Aircraft having been added to the STC (“Redelivery”) on or before the
relevant Scheduled Redelivery Date.

 

  (b) Supplier shall keep Customer advised of any change to the Scheduled
Redelivery Date as a result of any Variation or an Excusable Delay.

 

  (c) Supplier shall provide Customer with at least thirty (30) days’ prior
written notice of the week in which, and seven (7) days prior notice of the day
on which Supplier intends to effect Redelivery of a Contract Aircraft.

 

  (d) Within the available Free Parking Period following Redelivery of a
Contract Aircraft, Customer undertakes at its expense, including, without
limitation, towing, ground services, insurance, and preservation fees, to remove
such Contract Aircraft from the Supplier Site or the other Designated Site, as
applicable.

 

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  (e) Where the Contract Aircraft is not removed from its Designated Site
following expiry of the Free Parking Period, Supplier may charge Customer its
standard parking charge, and out of pocket expenses such as insurance and
preservation, as notified to Customer from time to time, and other fees such as
towing, ground services, insurance and preservation, for each day the Contract
Aircraft remains at the Designated Site other than as may be agreed by Customer
and Supplier.

 

7.3 Extension of Scheduled Redelivery Date

A Contract Aircraft’s Scheduled Redelivery Date shall be extended as follows:

 

  (a) in the event Supplier performs Extra Work, by the time taken by Supplier
to perform such Extra Work as shown and approved on a completed Extra Work Form;

 

  (b) in the event Customer (i) delays in the approval (or rejection) of
Variations beyond the timescales specified in Clause 6.3(c) or 6.4(e) or
(ii) delays in the approval (or rejection) of Extra Work beyond the timescales
specified in Clause 6.5, by the number of days of delay resulting from the
effect of such delay by Customer;

 

  (c) in the event a Variation is approved by Customer and Supplier, by the
number of days, if any, provided in the applicable Variation Particulars Form;

 

  (d) in the event Customer delays Delivery and/or Customer delays delivery of
any of the Customer Furnished Items and/or Customer delays in the performance of
any of Customer’s other obligations under this Agreement unless otherwise agreed
in writing by the Parties, by the number of days of delay (after the applicable
grace period, if any) resulting from the effects of such delay by Customer;

 

  (e)

solely in respect to the first Contract Aircraft, in the event any of the
Customer Furnished Documentation for the first Contract Aircraft is delivered
later than needed by Supplier and such late delivery causes a delay in
performance of the Conversion Services, by the number of days of delay resulting
from the effects of such delay by Customer (provided, however, that Supplier
shall use reasonable commercial efforts to minimize such delay). Supplier shall
notify Customer by the 4th of August, 2010 of the status of the Customer
Furnished Documents for the first Contract Aircraft; if all of the documents
listed in Schedule 3 and in Annex 3 to the Specification with respect to the
first Firm Contract Aircraft are delivered to Supplier by August 4, 2010, then
the Schedule 1 dates for the first Firm Contract Aircraft will not be changed
pursuant to this clause (e).

 

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  (f) in the event Supplier pays Late Charges under Clause 7.4 below for
previous Contract Aircraft whose Redelivery Dates were nose-to-tail to the
Scheduled Delivery Date of the applicable Contract Aircraft, by the aggregate
number of days the previous Contract Aircraft were late; and

 

  (g) in the case of an Excusable Delay, by the period specified in Clause 12.6.

Notwithstanding any contrary provision of this Agreement, Supplier will use its
best commercial efforts to minimize any delay in the Redelivery of the Contract
Aircraft.

 

7.4 Remedies for Delayed Redelivery

 

  (a) If Supplier does not effect Redelivery of a Contract Aircraft on or before
its Scheduled Redelivery Date, as extended by the provisions of clause 7.3 and a
grace period of [*] days, Supplier shall pay Customer the sum of [*] per day in
respect of each day Supplier has not effected Redelivery of such Contract
Aircraft following the Scheduled Redelivery Date, as so extended, by way of
liquidated damages and not as a penalty or forfeiture (it being agreed by each
Party that Customer would suffer actual damages in the event of such in or about
at least such amount on a daily basis but that such damages in respect of lease
and lessee costs, possible re-marketing costs and so forth are impossible to
calculate with any acceptable reliability) (the “Late Charges”). It is
understood and agreed by the parties that any Late Charges are Customer’s sole
remedy for delay in Redelivery of any Contract Aircraft.

 

  (b) [*]

 

  (c) Notwithstanding Clause 7.4(a), the Scheduled Redelivery Date may be
further extended by the duration of any delay to the extent caused by Customer’s
act or omission in performing its obligations under this Agreement (the
“Extended Redelivery Date”).

 

  (d) If the Scheduled Redelivery Date is extended in accordance with Clause
7.4(c) above, the period for which Late Charges are applicable (the “Delay
Period”) shall only begin to run from such Extended Redelivery Date or if the
Delay Period has already begun to run it shall be suspended until the Extended
Redelivery Date and no Late Charges shall be payable in respect of such period
of suspension, provided always that Supplier shall have given Customer written
notice of such failure or omission and of the extension of the Redelivery Date
resulting therefrom as soon as practicable after it shall have occurred and
after extension of the Redelivery Date resulting therefrom may reasonably be
determined.

 

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7.5 Customer’s On-Site Representatives

 

  (a) While a Contract Aircraft is at its Designated Site, Customer shall be
entitled to station a reasonable number of representatives at such Designated
Site throughout the period during which Supplier is performing Services on such
Contract Aircraft. The following facilities and equipment for Customer’s on-site
representatives shall be provided at no cost to Customer:

 

  (i) an office which shall contain a standard sized desk, a facsimile machine,
and an outside telephone line (for the avoidance of doubt, Supplier shall be
responsible for all reasonable out of premises telephone, e-mail, fax and line
charges);

 

  (ii) one (1) desk computer with high speed internet capability;

 

  (iii) photocopying services at a copying machine located near such office;

 

  (iv) free lunch on working days at Supplier’s lunch facilities; and

 

  (v) reduced hotel and car rental prices in Supplier’s country or, if available
from the operator of a Designated Site, in its country.

SECTION 8 WEIGHT CHANGE

 

8.1 Promptly after the signing of this Agreement by all parties, and again
immediately prior to Delivery, Customer shall provide Supplier and M&B with a
copy of the most recent Weight and Balance Report (a “WB Report”) for each of
the Contract Aircraft.

 

8.2 In accordance with the Program Schedule, upon Delivery of a Contract
Aircraft to its Designated Site, Supplier shall weigh such Contract Aircraft in
accordance with the provisions of paragraph 08 [Weighing] of the Specification
and such weighing shall be cross-checked with the applicable WB Report (the
“Aircraft Weighing”).

 

8.3 In accordance with the Program Schedule, Supplier, based on the WB Report,
the Aircraft Weighing and the conversion weight change (plus or minus) that it
shall have calculated, shall determine the final operating empty weight (the
“Final OEW”) and provide it to Customer and M&B no later than upon Redelivery of
the applicable Contract Aircraft.

SECTION 9 INFORMATION AND DOCUMENTATION TO BE PROVIDED BY SUPPLIER

 

9.1 Upon Redelivery of a Contract Aircraft, Supplier shall provide Customer and
M&B with all of the following, to the extent applicable to such Contract
Aircraft:

 

  (a) a list of any deferred items;

 

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  (b) a list of any SBs, ADs and Civil Aviation Authority requirements
incorporated by Supplier into such Contract Aircraft;

 

  (c) engine run data and Functional Check Flight data and tests performed
hereunder;

 

  (d) a completed Form of Certificate of Redelivery as set out in Schedule 6;

 

  (e) a completed Functional Check Flight Procedure; and

 

  (f) other documents required by applicable regulations.

 

9.2 Upon Redelivery of a Contract Aircraft, Supplier shall return to Customer
all Customer-Furnished Documentation for such Aircraft which was received by
Supplier from Customer pursuant to Clause 5.1 above, as follows:

 

  (a) in preliminary supplement form at Redelivery; and

 

  (b) in final supplement form within ninety (90) days after Redelivery.

SECTION 10 SUPPLEMENTARY TYPE CERTIFICATION OF AIRCRAFT CONVERSION

 

10.1 Prior to Redelivery of each Contract Aircraft, Supplier shall have obtained
approval of the Civil Aviation Authorities of all changes made to the approved
STC data for Conversion of such Contract Aircraft under the STC (by approval of
the STC master document list revision) and of the aircraft flight manual
supplement and Weight and Balance supplement for the applicable Contract
Aircraft.

 

10.2 Anything contained in this Article to the contrary notwithstanding,
Customer, and not Supplier, shall be responsible for, and shall bear and pay all
of the costs related to certification by civil aviation authorities other than
the FAA, the EASA, the CAAI, [*]. Notwithstanding the above, Supplier shall
support Customer in obtaining certification of a Contract Aircraft by other
civil aviation authorities having jurisdiction over such Contract Aircraft.

SECTION 11 PRICES AND TERMS OF PAYMENT

 

11.1 Prices

 

  (a) In consideration for the performance by Supplier of the Conversion
Services hereunder, for each Aircraft upon which such Conversion Services are to
be performed Customer undertakes to pay to M&B the Conversion Price set out in,
and in the manner and at the times set out in Schedule 7.

 

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  (b) Customer also undertakes to pay M&B for such Extra Work hereunder as may
be agreed between the Parties on a Extra Work Form or a Variation Particulars
Form, where applicable, for each Aircraft upon which such Extra Work are to be
performed Customer undertakes to pay to M&B the at price and in the manner and
times set out in Schedule 7.

 

  (c) Customer also undertakes to pay M&B for all other amounts payable under
this Agreement.

 

11.2 All late payments shall bear interest on the amount outstanding from day to
day (compounded quarterly) at the rate of LIBOR plus three (3) percent per month
commencing on the due date.

 

11.3 Terms of Payment. The terms of payment are set out in Schedule 7.

 

11.4 All the prices and rates set out in this Agreement are expressed in United
States of America Dollars. Except as agreed in this Agreement to the contrary,
all such prices and rates are subject to adjustment in accordance with the Price
Adjustment Formula.

 

11.5 All sums payable to M&B or Supplier under this Agreement shall be effected
in freely transferable United States of America Dollars, net, free of any
withholding or income taxes and/or value added or any other taxes or deductions.
All such payments shall be effected by wire transfer of immediately available
funds to the following account:

[*]

or to such other account as M&B may designate in writing. The date of each such
payment shall be deemed to be the date when the payment is disbursed from
Customer’s bank in accordance with those instructions.

 

11.6 [*]

SECTION 12 TIME AND EXCUSABLE DELAY

 

12.1 M&B, Supplier and Customer shall each perform its obligations in a diligent
and timely manner and M&B or Supplier, as applicable, recognises that the
express timings set forth for the performance of the Services are a material
consideration for Customer entering into this Agreement. The Parties acknowledge
that such performance obligations may be subject to and affected by certain
circumstances, delays and impediments defined as Excusable Delays in Clause
12.2. immediately below and as generally provided in this Clause 12.

 

12.2 “Excusable Delay” shall mean, with respect to any Party, any delay in a
Party’s performance of its obligations under this Agreement if such delay is not
occasioned by such Party’s fault or negligence and further is caused, wholly or
in substantial part, by forces beyond the reasonable control of such Party (or
such Parties’ contractors, subcontractors or suppliers), including but not
limited to:

 

  (a) delay by another Party in providing any necessary parts, components,
Materials or technical data required for the performance of Extra Work, which
Supplier can verify were ordered in a timely fashion; or,

 

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  (b) delay in Customer approvals requested by Supplier as a result of Extra
Work and/or a Variation to the extent such delay is beyond the allowable period
set out in Clause 7.3(b); or

 

  (c) act of God, peril of sea, fire, explosion, flood, and other natural
catastrophe, or

 

  (d) governmental action or inaction (other than ordinary course governmental
activity), orders or regulations, or reasonably unforeseen delays in
governmental conduct (including, without limitation, those of the Civil Aviation
Authorities having jurisdiction, and efforts related to the registration of the
converted Contract Aircraft by a civil aviation authority other than the CAAI,
FAA, and EASA), provided such action or delay is not by reason of any act,
omission or default by Supplier (or any of its contractors, subcontractors or
suppliers), in the performance of its obligations to the Civil Aviation
Authorities having jurisdiction, as applicable, or

 

  (e) riots, insurrection, civil war or other hostilities occurring or
threatened in the jurisdiction where the Designated Site is located and which
present a danger of loss or damage to any Contract Aircraft or other property of
Customer delivered, or to be delivered, pursuant to this Agreement or death or
personal injury to any Customer employees or agents, or

 

  (f) strike, lockout or other labour disturbances (other than the workforce of
Supplier) or delay in transit of due and timely and properly ordered raw
materials, components, parts or assemblies, except that such delays in
materials, components, parts or assemblies from the Contract Aircraft OEM or
from Supplier in connection with the Services shall not qualify as an Excusable
Delay for Supplier and provided that such delay is not by reason of any act,
omission or default by Supplier in the performance of its obligations under any
agreement with any third party; provided, however, that delay due to any such
cause shall be excused only for so long as resumption of performance remains
beyond the reasonable control of such Party. Such Party shall use its best
efforts to minimise the effects of any such cause of delay, or

 

  (g) in the case of Supplier only, public holidays at the location of the
Designated Site.

For the avoidance of doubt, failure by an aircraft seller or lessee to deliver
an aircraft to Customer for any reason other than a reason which itself would
constitute an Excusable Delay, shall not be considered an Excusable Delay.

 

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12.3 Customer shall not be liable for, nor be in default under this Agreement by
reason of, an Excusable Delay attributable to it. Each such Excusable Delay on
the part of Customer shall be referred to herein as a “Customer Excusable
Delay”. It is expressly agreed, however, that no Customer Excusable Delay shall
be applicable in the case of Customer’s obligation to make the payments provided
in this Agreement, except to the extent that the same results from a disruption
or delay in the banking system beyond the reasonable control of Customer.

 

12.4 M&B shall not be liable for, nor be in default under this Agreement by
reason of, an Excusable Delay attributable to it. Each such Excusable Delay on
the part of M&B shall be referred to herein as a “ M&B Excusable Delay”.

 

12.5 Supplier shall not be liable for, nor be in default under this Agreement by
reason of, an Excusable Delay attributable to it. Each such Excusable Delay on
the part of Supplier shall be referred to herein as a “Supplier Excusable
Delay”.

 

12.6 An Excusable Delay shall extend the time for the applicable Party’s
performance for as many days beyond the date therefor as is required to obtain
removal of the causes of such Excusable Delay and the effects thereof. This
provision, however, shall not relieve the Party to which an Excusable Delay is
attributable from advising the other Parties of the occurrence of the causes
leading to the Excusable Delay or from using its reasonable efforts to avoid or
remove such cause(s) and the effects thereof and to continue its performance
with reasonable dispatch whenever such cause(s) and the effects thereof are
removed.

 

12.7 A Party may delay performance of an obligation under this Agreement because
of the occurrence of an event of Excusable Delay that was not reasonably
foreseeable when the Agreement was made if it:

 

  (a) could not have taken any reasonable steps to avoid or mitigate the
consequences of the event of Excusable Delay;

 

  (b) serves notice in writing on the other Parties giving full details of the
event of Excusable Delay within a reasonable period of becoming aware of it;

 

  (c) promptly provides any further information in relation to the delay that
the other Parties reasonably require; and

 

  (d) has not defaulted in performing the obligation before the event of
Excusable Delay occurs.

 

12.8 Except as provided in Clause 12.10 below, an event of Excusable Delay shall
not entitle any Party to terminate this Agreement and no Party shall be in
breach of this Agreement, or otherwise liable to any other Party, by reason of
any delay in performance, or non-performance of any of its obligations due to an
event of Excusable Delay.

 

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12.9 If the Party affected by the event of Excusable Delay fails to comply with
its obligations under Clauses 12.7(a) to 12.7(d) inclusive, then no relief for
Excusable Delay, including the provisions of Clause 12.8 above, shall be
available to it and the obligations of all Parties shall continue in force.

 

12.10 Termination for Excusable Delay

 

  (a) In the event that Delivery has not occurred within ten (10) days following
the relevant Contract Aircraft’s Scheduled Delivery Date as a consequence of an
Excusable Delay, the Parties shall endeavour to agree on a course of action. If
Delivery has not occurred within [*] of the relevant Contract Aircraft’s
Scheduled Delivery Date as a consequence of an Excusable Delay, then M&B and
Supplier shall have the right to reschedule such Contract Aircraft to another
Conversion Slot, or if such rescheduling is not acceptable to all Parties, then
Customer, in the case of a Supplier Excusable Delay, or M&B and Supplier, in the
case of a Customer Excusable Delay, acting in good faith, shall have the right
to terminate this Agreement forthwith in respect of such Contract Aircraft by
notice in writing to the other Party or Parties, whereupon no Party shall have
any liability to any other under this Agreement in respect of such Contract
Aircraft.

 

  (b) If, following Delivery, performance of the Services is delayed by an event
of Excusable Delay for a continuous period of [*], the Party whose performance
has not been prevented by the event of Excusable Delay (for the avoidance of
doubt, Customer in the event of an Supplier Excusable Delay and Supplier in the
event of a Customer Excusable Delay) shall have the right to terminate this
Agreement forthwith in respect of such Contract Aircraft by notice in writing to
the other Party; provided that such right of termination may be exercised only
while the event of Excusable Delay is continuing.

 

  (c) In the event of termination under Clause 12.10(b), Clause 19.4 shall
apply.

SECTION 13 WARRANTIES

The Supplier shall grant to Customer the Warranty in respect of the Services
performed hereunder as set out in Schedule 8.

SECTION 14 AFTER SALES SUPPORT SERVICES

 

14.1 Supplier shall provide to Customer or the applicable Aircraft Operator (and
the use of the term “Customer” in this section 14 shall then be deemed to mean
“Aircraft Operator”) the after sales support services in relation to the
Services in accordance with the terms of this Clause 14 (the “After Sales
Support Services”).

 

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14.2 The After Sales Support Services shall, except as otherwise agreed in this
Clause 14, [*].

 

14.3 Supplier shall provide the After Sales Support Services in respect of each
Contract Aircraft for the lesser of:

 

  (a) a period of [*] following Redelivery of such Contract Aircraft;

 

  (b) the period up to the date on which such Contract Aircraft has been out of
service continuously for at least [*];

provided, however, that in any event Supplier shall provide After Sale Support
Services in respect of the Contract Aircraft for so long as Supplier provides
similar after-sale support services for any third party with respect to Boeing
767-300 aircraft converted by Supplier from passenger to freighter
configuration.

(the “After-Sales Support Period”).

 

14.4 As part of the After Sales Support Services Supplier shall provide the
following services to Customer for the After Sales Support Period:

 

  (a) POC

No later than 30 days prior to Scheduled Redelivery Date, Supplier shall
designate a point of contact within the Bedek Aviation Group/Aircraft Division
or within such group’s successor as the case may be, who, after Redelivery of a
Contract Aircraft to Customer, shall be available during normal Supplier
business hours to respond to Customer’s requests for After Sales Support
Services (a “POC”);

 

  (b) AOG Desk

 

  (i) Supplier shall maintain, on a twenty-four (24) hour per day, seven
(7) days per week basis (excluding the Jewish Day of Atonement), an Aircraft on
Ground POC (the “AOG Desk”).

 

  (ii) In respect of a call by Customer to the AOG Desk, followed by a detailed
email, in regard to an Aircraft on the ground situation (an “AOG Situation”),
immediate contact by Supplier’s technical / logistic support personnel shall be
made with Customer.

 

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  (iii) In respect of calls in relation to After Sales Support Services other
than to the AOG Desk in respect of an AOG Situation, followed by an detailed
email, such contact by Supplier’s technical / logistic support personnel shall
be made within two (2) Business Days following Customer’s first call.

 

  (c) Spares and Repair Services

 

  (i) Supplier undertakes to supply Customer or the applicable Aircraft
Operator, on request, with spare parts for those items and equipment
manufactured and supplied by Supplier, and to perform for Customer maintenance
and repair services with respect to such items and equipment manufactured,
supplied and installed by Supplier.

 

  (ii) Supplier recommends that Customer maintain at the relevant facility of
the Aircraft Operator a store of spares of the type and quantity recommended by
Supplier. Such tasks, if not covered by the Warranty, shall be performed at
prices and on terms and conditions that shall be mutually agreed upon by
Supplier and Customer on a case-by-case basis, [*].

 

  (d) Airworthiness Directives and Service Bulletins

 

  (i) Any new Airworthiness Directives related to the STC, or within the
responsibility of Supplier under a Conversion Map for the Contract Aircraft,
imposed by the Civil Aviation Authorities, shall be reviewed by Supplier, it
being a condition to Supplier’s obligation to do so that Customer or the
applicable Aircraft Operator shall have promptly advised Supplier in writing of
each Civil Aviation Authority, and each change of the Civil Aviation Authority
regulating such Contract Aircraft. For the avoidance of doubt, any AD released
with respect to and as a result of the Supplier Conversion, as opposed to an AD
relating to general freighter conversions, shall be considered a design Defect
and handled in accordance with the Warranty contained in Schedule 8.

 

  (ii)

Supplier shall obtain the approval of the Civil Aviation Authorities, in any
case where special or alternate means of compliance (“AMOC”) will have to be
taken due to the work that has to be done by Supplier to satisfy the relevant
Airworthiness Directive. Such alternate means of compliance shall be detailed in
the AMOC approval documents. When the AMOC requires detailed instructions a
Service Bulletin shall be issued by Supplier and shall be included in the AMOC
approval. Each AMOC approval and Service Bulletin (if required) shall be
prepared so that

 

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the necessary variations can be accomplished within the compliance schedule of
the regulation to which such Service Bulletin relates, as will be decided by
such Civil Aviation Authorities.

 

  (iii) Any Service Bulletins related to a Contract Aircraft as originally
configured (being the configuration prior to Conversion) and issued by the OEM
in relation to a Contract Aircraft, shall be reviewed and a report shall be
prepared (an “SB Report”) by Supplier [*]. In the event elements of such
Contract Aircraft modified by the Conversion are affected by such Service
Bulletins, Supplier shall advise Customer and Aircraft Operator in writing of
the actions required or recommended and the estimated costs of such actions;
provided, however, that if the OEM provides engineering and a parts kit to
comply with any such Service Bulletin at no charge to Customer, and such Service
Bulletin is necessary, then Supplier will supply to Customer, [*], the parts and
engineering required to comply with such Service Bulletin where such elements
are concerned.

 

  (iv) Upon Redelivery of a Contract Aircraft, Supplier shall provide Customer
with an “STC Package” for such Contract Aircraft, consisting of:

 

  (A) a review of all relevant ADs, at the time of Redelivery, providing
information with respect to whether the AD provisions are applicable, applicable
with changes or non-applicable to such Contract Aircraft (an “AD Review”); and

 

  (B) a review of all relevant SBs, at the time of Redelivery, providing
information with respect to whether the SB provisions are applicable, applicable
with changes or non-applicable to such Contract Aircraft (an “SB Review”);

in each case, that were implemented during the performance of the Services.

 

  (v) All of the After-Sales Support Services provided in this Clause 14.4(d)
shall be provided [*] except (i) as referred to in Clause 14.4(d)(i) and
(ii) that, if Conversion Kit parts or any other form of Materials are required,
[*].

 

  (vi) In the event of any conflict between the provisions of this Clause 14 and
the provisions of the Warranty (Schedule 8), the provisions of the Warranty
shall control.

 

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confidential treatment and have been filed separately with the SEC.

 

  (e) Product Improvement

Accomplishment of any other improvement to the Conversion of Aircraft as derived
from the accumulative experience of Supplier in the Conversion of Aircraft, or
of Customer’s special needs, shall be implemented following issue of approved
(by the one or more applicable Civil Aviation Authorities) Service Bulletins
where found necessary by Supplier, or requested by Customer, unless covered by
the Warranty, at prices and on terms and conditions that shall be mutually
agreed upon by Supplier and Customer on a case-by-case basis.

 

  (f) Manual Updating

Supplier shall, upon request by Customer, update and provide a revision service,
in a web-based system in electronic media format, in relation to changes made by
the Supplier to any technical manuals and supplements in “ATA 100 Specification”
and other documentation related to the Contract Aircraft. Supplier shall charge
such amount as agreed in writing between Customer and Supplier.

 

  (g) Access to Technical Information

 

  (i) In the event Supplier cannot provide a part in a timely manner to support
maintenance or operation of a Contract Aircraft, then, at Customer’s request,
Supplier shall provide Customer or Customer’s agent for part design (“Customer
Part Designer”) all information (including drawings and manuals) necessary to
permit Customer or Customer Part Designer to manufacture against a signed
Approval to Manufacture (ATM) for the purposes of maintenance of a Contract
Aircraft any parts designed by Supplier and provided as part of the Services for
use on a Contract Aircraft.

 

  (ii) Supplier will provide all installation, assembly and detailed drawings
related to the Conversion, which may be required for maintenance of a Contract
Aircraft upon written request in support of (i) above.

 

  (h) Technical Support

 

  (i) Without prejudice to the Warranty, and upon contact of the POC by Customer
or the applicable Aircraft Operator, Supplier shall provide technical advice to
assist Customer or the applicable Aircraft Operator with the resolution of any
technical problem with the operation of a converted Contract Aircraft which,
after reasonable investigation, is not readily identifiable by Customer or such
Aircraft Operator but which Customer or such Aircraft Operator reasonably, and
in good faith, believes to be attributable to the design characteristics of one
or more components of the conversion of such Contract Aircraft, the Services or
the Extra Work.

 

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  (ii) Supplier shall, if requested by Customer or the applicable Aircraft
Operator, promptly investigate and analyse each such technical problem and shall
recommend such corrective action as may be feasible.

 

  (iii) Customer or the applicable Aircraft Operator shall furnish to Supplier
all data and information in Customer’s or the applicable Aircraft Operator’s
possession relevant to each such technical problem, in a format reasonably
acceptable to Supplier and Customer shall co-operate with Supplier in the
conduct of its investigations and such tests as may be required.

 

  (iv) Supplier shall promptly advise Customer or the applicable Aircraft
Operator in writing at the conclusion of its investigation of Supplier’s opinion
as to the cause or causes of such technical problem and Supplier’s
recommendation as to corrective action.

 

  (v) Supplier will also provide advice on maintenance, repair schemes and
modifications (including support and development for such schemes and
modifications) relevant to the Conversion of the Contract Aircraft.

 

  (vi) Supplier shall review and approve repairs to any structure or systems
which have been affected by the Services or any relevant Extra Work.

 

  (vii) If requested by Customer or the applicable Aircraft Operator, Supplier
shall provide each applicable repair approval on FAA Form 8110-3 or equivalent.
[*]

 

  (viii) Supplier shall, on request, review and approve any repair under any
repair scheme conditioned or recommended by the OEM for any structure or system
whether or not affected by the Services on the Contract Aircraft. All such
reviews and approvals shall be charged at the Extra Work Manhour rates in
Schedule 7.

 

  (i) Training Services

 

  (i)

During the period beginning ninety (90) days prior to the Scheduled Redelivery
Date of the first Contract Aircraft and ending one-hundred and eighty (180) days
after Redelivery of the final Contract Aircraft, Supplier will provide [*], at
the Supplier Site (or such site as is mutually agreed), a familiarisation course
relating to the Conversion in the form of a three (3) day B767-300 course for up
to [*] of

 

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Customer’s or the applicable Aircraft Operator’s (or a combination of the two)
suitably qualified personnel free of charge per Contract Aircraft. Such training
services shall include a training syllabus and training guides for all students
(content to be agreed) to familiarise all students with the converted Aircraft.

 

  (ii) Supplier’s training centre will provide other training services on a
re-charge basis in respect of the Aircraft, including airframe, engines,
electrical avionics systems, pilot and loadmaster courses. All courses will
encompass mechanical and electrical disciplines such that, subject to the
appropriate period of experience of the students, they will enable such students
to obtain type approval status.

 

14.5 Subsequent to the Expiration of the After-Sales Support Period

 

  (a) Subsequent to the expiration of the After-Sales Support Period, or sooner,
if Supplier shall not then be continuing to make available After-Sales Support
Services of Contract Aircraft in accordance with the provisions of this
Agreement, Supplier shall, upon the request of Customer, make available to
Customer the documentation in its possession and/or under its control applicable
to After-Sales Support Services (the “After-Sales Support Documentation”).

 

  (b) Customer may use the After-Sales Support Documentation solely for the
purpose of providing the After-Sales Support Services described in this
Agreement to its lessee or purchaser customers with respect to the Contract
Aircraft for so long as it owns or operates the Contract Aircraft.

SECTION 15 LIABILITIES AND INDEMNITIES

 

15.1 Supplier shall be directly liable to Customer and M&B in respect of:

 

  (a) any liability under the Warranty;

 

  (b) the liquidated damages detailed at Clauses 7.4(a);

 

  (c) the IP Indemnity at Clause 15.7;

 

  (d) any gross negligence or wilful misconduct of Supplier or any contractor,
subcontractor or supplier of Supplier;

 

  (e) death or personal injury suffered by the directors, employees, servants or
agents of Customer or M&B or any of them to the extent due to the negligence or
wilful misconduct of Supplier while such persons are present on the Supplier
Site for the purposes of this Agreement; and

 

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  (f) Supplier’s breach of its obligations under this Agreement,

except to the extent such losses result from the grossly negligent act or
omission of that which shall be applicable of Customer or M&B (respectively) or
any of their respective directors, employees, servants or agents or any of them.

 

15.2 The express liabilities of Supplier contained in Clause 15.1 shall be in
substitution for all other conditions, warranties, representations or
obligations whether express or implied, statutory or otherwise which might
impose any liability on M&B and/or Supplier, and their respective directors,
employees, servants or agents or any of them arising directly or indirectly out
of or in connection with the Services provided by Supplier hereunder or
otherwise howsoever under this Agreement whether or not due to the negligence,
sole or contributory, or other tortious act or omission or breach of contract or
statutory duty of M&B and/or Supplier, and their respective directors,
employees, servants or agents or any of them which are hereby expressly excluded
insofar as such exclusion is permissible in accordance with any applicable
provision of New York law in force from time to time, and the provisions of this
Agreement shall override any alleged or actual representation or collateral
agreement to the contrary. Accordingly, M&B and Supplier’s liabilities under
this Agreement shall be limited in accordance with the provisions of Clause 15.1
and this Clause15.2.

 

15.3 Customer shall indemnify and hold harmless M&B and Supplier their
shareholders and any of their respective directors, employees, servants and
agents and any of them from and against (and agrees that Customer shall make no
claims against M&B and/or Supplier in respect of) any liabilities, actions,
losses, claims, proceedings, judgments, damages, obligations, costs and expenses
of any nature whatsoever (including legal fees, costs and expenses) not
expressly listed in Clause 15.1 above made by whomsoever which may at any time
be incurred by or imposed on M&B and/or Supplier, its directors, employees,
servants or agents or any of them arising directly or indirectly out of or in
connection with the Services and Extra Work provided by Supplier hereunder or
otherwise under this Agreement, except to the extent such liabilities, actions,
losses, claims, proceedings, judgments, damages, obligations, costs or expenses
result from the gross negligence or wilful misconduct of that which shall be
applicable of M&B or Supplier or their respective directors, employees, servants
or agents. [*]

 

15.4 Customer retain the right following consultation with M&B or Supplier (as
applicable) to assume and control the defence of any claim against Supplier or
M&B for which Customer has agreed to indemnify M&B and Supplier under Clause
15.3, wherever Customer determines that it is in its best interest to control
such defence. In the event that Customer chooses in its absolute discretion to
assume or control the defence:

 

  (a) Customer shall diligently pursue such proceedings or negotiations;

 

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  (b) Customer shall at all times consult in good faith with M&B or Supplier, as
applicable, with respect to actions taken in relation thereto; and,

 

  (c) Customer agrees not to do or say anything which is materially detrimental
to the rights and interests of Supplier or M&B except where Customer is legally
compelled to do so by virtue of due process of law,

Supplier and M&B shall give Customer all reasonable assistance for the
preparation of such proceedings or negotiations (including prompt provision to
Customer of all data, records and assistance within Supplier’s and M&B’s control
which are material to any such claim and access to Supplier’s and M&B’s
personnel as reasonably relevant to such preparation) and Customer shall not,
except pursuant to a final award, pay or accept any such claim or compromise any
such proceedings, without the prior written consent of Supplier and/or M&B (as
applicable) (such consent shall not be unreasonably withheld, delayed or
conditioned). In the event Customer does not elect to assume and control the
defense of a claim against Supplier or M&B for which Customer has an
indemnification obligation hereunder, neither Supplier nor M&B (as applicable)
shall, except pursuant to a final award, pay or accept any such claim or
compromise any such proceedings without the prior written consent of Customer
(such consent shall not be unreasonably withheld, delayed or conditioned).

 

15.5 NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE CONTRARY, AND
EXCEPT FOR THE LIQUIDATED DAMAGES AND OTHER SUMS PAYABLE UNDER CLAUSE 7.4(A), IN
NO EVENT SHALL SUPPLIER, M&B, OR CUSTOMER (SUBJECT TO CUSTOMER’S OBLIGATIONS
UNDER CLAUSE 15.3 WITH RESPECT TO CLAIMS OF THIRD PARTIES AGAINST SUPPLIER
AND/OR M&B), BE LIABLE UNDER THIS AGREEMENT FOR LOSS OF USE, LOSS OF PROFIT
AND/OR FOR ANY INCIDENTAL AND/OR INDIRECT AND/OR CONSEQUENTIAL LOSS OR DAMAGE
ARISING FROM THIS AGREEMENT OR THE SERVICES PROVIDED PURSUANT HERETO. FOR THE
AVOIDANCE OF DOUBT, AND NOTWITHSTANDING ANY CONTRARY PROVISION OF THIS
AGREEMENT, IN NO EVENT SHALL CUSTOMER BE LIABLE TO SUPPLIER OR M&B UNDER THIS
AGREEMENT FOR LOSS OF USE, LOSS OF PROFIT AND/OR FOR ANY INCIDENTAL AND/OR
INDIRECT AND/OR CONSEQUENTIAL LOSS OR DAMAGE TO THE EXTENT THE SAME IS INCURRED
BY SUPPLIER OR M&B ITSELF OR THEMSELVES (AS OPPOSED TO THIRD PARTY CLAIMS –
REGARDLESS OF THE TYPE OF DAMAGE CLAIMED – AGAINST SUPPLIER OR M&B WHICH ARE NOT
SUBJECT TO THE LIMITATION OF LIABILITY OF THIS SECTION 15.5).

 

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15.6 (Intentionally omitted)

 

15.7 Customer acknowledges and agrees that the rates agreed between M&B and
Customer for the Services have been calculated (amongst other things) by
specific reference to the exclusions and limitations contained in this Clause
15.

 

15.8 If any claim is made against Customer that the Services, Extra Work or the
Conversion infringe, or that the use of the Conversion features of a Contract
Aircraft infringes, the patent, copyright, design trade mark or other industrial
or intellectual property rights of any other person, Supplier shall fully and
effectively indemnify and hold harmless Customer on demand against all loss,
damage, costs and expenses awarded against, incurred by or suffered by Customer
in connection with or arising out of or as a result of the claim (this “IP
Indemnity”) on the condition that:

 

  (a) The relevant Customer gives Supplier written notice within ten
(10) Business Days after Customer receives notice of a suit or action against
Customer alleging infringement or within ten (10) Business Days after Customer
receives a written claim of infringement, provided, however, that Customer’s
failure to provide notice to Supplier of a suit, action or written claim within
those period shall not limit Supplier’s indemnity obligations except as and to
the extent Supplier is actually and materially prejudiced by such failure.

 

  (b) Supplier is given full control of any proceedings or negotiations in
connection with any such claims and shall diligently pursue them unless all
Parties agree otherwise. Supplier shall at all times consult with Customer
before taking any action in relation thereto;

 

  (c) Customer shall give Supplier all reasonable assistance for the preparation
of such proceedings or negotiations and shall:

 

  (i) promptly provide to Supplier all data, records and assistance within
Customer’s control which are material to any such claim, suit or action; and

 

  (ii) (except as to amounts mandated by a judgment) obtain Supplier’s prior
approval to pay or assume any liabilities, damages, royalties or costs;

 

  (d) Except pursuant to a final award, neither Customer, M&B nor Supplier shall
pay or accept any such claim or compromise any such proceedings, without the
consent of the other(s) (such consent shall not be unreasonably withheld,
delayed or conditioned). In the event of a failure of Customer, Supplier, and
M&B to agree on the settlement of a claim, the matter shall be referred to the
determination of leading patent counsel instructed by the relevant Parties,
whose decision shall be final and binding;

 

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  (e) Customer shall do nothing which would or might vitiate any policy of
insurance or insurance cover which M&B and/or Supplier may have in relation to
such infringement; and

 

  (f) Supplier shall be entitled to the benefit of, and Customer shall
accordingly account to Supplier for, all damages and costs (if any) awarded in
favour of and paid to Customer which are payable or agreed with the consent of
Customer (which consent shall not be unreasonably withheld, delayed or
conditioned) to be paid by any other party in respect of any such claim of
infringement to the extent that it has been the subject of an indemnity from
Supplier under this Clause which has been satisfied by Supplier.

 

  (g) Supplier’s obligations and Customers’ remedies herein consist of, at
Supplier’s option, replacing an infringing item or otherwise curing any
infringement to the extent that such replacement or cure avoids any claim, loss,
damage, cost or expense otherwise indemnifiable by Supplier under this Clause
15.7.

 

  (h) This IP Indemnity shall not apply unless, from the time of design of the
allegedly infringing Contract Aircraft or Item until the resolution of the
infringement claim, the country and flag country of such Contract Aircraft:

 

  (i) are fully bound by the Chicago Convention on International Civil Aviation
of December 7, 1944, and are fully entitled to all benefits of Article 27
thereof; or

 

  (ii) are parties to the International Convention for the Protection of
Industrial Property (“Paris Convention”).

 

  (i) This IP Indemnity shall not apply to Customer Items or engines.

 

15.9 Liability of M&B and Supplier

 

  (a)

For the avoidance of doubt, wherever in this Agreement or any document or
certificate delivered in connection herewith M&B undertakes or assumes a
liability, obligation, duty or responsibility or delivers a certificate, whether
or not expressly stated to be a joint undertaking with Supplier, Supplier shall
be jointly and severally liable for such liability, obligation or responsibility
or certification of M&B, and Customer shall be free to look to Supplier to
satisfy or perform such liability, obligation, duty or responsibility or
certification without first making any demand upon, and irrespective of any
partial performance by, M&B. Upon any failure by M&B to perform its obligations
hereunder or

 

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any document or certificate delivered in connection herewith (or Supplier to
perform such obligations for M&B), Customer agrees that it shall only seek
recourse against Supplier and only upon failure by Customer to obtain a final,
non-appealable court order obtaining such relief against Supplier shall Customer
seek recourse against M&B.

 

  (b) The Supplier acknowledges and agrees it has undertaken and accepted the
imposition on it of direct duties and obligations owed, or that may become
owing, to Customer under and in accordance with the terms of this Agreement and
that this Agreement is intended to impose such direct duties and obligations on
Supplier.

 

  (c) Customer hereby irrevocably waives any claim against M&B and each of its
shareholders for failure by Supplier to perform any of its obligations hereunder
or under any document or certificate delivered in connection herewith.

 

  (d) The parties hereto acknowledge that the Supplier shall be solely
responsible for all product liability claims arising under or with respect to
this Agreement and that M&B and/or its shareholders shall in no event have any
liability for such product liability claims.

SECTION 16 INSURANCE OBLIGATIONS

 

16.1 Customer’s Insurance

Customer, at its expense, effective upon delivery of a Contract Aircraft to the
Designated Site and, until the earlier to occur of the next “D” check of such
Contract Aircraft and the third anniversary of Redelivery of such Contract
Aircraft, shall maintain, or cause to be maintained, in full force and effect,
in respect of such Contract Aircraft, the following insurances:

 

  (a)

Hull All-Risks Insurance (with a deductible not to exceed One Million US Dollars
(US$1,000,000) and Hull War and Allied Perils Insurance (with acceptable
deductible and standard exclusions) on the ground and in flight (excluding,
however, the Functional Check Flights), in the initial stated amount of not less
than Twenty Million US Dollars ($20,000,000) (being not less than the value of a
Contract Aircraft declared by Customer prior to commencement of Supplier’s
performance hereunder) (without any limitations and such insurance shall not be
subject to AVN 29). Such initial stated amount of insurance coverage of a
Contract Aircraft shall be increased progressively, from time to time, during
performance of the Services, if and as reasonably necessary to reflect the
addition to the value of such Contract Aircraft resulting from performance of
the Services so that the insured value of the Contract Aircraft is not less than
its then reasonable value including such addition to the value resulting from
the performance of such services. Each such increase in the amount of the
insurance coverage shall be made at the time/s and for the

 

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amount/s reasonably specified by M&B and/or Supplier from time to time by
written notice to Customer’s insurers. M&B and Supplier shall be loss payees
under the Hull Coverage for each Contract Aircraft to the extent of the amounts
owed by Customer hereunder with respect to that Contract Aircraft, provided that
M&B and Supplier shall no longer be loss payees under the Hull Coverage for a
Contract Aircraft once the Customer has paid all amounts due to Supplier and M&B
hereunder for Services and Extra Work with respect to that Contract Aircraft.
Third Party Aircraft, Legal Liability (including liability towards air crew,
technical staff accompanying the Contract Aircraft and passengers liability),
Public Liability, Bodily Injury, and Property Damage Insurance (collectively,
“Liability Insurance”) in respect of the Contract Aircraft, in an amount not
less than Five Hundred Million US Dollars (US$500,000,000) (with a deductible
not to exceed One Million US Dollars (US $1,000,000), naming M&B and Supplier as
additional insureds (with standard limitations and such Liability Insurance
shall not be subject to AVN 53).

 

  (b) Such insurance coverages shall contain:

 

  (i) a breach of warranty Clause;

 

  (ii) a Clause providing 30 days (7 days, in the case of war and related
perils) prior written notice to Supplier and M&B of cancellation or change; and

 

  (iii) an express waiver by the insurer thereof of its right of subrogation
against M&B and Supplier.

 

16.2 Supplier’s Insurance

Supplier shall, at all times relevant hereto and at its own expense, maintain,
and cause each Designated Site to maintain,

 

  (a) Hanger-Keeper’s insurance (with limits of Five Hundred Million US Dollars
(US $500,000,000) and a deductible not to exceed One Million US Dollars (US
$1,000,000)) insuring Supplier’s or such Designated Site’s, as applicable, legal
liability for a Contract Aircraft and any Customer Furnished Equipment while it
is on the ground at its Designated Site and providing for insurance coverage
insuring Supplier’s liabilities under clauses 15.1(b) and 15.1(c). The policies
of such insurance shall name Customer and M&B as an additional insured and shall
contain an express waiver by the insurer thereof of its right of subrogation
against Customer and M&B.

 

  (b) Products Liability Insurance with limits of One Hundred Fifty Million US
Dollars (US $150,000,000) and a deductible not to exceed One Million US Dollars
(US $1,000,000), naming Customer as an additional insured and containing an
express waiver by the insurer of its right of subrogation against Customer.

 

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16.3 State of Israel Coverage

While a Contract Aircraft is at the Supplier Site, there is, as of the date of
this Agreement, and there will be, to the best of Supplier’s knowledge, in
effect throughout the time that such Contract Aircraft will be at the Supplier
Site, a provision of the State of Israel Property Tax and Indemnification Law
regulations, which provides, in sum and substance, that the owner of an aircraft
(or the party responsible for bearing the costs of “war damages”), not
registered in Israel and not required to be so registered, and which is in
Israel (including its airspace) for the sole purpose of being repaired and/or
upgraded and which sustains “war damage” shall be entitled to receive 100% of
the value of such “war damage” to such aircraft, where for such purpose, “war
damage” means damage that is caused to physical property due to war activities
by enemy regular forces, or due to other hostile activities against Israel, or
due to war activities of the Israel Defense Forces.

 

16.4 Other Insurance Provisions and Requirements

 

  (a) The insurance coverages to be maintained by the Parties under Clauses 16.1
and 16.2 above (the “Insurance Policies”) shall be primary insurance, and any
insurance in the hands of another Party hereto which may cover the risks insured
under the Insurance Policies shall be excess insurance over any other valid and
collectable insurance available to the Party required to indemnify the other
Party hereunder, without right of participation.

 

  (b) All of the insurance policies of each Party shall be written through a
company or companies reasonably satisfactory to the other Party.

 

  (c) No later than two (2) Business Days prior to delivery of an Aircraft to
the Supplier Site, Supplier shall furnish to Customer, and Customer shall
furnish to Supplier and M&B, Certificates of Insurance certifying that such
policies of insurance, endorsed as required under this Agreement, are in full
force and effect and comply with the terms, conditions, and insurance provisions
identified above and that Customer and M&B shall each be given thirty (30) days
(seven (7) days with respect to war and allied perils) prior written notice by
the insurers in the event that either the insurers or Supplier, as the case may
be, desire to cancel or change such policies to materially reduce the coverage
thereof.

 

  (d) Each Party shall be responsible for all deductibles under its Insurance
Policies set out in Clauses 16.1 and 16.2 above, except as may otherwise be
expressly provided in this Agreement.

 

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  (e) It is envisaged that each of Supplier and Customer will produce draft
insurance certificates and brokers letters of undertaking in a timely manner to
the other for approval prior to Delivery (in the case of the Supplier) and
Redelivery (in the case of Customer).

SECTION 17 DISPUTE RESOLUTION

 

17.1 Any dispute, difference or claim arising out of or in connection with this
Agreement (including any dispute as to the existence, scope, validity or
termination of this Agreement or of this Clause) which cannot be amicably
settled in good-faith discussions between the Parties shall be finally resolved
by reference to the exclusive jurisdiction of the courts located in New York
City to which each of the Parties irrevocably agrees to submit, except as set
forth in Clauses 17.2 and 17.3 below.

 

17.2 Any dispute arising in connection with this Agreement as to:

 

  (a) whether or not a Contract Aircraft is ready for Redelivery; or

 

  (b) the validity of any warranty claim made under Schedule 8, paragraph 9.

shall be referred to an expert FAA Designated Engineering Representative (“FAA
DER”) chosen by the Parties or (in default of express agreement within fourteen
(14) days of nomination of any such FAA DER by the Parties) a person of similar
standing appointed at the request of any Party by application of Clause 17.1
above (an “Expert”):

 

  (i) the FAA DER or Expert, as applicable, shall be instructed to notify the
Parties of his determination of any matter referred to him within thirty
(30) Business Days of such referral;

 

  (ii) the Parties shall be entitled to make written submissions to the FAA DER
or Expert, as applicable, but, subject thereto, the FAA DER or Expert, as
applicable, shall have power to determine the procedure to be followed in
relation to his determination; and

 

  (iii) in making his determination, the FAA DER or Expert, as applicable, shall
act as an expert and not as an arbitrator, his decision as to any matter
referred to him for determination shall in the absence of manifest error be
final and binding in all respects on the Parties and shall not be subject to
question on any ground whatsoever.

 

17.3 Nothing in this Agreement shall operate to disentitle a Party or Parties
from pursuing an application for injunctive or declaratory relief before a court
of competent jurisdiction.

 

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17.4 Service of Legal Process

 

  (a) Customer hereby agrees that service to the individuals at the addresses
listed for it in Section 20.2, via commercial courier which retains a record of
delivery or via certified mail, return receipt requested, shall constitute
proper service upon Customer of an action or proceeding relating to this
Agreement brought under the terms of Section 21 below and such service shall be
deemed made upon receipt by Customer. Customer shall provide, within three
(3) business days of receipt of a summons and complaint or summons and notice, a
duly notarized acknowledgment of such service to M&B and Supplier’s attorneys of
record.

 

  (b) Supplier hereby irrevocably authorises and appoints Cohen Tauber
Spievack & Wagner, with offices at 420 Lexington Avenue, Suite 2400, New York,
New York, 10170 (or such other entity as they may from time to time by joint
written notice to Customer substitute) to accept service of all legal process
arising out of or connected with this Agreement and service on such agent (or
such substitute) shall be deemed to be service on Supplier.

 

  (c) M&B hereby irrevocably authorises and appoints Cohen Tauber Spievack &
Wagner, with offices at 420 Lexington Avenue, Suite 2400, New York, New York,
10170 (or such other entity as they may from time to time by joint written
notice to Customer substitute) to accept service of all legal process arising
out of or connected with this Agreement and service on such agent (or such
substitute) shall be deemed to be service on M&B.

SECTION 18 CONFIDENTIAL INFORMATION

 

18.1 Each Party shall keep and procure to be kept secret and confidential all
Confidential Information belonging to the other Parties and disclosed or
obtained as a result of the relationship of the Parties under this Agreement
and, subject to Clause 18.2, shall not use nor disclose any Confidential
Information without the written consent of the other Parties. Each Party shall
be responsible to the other(s) in respect of any disclosure or use of such
Confidential Information by a person to whom disclosure is made by it.

 

18.2 Clause 18.1 above shall not preclude any Party disclosing information:

 

  (a) in accordance with any legal requirement so to do;

 

  (b) to its respective professional advisers and auditors;

 

  (c)

to its respective lenders and investors and prospective lenders and investors,
provided such persons or entities sign a non-disclosure agreement with the
disclosing party hereunder on

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

 

terms similar to the confidentiality terms of this Agreement or are otherwise
bound by a confidentiality agreement with Customer which prohibits the
disclosure of such confidential information or its use for any purpose other
than the evaluation of a financing or investment and M&B and Supplier are third
party beneficiaries of such agreement;

 

  (d) for the purpose of exercising its rights or performing its obligations
under this Agreement;

 

  (e) which is in the public domain other than in breach of this Agreement or
any other confidentiality agreement;

 

  (f) to any taxation authority;

 

  (g) which it becomes lawfully in possession of and owed in respect of it no
pre-existing duty of confidentiality to the providing Party; or

 

  (h) which the recipient Party can prove by written evidence was already known
to it before its receipt from the providing Party;

provided that, in the case of Clause 18.2(b), such disclosures shall be made
under undertakings of confidentiality equivalent to those contained in this
Agreement.

The provisions of this Clause 18 shall survive any termination of this
Agreement.

SECTION 19 TERMINATION

 

19.1 Termination by M&B

 

  (a) In the event that Customer fails to make any payment within two
(2) Business Days following notice of non-payment, M&B shall be entitled to
terminate this Agreement as to Customer and, without prejudicing any other right
or remedy it may have, Clause 5.3 shall apply.

 

  (b) M&B shall be entitled to terminate this Agreement as to Customer forthwith
by written notice to Customer, as appropriate, if:

 

  (i) an Encumbrancer takes possession of a material part or a receiver is
appointed over any of the property or assets of Customer;

 

  (ii) Customer makes any voluntary arrangement with its creditors or becomes
subject to an administration order;

 

  (iii) Customer goes into liquidation; and/or

 

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confidential treatment and have been filed separately with the SEC.

 

  (iv) any other analogous events to Clauses 19.1(b)(i) to (iii) occur in any
jurisdiction.

 

  (c) In the event of termination under Clause 19.1(b), Clause 19.4 shall apply.

 

19.2 Termination by M&B and/or Supplier

 

  (a) M&B and/or Supplier shall be entitled to terminate this Agreement in
respect of a particular Contract Aircraft, but not this Agreement as a whole, in
accordance with Clauses 5.7(d), 12.10(a), and 12.10(b) and

 

  (b) M&B and/or Supplier shall be entitled to terminate this Agreement in
respect of a particular Contract Aircraft, but not this Agreement as a whole, if
Supplier, in good faith and using best efforts, determines within thirty
(30) days of receipt of all the Customer Furnished Documentation for a Contract
Aircraft that it is unable to Convert such Contract Aircraft because of an
Aircraft Condition Cause (per section 6.3 (b) (ii)). Supplier shall advise
Customer of such Aircraft Condition Cause promptly after making such
determination.

 

19.3 Early Termination by Customer

 

  (a) In addition to any other right of termination provided herein, Customer
shall have the right to terminate this Agreement with respect to one or more
Contract Aircraft by delivering written notice of termination to Supplier at any
time prior to such Contract Aircraft’s Scheduled Delivery Date upon payment to
M&B of the applicable amount listed below:

[*]

 

  (b) The Parties acknowledge and agree that any amount payable pursuant to
Clause 19.3 shall not be deemed to be a penalty but shall be deemed liquidated
damages to account for losses incurred by Supplier and M&B in the event of
termination during the periods described above, which losses are not capable of
being measured at this time.

 

  (c) Upon termination pursuant to this Clause 19.3 in respect of any Contract
Aircraft, M&B shall refund all payments, if any, made by Customer in respect of
such Contract Aircraft. Upon payment by Customer of the applicable amount
pursuant to this Clause 19.3 for any Contract Aircraft (or after offsetting or
recoupment as provided in the preceding sentence), Customer shall have no
further obligation to M&B and Supplier pursuant to this Agreement in respect of
such Contract Aircraft.

 

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19.4 Effect of Termination Following Delivery

Upon termination of this Agreement, in accordance with Clauses 6.3(e), and
19.1(b), in respect of one or all Contract Aircraft which is located at a
Designated Site:

 

  (a) Customer shall pay to M&B the agreed-upon prices for all Services (or
partial Services) performed by Supplier in respect of the affected Contract
Aircraft plus, at Customer’s option, cost and expense:

 

  (i) the cost of restoring such Contract Aircraft to a condition permitting a
ferry flight to a site designated by Customer; or,

 

  (ii) the cost of restoring such Contract Aircraft to a condition suitable to
Customer and acceptable to Supplier; and,

 

  (b) M&B and/or Supplier shall:

 

  (i) refund any and all amounts paid by Customer in respect of such Contract
Aircraft as of the date of termination in excess of such amounts to be paid to
M&B; and,

 

  (ii) Supplier shall redeliver to Customer, or permit Customer to obtain, all
unused Customer Furnished Items with respect to such Contract Aircraft at
Customer’s expense, and

 

  (c) except as provided in this Clause 19.4, no Party shall have any further
liability to any other Party under this Agreement or otherwise with respect to
such Contract Aircraft.

 

19.5 Any termination pursuant to this Agreement in respect of a particular
Contract Aircraft shall not relieve any Party from obligations or liabilities
incurred under this Agreement before the date of effectiveness of such
termination in respect of such Contract Aircraft nor shall any such termination
prejudice the rights or remedies of the Parties hereto or their obligations
arising out of such termination to the extent arising at law or pursuant to any
provision of this Agreement.

SECTION 20 MISCELLANEOUS

 

20.1 Party Representatives

 

  (a) Customer, M&B and Supplier shall provide and nominate, in a timely manner,
and at their respective expenses, the Customer Representative, M&B
Representative and Supplier Representative, respectively, throughout the period
of Conversion of the Contract Aircraft.

 

  (b) Customer Representative and M&B Representative shall liaise when required
directly with the Supplier Representative and they shall together be the prime
means of communication among the Parties in respect of all Services carried out
by Supplier.

 

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  (c) Customer Representative and M&B Representative shall at all times comply
with the health, safety and security requirements of Supplier or, in the case of
a different Designated Site, the operator thereof, and shall generally conduct
themselves in accordance with the reasonable requirements of Supplier, or such
operator, in whatever part of the Supplier Site, or other Designated Site, as
agreed, they may be at the time.

 

20.2 Notices

 

  (a) Any notice:

 

  (i) which is given under this Agreement shall be: in writing and delivered by
hand or sent by commercial courier or by facsimile; respectively addressed as
follows:

 

  (A) If to Customer, to:

Cargo Aircraft Management, Inc.

7100 TPC Drive, Suite 100,

Orlando, FL 32822, USA

Attention: General Counsel

Fax No: 407-517-0302

Email: legal@cargoleasing.com

 

  (B) If to M&B, to:

M&B CONVERSIONS LIMITED

29/31 Glasthule Road,

Glasthule, Co. Dublin, Ireland

Attention: Managing Director

Facsimile No.: +353 1 230 3013

Email: jreinherz@mbconversions.com

with a copy to:

ISRAEL AEROSPACE INDUSTRIES LTD.

Bedek Aviation Group

Aircraft Division

Ben Gurion International Airport

70100 Israel

Attention: Director of Contracts and Customer Support

Facsimile No.: 972-3-935-8953

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
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  (C) If to Supplier, to:

ISRAEL AEROSPACE INDUSTRIES LTD.

Bedek Aviation Group

Aircraft Division

Ben Gurion International Airport

70100 Israel

Attention: Director of Contracts and Customer Support

Facsimile No.: 972-3-935-5495

with a copy to:

Director of Finance, Aircraft Division

Facsimile No.: + 972-3-935-7471

Legal Department

Facsimile No.: +972-3-935-8987

with a copy to:

M&B at the address above

or to any other address which the relevant Party has notified in writing, with
no less than five (5) Business Days’ notice, as being its address for service;
and

 

  (ii) shall be deemed to be served on the day when delivered.

 

  (b) If the deemed day of any notice is outside business hours, as defined in
the definition of the “Business Day”, in the recipient’s location then such
notice shall be deemed to be served on the next Business Day in the recipient’s
location.

 

  (c) All times in this Clause 20.2 are those of the location where the notice
is received.

 

  (d) To prove service a Party shall only need to show that the notice was
properly addressed and actually delivered (which, in the case of a facsimile,
may be by facsimile transmission confirmation).

 

  (e) A notice may not be served by e-mail.

 

20.3 Taxes

 

  (a)

The Parties agree that Supplier shall be solely responsible for the payment of
any and all taxes and other governmental assessments of any nature due or
asserted in Israel and in any national or local jurisdiction of any Designated
Site with respect to or in any way arising out

 

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of or resulting from this Agreement, the parties’ respective performances
hereunder or the payment of sums hereunder or with respect hereto. In addition,
and without limiting the foregoing, Supplier shall bear, or shall require its
contractors, subcontractors and suppliers to bear, any and all taxes or
governmental assessments charged by any national or local jurisdiction of any
country where any such contractor, subcontractor or supplier may be located and
related to or arising out of the provision of any parts or services with respect
to this Agreement and the services contemplated hereby. Supplier shall indemnify
M&B and Customer for any payment by M&B or Customer in connection with the
enforcement of any and all such taxes and governmental assessments (including
penalties or interest payable in connection therewith).

 

  (b) The Parties agree that M&B shall be solely responsible for the payment of
any and all taxes and other governmental assessments of any nature due or
asserted in Ireland with respect to or in any way arising out of or resulting
from this Agreement, the Parties’ respective performances hereunder or the
payment of sums hereunder or with respect hereto. M&B shall indemnify Supplier
and Customer for any payment by Supplier or Customer in connection with the
enforcement of any and all such taxes and governmental assessments (including
penalties or interest payable in connection therewith).

 

  (c) The Parties agree that Customer shall be solely responsible for the
payment of any and all taxes and other governmental assessments of any nature
due or asserted in the United States with respect to or in any way arising out
of or resulting from this Agreement, the Parties’ respective performances
hereunder or the payment of sums hereunder or with respect hereto. Customer
shall indemnify M&B and Supplier for any payment by M&B or Supplier in
connection with the enforcement of any and all such taxes and governmental
assessments (including penalties or interest payable in connection therewith).

 

  (d) Notwithstanding any contrary provision of this Agreement, each Party shall
be solely responsible for, and shall not be entitled to any indemnification
hereunder for, any and all taxes and other governmental assessments of any
nature imposed upon or measured by such Party’s income.

 

20.4 Future Regulatory Change

If any law or governmental regulation or change in the interpretation thereof by
a governmental agency of the United States Government or other applicable
governmental agency, including ADs issued by the FAA or other appropriate Civil
Aviation Authority, which is promulgated on a date subsequent to the date of
this Agreement, requires any change, addition or modification in a Contract
Aircraft or in the STC Services, the Services or Conversion work as to any
Contract

 

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Aircraft, or in Customer Furnished Equipment in order for Supplier to either
complete the STC Services or, as to any Contract Aircraft, the Services or
comply with any of its obligations hereunder, such change, addition or
modification to such Contract Aircraft, or Customer Furnished Equipment or in
the STC Services, Services, Conversion work as to any Contract Aircraft shall be
made at Customer’s expense, and the Parties will execute an amendment to this
Agreement reflecting such change. If Redelivery of an Aircraft to Customer will
be delayed by reason of any such change in law, the Scheduled Completion Date of
such Contract Aircraft shall be appropriately extended as mutually agreed in
writing by the Parties.

 

20.5 [*]

 

20.6 M&B Approval

M&B may delegate all or part of its obligations in respect of the approval of
any work or action undertaken or performed under the terms of this Agreement,
from time to time to Supplier and/or any such other person(s) as M&B may select.
If M&B selects person(s) other than Supplier, M&B shall upon reasonable notice
inform Customer and Supplier in writing of the identity and authorised
signatory(ies) of such person(s).

 

20.7 Assignment and Transfer

 

  (a) This Agreement is personal to Customer, M&B and Supplier and, shall not be
assigned or transferred, in whole or in part, by any Party without the other
Parties’ prior written consent;

 

  (b) Any attempted assignment of rights or transfer of rights and/or
obligations without such prior written consents shall be null and void.

 

  (c) This clause shall not prevent Supplier from subcontracting appropriate
parts of the Services and Extra Work in accordance with normal Supplier
practices and procedures.

 

  (d) Notwithstanding Clauses 20.7(a) and 20.7(b), Customer may, without the
consent of M&B or Supplier:

 

  (i) assign all of Customer’s rights and obligations under this Agreement to
(A) any successor to all or substantially all of Customer’s assets, or (B) any
person who controls Customer, any person controlled by Customer, or any person
under common control with Customer (with “control” for such purpose meaning the
power to vote more than 50% of the equity interests of the relevant entity);

 

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  (ii) assign all of Customer’s rights and obligations under this Agreement with
respect to any particular Contract Aircraft to the owner or to a subsequent
purchaser of that Contract Aircraft; or

 

  (iii) assign to any extent to the lessee or Aircraft Operator any or all of
Customer’s rights hereunder with respect to that Contract Aircraft (including
without limitation any warranty rights and any rights to After Sales Support
Services), or allow such lessee or Aircraft Operator to exercise those rights on
Customer’s behalf, for the term during which that Contract Aircraft is leased to
or operated by that lessee or Aircraft Operator,

provided that:

 

  (i) Customer provides M&B and Supplier with at least 14 days prior written
notice of the proposed assignment and transfer, naming the proposed assignee and
describing its business;

 

  (ii) the assignee agrees in writing to be bound by, and to honor, all of the
terms of this Agreement by executing a deed of novation, or other similar
document, the form of which shall be reasonably acceptable to M&B and Supplier
but which shall not increase the obligations or decrease the rights of Customer
(including such assignee) under this Agreement;

 

  (iii) the credit standing of such assignee is acceptable to M&B, in its sole
discretion;

 

  (iv) the assignee is not a person or entity operating or located in (or
controlled by any person or entity that are located in ) a country with which
Israel does not have diplomatic relations;

 

  (v) the assignee is not a person or entity that has been in breach under any
contract with Supplier; and

 

  (vi) such assignment, or the performance of this Agreement after such proposed
assignment, is not contrary to applicable law.

 

  (e) In addition to and notwithstanding the above, (i) Customer may assign this
Agreement in whole or in respect to any one or more of the Aircraft to an
affiliated company which owns (beneficially or by way of legal title) or
operates such Contract Aircraft (the “Owner/Operator”), (ii) Owner/Operator may
assign this Agreement as collateral for the financing of the Conversion to a
financing party, and/or (iii) Customer may assign this Agreement as collateral
for the financing of the Conversion, so long as Customer provides a guarantee of
all obligations of Owner/Operator under this Agreement or otherwise.

 

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20.8 Non-Waiver

The failure of a Party to enforce at any time any of the provisions of this
Agreement, or to require at any time the performance by any other Party of any
of the provisions hereof, shall in no way be construed to be a waiver of such
provisions, or in any way affect the validity of this Agreement or any part
thereof, or the right of such Party to enforce each and every such provision at
some later date.

 

20.9 Survival

The obligations contained in Clauses 11 (Prices), 13 (Warranties), 14 (After
Sales Support Services), 15 (Liabilities and Indemnities), 16 (Insurance
Obligations), 18 (Confidential Information), 20 (Miscellaneous) and 21
(Governing Law) shall survive the expiration or termination of this Agreement
and remain in full force and effect.

 

20.10 Captions

The caption headings of the Clauses appearing in this Agreement are for
convenience of reference only and shall not be construed in any way to limit or
extend the language of the provisions to which they refer.

 

20.11 Preamble and Schedules

The Preamble to this Agreement and the Schedules and Appendices attached hereto
form an integral part hereof.

 

20.12 Entire Agreement

 

  (d) This Agreement constitutes the entire agreement, and supersedes all
previous communications, representations or agreements, either oral or written,
heretofore made between the Parties relating to the subject matter of this
Agreement. This Agreement may not be varied other than in writing duly signed by
an authorised representative of each Party.

 

  (e) Each Party acknowledges that it has not relied upon or been induced to
enter into this Agreement by a representation other than those expressly set out
in this Agreement.

 

20.13 Representations of M&B

M&B hereby represents and warrants to Customer and Supplier that:

 

  (d) M&B is a duly organised and validly existing private company limited by
shares under the laws of Ireland;

 

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  (e) M&B has full power, authority and legal right to execute, deliver and
perform this Agreement;

 

  (f) The execution and delivery of this Agreement by M&B and the performance by
M&B of its obligations under this Agreement:

 

  (i) do not require the approval or consent of any Person; and,

 

  (ii) will not conflict with, or constitute a violation of:

 

  (A) any of the terms or provisions of the constituent documents of M&B;

 

  (B) any of the terms or provisions of any material agreement to which M&B is a
party or which purports to be binding on it or its property; or,

 

  (C) any applicable law, rule or regulation or any order, judgment or decree of
any Governmental Authority; and,

 

  (g) This Agreement has been duly authorised, executed and delivered by M&B and
constitutes the valid and legally binding obligation of M&B, enforceable against
M&B in accordance with its terms under the laws of Ireland and under New York
law, subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors’ rights generally and subject to general
principals of equity, regardless of whether considered in a proceeding in equity
or at law.

 

20.14 Representations of Supplier

Supplier hereby represents and warrants to Customer and M&B that:

 

  (d) Supplier is a corporation, duly organised and validly existing under the
laws of the State of Israel;

 

  (e) Supplier has full power, authority and legal right to execute, deliver and
perform this Agreement;

 

  (f) The execution and delivery of this Agreement by Supplier and the
performance by Supplier of its obligations under this Agreement:

 

  (i) do not require the approval or consent of any Person;

 

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  (ii) will not conflict with, or constitute a violation of:

 

  (A) any of the terms or provisions of the constituent documents of Supplier;

 

  (B) any of the terms or provisions of any material agreement to which Supplier
is a party or which purports to be binding on it or its property; or,

 

  (C) any applicable law, rule or regulation or any order, judgment or decree of
any Governmental Authority;

 

  (g) This Agreement has been duly authorised, executed and delivered by
Supplier and constitutes the valid and legally binding obligation of Supplier,
enforceable against Supplier in accordance with its terms under the laws of the
State of Israel and under New York law, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’ rights
generally and subject to general principals of equity, regardless of whether
considered in a proceeding in equity or at law;

 

  (h) Supplier is an FAA certified repair station, holding Certificate No.
MK1Y325K; and

 

  (i) The operators of all Designated Sites, shall be FAA certified repair
stations holding current certification certificates.

 

20.15 Representations of Customer

Customer hereby represents and warrants to M&B and Supplier that:

 

  (d) Customer is a corporation duly organised, validly existing and in good
standing under the laws of Florida;

 

  (e) Customer has full corporate power, authority and legal right to execute,
deliver and perform this Agreement;

 

  (f) The execution and delivery of this Agreement by Customer and the
performance by Customer of its obligations under this Agreement:

 

  (i) do not require the approval or consent of any Person;

 

  (ii) will not conflict with, or constitute a violation of:

 

  (A) any of the terms or provisions of the constituent documents of Customer;

 

  (B) any of the terms or provisions of any material agreement to which Customer
is a party or which purports to be binding on it or its property; or,

 

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  (C) any applicable law, rule or regulation or any order, judgment or decree of
any Governmental Authority;

 

  (g) This Agreement has been duly authorised, executed and delivered by
Customer and constitutes the valid and legally binding obligation of Customer,
enforceable against Customer in accordance with its terms under the laws of
Florida and New York law subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors’ rights generally
and subject to general principals of equity, regardless of whether considered in
a proceeding in equity or at law; and

 

  (e) Customer irrevocably and unconditionally waives any immunity to which it
or its property may at any time be entitled, whether characterized as sovereign
immunity or otherwise, from any claim or action in connection with this
Agreement as may be brought in any jurisdiction, including immunity from service
of process, immunity from jurisdiction of any court or tribunal, and immunity of
any of its property from attachment prior to judgment or from execution of a
judgment.

 

20.16 Counterparts

This Agreement maybe executed in any number of separate counterparts by the
Parties, and each counterpart shall, when executed and delivered, be deemed to
be an original document, but all counterparts shall together constitute one and
the same document.

 

20.17 Third Party Benefit

No third party is intended to benefit from, nor may any third party seek to
enforce, any of the terms and provisions of this Agreement, except that, upon
Customer’s written consent Supplier will honor Warranty claims under Schedule 8
submitted by a Customer or an Aircraft Operator for a Contract Aircraft on which
Supplier has completed Services.

 

20.18 Publicity

Except as required by law or by any regulatory authority, no Party shall make
any public statement of any nature (including but not limited to press releases,
circulars and public announcements) which concerns this Agreement or any of the
matters referred to in it without the consent of the other Party.

 

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SECTION 21 GOVERNING LAW

The validity, construction and performance of this Agreement shall be governed
by New York Law.

[Signatures Appear on Following Page]

 

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IN WITNESS WHEREOF, the Parties have signed this Agreement on the date set forth
above.

CUSTOMER

 

By:  

/s/ Joseph C. Hete

    By:  

/s/ George A. Golder

Print Name:  

Joseph C. Hete

    Print Name:  

George A. Golder

Title:  

CEO

    Title:  

Secretary

M&B CONVERSIONS LIMITED       By:  

/s/ Joseph Reinherz

      Print Name:  

Joseph Reinherz

      Title:  

Managing Director

     

ISRAEL AEROSPACE INDUSTRIES LTD.

 

                    (as Supplier)

      By:  

/s/ E. Hattem

    By:  

/s/ J. Vistanetzky

Print Name:  

E. Hattem

    Print Name:  

J. Vistanetzky

Title:  

GM Bedek Aviation

    Title:  

GM Finance Div., Bedek

 

Group/IAI

     

Aviation Group, IAI

 

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Schedule 1

Aircraft Description and Program Schedule

SECTION 1. Aircraft Description

 

1.1 The Aircraft are:

FIRST FIRM AIRCRAFT:

 

AIRCRAFT Model: 767-338ER       Reg No:    AIRCRAFT Type: 767-300       MSN:   
24146 ENGINES    Model: CF6-80C2B6       Type:    Engine Serial Number    (1)   
         (2)          MTOW: 408,000 Lb    MLW: 320,000 Lb    MZFW: 288,000 Lb
SECOND FIRM AIRCRAFT: AIRCRAFT Model: 767-338ER       Reg No:    AIRCRAFT Type:
767-300       MSN:    24317 ENGINES    Model: CF6-80C2B6       Type:    Engine
Serial Number    (1)             (2)          MTOW: 408,000 Lb    MLW: 320,000
Lb    MZFW: 288,000 Lb

 

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THIRD FIRM AIRCRAFT: AIRCRAFT Model: 767-338ER       Reg No:    AIRCRAFT Type:
767-300       MSN:    24407 ENGINES    Model: CF6-80C2B6       Type:    Engine
Serial Number    (1)       (2)    MTOW: 408,000 Lb    MLW: 320,000 Lb    MZFW:
288,000 Lb

SECTION 2 PROGRAM SCHEDULE - CONVERSION SLOTS

M&B and Supplier shall reserve, in relation to the Firm Aircraft detailed in the
table below, the respective Conversion Slots as allocated to such Contract
Aircraft in the table below (each a “Conversion Slot”).

 

Aircraft

  

Scheduled Delivery Date

  

Initial Scheduled Redelivery Date

FIRST

FIRM

   [*]    [*]

SECOND

FIRM

   [*]    [*]

THIRD

FIRM

   [*]    [*]

OPTION

AIRCRAFT

   [*]    [*]

 

* Including: Holidays, Maintenance and extension due to late delivery of
Customer Furnished Documentation

** Including: Holidays

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

Schedule 2

Specification

1. “Specification” shall mean the specification described below, as agreed with
Customer and M&B, with the revision numbers stated below and as attached to this
Agreement, as updated from time to time by Variations:

 

No.

  

MSN

  

Revision No.

  

Revision Date

  

MSN

[1]    371-00-00-C8003    2.6.3    July 12, 2010    24146, 24317, 24407

Note: Specifications for Option Aircraft will be provided by Supplier upon
receipt of Option Aircraft Technical Data.

2. WEIGHT UPGRADES

 

Aircraft

  

MSN

  

Incoming Weights

  

Outgoing Weights

  

Total Weight
Upgrade

     

MTW

  

MTOW

  

MLW

  

MZFW

  

MTW

  

MTOW

  

MLW

  

MZFW

  

1

   24146    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]

2

   24317    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]

3

   24407    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]    [*]

4-10

   TBD    TBD    TBD    TBD    TBD    TBD    TBD    TBD    TBD    TBD

[*]

 

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Schedule 3

Customer and Supplier Furnished Documentation and Equipment

SECTION 1. CUSTOMER FURNISHED DOCUMENTATION

 

Doc No

  

Description

  

Date of Delivery by Customer*

  

Date and Condition of Redelivery by Supplier

1    Aircraft Maintenance Manual (“AMM”)    Four (4) months prior to Delivery   
In preliminary supplement form at Redelivery, and in final supplement form
within ninety (90) days after Redelivery 2    Wiring Diagram Manual (“WDM”)   
Four (4) months prior to Delivery    In preliminary supplement form at
Redelivery, and in final supplement form within ninety (90) days after
Redelivery 3    Illustrated Parts Catalog (“IPC”)    Four (4) months prior to
Delivery    In preliminary supplement form at Redelivery, and in final
supplement form within ninety (90) days after Redelivery 4    System Schematic
Manual    Four (4) months prior to Delivery    In preliminary supplement form at
Redelivery, and in final supplement form within ninety (90) days after
Redelivery 5    Airplane Flight Manual (“AFM”)    Deliver with Aircraft    In
final supplement form at Redelivery 6    Operations Manual    Four (4) months
prior to Delivery    In final supplement form at Redelivery 7   
Weight and Balance Manual    Four (4) months prior to Delivery    In final
supplement form at Redelivery 8    Weight and Balance Report    Four (4) months
prior to Delivery    In final supplement form at Redelivery

 

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Doc No

  

Description

  

Date of Delivery by Customer*

  

Date and Condition of Redelivery by Supplier

9    Electrical Loads Analysis Report    Four (4) months prior to Delivery    In
final supplement form at Redelivery 10    Interior Configuration Diagram    Four
(4) months prior to Delivery    N/A 11    Quick Reference Handbook    Four (4)
months prior to Delivery    In preliminary supplement form at Redelivery, and in
final supplement form within ninety (90) days after Redelivery 12    Master
Minimum Equipment List (MMEL)    N/A    FAA approval of Supplier’s changes
resulting from the Conversion Services will be available to Customer on the FAA
website. 13    Minimum Equipment List (MEL)    Four (4) months prior to Delivery
   Changes to be made by Customer based upon the FAA approval of the Conversion
changes as per item 12. 14    Maintenance Planning Data ([MSG-3 MPD] TO CONFIRM)
   Four (4) months prior to Delivery    In preliminary supplement form at
Redelivery, and in final supplement form within ninety (90) days after
Redelivery 15    Fault Report Manual    Four (4) months prior to Delivery    In
preliminary supplement form at Redelivery, and in final supplement form within
ninety (90) days after Redelivery 16    Fault Isolation Manual    Four (4)
months prior to Delivery    In preliminary supplement form at Redelivery, and in
final supplement form within ninety (90) days after Redelivery

 

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confidential treatment and have been filed separately with the SEC.

 

Doc No

  

Description

  

Date of Delivery by Customer*

  

Date and Condition of Redelivery by Supplier

17    Aircraft Log Book    Deliver with Aircraft    Returned at Redelivery 18   
Structural Repair Manual    Four (4) months prior to Delivery    In preliminary
supplement form at Redelivery, and in final supplement form within ninety (90)
days after Redelivery 19    List of all ADs and SBs implemented on a Contract
Aircraft    Four (4) months prior to Delivery    At Redelivery 20    List of all
ADs and SBs to be implemented by Supplier    Three (3) months prior to Delivery
   N/A 21    Operational Manual    Four (4) months prior to Delivery    In
preliminary supplement form at Redelivery, and in final supplement form within
ninety (90) days after Redelivery 22    Supplemental Structural Inspection
Document (SSID)    n/a    In final supplement form at Redelivery

 

* Date of Delivery by Customer for the first Firm Aircraft shall be “as soon as
possible”.

 

1.1 All documentation must be the last revision thereof, and, if available, in
CD format. The WDM must also be provided in hard copy. If Customer is unable to
provide any of the above, Supplier will endeavour to procure such items on
behalf of Customer at Customer’s expense and any delay in the performance of the
Conversion Services shall be deemed to be an Excusable Delay.

 

1.2 To the extent Customer is unable to supply the most current and up to date
versions and/or is unable to supply all the necessary work cards, such omissions
shall be treated by Supplier as a Customer Variation under which Supplier will
advise Customer of any impact on the Scheduled Redelivery Date and the cost, if
any, associated therewith.

 

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1.3 Customer shall deliver to Supplier, not less than fourteen (14) days prior
to Delivery, a signed declaration from Customer’s Director of Quality Control,
or equivalent, certifying that:

 

  (i) all documentation to be provided by Customer for the Conversion for each
Contract Aircraft are the most current and updated versions thereof; and

 

  (ii) such documentation includes, without limitation, all of the necessary
work cards for such Conversion.

CUSTOMER-FURNISHED EQUIPMENT

All Customer Furnished Equipment must be supplied in serviceable condition,
ready for installation and suitable for an Aircraft’s configuration, with proper
regulatory documentation.

Supplier shall provide Customer with all necessary information in sufficient
time of the relevant date of delivery below, to enable Customer to comply with
the date of delivery of such CFE.

 

No.

  

DESCRIPTION

  

DATE OF DELIVERY

1    The Contract Aircraft    Two (2) Business Days prior to Scheduled Delivery
Date 2    AD and SB kits (for Extra Work)    Customer will attempt to deliver
thirty (30) days prior to Scheduled Delivery Date, but not later than Schedule
Delivery Date 3    Emergency equipment, as per Specification    One (1) month
after Delivery, if not installed on the Contract Aircraft 4    Paint materials
   Thirty (30) days prior to painting the Contract Aircraft, other than paint
for flight controls which require removal for balancing after painting which
shall be provided at aircraft delivery. 5    CLS    45 days after Delivery 6   
Insulation Blankets    Delivery

 

1.4 M&B and/or Supplier shall notify and agree with Customer any specifications
which M&B and/or Supplier may reasonable require in respect of any Customer
Furnished Equipment.

 

CAM Conversion Agreement

 

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to a request for

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Schedule 4

Supplier Furnished Equipment and Options

 

ITEM

  

SFE

  

Price (US$)

1    Paint material, logo templates (if furnished by Supplier)    2    Paint
stripper materials    3    Emergency Equipment (if furnished by Supplier)    4
   AD/SB kits to be implemented during the conversion (if furnished by Supplier)
   5    Manuals Supplements in electronic format.   

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

Schedule 5

Form of Certificate of Delivery

CERTIFICATE OF DELIVERY

relating to Conversion Agreement between

Cargo Aircraft Management, Inc. (“Customer”), M&B CONVERSIONS

and

Israel Aerospace Industries Limited as Supplier.

 

CUSTOMER:            DATE:            Work Order No:            AIRCRAFT  
Model:       Reg No:       MSN:    ENGINES   Model:            Type:         
Engine Serial Number   (1)            (2)          MTOW:   MLW:       MZFW:   

Receipt is hereby acknowledged of the above registered aircraft at the
Designated Site on                                  at                      am /
pm. Customer herewith certifies that this aircraft has been maintained to an
approved maintenance schedule and that all work notified meets the requirements
of the approved maintenance schedule and all inbound defects have been
transferred to aircraft technical log.

 

Fuel on board upon Delivery                                  kgs/lbs.

 

Loose equipment on board -

  as per Form [—]     Exterior damage -   as per Form [—]     Documentation on
board -   as per Form [—]    

 

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to a request for

confidential treatment and have been filed separately with the SEC.

 

DEFECTS AGREED EXISTING UPON CONTRACT AIRCRAFT DELIVERY

1

  

2

  

3

  

4

  

5

  

 

Description of Component

     1    All Seats    2    Galleys    3    Lavatories    4    Closets    5   
Partitions    6    Carpets and liners    7    Curtains    8    PSU’s Assembly   
9    Overhead Bins    10    Side Wall Panels    11    Ceiling Panels    12   
Dado Panels    13    Emergency Equipment   

 

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to a request for

confidential treatment and have been filed separately with the SEC.

 

Description of Component

     14    Entertainment Components    15    Interphone System    16    Cabin
Light    17    Passenger Signs    18    Emergency Lights Packs    19    Cabin
Smoke Detection Equipment    20    Heating & Cooling Equipment   

All above information has been noted and agreed.

Furthermore, Customer herewith certifies all payments to be made upon Delivery
of the Contract Aircraft have been made in full.

 

For and on Behalf of   For and on Behalf of   For and on Behalf of Customer:  

M&B:

  Israel Aerospace Industries Limited, Bedek Aviation Group: Name:   Name:  
Name: Sign:   Sign:   Sign: Title:   Title:   Title: Date:  

Date:

 

Date:

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

Schedule 6

Form of Certificate of Redelivery

CERTIFICATE OF REDELIVERY

relating to Aircraft Conversion Agreement between

Cargo Aircraft Management, Inc. (“Customer”), M&B CONVERSIONS

and

Israel Aerospace Industries Limited as Supplier.

 

CUSTOMER:                   DATE:                   Work Order No:            
      AIRCRAFT    Model:          Reg No:          MSN:       ENGINES    Model:
                  Type:                Engine Serial Number    (1)            
      (2)                MTOW:      

MLW:

        

MZFW:

  

Redelivery is hereby accepted of the above registered aircraft at the Designated
Site                      on                      at am / pm. Israel Aerospace
Industries Limited, Bedek Aviation Group herewith certifies that all work
covered in the Specification as at                              has been carried
out in accordance with the defined work scope less any items noted in the
Technical Log

 

Fuel on board upon Redelivery                              kgs/lbs.

 

Conversion

 

- as per Form [—]

   

Loose equipment on board

 

- as per Form [—]

   

Exterior damage

 

- as per Form [—]

   

Documentation on board

 

- as per Form [—]

   

Note: if any carried forward items, separate list of these to be attached to
this form with details of when they are scheduled to be fixed, who bears the
cost and what the cost is.

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

All above information has been noted and agreed.

For and on Behalf of

 

For and on Behalf of

 

For and on Behalf of

Customer:   M&B:   Israel Aerospace Industries Limited, Bedek Aviation Group:
Name:   Name:   Name: Sign:   Sign:   Sign: Title:   Title:   Title: Date:  
Date:   Date:

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

Schedule 7

Prices and Payment Terms

SECTION 1 PRICE AND TERMS OF PAYMENT

 

1.1 Conversion Price

 

Aircraft

  

Basic Conversion Price

  

Weight Upgrade

  

Price Adjustment*

  

Total

1.    [*]    [*]    [*]    [*] 2.    [*]    [*]    [*]    [*] 3.    [*]    [*]
   [*]    [*] 4.    [*]    [*]    [*]    [*] 5.    [*]       [*]    [*] 6.   
[*]       [*]    [*] 7.    [*]       [*]    [*] 8.    [*]       [*]    [*] 9.   
[*]       [*]    [*] 10.    [*]       [*]    [*]

 

* [*]

The Conversion Price shall include the services in relation to the Conversion
Services detailed at Clause 4.2.

 

  (a) After Sales Support Services where excluded from the Conversion Price as
detailed in Clause 14.2.

 

1.2 Terms of Payment

Customer undertakes to pay:

 

  (a) the Conversion Price and Fixed price Maintenance (if any) for each Firm
Order Aircraft and Option Aircraft, in accordance with the following Conversion
Payments, in relation to relevant criteria for payment detailed in respect of
each Conversion Payment below, as escalated in accordance with Section 4 below.

 

CAM Conversion Agreement

 

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confidential treatment and have been filed separately with the SEC.

 

Conversion and Fixed-Price Maintenance Payment

  

Criteria for Payments

[*]    [*]    [*] [*]    [*]    [*]

 

  (b) If Customer requires After Sales Support Services excluded under Clause
14, the prices detailed therein, as escalated in accordance with Section 4
below; and

 

  (c) Supplier’s price for the provision of flight crew is US$ [*] per
Pre-Acceptance Flight, plus flight insurance.

 

1.3 EXTRA WORK RATES AND TERMS OF PAYMENT

Customer undertakes to pay the following rates in respect of Extra Work in
relation to Services, as escalated in accordance with Section 4 below:

 

  (a) For labour performed by Supplier in relation to:

 

(i)

   engineering work   US$[*] per hour

(ii)

   maintenance work related to Conversion   US$[*] per hour

(iii)

   DER services   [*]

 

  (b) For Insulation Blanket installation as detailed in Clause 4.3(g) - US$[*]

 

  (c) For vendor parts, materials and kits supplied by Supplier:

[*]

 

  (c) For vendor parts, materials and kits supplied by the Customer: [*] per
item handling charge.

 

  (d) [*]

 

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  (e) For sub-contracted work:

[*]

In respect of all Extra Work, Customer shall make the following payments:

[*]

SECTION 2 [*]

SECTION 3 FINAL ACCOUNT

 

3.1 No later than ninety (90) days following Redelivery of a Contract Aircraft,
M&B shall compile a final account of all sums due to M&B under the Agreement. In
the event that there are amounts due to either Party as a result of such final
account, the other Party shall make payment of such sums within seven
(7) Business Days of issuance of the appropriate invoice or credit note, as the
case may be.

SECTION 4 PRICE ADJUSTMENT FORMULA

All payments, prices and rates payable by Customer under this Agreement are
expressed in 1 January 2010 U.S. dollars and shall be increased (i) during the
first five (5) years of the Term of this Agreement by [*] on each January 1,
beginning January 1, 2011, and (ii) on each January 1, beginning January 1,
2016, and till the end of the Term of this Agreement, at M&B’s option, either by
[*] or in accordance with the following escalation formula:

[*]

 

CAM Conversion Agreement

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

Schedule 8

Warranty

SECTION 1 SCOPE OF WARRANTY

In relation to any goods or services provided by Supplier in relation to the
Services or any Extra Work provided in connection with this Agreement (such
Services and such Extra Work, the “Warranty Services”) where the goods or
services do not comply with the details of the Specification or are not fit for
their intended purpose, whether in consequence of faulty design, faulty
materials, bad workmanship, negligence or any other reason attributable to
Supplier or its employees, contractors or sub-contractors or suppliers or the
employees, contractors, subcontractors or suppliers of any of them, it shall
constitute a defect (“Defect”) and “Defective” shall be construed accordingly.

Subject to the provisions of paragraphs 4 and 5 below, Supplier warrants to
Customer (this “Warranty”) that:

 

1.1 Upon Redelivery by Supplier, a Contract Aircraft shall qualify for, without
further work, and Supplier shall cause to be issued by the Civil Aviation
Authorities, an Airworthiness Certificate as a freighter aircraft in accordance
with Customer’s designated configuration and Specification (as amended by prior
written agreement of the Parties); and

 

1.2 Warranty Services performed by Supplier on a Contract Aircraft or part,
accessory, equipment or component installed on a Contract Aircraft shall conform
to the Specification; and

 

1.3 The Warranty Services shall be free from:

 

  (a) Defects in workmanship (including selection of materials and process of
manufacturing by Supplier, its contractors, subcontractors and suppliers, and
installation) for a period of [*] (but only [*] in respect of the Paint
Services, if any and Components) after Redelivery of such Contract Aircraft to
Customer; and

 

  (b) design Defects only with respect to the Conversion Services performed on a
Contract Aircraft structure specifically designed by Supplier, its contractors
or subcontractors for the service life of such Contract Aircraft.;

 

  (c) without limiting 1.3(b) above, Defects with respect to the Conversion
Services performed on an Contract Aircraft structure and any other items
specifically designed by Supplier, its contractors or subcontractors for a
period of [*] after Redelivery of such Contract Aircraft to Customer; and

 

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confidential treatment and have been filed separately with the SEC.

 

  (d) Defects with respect to any Warranty Services, other than Conversion
Services performed on a Contract Aircraft structure, inclusive of the
accessories, equipment, parts or components installed on a Contract Aircraft,
for the first to occur of (i) [*] following Redelivery of such Contract Aircraft
to Customer; or (ii) the next scheduled maintenance check covering such Warranty
Services.

Each of the periods of Warranty applicability referred to in paragraphs 1.3(a)
to 1.3(c) above are defined as a “Warranty Period”.

 

1.4 It is understood that, if Supplier is able, using its reasonable endeavours,
to assign an applicable OEM warranty to Customer with respect to an accessory,
equipment, part or component that is at least equal in scope and benefit to this
Warranty (an “OEM Warranty”) and such OEM Warranty is assigned to Customer, then
Customer shall pursue its warranty rights under such OEM Warranty in addition to
pursuing its rights under this Warranty, and any compensation or relief provided
to Customer under that OEM Warranty shall reduce Supplier’s obligations under
this Warranty.

SECTION 2 WARRANTY WORK

 

2.1 Supplier undertakes to complete, at its cost and expense, with respect to
any Defect reasonably demonstrated to be a Defect covered by this Warranty and
with respect to which Supplier has received notice from Customer at any time
during the applicable Warranty Period, any repairs, replacements or corrections
required by exercise of this Warranty by Customer (including engineering design,
preparation of parts, materials and kits required and the installation thereof)
or which is required by the Civil Aviation Authorities or otherwise relating to
the Warranty Services (“Warranty Work”).

 

2.2 Customer may request that Warranty Work be conducted at another repair
facility approved in writing in advance by Supplier (an “Alternative Repair
Facility”). Supplier shall respond promptly, and in any event within three
(3) Business Days, to any request by Customer to conduct Warranty Work at an
Alternative Repair Facility. Upon written request by Customer, Supplier shall
promptly deliver, at its cost and expense, to the designated Alternative Repair
Facility, all material necessary to correct any Defect related to the Warranty
Services in accordance with this Agreement and any applicable Civil Aviation
Authority requirements, within the time period allocated by the Civil Aviation
Authority, if and as applicable, and pay for all labour and redelivery charges.

 

2.3 If Supplier shall not approve of such other repair facility, it may send a
field team to the location of a Contract Aircraft to perform Warranty Work at no
cost to Customer.

 

2.4 Supplier may send appropriate representatives to supervise all Warranty Work
performed at the cost and expense of Supplier.

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

2.5 In performing its obligations under this Warranty, Supplier shall, in all
events, use its best commercial efforts to perform or to secure the performance
of Warranty Work (including any replacements of Defective accessories,
equipment, parts or components as permitted under Section 3 below) as promptly
as reasonably possible and with the least reasonable disruption to Customer’s
(or its lessee’s or Aircraft Operator’s) operations. Without limiting the
foregoing, Supplier shall commence work, or cause work to be commenced, to
repair or replace any Defect within twenty-four (24) hours following either
Supplier’s acceptance of the relevant claim as a Valid Warranty Claim or a Third
Party Expert Warranty Determination that the relevant claim is a Valid Warranty
Claim. In addition, at the request of Customer and with the consent of Supplier,
which shall not be unreasonably withheld, Supplier will commence work, or cause
work to be commenced, to repair or replace any Defect prior to the acceptance or
determination of the relevant claim as a Valid Warranty Claim, provided that the
reasonable cost of such work shall be reimbursed by Customer to Supplier if the
claim is ultimately determined not to be a Valid Warranty Claim.

SECTION 3 WARRANTY WORK FOR OTHER SERVICES

 

3.1 During the Warranty Periods at paragraph 1.3(a) to 1.3(d) Supplier
undertakes at Supplier’s option, either to repair such Defect in the accessory,
equipment, part or component in which the Defect appears, or, to replace such
accessory, equipment, part or component with a similar item free from Defects.

SECTION 4 WARRANTY WORK AT SUPPLIER’S EXPENSE

 

4.1 All Warranty Work shall be performed by Supplier at its expense, and with
reasonable care and skill.

 

4.2 The freight charge for the return shipment by Customer to Supplier of items
and the reasonable ferry costs of Aircraft, in which there is a Defect which is
the subject of Warranty Work shall be at Customer’s expense; provided that, if
it is confirmed prior to the shipment that there is a Defect in such items,
Supplier shall pay such charges and costs, and, if it is confirmed after the
shipment that there is such a Defect, Supplier shall reimburse to Customer the
charges and costs promptly upon Supplier’s receipt of an invoice from Customer.
All Warranty Work shall be performed by Supplier or an Alternative Repair
Facility at Supplier’s expense at the Supplier Site or an Alternative Repair
Facility, and Customer shall at Supplier’s option either:

 

  (a) return to Supplier, at the Supplier Site, a Contract Aircraft and/or the
accessory, equipment, part or component (as the case may be); or

 

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confidential treatment and have been filed separately with the SEC.

 

  (b) have the accessory, equipment, part or component repaired and installed or
a replacement accessory, equipment, part or component supplied by Supplier
installed at an Alternative Repair Facility;

provided, however, in the event any Warranty claim made by Customer under this
Warranty is determined not to be a Valid Warranty claim (as defined in paragraph
9.5(a)) whether such determination is made by the Parties or the Third Party
Expert (as defined in paragraph 9.4(a)(i)) or Supplier (and accepted by Customer
without submission to a Third Party Expert) (in which case Supplier shall have
provided to Customer written substantiation of its findings), all the direct
costs associated therewith, including, but not limited to, freight, insurance
and testing, shall be borne by Customer.

 

4.3 If a Warranty claim by Customer hereunder is determined to be a Valid
Warranty Claim, Supplier shall be responsible for the freight charge for the
return shipment of items and the reasonable return ferry costs of Aircraft, in
which there is a Defect which is the subject of Warranty Work (or of any
replacements therefor) from Supplier or an Alternative Repair Facility to
Customer, and Supplier shall bear all risks of such shipment of items (but not
the risks with respect to the ferry of an Aircraft). If a Warranty claim is
determined not to be a Valid Warranty Claim, Customer shall be responsible for
all such freight charges and ferry costs, and for all risks of such shipment or
ferry.

SECTION 5 CUSTOMER-FURNISHED EQUIPMENT EXCLUDED

 

5.1 This Warranty only applies to Defects in Customer-Furnished Equipment, to
the extent that Supplier warrants that the workmanship incorporated in the
installation of Customer-Furnished Equipment shall be free of Defects.

 

5.2 Supplier shall assist Customer in enforcing any rights which Customer may
have against any manufacturer of any such Customer-Furnished Equipment under any
warranty obtained for Customer as aforesaid.

SECTION 6 LIMITATIONS AND EXCLUSIONS

 

6.1 Supplier shall have no liability under this Schedule 8 in respect of any
Defect:

 

  (a) which results from any negligent act or omission of Customer, including,
but not limited to, any failure to operate, maintain or store a Contract
Aircraft in accordance with governmental regulations, manufacturer’s
instructions, Supplier’s reasonable instructions, or other applicable
instructions;

 

  (b) which is attributable to or constitutes normal wear and tear;

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
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confidential treatment and have been filed separately with the SEC.

 

  (c) which results from a Contract Aircraft or any Supplier part, systems part
or vendor part having been repaired, altered or modified after Redelivery except
by Supplier or in a manner approved by Supplier, each approval not to be
unreasonable withheld;

 

  (d) which results from a Contract Aircraft or any Supplier part, systems part
or vendor part having been operated in a damaged state, except where such Defect
occurs in flight or where such operation of the Contract Aircraft is carried out
under approved instructions for the purpose of returning the Contract Aircraft
or any Supplier part for repair; or

 

  (e) which results from F.O.D., misuse, or accident.

 

6.2 Supplier shall have no liability under this Schedule 8 in respect of any
Supplier part, systems part or vendor part from which the trademark, name part
or serial number or other identification numbers have been removed or defaced as
a result of an act or omission by Customer.

 

6.3 Notwithstanding any provisions to the contrary contained in this Agreement,
Supplier shall have no obligation to Customer in respect of this Warranty in
relation to a Contract Aircraft, if any sum is due and outstanding by Customer
under this Agreement beyond any applicable notice period, provided that this
provision shall only have effect for the period during which any such sum is due
and outstanding and is not being withheld pursuant to a bona fide dispute and
Customer shall have the full benefit of the provisions of this Warranty upon
payment of all such sums.

SECTION 7 WAIVER

 

7.1 THIS WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED (INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTY ARISING FROM THE
COURSE OF PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE), OF ANY NATURE
WHATSOEVER, WHETHER ARISING IN CONTRACT, TORT OR NEGLIGENCE OF ANY DEGREE,
STRICT LIABILITY OR OTHERWISE, AND CUSTOMER HEREBY WAIVES ALL OTHER RIGHTS,
OBLIGATIONS AND/OR WARRANTIES AND ASSUMES ALL RISKS AND LIABILITIES IN RESPECT
THEREOF.

 

7.2 Except as provided in paragraph 7.1 above or elsewhere in this Schedule 8,
the extent of Supplier’s liability under this Warranty shall not exceed the cost
of repairing or replacing any Defective part/s or Warranty Services or
correcting any design Defect and the cost of shipping any parts or equipment to
and from the location of such repair, replacement or correction.

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

SECTION 8 TITLE TO PARTS

 

8.1 All accessories, equipment, parts or components provided by Supplier
hereunder shall become part of a Contract Aircraft and shall become the property
of Customer upon full payment as required under Clause 11 (Prices and Terms of
Payment).

 

8.2 Supplier shall transfer to Customer good title to all such accessories,
equipment, parts and components, and shall return each Contract Aircraft to
Customer upon Redelivery, free and clear of all liens, claims or rights of any
other Persons, other than Persons claiming through Customer.

SECTION 9 PROCEDURE FOR DETERMINING A VALID WARRANTY CLAIM

 

9.1 Notice of Claim

 

  (a) If Customer discovers, or learns of, any alleged Defect which Customer
believes gives rise to a Warranty claim (other than a claim related to patent,
copyright or trademark infringement under the IP Indemnity) (a “Warranty
Claim”), Customer shall give written notice to Supplier of such claim (“Warranty
Notice”);

 

  (b) The Warranty Notice shall include:

 

  (i) a description of the Warranty Claim in reasonable detail; and

 

  (ii) a description of Customer’s assessment of the Warranty Work which must be
performed to remedy the Warranty Claim.

 

9.2 Claim Acceptance and Rejection

Supplier shall, within fifteen (15) Business Days after receipt of both (i) a
Warranty Notice; and (ii) the materials that are the subject of such Warranty
Notice (the “Warranty Notice Period”) (which materials will be deemed received
by Supplier for this purpose if shipped or ferried to an Alternative Repair
Facility permitted under the provisions of this Schedule 8), inspect the
materials or workmanship which are the subject of the Warranty Notice and give
notice to Customer of the Warranty Claims included in the Warranty Notice which
Supplier accepts (“Accepted Warranty Claims”) and the Warranty Claims included
in the Warranty Notice which Supplier disputes (“Disputed Warranty Claims”)
(together the “Supplier Warranty Response”).

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
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confidential treatment and have been filed separately with the SEC.

 

9.3 Third Party Expert Determination

 

  (a) Supplier and Customer shall make reasonable efforts to resolve any
Disputed Warranty Claims.

 

  (b) If Supplier and Customer are not able to resolve any Warranty Claims by
agreement and withdrawal of such Warranty Claims, Customer and Supplier shall,
within fifteen (15) Business Days after receipt by Supplier of the Warranty
Notice, instruct the Third Party Expert, as defined at paragraph 9.4(a)(i)
below, to conduct an inspection of the affected Aircraft, parts, or
documentation provided by Customer to Supplier which is all of the workmanship
which is the subject of the Disputed Warranty Claim (the “Expert Inspection”).

 

  (c) Customer and Supplier shall have the right to be present at the Expert
Inspection and to present, at or before the Expert Inspection, their written
positions concerning the Disputed Warranty Claims.

 

  (d) If Customer’s assessment of the Warranty Work consists solely of line
maintenance, then Customer may have the Defect repaired at an Alternative Repair
Facility prior to the Third Party Expert’s inspection, provided that Customer
provides reasonable documentation to Supplier of the Warranty Work. Supplier
shall not be obliged to pay the costs and expenses of repairs under this
paragraph 9.3(d) unless the Warranty Claim is found to be a Valid Warranty
Claim, as defined at paragraph 9.5(a), by agreement of Customer and Supplier or
the Third Party Expert, as applicable.

 

  (e) As soon as possible after the Expert Inspection, the Third Party Expert
shall deliver to Customer and Supplier the Third Party Expert’s written
determination of whether or not the Disputed Warranty Claims are Valid Warranty
Claims (a “Third Party Expert Warranty Determination”). The Third Party Expert
Warranty Determination shall be binding on Customer and Supplier.

 

9.4 Selection of Third Party Expert

 

  (a) The Third Party Expert shall be selected as follows:

 

  (i) Not less than three (3) Business Days prior to the date set forth in
Clause 9.3(b) of this Schedule 8, Customer and Supplier shall mutually and
reasonably agree on the appointment of a single Person, qualified in the
aircraft discipline relevant to the Disputed Warranty Claim, to act as a third
party expert to make the required determination (a “Third Party Expert”),
whereupon Supplier shall obtain the acceptance of the appointment by the Third
Party Expert as soon as practicable and give notice of such Third Party Expert
acceptance to Customer (an “Acceptance Notice”).

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
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  (ii) If the Third Party Expert does not accept the appointment within two
(2) Business Days, Customer and Supplier shall mutually and reasonably agree on
another Third Party Expert to make the required determination; and Supplier
shall obtain such other party’s acceptance and notify Customer of the
acceptance, in accordance with the procedure at 9.4(a)(i).

 

9.5 Assessment of Third Party Expert Expenses

 

  (a) Any warranty claims which are Accepted Warranty Claims or which are
determined to be Valid Warranty Claims in a Third Party Expert Warranty
Determination shall be valid Warranty Claims for purposes of this Schedule 8 (a
“Valid Warranty Claim”).

 

  (b) If the Third Party Expert determines that all of the Disputed Warranty
Claims submitted to the Third Party Expert for a validity determination are
Valid Warranty Claims, then Supplier shall bear the expense of the Third Party
Expert.

 

  (c) If the Third Party Expert determines that all of the Disputed Warranty
Claims submitted to the Third Party Expert for a validity determination are not
Valid Warranty Claims, then Customer shall bear the expense of the Third Party
Expert.

 

  (d) If the Third Party Expert determines that some of the Disputed Warranty
Claims submitted to the Third Party Expert are Valid Warranty Claims and some
are not, then the expenses of the Third Party Expert shall be apportioned
between Supplier and Customer as determined by the Third Party Expert.

SECTION 10 PRIMARY BENEFIT

 

10.1 The Parties acknowledge that this Warranty shall be for the primary benefit
of Customer and lessees (and, any subsequent lessee of a Contract Aircraft upon
prior written notice to Supplier of each such lessee).

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

Schedule 9

Variation Particulars Form

Form of SUPPLIER VARIATION PARTICULARS FORM

In response to the requisition for incorporation of the Supplier Variation ref:
— (details attached).

It is agreed that incorporation of the Supplier Variation will be carried out on
the following basis:

 

i) Impact on the STC Development Program

To be confirmed by                                          on completion of
design work in i) above.

 

  a) This Supplier Variation, if incorporated, has no impact on the STC
Development Program.

or

 

  b) Incorporation of this Supplier Variation will extend the STC Development
Program by … days and the revised STC delivery date will be                     

 

ii) Impact on the Conversion weight

 

  a) This Supplier Variation, if incorporated, has no impact on the Conversion
Weight Change

 

or To be advised by                                          on completion of
design work in i) above.

 

  b) The effect on the Conversion Weight Change is : [            ] lbs

 

iv) Any other consequences          Yes or No              if yes, please
described

                                                             (use separate sheet
if necessary)

 

iii) CUSTOMER Approval

 

  a) Required                                                              

or

 

  b) Not Required                                          [ever not required?
Mandatory change?]

 

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[Add Customer]

 

Issued by Supplier

 

 

  

Approved by CUSTOMER (if required)

 

 

For and on behalf of Supplier

 

 

Date

 

 

  

For and on behalf of CUSTOMER

 

 

Date

 

 

[add Customer]

 

 

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

CUSTOMER VARIATION PARTICULARS FORM

In response to the requisition for incorporation of Customer Variation ref: —
(details attached). It is agreed that incorporation of the Customer Variation
will be carried out on the following basis:

 

i) Customer Variation Price [paid by Supplier; may be passed on to
Customer][mandatory?]

 

  a) Not Recurring Price

 

Labour

 

Materials

 

Total

Manhours

  Rate   $   $   $

 

  • Provisional price for design work only, full costings to be provided to the
by                             

 

  b) Recurring Price

 

Labour

 

Materials

 

Total

Manhours

  Rate   $   $   $

 

ii) Impact on the STC Development Program

To be confirmed by                                          on completion of
design work in i) above.

 

  b) This Customer Variation, if incorporated, has no impact on the STC
Development Programme.

or

 

  b) Incorporation of this Customer Variation will extend the STC Development
Program by          days and the revised STC delivery date will be
                    

 

iii) Impact on the Conversion weight

 

  b) This Customer Variation, if incorporated, has no impact on the Conversion
weight

 

or To be advised by                                          on completion of
design work in i) above.

 

  b) The effect on the Conversion weight is : [            ] lbs

 

iv) Any other consequences          Yes or No          if yes, please described

                                                             (use separate sheet
if necessary)

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
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v) Approval

 

Issued by Supplier

 

 

 

Approved by CUSTOMER

 

 

For and on behalf of Supplier

 

 

Date

 

 

 

For and on behalf of CUSTOMER

 

 

Date

 

 

[add Customer]

 

 

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

 

Schedule 10

Extra Work Form

 

Aircraft Reg. No.:   

 

      Date:   

 

            Add:   

 

   Aircraft Serial No.:   

 

           

 

NOTE –   This form not to be used for changes to the Specification (a Variation
Particulars Form shall be completed to document changes to the Specification).

In accordance with the terms and conditions of that certain Conversion
Agreement, dated as of             , [200    ], the following Extra Work is
hereby [requested][proposed]:

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     

 

     

ADDITIONAL [MANHOURS][DAYS] REQUIRED TO COMPLETE EXTRA WORK DETAILED ABOVE:
                                        

SCHEDULED COMPLETION DATE:                                                  

CONFIRM NO IMPACT ON OEW OR, IF IMPACT DESCRIBE THE IMPACT:
                        

Approved and Authorised by:                                          
                                                                            

[Customer Representative]

Approved and Accepted by:                                          
                                                                            

[Supplier Representative]

 

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Those portions of this Agreement marked with an [*] have been omitted pursuant
to a request for

confidential treatment and have been filed separately with the SEC.

Schedule 11

Aircraft Status Report

 

Key Dates

  

Date Required
Performance

    

Actual Date
Performance

           

Pacing Items for Next

Aircraft Status Report

  Aircraft Arrival On site:               1       Induction Date:              
2       Contract Completion Date:               3       Current Projected
Completion:               4       Not to Exceed Date:               5      

Plug (Needed vs. Actual)

              

Door (Needed vs. Actual)

              

Key Metrics

  

This Week

    

Last Week

    

Trend

    

Accomplishments for

this Aircraft Status Report

  % Buffer Consumed               1       % Progress on the Longest Chain      
        2       Projected Delivery Date               3       Logistics: Parts
Shortages               4                     5       Logistics: Parts shortages
w/o date               6       Project Cycle Time                        

Slippages this Week

  Routine Cards Open                Routine Cards Closed               
Non-Routine Cards Open                Non-Routine Cards Closed               
RFTA’s                REA’s