Exhibit 10.5


 


EMBRAER LETTER
AGREEMENT DCT-026/2003


 


INDEX


 


	
  1 — START-UP TEAM

  
	
   

  
	
  2

  	
  ***

  
	
   

  	
   

  
	
  3.

  	
  ***

  
	
   

  	
   

  
	
  4.

  	
  ***

  
	
   

  	
   

  
	
  5 — SPARE PARTS CREDIT

  
	
   

  
	
  6 —
  ADDITIONAL CUSTOMER SUPPORT PACKAGE

  
	
   

  
	
  7

  	
  ***

  
	
   

  	
   

  
	
  8

  	
  ***

  
	
   

  	
   

  
	
  9 — ADDITIONAL ASSISTANCE AND SUPPORT

  
	
   

  
	
  10
  — MISCELLANEOUS

  



 


	
  EXHIBIT:

  
	
  “1” -

  	
  SPECIAL INSURANCE CLAUSES

  
	
  “2” -

  	
  ADDITIONAL ASSISTANCE

  
	
  “3” -

  	
  SUPPORT

  



 












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


 

















 


LETTER
AGREEMENT DCT-026/2003


 


This Letter Agreement DCT-026/2003 (“Agreement” or “Letter Agreement”)
dated June 9, 2003 is an agreement between JetBlue Airways Corporation
(“Buyer”) with its principal place of business at 118-29 Queens Boulevard, 5th
floor - Forest Hills, NY 11375, and EMBRAER - Empresa Brasileira de Aeronáutica
S.A. (“Embraer” or “Embraer-Brazil”), with its principal place of business at
São José dos Campos, SP, Brazil (collectively the “Parties”), relating to
Purchase Agreement DCT-025/2003 (the “Purchase Agreement”) dated as of June 9,
2003.


 


This Letter Agreement constitutes an amendment, supplement and
modification of the Purchase Agreement as it sets forth additional agreements
of the Parties with respect to the matters set forth therein. All terms defined
in the Purchase Agreement shall have the same meaning when used herein, and in
case of any conflict between this Letter Agreement and the Purchase Agreement,
this Letter Agreement shall prevail.


 


WHEREAS:


 


a)                                      The Parties have
entered into the Purchase Agreement, pursuant to, and subject to the terms and
conditions of, which Buyer shall buy and Embraer shall sell one hundred (100)
Firm Aircraft and up to one hundred (100) Option Aircraft.


 


b)                                     The Parties wish
to set forth the additional agreements of the Parties with respect to certain
matters related to the purchase of the above referenced Aircraft.


 


NOW, THEREFORE, for good and valuable consideration, the Parties agree
as follows:


 


1 — START-UP TEAM


 


With respect to the Firm Aircraft, Embraer
shall provide a start-up team to take place at the initial line operation of
the first Aircraft, composed of the following individuals:


 


•   *** for *** days ***.


•   *** for *** days.


•   *** for *** days


•   *** for *** 
days


•   *** for *** 
days.


 


The sole purpose of these specialists is to
advise and assist with Buyer’s certification proving runs and start-up
operations of the Aircraft, making Buyer’s pilots and mechanics familiar with
the operation and maintenance of the Aircraft.


 


Embraer shall at its sole criteria indicate
the individuals that will compose the start-up team, and Embraer shall be able
to replace at any time any of such individuals, provided that such individuals
shall stay at Buyer’s facilities for a time period of at least ***  days. The start-up team is in addition to
the pilot and mechanic training, and to the FSR specified in Article 2.3.2 of
Attachment B to the Purchase Agreement.


 












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


 


1

















 


Embraer personnel shall not be authorized to
perform any direct flight or maintenance services on Buyer’s Aircraft. Without
a previous written authorization from Embraer, an Embraer’s mechanic shall not
perform any maintenance or handling activity on the Aircraft, or an Embraer’s
pilot shall not perform any supervising training of Buyer’s pilots during
regular flight operations of the Aircraft. In case Buyer obtains such previous
authorization, Buyer shall include Embraer as additional insured in the
Comprehensive Airline Liability insurance policies carried by Buyer, without
recourse against Embraer for any failure, act or omission of Embraer’s pilots
or mechanics while rendering the services set forth in this Paragraph, in such
a manner as to cover any and all risks arising from or in any way connected
with such services. Buyer shall also supply Embraer with a copy of the
endorsements to the insurance policies above mentioned, in accordance with the
clauses contained in Exhibit “1” to this Agreement, within twenty-four (24)
hours prior to the date on which Pilots or Mechanics Assistance Service are to
begin as indicated above. For the avoidance of doubt, the indemnity provided in
Article 22 of the Purchase Agreement shall apply to the services set forth in
this Section 1.


 


Embraer reserves the right to halt the
services mentioned in this Section 1, should any of the following situations
occur at Buyer’s base: a) there is a labor dispute or work stoppage in
progress; b) war or war like operations, riots or insurrections; c) any
conditions which is dangerous to the safety or health of Embraer’s employee; or
d) the government of Buyer’s country refuses permission to Embraer’s employee
to enter the country. Embraer shall resume the services mentioned in this
Section 1 promptly after the above-described situation ceases.


 


At no charge to Embraer, Buyer shall provide
the start-up team members with communication facilities (telephone, facsimile)
as well as office space and facilities at Buyer’s main base, and Buyer shall
also (a) arrange all necessary work permits and airport security clearances
required for Embraer’s team members, to permit the accomplishment of the
services mentioned in this Article 1, in due time; and (b) obtain all necessary
custom clearances both to enter and depart from Buyer’s country for Embraer’s
team members and their personal belongings and professional tools.


 


The start-up team members shall be allowed
solely in those areas related to the subject matter hereof and Embraer agrees
to hold harmless Buyer from and against all and any kind of liabilities in
respect of such team members to the extent permitted by law, except as provided
to the contrary in Article 2.3.2.i of Attachment B to the Purchase Agreement.


 


Buyer shall bear all incremental expenses
related to the transportation, board & lodging of the Embraer personnel in
the event such personnel is required to render the services provided for herein
in any place other than Buyer’s main maintenance base, otherwise all costs of
travel and accommodation for such personnel shall be borne by Embraer.


 


At no charge to Embraer, Buyer shall provide
Embraer pilots with transportation means from/to Buyer operational base or
airport where such pilots will render the services, so that the pilots can
report to Buyer’s operation facilities or leave the airport in a timely manner
according to the schedule of the flights they are engaged in.


 


2

















 


2
             ***


 


3.             ***


 


4.             ***


 


5 — SPARE PARTS CREDIT


 


Embraer will
provide Buyer a spare parts credit of USD *** United States Dollars) per each
of the Firm Aircraft effectively delivered to Buyer. Embraer shall issue such
spare parts credits in Sao Jose dos Campos, SP, Brazil, ***.  *** shall be made available to Buyer ***
prior to the Contractual Delivery Date of the *** Firm Aircraft. Each of ***
shall be made available to Buyer ***. The spare parts credit shall be used by
Buyer for the purchase of Embraer-made spare parts and ground support equipment
from the Embraer - Brazil spare parts facility (except for engines, engine
related parts and APU), on a mutually agreed delivery schedule.


 


To be eligible to utilize such credit, Buyer
shall not be in default in respect of any payment that has become due and
payable by Buyer to Embraer or an affiliate of Embraer (as per the terms of the
relevant agreement or invoice).


 


These credits shall not be
escalated and expire if not used within *** after being issued.


 


In the event that the Purchase Agreement is
terminated with respect to any Firm Aircraft for any reason (and
notwithstanding any provision of the Purchase Agreement to the contrary), Buyer
shall ***.


 


6 — ADDITIONAL CUSTOMER SUPPORT PACKAGE


 


a.          Computer Basic Training
(“CBT”):  Embraer shall provide ***
to Buyer one (1) EMBRAER 190 CBT courseware for *** transition training. Such
courseware shall be licensed to Buyer as long as such courseware is used by
Buyer for training its own personnel and is subject to Embraer and Buyer
entering into a CBT license agreement within 2 months after execution of the
Purchase Agreement. Revision service will be provided *** to Buyer for as long
as Buyer ***. Buyer may use such license for internal training without any
limitation of number of stations, but Buyer shall not be authorized to supply
training to third parties.


 


All related training materials, such as ***
training manual based on a standard aircraft configuration, shall also be
provided to Buyer. Such material shall be similar to those received by the
trainees in the classroom.


 


In case Buyer does not ***,
Buyer shall be deemed to have ***.


 


The CBT Courseware is copyright-protected and
any and all author rights, intellectual, commercial or industrial proprietary
rights of whatever nature in the CBT Courseware are and shall at all times
remain with Embraer. Buyer may not sub-license nor sell the complete CBT
Courseware or parts thereof to third parties.


 












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


 


3

















 


b.         EMBRAER 190 Simulator Data Package: Embraer
shall provide *** to Buyer one (1) EMBRAER 190 simulator data package (the “Sim
Data Package”) ***, subject to the Parties entering into a Sim Data Package
license agreement. Such Simulator Data Package shall be delivered by Embraer to
Buyer within *** days following the Actual Delivery Date of Firm Aircraft ***.
Such data shall be sufficient to enable Buyer to obtain FAA qualification of
the simulator at level “D”, except for the items that are under Buyer’s/operator’s
regulatory responsibility. Subject to the above, it shall be Buyer’s
responsibility to obtain such qualification, at Buyer’s sole expense.


 


In the event that the Purchase Agreement is
terminated with respect to any Firm Aircraft for any reason (and notwithstanding
any provision of the Purchase Agreement to the contrary), Buyer shall ***.


 


It is understood that the Sim Data Package
shall be used exclusively by Buyer to build its own EMBRAER 190 simulator, for
its training purposes, and it shall not be sold, transferred, leased or
assigned to any other party. In case Buyer does not ***, Buyer shall be deemed
to have ***.


 


c.          Embraer-made parts for
simulator: Embraer shall provide *** to Buyer *** of Embraer’s manufactured
parts required to manufacturer an EMBRAER 190 simulator (“Sim Parts”) ***. Such
Sim Parts shall be delivered by Embraer to Buyer within *** days following the
Actual Delivery Date of Firm Aircraft ***. It is understood by the Parties that
the Sim Parts shall be used exclusively by Buyer to build its own EMBRAER 190
simulator, for its training purposes, and it shall not be sold, transferred,
leased or delivered to any other party. In case Buyer does not ***, Buyer shall
be deemed to have ***.


 


In the event that the Purchase Agreement is
terminated with respect to any Firm Aircraft for any reason (and
notwithstanding any provision of the Purchase Agreement to the contrary), ***.


 


d.         Avionics Instruments
Mock-Up Trainer: Embraer shall provide *** to Buyer and as soon as reasonably
possible but no later than *** months after the first Aircraft Actual Delivery
Date, *** EMBRAER 190 Mock-Ups Trainer to support pilot training.


 


The Mock-Up Trainer will represent the
aircraft cockpit configuration in a 1:1 scale including the side consoles
representation.


 


e.          EMBRAER 190 Cabin
Trainer for Flight Attendants: Embraer shall provide ***  to Buyer and as soon as reasonably possible
but no later than *** months after the *** Aircraft Actual Delivery Date, a
EMBRAER 190 full scale cabin trainer (“Cabin Trainer”), composed of one
fuselage section, including interior components, one or more doors (including
overwing door, if it exists), if different types of doors exist, and galley,
but excluding any fixtures and equipment which are classified as BFE for the actual
Aircraft. The certification by FAA will be Buyer’s responsibility,


 












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


 


4

















 


but Embraer shall manufacture the mock up in such a manner and shall
provide Buyer with documentation support, as to enable Buyer to obtain such
certification. In case Buyer does not *** Buyer shall be deemed to have ***.


 


f.            On-site Training:
Embraer shall provide *** to Buyer, a maintenance training course at Buyer’s
main maintenance base to up to *** of Buyer selected personnel. These trainees
shall be trained *** by Embraer or it’s designated training provider. The
Training will be conducted according to a standard training syllabus which will
be provided by Embraer or its designated training provider and any additional
training request shall be discussed and agreed by Embraer and Buyer.


 


g.         Engineering Services:  Embraer shall provide remote technical and
engineering support services, twenty-four (24) hours a day and seven (7) days a
week, for airframe and systems. This service may be accessed by phone, fax and
e-mail at the main facilities of Embraer and is designed to support daily
operations of the aircraft by Buyer by assisting Buyer with the identification
and investigation of the causes of in-services issues and during AOG
situations, as required. This service shall be provided *** Buyer within such
scope and shall be available to Buyer until ***. Technical and engineering
support is also available to assist Buyer in performing minor structural
repairs on the Aircraft, such as dents, abrasions, scrapes and similar damages
during normal operations, or caused by ground handling personnel and vehicles
while servicing the Aircraft on ground. Such assistance consists of the
analysis of damage reports submitted by Buyer, preparation of instructions for
repair in accordance with structural repair standard of Embraer. This support
is provided *** Buyer, up to ***.


 


h.         Account Manager:  Embraer shall assign an Account Manager to
support Buyer shortly after execution of the Purchase Agreement. The Account
Manager will be responsible for coordinating all product support related
actions of Embraer to assure a smooth aircraft introduction into service and,
thereafter, for concentrating and addressing all issues concerning the
operation of the Aircraft by Buyer. A team composed of the Technical
Representative, one regional spare parts representative and a regional field
engineer shall support the assigned Account Manager.


 


i.             ***.


 


7               ***


 


8               ***


 


9 — ADDITIONAL ASSISTANCE AND SUPPORT


 


Terms and
conditions of certain additional assistance and support are provided in
Exhibits 2 and 3.


 












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


 


5

















 


Embraer agrees
to cooperate in good faith with Buyer in Buyer’s efforts to *** provided that
this obligation shall not increase Embraer’s *** and shall be subject at all
times to Embraer’s other obligations hereunder ***.


 


10 — MISCELLANEOUS


 


The provisions of Articles 18 (Applicable
Law), 19 (Jurisdiction), 22 (Notices), 23 (Confidentiality), 25 (Severability),
26 (Non-Waiver), 28 (Negotiated Agreement), and 29 (Counterparts) of the
Purchase Agreement are hereby incorporated by reference.


 


[Signature page follows.]


 












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


 


6

















 


IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers and to be
effective as of the day and year first above written.


 


	
  EMBRAER -
  EMPRESA BRASILEIRA DE

  AERONÁUTICA S.A.

  	
  JETBLUE
  AIRWAYS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
  Title:

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  Date:

  
	
  Place:

  	
  Place:

  
	
  Witnesses:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Name:

  
	
  ID:

  	
  ID:

  



 

















 


EXHIBIT “1”
TO LETTER AGREEMENT DCT-026/2003

INSURANCE SPECIAL CLAUSES


 


Buyer shall include the following endorsements in its Hull and
Comprehensive Airline Liability insurance policies:


 


1.               Hull All Risks Policy, including War,
Hi-jacking and Other Perils.


 


“It is hereby understood and agreed that
Insurers agree to waive rights of subrogation against Embraer with regard to
the insured Aircraft.


 


This endorsement shall not operate to
prejudice Insurer’s rights of recourse against Embraer - Empresa Brasileira de
Aeronáutica S.A. as manufacturer, repairer, supplier or servicing agent where
such right of recourse would have existed had this endorsement not been
effected under this Policy.”


 


2.               Comprehensive Airline Liability Policy,
based on the AVN53 - Additional Insured Endorsement


 


“It is hereby understood and agreed that
Embraer - Empresa Brasileira de Aeronáutica S.A. including any business entity
owned by or subsidiaries to Embraer, and all partners, executive officers,
employees and stock holders, are added as Additional Insureds only with respect
to the operation of the Aircraft by the Named Insured.


 


This endorsement does not provide coverage
for any Additional Insured with respect to claims arising out of its legal
liability as manufacturer, repairer, supplier or servicing agent and shall not
operate to prejudice Insurer’s right of recourse against any Additional Insured
as manufacturer, repairer, supplier or servicing agent.”


 


3.               Notwithstanding anything to the contrary
as specified in the Policy or any endorsement thereof, the coverages stated in
paragraphs 1 and 2 above, shall not be cancelled or modified by the Insurer,
without 48 hours advance written notice to Embraer to such effect.


 


This Endorsement attaches to and forms part of Policy No.
                             ,
and is effective from the        day of
         , 200   .


“


 


1

















 


EXHIBIT “2”
TO LETTER AGREEMENT DCT-026/2003

ADDITIONAL ASSISTANCE


 


***


 












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


 


1

















 


EXHIBIT “3”
TO LETTER AGREEMENT DCT-026/2003

SUPPORT


 


***


 












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


 


1