Exhibit 10.3


 





 


VGAA


WET LEASE
& BLOCKED SPACE


HEADS OF
AGREEMENT


 


Between :                                           L-Air Holding Inc.,


 


with
registered office at 130 King Street West, suite 3670, Toronto, Ontario,


Canada, M5X
1B1, herewith represented by Mr. Alex Goldman, President;


further called
L-Air,


 


And                                                                          VGAA N.V.,


 


with
registered office at 400, Rue Leopold I, 1090 Brussels, herewith


represented by
Mr. H. Yeritsyan, President-Managing Director,


further called
VGAA,


 


for and in
consideration of the mutual covenants contained in this agreement, parties
agree as follows :


 


1.                                 General Co-operation Principles


 


1.1.                         Semi
Wet lease on Brussels-Yerevan routing


 


Subject to the appropriate governmental
approvals, L-Air as the Lessor will operate on a wet lease basis flights
between Lyon – Yerevan – Brussels – Los Angeles and vice versa for and on
behalf of the VGAA as the Lessee.


 


1.2.                         Schedules


 


1.2.1.                Schedules of flights considered under
1.1 and 1.2 are subject to :


a/      traffic
rights to be arranged by L-Air on the whole route except for departure ex EVN
which will be arranged by VGAA


b/      airport
slots at all destinations


c/      all
relevant governmental, JAA and FAA approvals


 


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1.2.2.                Subject to art.
1.3.1., the schedule has been agreed as follows :


 


	
  LYS-EVN

  	
   

  	
  day 2

  	
   

  	
  departure 22h00

  	
   

  	
  arrival 03h00

  	
   

  
	
  EVN-BRU

  	
   

  	
  day 3

  	
   

  	
  departure 05h00

  	
   

  	
  arrival 10h00

  	
   

  
	
  BRU-LAX

  	
   

  	
  day 3

  	
   

  	
  departure 12h00

  	
   

  	
  arrival 23h30

  	
   

  
	
  LAX-BRU

  	
   

  	
  day 4

  	
   

  	
  departure 02h00

  	
   

  	
  arrival 13h00

  	
   

  
	
  BRU-EVN

  	
   

  	
  day 4

  	
   

  	
  departure 15h00

  	
   

  	
  arrival 20h00

  	
   

  
	
  EVN-LYS

  	
   

  	
  day 4

  	
   

  	
  departure 
  02h00

  	
   

  	
  arrival 03h00

  	
   

  



 


2.                                  Semi Wet Lease


 


2.1.                         Aircraft
– Operation – Capacity


 


L-Air will operate on a wet lease basis under
it’s Belgian Operating Licence – Air Operator’s Certificate the flights
considered under article 1.1 with Airbus A340-300 aircraft, offering a maximum
capacity of 10 first class seats, 30 business seats and 225 economy seats.  L-Air has the right to replace the airbus
A340-300 aircraft with any other aircraft, whether or not operated by L-Air, providing
this aircraft offers the same cargo and pax capacity, suitable to perform the
contracted flights.


 


2.2                            Traffic
rights


 


The whole route will be operated under L-Air
flight number under traffic rights of 3rd and 4th freedom
of Armenian to be negotiated and obtained by VGAA under bilateral agreement
between the Belgian and Armenian Government.


 


1.3                            Aircraft
capacity


 


All pax seats and cargo capacity on the whole
route is exclusively reserved for VGAA.


 


1.4.                         Remuneration,
costs and expenses


 


1.4.1.                VGAA will pay L-Air for the wet lease
operation per rotation the amount of $360.000 USD – each rotation.  VGAA certifies to pay each flight rotation
latest one week before flight departure


This rotation rate has been calculated based
on the following parameters :


- EVN fuel rate :     $350,- per ton


- USD 1- / EUR 0.94


An increase of the cost of one of both
parameters with more than 5% will increase the cost of the flight accordingly.


2.4.2.                L-Air will bear all costs and expenses
for the aircraft in respect of the operation considered under article 1.1.
herewith, excluding the following that will be born by VGAA :


 


a/ all cargo handling charges at Brussels,
Yerevan, Lyon and Los Angeles airport;


 


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b/ all other costs such as pax handling,
catering, approach, government taxes etc. are to be paid by L-Air.


 


2.                                  Governmental approvals


 


2.1.                         Flights considered herewith
will be operated by L-Air under Operating Licence – Air Operator’s Certificate
of L-Air, to be issued by the Belgian Civil Aviation Authorities and with
approval of the U.S. Civil Aviation Authorities (FAA/DoT).


 


2.2.                         Flights will be operated under
L-Air flight number under traffic rights of 3rd and 4th
freedom of L-Air pursuant to the bilateral agreement between the Belgian and US
Government.


 


3.                                  Flight departure


 


The first flight departure is foreseen for
the second of April 2003.  L-Air has to
make sure that all flight authorisations are obtained before that date.


 


4.                                  Technical problems


 


In case the aircraft cannot fly due to a
technical problem, L-Air is obliged to replace the aircraft and to make sure
that all passengers arrive at final destination at the latest 24 hours after
the programmed arrival.  All costs
caused by this delay, such as extra meals, hotel accommodations for the
passengers etc, will be paid by L-Air.


 


5.                                  Bank guarantee


 


VGAA will open a bank guarantee in name of
L-Air of 250.000 USD, validity date latest 15 days before the first flight
departure.


 


6.                                  Execution and Termination


 


This agreement shall become effective on
January 28th 2003, and shall supersede any existing arrangements
between parties, covering the same subject and shall continue in force until
terminated by either party giving to the other party three months written notice
by registered letter with return signed receipt.


 


If either party should at any time default in
observing or performing any of the terms and conditions stated in this
agreement or should become bankrupt, or enter into any arrangement with its
creditors or go into liquidation, or suffer any of its goods to be taken in
execution, or if a receiver or trustee or all or substantial part or parts of
its property be appointed or applied for, this agreement may immediately be
cancelled by the other party.


 


7.                                  Event of Default


 


If any party under this agreement breaches
any of the provisions of this agreement by any of the contracting parties,
defaulting party will be given by the non-


 


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defaulting party a period of maximum 30
(thirty) days after written notice of the default by the non-defaulting party,
upon the choice of the non-defaulting party, in order to enable the defaulting
party to remedy to the default.  If
after this maximum of 30 (thirty) days, the default is not remedied, this
agreement shall be automatically terminated upon expiration of this period.


 


8.                                 Miscellaneous


 


8.1.                         This agreement, qualified as
‘heads of agreement’, is to be considered as basic understanding between the
parties, in execution whereof detailed agreements and arrangements will be made
in respect of the clear understanding between parties involved.


8.2.                         Any of the provisions of this
agreements, which should conflict with any other agreements or arrangement as
signed or orally agreed upon between the parties to this agreement, shall
prevail to the provisions or arrangements of the other agreements.


8.3.                         If any or more of the
provisions contained in this agreement will be illegal, unenforceable, or for
any reason not to be held valid, this will not affect any other provision of
this agreement and the agreements related hereto.


8.4.                         This agreement shall in all
respects be governed by and construed in accordance with the laws of the
Kingdom of Belgium.


8.5.                         Any dispute concerning validity,
the interpretation or the performance of this agreement shall be finally
settled by the competent courts of the Kingdom of Belgium


 


In witness whereof it is agreed upon in good
faith in Brussels, January 29th 2003-01-28


 


 


	
  For and behalf of

  	
  For and behalf of

  
	
   

  	
   

  
	
   

  	
   

  
	
  L-AIR 
  Holding Inc.

  	
  VGAA N.V.

  



 


 


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