In this task, you're given a passage that represents a legal contract or clause between multiple parties. Your job is to write questions that ask the basic details corresponding to the legal contracts or clauses. Avoid questions that can be answered correctly without actually understanding the paragraph, and which might have multiple answers. The answer to each question should be unambiguous.

EXHIBIT 10.71

May 04, 2017 Strategic Alliance Agreement This Strategic Alliance Agreement (this Agreement) is entered into as of the 26t h day of May, 2017 (hereinafter referred to as the effective date of the Agreement), by and between Cool Technologies Inc.., a Nevada corporation (hereinafter referred to as COOL TECH), and VETERAN TECHNOLOGY GROUP, LLC, a Missouri corporation (hereinafter referred to as VET TECH). WITNESSETH: WHEREAS, COOL TECH and VET TECH wish to enter into a strategic alliance to market and perform certain complementary business consulting services; NOW, THEREFORE, in consideration of the foregoing and of the mutual premises hereinafter expressed, the parties hereto do mutually agree as follows: ARTICLE I. SCOPE OF STRATEGIC ALLIANCE. A. COOL TECH shall, in a professional manner, take all steps necessary to market and produce its Mobile Generation Program and its other services (collectively the COOL TECH Services) for clients referred to COOL TECH by VET TECH. Any engagement to perform COOL TECH Services shall be on such terms and conditions as COOL TECH may approve at its sole discretion. COOL TECH will perform, schedule, staff and manage all COOL TECH Services or with COOL TECH/VET TECH approved team. Notwithstanding the foregoing, VET TECH may, at its election, bill the client directly for COOL TECH Services and under such circumstances COOL TECH shall bill VET TECH the pre-agreed amount for the engagement as adjusted by any client-approved change orders. For any Government Sales brought by VET TECH COOL TECH agrees to be held to the same billing and payment terms as is dictated under the Federal Acquisition Regulation (FAR) guidelines and requirements; otherwise, COOL TECH will bill the client directly. VET TECH agrees to include reference to COOL TECH in each contract and proposal involving COOL TECH Services. COOL TECH's Mobile Generation (MG), and other proprietary information and associated products, copyrights, trademarks, trade names and logos developed by COOL TECH shall remain the property of COOL TECH and reference to COOL TECH's rights shall be made in all uses of such materials in at least 12 point type. 1





B. VET TECH shall, in a professional manner, take all steps necessary to market and perform its business management consulting, GAIT Software and other AI services (collectively the VET TECH Services) for clients referred to VET TECH by COOL TECH. Any engagement to perform VET TECH Services shall be on such terms and conditions as VET TECH may approve in its sole discretion. VET TECH will perform, schedule, staff and manage all VET TECH Services or a joint VET TECH/COOL TECH team. VET TECH will perform, schedule, staff and manage all VET TECH Services or with VET TECH/COOL TECH approved team. Notwithstanding the foregoing, COOL TECH may, at its election, bill the client directly for VET TECH Services and under such circumstances VET TECH shall bill COOL TECH the pre-agreed amount for the engagement as adjusted by any client-approved change orders; otherwise, VET TECH will bill the client directly. COOL TECH agrees to include reference to VET TECH in each contract and proposal involving VET TECH Services. VET TECH's GAIT Software and other AI services (collectively the VET TECH Services), and other proprietary information and associated products, copyrights, trademarks, trade names and logos developed by VET TECH shall remain the property of VET TECH and reference to VET TECH's rights shall be made in all uses of such materials in at least 12 point type. ARTICLE II. PERIOD OF PERFORMANCE. This Agreement shall be effective as of the date first set forth above and, shall expire on the later of (i) five (5) years from the date hereof, or (ii) with respect to any projects identified in any contract for which VET TECH is billing the client directly, upon the completion of COOL TECH's Services and receipt of payment by COOL TECH from VET TECH for said services. This Agreement shall be automatically renewed for successive one year periods unless either party gives written notice of termination to the other party at least thirty (30) days prior to the date of expiration. Notwithstanding the foregoing, this Agreement shall be earlier terminated (x) by mutual agreement of the parties, or (y) at any time upon sixty (60) days advance written notice to the other party. Time is of the essence in this Agreement. 2





ARTICLE III. MANAGEMENT. Each party shall designate a partner, officer or other senior person to be responsible for the overall administration of this Agreement. VET TECH shall have ultimate responsibility for client relationships for those clients that it elects to bill directly for COOL TECH Services and COOL TECH will respond to VET TECH's direction. ARTICLE IV. CONFIDENTIAL INFORMATION. The parties acknowledge and agree that in the course of the performance of the VET TECH Services and the COOL TECH Services (collectively, the Services) or additional services pursuant to this Agreement, that each may be given access to, or come into possession of, confidential information of the other party which information may contain trade secrets, proprietary data or other confidential material of that party. Therefore the parties have executed a Non-Disclosure Agreement which is attached hereto as Exhibit A, and incorporated by reference as if fully set forth herein. Materials used in any engagement undertaken pursuant to this Agreement shall not be altered or changed without the consent of both parties. ARTICLE V. NO PARTNERSHIP. Nothing herein contained shall be construed to imply a joint venture, partnership or principal- agent relationship between VET TECH and COOL TECH, and neither party shall have the right, power or authority to obligate or bind the other in any manner whatsoever, except as otherwise agreed to in writing. The parties do not contemplate a sharing of profits relating to the VET TECH Services or the COOL TECH Services so as to create a separate taxable entity under Section 761 of the Internal Revenue Code of 1986, as amended, nor co-ownership of a business or property so as to create a separate partnership under the law of any jurisdiction, including, without limitation, MISSOURI or NEVADA. Accordingly, for tax, property and liability purposes VET TECH will provide the VET TECH Services, and COOL TECH will perform the COOL TECH Services, each on a professional basis and as an independent contractor of the other. JOINT SERVICES WILL BE DEFINED IN ADDENDUM XX. Revenues and expenses relating to the Services and any additional services shall be reported separately by the parties for tax purposes. During the performance of the any of the Services, VET TECH's employees will not be considered employees of COOL TECH, and vice versa, within the meaning or the applications of any federal, state or local laws or regulations including, but not limited to, laws or regulations covering unemployment insurance, old age benefits, worker's compensation, industrial accident, labor or taxes of any kind. VET TECH's personnel who are to perform the VET TECH Services or additional services to be provided by VET TECH hereunder shall be under the employment, and ultimate control, management and supervision of VET TECH. COOL TECH's personnel who are to perform the COOL TECH Services or additional services to be provided by COOL TECH hereunder shall be under the employment, and ultimate control, management and supervision of COOL TECH. It is understood and agreed that COOL TECH's employees shall not be considered VET TECH's employees within the meaning or application of VET TECH's employee fringe benefit programs for the purpose of vacations, holidays, pension, group life insurance, accidental death, medical, hospitalization, and surgical benefits, and vice versa. 3





ARTICLE VI. TRADEMARK, TRADE NAME AND COPYRIGHTS. Except as expressly provided herein, this Agreement does not give either party any ownership rights or interest in the other party's trade name, trademarks or copyrights. ARTICLE VII. INDEMNIFICATION. Each of VET TECH and COOL TECH, at its own expense, shall indemnify, defend and hold the other, its partners, shareholders, directors, officers, employees, and agents harmless from and against any and all third-party suits, actions, investigations and proceedings, and related costs and expenses (including reasonable attorney's fees) resulting solely and directly from the indemnifying party's negligence or willful misconduct. Neither VET TECH nor COOL TECH shall be required hereunder to defend, indemnify or hold harmless the other and/or its partners, shareholders, directors, officers, directors, employees and agents, or any of them, from any liability resulting from the negligence or wrongful acts of the party seeking indemnification or of any third- party. Each of VET TECH and COOL TECH agrees to give the other prompt written notice of any claim or other matter as to which it believes this indemnification provision is applicable. The indemnifying party shall have the right to defend against any such claim with counsel of its own choosing and to settle and/or compromise such claim as it deems appropriate. Each party further agrees to cooperate with the other in the defense of any such claim or other matter. ARTICLE VIII. NON-SOLICITATION OF PERSONNEL. COOL TECH and VET TECH agree not to engage in any attempt whatsoever, to hire, or to engage as independent contractors, the other's employees or independent contractors during the term of this Agreement and for a period of six (6) months following expiration or termination of this Agreement except as may be mutually agreed in writing. ARTICLE IX. INTELLECTUAL PROPERTY Work performed on engagements pursuant to this Agreement by either VET TECH and/or COOL TECH and information, materials, products and deliverables developed in connection with engagements pursuant to this Agreement shall be the property of the respective parties performing the work or creating the information. All underlying methodology utilized by COOL TECH and VET TECH respectively which was created and/or developed by either prior to the date of this Agreement and utilized in the course of performing engagements pursuant to this Agreement shall not become the property of the other. Each party's rights, titles and interests are described in the Non-Disclosure Agreement attached hereto as Exhibit A. 4





ARTICLE X. GENERAL PROVISIONS. A. Entire Agreement: This Agreement together with all documents incorporated by reference herein, constitutes the entire and sole agreement between the parties with respect to the subject matter hereof and supersedes any prior agreements, negotiations, understandings, or other matters, whether oral or written, with respect to the subject matter hereof. This Agreement cannot be modified, changed or amended, except for in writing signed by a duly authorized representative of each of the parties. B. Conflict: In the event of any conflict, ambiguity or inconsistency between this Agreement and any other document which may be annexed hereto, the terms of this Agreement shall govern. C. Assignment and Delegation: Neither party shall assign or delegate this Agreement or any rights, duties or obligations hereunder to any other person and/or entity without prior express written approval of the other party. D. Notices: Any notice required or permitted to be given under this Agreement shall be in writing, by hand delivery, commercial overnight courier or registered or certified U.S. Mail, to the address stated below for COOL TECH or to the address stated below for VET TECH, and shall be deemed duly given upon receipt, or if by registered or certified mail three (3) business days following deposit in the U.S. Mail. The parties hereto may from time to time designate in writing other addresses expressly for the purpose of receipt of notice hereunder. If to VET TECH: If to COOL TECH: E. Severability: If any provision of this Agreement is declared invalid or unenforceable, such provision shall be deemed modified to the extent necessary and possible to render it valid and enforceable. In any event, the unenforceability or invalidity of any provision shall not affect any other provision of this Agreement, and this Agreement shall continue in full force and effect, and be construed and enforced, as if such provision had not been included, or had been modified as above provided, as the case may be. F. Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of Missouri. Without giving effect to its choice of law principles. 5





G. Paragraph Headings: The paragraph headings set forth in this Agreement are for the convenience of the parties, and in no way define, limit, or describe the scope or intent of this Agreement and are to be given no legal effect. H. Counterparts: This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. I. Exhibits: The Exhibits attached hereto are made a part of this Agreement as if fully set forth herein. IN WITNESS WHEREOF, the parties, by their duly authorized representatives, have caused this Agreement to be executed as of the date first written above. Veteran Technology Group, LLC Cool Technologies Inc. By: Name: /s/ Michael Grimes___ /s/ Timothy Hassett___ By: Name: _Michael Grimes ____ ___Timothy Hassett__ 6
Highlight the parts (if any) of this contract related to Anti-Assignment that should be reviewed by a lawyer. Details: Is consent or notice required of a party if the contract is assigned to a third party?

FRANCHISE AGREEMENT                                                   TABLE OF CONTENTS

1.       INTRODUCTION AND DEFINITIONS.......................................1          1.A.     INTRODUCTION..............................................1          1.B.     DEFINITIONS...............................................3

2.       GRANT OF FRANCHISE RIGHTS..........................................7          2.A.     GRANT OF FRANCHISE........................................7          2.B.     PRINCIPAL OWNERS' GUARANTY................................7          2.C.     TERRITORIAL RIGHTS........................................8          2.D.     RESERVATION OF RIGHTS.....................................8          2.E.     OPTION TO DEVELOP OTHER SITES WITHIN THE TERRITORY........9          2.F.     TERM OF FRANCHISE.........................................9

3.       OTHER DISTRIBUTION METHODS........................................10          3.A.     SPECIAL DISTRIBUTION ARRANGEMENTS........................10

4.       FRANCHISE AND OTHER FEES..........................................10          4.A.     INITIAL FRANCHISE FEE....................................10          4.B.     DEFERRAL OF FRANCHISE FEE................................10          4.C.     ROYALTY FEE..............................................10          4.D.     ADVERTISING FUND FEE.....................................11          4.E.     TRANSFER FEE.............................................11          4.F.     FEES FOR ADDITIONAL FRANCHISES...........................11          4.G.     FEES FOR RENEWAL OF FRANCHISE............................12          4.H.     PAYMENT BY ELECTRONIC FUNDS TRANSFER.....................12          4.I.     LATE CHARGE AND INTEREST. ...............................12

5.       RENEWAL OF FRANCHISE TERM.........................................13          5.A.     FRANCHISEE'S RIGHT TO A SUCCESSOR FRANCHISE..............13          5.B.     RELEASES.................................................14          5.C.     NOTICES..................................................15

6.       TRADEMARKS AND LIMITATIONS........................................15          6.A.     OWNERSHIP OF MARKS.......................................15          6.B.     DISCONTINUANCE OF USE OF MARKS...........................16          6.C.     CORPORATE NAME...........................................16          6.D.     TERMINATION..............................................17          6.E.     TRADEMARK ENFORCEMENT....................................17          6.F.     USE OF SERVICE MARK......................................17

7.       SELECTION OF FRANCHISE LOCATION...................................18          7.A.     SITE SELECTION...........................................18          7.B.     LEASE....................................................18          7.C.     RELOCATION...............................................20

8.       DEVELOPMENT OF UNIT...............................................21          8.A.     UNIT DESIGN SPECIFICATIONS AND CONSTRUCTION PLANS........21          8.B.     DEVELOPMENT OF THE UNIT..................................21          8.C.     EQUIPMENT, FIXTURES, FURNISHINGS, AND SIGNS..............22          8.D.     EXCEPTIONS TO EQUIPMENT OR FURNISHINGS...................22          8.E.     CONSTRUCTION ASSISTANCE..................................23          8.F.     LIMITATION ON LIABILITY..................................23

9.       UNIT OPENING......................................................24          9.A.     COMMENCEMENT OF OPERATIONS...............................24

10.      FRANCHISEE TRAINING...............................................24          10.A.    INITIAL TRAINING.........................................24          10.B.    EMPLOYEE TRAINING........................................25          10.C.  ON-SITE TRAINING...........................................26          10.D.    COMPANY GROWTH...........................................26          10.E.    RETRAINING PROGRAMS......................................26          10.F.    OTHER GUIDANCE...........................................26

11.      ADVERTISING AND OTHER PROMOTIONS..................................27          11.A.    PROVIDING OF ADVERTISING MATERIALS.......................27          11.B.    CONTROL OF ADVERTISING PROGRAMS AND CONCEPTS.............27          11.C.    SEGREGATION OF ADVERTISING FUND..........................28          11.D.    SUSPENSION OF ADVERTISING FUND FEES......................29          11.E.    FRANCHISEE'S REQUIRED ADVERTISING EXPENDITURES...........29          11.F.    USE OF TRADEMARK REFERENCES AND APPROVAL...............                                     OF FRANCHISEE'S MARKETING..............29

12.      ADHERENCE TO UNIFORM STANDARDS....................................30          12.A.    STANDARDS AND OPERATIONS MANUAL..........................30          12.B.    CONFIDENTIALITY OF OPERATIONS MANUAL.....................32          12.C.    INCORPORATION OF OPERATIONS MANUAL INTO AGREEMENT........32          12.D.    MODIFICATIONS/UPDATES OF OPERATIONS MANUAL...............33

13.      UNIT IMAGE AND OPERATION..........................................33          13.A.    CONDITION AND APPEARANCE OF UNIT.........................33          13.B.  UNIT MENU..................................................35          13.C.    ADHERENCE TO APPROVED ITEMS..............................35          13.D.    EXCEPTION PROCESS........................................36          13.E.  PROMOTIONAL ALLOWANCES.....................................37

14.      FRANCHISEE OPERATIONS.............................................37          14.A.    MANAGEMENT...............................................37          14.B.  SUFFICIENT WORKING CAPITAL.................................38          14.C.  FILING OF OPERATIONS AND SALES REPORTS.....................38          14.D.    EMPLOYEE DRESS AND CUSTOMER SERVICE......................38





         14.E.  COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES...........38          14.F.    PAYMENT OF TAXES.........................................39          14.G.    SALE OF PRODUCT..........................................39          14.H.    COOPERATION..............................................39          14.I.    INSURANCE................................................39          14.J.    SUGGESTED RETAIL PRICES..................................40

15.      ACCOUNTING, REPORTS AND FINANCIAL STATEMENTS......................41          15.A.  ESTABLISHMENT OF ACCOUNTING SYSTEM.........................41          15.B.   MAINTENANCE OF RECORDS....................................41

16.      AUDITS AND INSPECTIONS............................................42          16.A.    AUDITS...................................................42          16.B.    RIGHT OF ENTRY AND INSPECTION............................42

17.      TRANSFER, ASSIGNMENT AND REPURCHASE. .............................43          17.A.  BY PRETZEL TIME............................................43          17.B.  BY FRANCHISEE..............................................43          17.C.  CONDITIONS FOR APPROVAL OF TRANSFER........................44          17.D.    TRANSFER TO A WHOLLY-OWNED CORPORATION...................45          17.E.  FORMATION OF A CORPORATION.................................46          17.F.  DEATH OR DISABILITY OF FRANCHISEE..........................47          17.G.    PRETZEL TIME'S FIRST RIGHT OF REFUSAL....................47          17.H.    PUBLIC OR PRIVATE OFFERINGS..............................48

18.      TERMINATION OF AGREEMENT BY FRANCHISEE............................49          18.A.  FRANCHISEE'S RIGHT TO TERMINATE............................49

19.      DEFAULT AND TERMINATION...........................................50          19.A.  EXACT AND COMPLETE PERFORMANCE REQUIRED....................50          19.B.    DEFAULT AND RIGHT TO CURE................................50          19.C.  EXTENSION OF NOTICE........................................50          19.D.  REPEATED BREACHES..........................................50          19.E.    EVENTS OF DEFAULT - 30 DAYS NOTICE - CURABLE DEFAULTS....51          19.F.    EVENTS OF DEFAULT - IMMEDIATE TERMINATION - NO                   RIGHT TO CURE............................................53

20.      RIGHTS AND OBLIGATIONS OF PRETZEL TIME AND FRANCHISEE UPON TERMINATION            OR EXPIRATION OF THE FRANCHISE..................................56          20.A.  AMOUNTS OWED...............................................56          20.B.    DISCONTINUANCE OF MARKS..................................56          20.C.    RETURN OF MATERIALS......................................57          20.D.    TELEPHONE COMPANY........................................57          20.E.    CONFIDENTIAL INFORMATION.................................58          20.F.    LEASING..................................................58          20.G.    COVENANT NOT TO COMPETE..................................58          20.H.  PRETZEL TIME'S RIGHT TO PURCHASE ASSETS OF THE UNIT........59

21.      RELATIONSHIP OF THE PARTIES/INDEMNIFICATION.......................60          21.A.    EXCLUSIVE RELATIONSHIP...................................60          21.B.  NO LIABILITY FOR ACTS OF OTHER PARTY.......................61          21.C.    TAXES....................................................61          21.D.    INDEMNIFICATION..........................................62          21.E.  INDEPENDENT CONTRACTOR.....................................62

22.      PROTECTION OF TRADE SECRETS.......................................63          22.A.  CONFIDENTIAL INFORMATION...................................63          22.B.  DISCLOSURE OF IDEAS AND NEW PROCEDURES.....................64

23.      ENFORCEMENT.......................................................65          23.A.    UNAVOIDABLE DELAYS.......................................65          23.B.    RIGHTS OF PARTIES ARE CUMULATIVE.........................65          23.C.    WAIVER OF OBLIGATIONS....................................65          23.D.    CONTINUING OBLIGATIONS...................................66          23.E.    INVALID OR UNENFORCEABLE PROVISIONS......................66          23.F.  INJUNCTIVE RELIEF..........................................66          23.G.    APPLICABLE LAW...........................................67          23.H.    ENTIRE STATUS OF AGREEMENT...............................67          23.I.    AMENDMENT OF AGREEMENT...................................67          23.J.    HEIRS, SUCCESSORS AND ASSIGNS............................67          23.K.    CONDITIONS AND CONTINGENCIES.............................67          23.L.    WAIVER BY PRETZEL TIME...................................68          23.M.    COSTS AND EXPENSES OF ENFORCEMENT........................68          23.N.    RIGHTS OF PARTIES ARE CUMULATIVE ........................69          23.O.    WAIVER OF JURY TRIAL.....................................69          23.P.  WAIVER OF PUNITIVE DAMAGES.................................69          23.Q.  EXCLUSIVE JURISDICTION.....................................69          23.R.    LIMITATIONS OF CLAIMS....................................69

24.      ACKNOWLEDGMENTS AND REPRESENTATIONS...............................70

25.      CONSTRUCTION......................................................70          25.A.    HEADINGS.................................................70          25.B.  TERMINOLOGY................................................70          25.C.    COUNTERPARTS.............................................71          25.D.  REASONABLENESS.............................................71

26.      SECURITY AGREEMENT................................................70          26.A.    SECURITY INTEREST........................................71          26.B.  DEFAULT REMEDIES UNDER U.C.C...............................72

27.      NOTICES...........................................................72          27.A.    DELIVERY OF NOTICES......................................72





EXHIBITS

         FRANCHISE ACKNOWLEDGMENTS AND REPRESENTATIONS            STATEMENT        . . . . . . . . . . . . . . . . . . . . . . .. A

         PRINCIPAL OWNER, OTHER OWNERS, DESIGNATED PRINCIPAL            OWNERS, UNIT AND MANAGER, SUPERVISING OWNERS AND INITIAL            CAPITALIZATION           . . . . . . . . . . . . . . . .. . . . B

         PERMITTED COMPETITIVE BUSINESSES, FORM DEVELOPMENT            AGREEMENT (FOR SINGLE-UNIT FRANCHISES), IDENTITY OF           DEVELOPER AND DATE OR DEVELOPMENT AGREEMENT               . . . .C

         OWNER'S AND GUARANTOR'S UNDERTAKING AND ASSUMPTION OF                  OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . D

         AUTHORIZATION AGREEMENT FOR PREARRANGED PAYMENTS (DIRECT DEBITS). E

         UNIT SITE AGREEMENT               . . . . . . . . . . . . . . .   F

         COLLATERAL ASSIGNMENT OF TELEPHONE NUMBERS AND LISTINGS       . . G

         MUTUAL CONFIDENTIALITY AGREEMENT                            . .  .H

         TCBY YOGURT PRODUCTS ADDENDUM                        . . . . . .  I

FRAN.AGT 6.5.96

         SATELLITE UNIT ADDENDUM            . . . . .  . . . . . . . . .   J

         RELEASE AGREEMENT                  .  .  . . . . . . . . . . . .  K

         THIRD PARTY ASSIGNMENT AGREEMENT            . . . . . . . . .     L

         SUBLEASE                   .  .  . . . . . . . . . . . . . . .    M

         COLLATERAL ASSIGNMENT OF LEASE              . . . . . . . . .     N

                               PRETZEL TIME, INC.                                FRANCHISE AGREEMENT

         This  agreement is made and entered into this day of , 19  (hereinafter referred  to  as  Effective  Date)  by  and  between  Pretzel  Time,  Inc.,  a Pennsylvania   corporation   with  its  principal  place  of  business  at  4800 Linglestown Road, Suite 202,  Harrisburg,  Pennsylvania  17112 trading and doing business  as  Pretzel  Time  (hereinafter  referred  to  as  Pretzel  Time)  and Franchisee (as defined below) who hereby agrees to the following:

Franchisee:

,

a

,

with its principal address at:

         NOW  THEREFORE,   in  consideration  of  the  mutual  covenants  herein contained,  and  intending  to be legally  bound  hereby,  the parties  agree as follows:

1.       INTRODUCTION AND DEFINITIONS.

         1.A.     INTRODUCTION.

         Pretzel Time and its  Affiliates  (as defined below) have developed and continue to develop methods of operating food service businesses,  including the food  service  business  referred to in this  Agreement  as a Pretzel  Time Unit (defined  below),  which  feature  Products  (defined  below)  for off  premises consumption.  Pretzel Time has established  quality  products and services which will  continue to be a unique  benefit to Pretzel Time and its  Franchisees.  In addition to off-premises dining, Pretzel Time may, in its sole discretion, offer to a Pretzel  Time Unit the right to offer  TCBY  frozen  yogurt  and other TCBY yogurt  products.  Pretzel  Time  Units  operate  at  locations  that  feature a distinctive  food  service  format and Trade Dress  (defined  below) and utilize distinctive  business formats,  specifications,  employee selection and training programs,  signs, equipment,  layouts, unit fronts, operation systems,  recipes,





methods,  procedures,  designs  and  marketing  and  advertising  standards  and formats,  all of which  Pretzel  Time may  modify  from time to time in its sole discretion  (the Pretzel Time System).  Pretzel Time operates,  and franchises certain  qualified  persons and entities to license and grants the  privildge to operate, Pretzel Time Units using the Pretzel Time System and the Marks (defined below).

         Pretzel Time has  developed and perfected a System for providing to the public, at retail, in an efficient manner, a variety of distinctive, hand-rolled soft pretzels,  pretzel-related  products (such as pretzel dogs), beverages, and complimentary  pretzel  toppings.  These  Products and services which comprise a part of the Pretzel  Time System are  delineated  and set forth in detail in the Pretzel Time Operations Manual (hereinafter  Operations Manual). These Pretzel Time Units,  which may include stores,  carts, and kiosks, are known as Pretzel Time Units.

         Franchisee  acknowledges  and agrees that  Pretzel  Time has expended a considerable  amount of time and effort in  developing  and refining the recipes for, the methods of preparation of, the Products.  Pretzel Time may from time to time modify such recipes and methods of preparation, which may include requiring Franchisee  to prepare  pretzels and other  Products  from scratch  mixes and to purchase  prepared food  products from Pretzel Time or an approved  Pretzel Time Affiliate.  Pretzel Time and its Affiliates  currently operate and will continue to operate  Pretzel Time Units  offering and selling the Products.  Pretzel Time franchises  others to operate Pretzel Time Units and other outlets  offering and selling the Products.  Pretzel Time owns, uses,  promotes and franchises certain trade names, trademarks,  service marks and other commercial symbols,  including the trade and service marks,  Pretzel Time and  associated  logos,  which have gained and continue to gain public  acceptance  and goodwill,  and may hereafter create, use and franchise  additional  trademarks,  service marks and commercial symbols in conjunction with the operation of Pretzel Time Units.

         The distinguishing  characteristics of the Pretzel Time System include, but are not limited to, the following:

                  (a) The Pretzel Time trade name and in combination  with other          commercial  symbols owned by Pretzel Time with a color scheme  pattern,          Unit design,  insignia,  slogans,  coordinating  Pretzel Time's overall          operation, retail facilities,  advertising, training, and other related          matters;

                  (b) A developed  marketing  concept and uniform  procedure for          the operation of a Pretzel Time Unit,  including  stylized  designs and          display  facilities  to provide  the  highest  quality of Pretzel  Time          pretzels,  soft  beverages,  toppings and other  Pretzel  Time-approved          products; and

                  (c) Rules of  operation  and a  procedure  for  operating  and          training Franchisees, managers and employees.

         Franchisee  recognizes the benefits to be derived from being identified with and  licensed by Pretzel  Time,  and being able to utilize the Pretzel Time System of retailing  Pretzel Time  Products  and related  products,  service and trademarks which Pretzel Time makes available to its Franchisees. Franchisee has applied  for a  franchise  to operate a Pretzel  Time Unit at the Site  (defined below). Franchisee's application and the Site have been approved by Pretzel Time in reliance upon all of the  representations  made in such  application  and the Franchisee's  Acknowledgments and Representations  Statement, a copy of which is attached hereto as Exhibit A, which shall be executed by Franchisee concurrently with this  Agreement.  Franchisee  desires to operate a Pretzel  Time  Franchise pursuant  to the  provisions  hereof  and  at the  Site  specified  herein,  and Franchisee has had a full and adequate  opportunity to be thoroughly  advised of the terms and conditions of this Franchise Agreement by legal counsel of its own choosing.

         1.B.     DEFINITIONS.

         For  purposes  of this  Agreement,  the  terms  listed  below  have the following meanings: Other terms used in this Agreement are defined and construed in the context in which they occur.

         Affiliate  - Any person or legal entity that  directly or  indirectly owns or  controls  Pretzel  Time,  that  is  directly  or  indirectly  owned  or controlled by Pretzel  Time, or that is under common  control with Pretzel Time. For purposes of this  definition,  control  means the power to direct or cause the direction of the management and policies of an entity.

         Cart - It is a type of Pretzel Time Unit which is  free-standing  and sells Pretzel Time pretzels and other Pretzel  Time-approved  Products which are produced  or  manufactured  at a  co-existing  Kiosk  (defined  below)  or Store (defined below) situated in the Territory.

     Competitive  Business  - A business or  enterprise,  other than a Pretzel Time Unit,  that:  (1) Offers food products  which are the same as or similar to the  products  for  consumer  consumption  off  premises  or other  distribution channels;  or (2) Grants or has granted franchises or licenses or establishes or has  established  joint  ventures  for the  development  and/or  operation  of a business or an enterprise described in the foregoing clause (1).

         Controlling  Interest - An interest,  the ownership of which empowers the holder  thereof to exercise a  controlling  influence  over the  management, policies  or  personnel  of an entity on any issue and shall  prevent  any other person, group, combination,  or entity from blocking voting control on any issue or exercising any veto power. If a limited  partnership,  a general  partnership interest or such percentage of limited partnership interests as shall permit the





replacement or removal of any general  partner.  Without limiting the generality of the  foregoing,  ownership  of forty  percent  (40%) or more of the equity or voting  securities  of a  corporation  or ownership  of any general  partnership interest in a  partnership  or joint  venture  shall be deemed  conclusively  to constitute a  Controlling  Interest in the  corporation,  partnership,  or joint venture, as the case may be.

         Area  Developer's  Agreement  -  Agreement  pursuant to which an area developer  is granted the right to develop one (1) or more Pretzel Time Units in a geographic area in which the Unit is located.

         Franchisee  - The  party  to whom the  Franchise  is  granted  by the Franchisor,  Pretzel Time, Inc. The term is applicable to one or more persons, a corporation or a partnership,  as the case may be. If two or more persons are at any time the Franchisee hereunder,  their obligations and liabilities to Pretzel Time shall be joint and several. References to Franchisee and assignee which are applicable to an individual or individuals  shall mean the Owner (defined below) or Principal  Owners (defined  below) of the equity or operating  control of the Franchisee or the assignee,  if the  Franchisee or the assignee is a corporation or partnership.

         Net  Revenues  - For  purposes  of  this  Agreement,  the  term  Net Revenues  includes all gross sums, monies and other  consideration  received by Franchisee  of every kind and nature from sales and services  made in, upon,  or from any and all retail  Units  operated by  Franchisee  under the Pretzel  Time Marks in his  Territory,  whether  upon credit or for cash,  without  reserve or deduction for inability or failure to collect,  less all refunds and allowances, if any,  given in good faith to  customers,  and any sales,  use or excise taxes which are separately  stated and which Franchisee pays to any federal,  state or local tax authority.

         Immediate  family - (1) The spouse of a person;  and (2) the  natural and  adoptive  parents and natural and  adopted  children  and  siblings of such person and their spouses;  and (3) the natural and adoptive  parents and natural and adopted  children  and  siblings of the spouse of such  person;  and (4) any other member of the household of such person.

         Interest  - Eighteen  percent  (18%) per annum for the number of days overdue or the highest applicable rate allowed by law.

         Kiosk - Is a type of  Pretzel  Time  Unit,  which is a  free-standing enclosed area located within the common area of a mall which can manufacture and sell Pretzel Time pretzels and other Pretzel Time-approved  Products without the co-existence of a Pretzel Time Store within the territory.

         Marks - The  trademarks,  service marks,  logos and other  commercial symbols which Pretzel Time authorizes Franchisee to use to identify the services and/or products offered by Pretzel Time Units, including the mark Pretzel Time and the Trade Dress  (defined  below);  provided that such  trademarks,  service marks,  logos,  other  commercial  symbols  and the Trade  Dress are  subject to modification  and  discontinuance  at Pretzel  Time's  sole  discretion  and may include additional or substitute  trademarks,  service marks, logos,  commercial symbols and Trade Dress as provided in this Agreement.

         Owner - Each person or entity  holding  direct or indirect,  legal or beneficial Ownership Interests (defined below) in Franchisee and each person who has other direct or indirect property rights in Franchisee,  this Agreement, the Franchise or the Unit and as designated  in Exhibit B attached and  incorporated herein.

         Ownership Interests - In relation to a: (i) corporation, the legal or beneficial ownership of shares in the corporation;  (ii) partnership,  the legal or beneficial ownership of a general or limited partnership  interest;  or (iii) trust, the ownership of a beneficial interest of such trust.

         Permanent Disability - A mental or physical disability, impairment or condition  that is  reasonably  expected  to prevent or  actually  does  prevent Franchisee or an Owner of a Controlling  Interest in Franchisee from supervising the management and operation of the Unit for a period of six (6) months from the onset of such disability, impairment or condition.

         Permitted  Competitive  Business  - A business  which  constitutes  a Competitive  Business  and is  disclosed  in  Exhibit  C which  shall be made by Franchisee  and  Owners  as of the date of this  agreement  provided  that  such business does not offer hard or soft pretzels, or yogurt on its menu.

         Pretzel Time Unit  -  A food service business that:

                  (1) offers  Products  for consumer  consumption  off-premises,          provided  that  Pretzel  Time,  may in its sole  discretion,  authorize          and/or require such business to offer TCBY yogurt products  pursuant to          a  Yogurt  Product  Addendum  (defined  below)  or to  operate  Special          Distribution  Arrangements pursuant to a Special Distribution Agreement          (defined below); and

                  (2) operates using the Pretzel Time System and the Marks; and

                  (3) is either  operated by Pretzel Time or its  Affiliates  or          pursuant to a valid franchise from Pretzel Time.

         Pretzel Time Units are of three types: stores, carts, and kiosks.

         Principal Owner  - Each Owner which:





                  (1)  is a general partner in Franchisee; or

                  (2) has a direct or indirect equity interest:

                           (a) in  Franchisee  of twenty  percent  (20%) or more                            (regardless of whether such Owner is entitled to vote                            thereon); or

                           (b)  in any Pretzel Time unit; or

                  (3) is  designated  as a Principal  Owner in Exhibit B of this Agreement.

         Products - Products approved or required by Pretzel Time from time to time in its sole  discretion for sale at or from Pretzel Time Units,  including, without  limitation,  hand-rolled  soft pretzels of various  flavors  including, without limitation,  chocolate chip, raisin,  honey-wheat,  and cinnamon, frozen pretzels  and  other  pretzel-related  products  and  toppings,  frozen  yogurt, beverages, and other Pretzel Time-approved products, provided that the foregoing products are subject to  modification or  discontinuance  in Pretzel Time's sole discretion from time to time and may

include additional or substitute products.

         Site - The  location of the Pretzel  Time Unit as  described  in this Agreement. The term refers to the inside of the four walls of the Unit premises.

         Special Distribution Agreement - A separate agreement whereby Pretzel Time  authorizes  a  Franchisee  of a  Pretzel  Time  Unit to  operate a Special Distribution  Arrangement  at a  Special  Distribution  Location  designated  by Pretzel Time.

         Special Distribution  Arrangement - The sale of Products at or from a Special  Distribution  Location  (defined  below),  whether or not by or through on-premises food service  facilities or concessions,  pursuant to Pretzel Time's standards and  specifications for such sales, which Pretzel Time may change from time to time in its sole discretion.

         Special Distribution  Location - A facility or location,  which as by way of example and without limitation,  a school,  hospital,  office, work site, military facility, grocery store, convenience store, supermarket,  entertainment or sporting facility or event, bus or train station,  park, toll road or limited access highway  facility,  shopping mall or other similar  facility,  at or from which  Pretzel  Time,  in its sole  discretion,  authorizes  the  operation of a Special Distribution  Arrangement pursuant to a Special Distribution  Agreement, which facility may be located within or outside the Territory.

         Store - Is a traditional in-line Pretzel Time Unit where Pretzel Time Products  are  produced  and  sold  to  customers  at  retail  for  off-premises consumption.

         Territory  - The geographic area described in this Agreement.

         Trade  Dress - The unit  design,  decor and image which  Pretzel Time authorizes  and requires  Franchisee to use in connection  with the operation of Pretzel Time Units,  as it may be revised and further  developed by Pretzel Time or its Affiliates from time to time and as further described in the Manuals.

         Transfer - The voluntary, involuntary, direct or indirect assignment, sale, gift, pledge, mortgage, hypothecation, encumbrance or other disposition by Franchisee (or any of its Owners) or by operation of law of:

         (1)  Any interest in this Agreement;

         (2)  A Controlling Interest in Franchisee; or

         (3) Any interest in the Unit, equipment, furnishings or fixtures.

         A Transfer shall also be deemed to include a merger or consolidation of Franchisee  with  any  other  entity,  the  issuance  of  additional  securities representing,  or convertible into, an Ownership  Interest in Franchisee and any Transfer as a result of death  (subject to this Section),  divorce,  insolvency, corporate or  partnership  dissolution  proceedings or otherwise by operation of law.

Unit - The Pretzel Time Unit which  Franchisee is franchised to operate at the Site pursuant to this Agreement.

         Yogurt  Product  Addendum  - The form of  addendum  to the  Franchise Agreement used by Pretzel Time attached  hereto as Exhibit I from time to time to authorize or require, in its sole discretion,  a franchisee of a Pretzel Time Unit to offer TCBY frozen yogurt and other TCBY frozen yogurt products.

2.       GRANT OF FRANCHISE RIGHTS.

         2.A.     GRANT OF FRANCHISE.

         Pretzel  Time hereby  grants to  Franchisee  and  Franchisee  agrees to undertake,  during the term of this  Agreement and upon the terms and conditions stated in this Agreement, the right, license and privilege to operate,  conduct,





and do business  and to use certain  trade  names,  trademarks,  service  marks, logos,  and other  commercial  symbols,  including  Pretzel Time (referred to as Marks) solely and  exclusively for the operation of one retail  franchise Unit (referred to as Franchise), which is in the form of a (Store/Kiosk/Cart),  and to sell  those  Products  known as  Pretzel  Time  pretzels  and  other  Pretzel Time-approved   menu  items  and  Products   further   described  in  Section  2 (hereinafter Products) in accordance with the provisions of this Agreement and in accordance with rules,  standards,  systems,  and procedures as prescribed by Pretzel Time which may be changed,  improved and further  developed from time to time,  (hereinafter  Pretzel  Time  System),  at one (1) location  only,  such location to be

 (hereinafter Site).

         Pretzel  Time  will not,  as long as this  Agreement  is in effect  and Franchisee  is not in default,  enfranchise  or operate any other  Pretzel  Time Franchise  within the following  enclosed  mall or building  except as otherwise provided herein (hereinafter  referred to as Territory):  none. Franchisee has no territory other than the actual store location.  Franchisee acknowledges that Franchisee  has no rights  outside of the actual store location and that Pretzel Time has the right to sell certain  frozen  products as Pretzel Time desires and Pretzel  Time may conduct  Pretzel  Time's  business as Pretzel  Time so desires without hinderance from Franchisee.

         Franchisee  shall not  conduct  the  business of the Unit from any Site other  than  the  Site  specified,  except  as  otherwise  provided  under  this Agreement.  The form of addendum to the Franchise Agreement used by Pretzel Time is  attached  hereto  as  Exhibit  J to be  used  from  time  to time to add a satellite unit pursuant to the Satelite Unit Addendum.

         2.B.     PRINCIPAL OWNERS' GUARANTY.

         Franchisee shall cause all Principal Owners,  and their spouses,  as of the Effective Date to execute and deliver to Pretzel Time concurrently with this Agreement,  and all persons or entities which become Principal Owners, and their spouses,  thereafter to execute and deliver to Pretzel Time promptly thereafter, the  Owner's  and  Guarantor's  Undertaking  and  Assumption  of  Obligations, attached hereto as Exhibit D, or such other agreement as Pretzel Time prescribes from time to time,  undertaking  to be bound  jointly and  severally  by, and to guarantee the payment and  performance  of, all  provisions  of this  Agreement. Franchisee shall furnish to Pretzel Time, at any time upon request, in such form as Pretzel Time may require,  a list of its  shareholders or partners (of record and beneficially) reflecting their respective interests in Franchisee.

         2.C.     TERRITORIAL RIGHTS.

         Except as  otherwise  provided  in this  Agreement  and  provided  that Franchise  is in full  compliance  with  this  Agreement,  Pretzel  Time and its Affiliates  will  not  during  the  term  of this  Agreement  operate  or  grant franchises  for the operation of Pretzel Time Units within the  Territory  other than the Franchise granted to Franchisee pursuant to this Agreement.  Franchisee acknowledges  that  Franchisee  shall  have no  right  to any  Territory  unless Franchisee  and  Pretzel  Time have  entered  into a separate  Area  Developer's Agreement. Franchisee shall have no exclusive Territory based on this Agreement.

         2.D.     RESERVATION OF RIGHTS.

         Except as expressly limited by Section 2.C., Pretzel Time (on behalf of itself,  its Affiliates and its designees)  retains all rights,  in its sole and exclusive discretion,  to offer to sell the Products and services authorized for Pretzel Time Units under the Marks  hereinafter  described in Section 6 or other trade names, trademarks, service marks and commercial symbols through similar or dissimilar  channels of distribution and national  accounts and pursuant to such terms and  conditions  as Pretzel Time deems  appropriate.  Pretzel Time and its Affiliates  retain the right to offer for sale and sell, and franchise others to offer for sale and sell,  any other  Products or services  under the Marks and own and  operate  and grant to others  the right to operate  Pretzel  Time Units solely or in conjunction with TCBY stores or other snack food businesses at such locations  and on such  terms  and  conditions  as  Pretzel  Time,  in its  sole discretion,  deems appropriate.  Such Products shall include, but not be limited to, soft pretzels,  frozen pretzels and other pretzel-related  products,  frozen yogurt and other Pretzel Time-approved Products and such methods of distribution may include,  but shall not be limited to, sales at sports  arenas and stadiums, amusement  parks,   department  stores,   airports,  toll  road  travel  plazas, hospitals, office buildings, schools and colleges and other Non Traditional Unit venues  as  well  as  sales  to  wholesalers  and/or  distributors  for  resale. Notwithstanding  the foregoing,  Pretzel Time reserves the right both within and outside the  Territory  (if any) to sell at wholesale  all Products and services which comprise a part of the Pretzel Time System.

         FRANCHISEE  ACKNOWLEDGES  AND AGREES THAT PRETZEL TIME HAS THE RIGHT TO PLACE UNITS AT ANY LOCATION,  EXCEPT AS LIMITED BY THIS  AGREEMENT,  AT ITS SOLE DISCRETION  AND  WITHOUT  REGARD TO THE IMPACT UPON THE  FRANCHISEE'S  BUSINESS. FRANCHISEE  ACKNOWLEDGES  THAT  ABSENT A SEPARATE  AREA  DEVELOPER'S  AGREEMENT, PRETZEL  TIME  HAS THE  RIGHT  TO  PLACE  UNITS  AT ANY  LOCATION,  AT ITS  SOLE DISCRETION, AND WITHOUT REGARD TO THE IMPACT UPON THE FRANCHISEE'S BUSINESS.

         Franchisee  acknowledges that because complete and detailed  uniformity under many varying  conditions  may not be possible or  practical,  Pretzel Time specifically reserves the right and privilege,  at its sole discretion and as it may deem in the best  interests of all  concerned in any specific  instance,  to





vary standards for any Franchisee based upon the peculiarities of the particular Site,  landlords'  requirements,  business potential,  or other conditions which Pretzel  Time deems to be of  importance  to the  successful  operation  of such Franchisee's business.

         2.E.     OPTION TO DEVELOP OTHER SITES WITHIN THE TERRITORY.

         If Franchisee  seeks to add a different type of Pretzel Time Unit, such as a kiosk or a cart,  within the Territory,  then  Franchisee must seek Pretzel Time's  approval by  notifying  Pretzel  Time,  in  writing,  that he desires to develop  and  operate  other  units,  including  a cart  or  kiosk,  within  the Territory.  If Pretzel  Time has fully  negotiated  a lease  agreement  for such location,  then  Franchisee  shall (1) obtain the  consent  of the  landlord  to execute such lease and execute such lease,  if applicable;  (2) execute  Pretzel Time's then current form of Satellite Unit Addendum  (containing  Pretzel Time's then  current  fees  and  expense  requirements)  and such  ancillary  documents (including guarantees) as are then customarily used by Pretzel Time in the grant of franchises for Pretzel Time Units as modified for use in connection  with the Site, as necessary, and (3) pay Pretzel Time's reasonable out-of-pocket expenses incurred in locating such additional  Site and negotiating the lease  agreement, all within ten (10) business days after Pretzel Time's delivery to Franchisee of the lease agreement and the franchise documents.

         If Franchisee  timely notifies  Pretzel Time in writing that Franchisee desires to develop and operate an additional  Pretzel Time Unit, such as a kiosk or cart,  within its Territory and Pretzel Time has not fully negotiated a lease agreement for such location, then Franchisee will have thirty (30) days in which to negotiate and deliver to Pretzel Time a lease agreement for such site in form for execution.  If Pretzel Time  disapproves  the lease agreement for failure to meet  Pretzel  Time's  requirements,  Franchisee  will have ten (10) days within which to negotiate  and deliver to Pretzel Time a revised  lease  agreement  for such  location  in form for  execution.  If  Pretzel  Time  approves  the  lease agreement  for such  location  as  meeting  Pretzel  Time's  requirements,  then Franchisee  will (1) execute  such lease  agreement;  (2) execute the  franchise documents;   and  (3)  pay  Pretzel  Time's  reasonable  out-of-pocket  expenses incurred,  if any, in locating such  additional  Site and  negotiating the lease agreement,  all within ten (10) business days after Pretzel  Time's  delivery to Franchisee of the lease agreement and the franchise documents.

         2.F.     TERM OF FRANCHISE.

         The term of this Agreement shall commence on the Effective Date of this Agreement  and shall expire  twenty (20) years from the  effective  date of this Agreement.  References in this  Agreement to the term of this Agreement mean the initial term and any renewal term.

3.       OTHER DISTRIBUTION METHODS.

         3.A.     SPECIAL DISTRIBUTION ARRANGEMENTS.

         Franchisee  acknowledges  and agrees that (1) Franchisee is not granted any rights to operate Special  Distribution  Arrangements  within or outside the Territory  pursuant to this agreement;  and (2) the right to operate or grant to others the right to operate  Special  Distribution  Arrangements  is reserved to Pretzel Time;  and (3) Pretzel Time has no obligation to offer to Franchisee the right to operate Special Distribution Arrangements;  and (4) Pretzel Time or its designees  may instead  operate or grant to others the right to operate  Special Distribution Arrangements within and/or outside the Territory.

4.       FRANCHISE AND OTHER FEES.

         4.A.     INITIAL FRANCHISE FEE.

         The initial franchise fee is Twenty-Five Thousand Dollars ($25,000.00). Upon execution of this Agreement by Franchisee,  Franchisee shall pay to Pretzel Time, in consideration  of the franchise  granted herein,  Twenty-Five  Thousand Dollars  ($25,000.00)  payable by certified  check or cashier's  check in United States currency due upon execution of the Franchise Agreement. The franchise fee is fully  earned  by  Pretzel  Time  upon the  payment  in full  thereof  and is nonrefundable   (except  as   specifically   provided  in  this   agreement)  as consideration for expenses incurred by Pretzel Time in furnishing assistance and services to Franchisee  and for Pretzel  Time's lost or deferred  opportunity to franchise others,  and not as compensation for the use of the copyrighted works, Marks or Trade Dress. Franchisee acknowledges and agrees that this franchise fee is reasonable. The fee is not reduced if Pretzel Time is unable to obtain a TCBY Franchise.  An  additional  $1,000 is payable by Franchisee to Pretzel Time as a Yogurt Fee if Yogurt Product is included in the Franchise.

         4.B.     DEFERRAL OF FRANCHISE FEE.

         Payment of the initial  franchise fee is deferred for  franchises to be located in Minnesota and for Minnesota  residents until the franchise Unit opens at which time the franchise fee must be paid in full to Pretzel Time.  Franchise fees for Maryland  residents  and  franchises  to be located in Maryland will be escrowed  until the unit is  opened.  There may be other  stores in which  state administrators have required fees or royalties to be deferred or escrowed.

         4.C.     ROYALTY FEE.





         Franchisee,  in  partial  consideration  of the  grant of a  franchise, agrees to pay to Pretzel  Time a  continuing  Royalty of seven  percent  (7%) of Franchisee's  net  revenues  (as  defined  in  Section  1) on a weekly  basis as specified in this  Section;  provided  only 4% Royalty  shall be payable on TCBY frozen yogurt and other TCBY frozen yogurt products.  The Royalty is not uniform as to  all  franchisees,  it is  fully  earned,  and  is  nonrefundable  in  any circumstance.  Franchisee  shall pay weekly by electronic  funds  transfer (ACH) without offset,  defalcation,  credit or deduction of any nature to Pretzel Time the royalty fee, the advertising  fund fee and all other amounts due and payable on each Wednesday for the immediately  preceding week. The Royalty shall be paid by electronic funds transfer from Franchisee's  general operating  account.  The Royalty is paid,  in part,  to  compensate  Pretzel  Time for  various  services provided  to  Franchisee  after the Unit opens,  including,  but not limited to, quality, service, and cleanliness inspections. Pretzel Time, upon written notice to  Franchisee,  shall  have the right to  change  the  timing  of  Franchisee's payments of Royalty  Fees and  Advertising  Fund Fees due under this  Agreement. Franchisee  shall not subordinate to any other  obligation his obligation to pay the Royalty Fee or any other fee or charge hereunder.

         4.D.     ADVERTISING FUND FEE.

         Franchisee  agrees to pay on a weekly basis to Pretzel Time, as partial consideration  for the grant of the Franchise,  an  Advertising  Fund Fee of one percent  (1%) of Net revenues  for the  preceding  week as defined in Section 1. Franchisee  herein  acknowledges that the Advertising Fund Fee is not uniform as to all franchisees.  The Advertising Fund Fee is fully earned and nonrefundable. The  Advertising  Fund Fee shall be paid by electronic  funds  transfer from the Franchisee's  general  operating  account on Wednesday of each week based on the preceding week's Net revenues.

         4.E.     TRANSFER FEE.

         If Franchisee desires to assign his rights under the Franchise to a new franchisee,  Franchisee  (Assignor of the  Franchise),  agrees to pay to Pretzel Time a transfer  fee equal to the  greater of SIX  THOUSAND  TWO  HUNDRED  FIFTY DOLLARS  ($6,250.00) or the then current  transfer fee being paid by franchisees upon the assignment, gift, bequeath or transfer of ownership of the Franchise to cover administrative costs and expenses. The transfer fee is non-refundable. The fee shall be due and payable by the current  Franchisee to Pretzel Time five (5) days prior to the transfer of the Franchise to the assignee.  Additionally,  the assignee  of the  Franchisee  shall pay  Pretzel  Time an  additional  amount of Twenty-Five  Thousand Dollars  ($25,000.00) (plus $1,000.00 if Yogurt Product is included),  for any  additional  units that are not existing  stores or the then current initial franchisee fee for traditional Pretzel Time Units.

         4.F.     FEES FOR ADDITIONAL FRANCHISES.

          In the event that Franchisee  meets Pretzel Time's  qualifications  to open  additional  Franchises at sites  acceptable to both Franchisee and Pretzel Time,  which  approval is at the sole  discretion of Pretzel  Time,  the initial franchisee  fee shall be the greater of FIVE THOUSAND  DOLLARS  ($5,000.00)(plus $1,000.00 if Yogurt  Product is included) or the then current fee for additional franchises set by Pretzel Time, at its sole discretion. The decision to grant an additional  franchise  location shall be in the sole  discretion of Pretzel Time and at no time does Pretzel Time promise or guarantee that additional franchises will be offered  or  approved.  Such  decisions  will be made on a  case-to-case basis,  based on  factors  including,  but not  limited to the  availability  of suitable locations,  quality of standards maintained in the Franchisee's current Units,   the  impact  of  additional   locations  upon  the  operations  of  the Franchisee's  current Units, the geographical  distance between the Franchisee's existing and proposed  location,  the business  plan of Pretzel  Time,  national contracts  with  major  corporations,  the  population  of  the  area  near  the prospective  site,  the quality of the site,  and other  economic  and  business factors.  Under no  circumstances  is  Franchisee  entitled to demand or require Pretzel Time to grant to Franchisee a Franchise or a similar variation thereof.

         4.G.     FEES FOR RENEWAL OF FRANCHISE.

         Franchisee  agrees that in consideration of the grant of the Successor Franchise  (defined in Section 5.A.),  Franchisee shall pay the current renewal fee as of the  date of  renewal  and  execute  a  general  release  in the  form prescribed  by Pretzel Time in  accordance  with Section 5.B. The renewal fee is due and payable thirty (30) days prior to the renewal day.

         4.H.     PAYMENT BY ELECTRONIC FUNDS TRANSFER.

         Franchisee agrees to pay all Royalties,  Advertising Fund Fees, amounts due Pretzel Time for purchases by Franchisee from Pretzel Time or its Affiliates and other amounts which  Franchisee  owes to Pretzel Time via  electronic  funds transfer from Franchisee's general account,  which shall be initiated by Pretzel Time and any transfer fees shall be paid by Franchisee  every  Wednesday for the preceding week based upon the Net Revenues.  Franchisee herein agrees to execute and complete all necessary  documentation required by Pretzel Time to permit the wire transfer to Pretzel Time (in the form attached  hereto as Exhibit E or such other form as Pretzel Time shall accept). Under this procedure, Franchisee shall authorize  Pretzel  Time to initiate  debit  entries  and/or  credit  correction entries  to  Franchisee's   general  operating  bank  account  for  payments  of Royalties,  Advertising Fund Fees and other amounts payable under this Agreement and any late or interest  charges due thereon.  Franchisee  shall make the funds





available to Pretzel Time for  withdrawal by  electronic  transfer no later than one day prior to the due date for payment therefor.  The Royalty and Advertising Fund Fees amount actually  transferred from Franchisee's  account shall be based on the Unit's Net Revenues  indicated on the reports  submitted by Franchisee as required  hereunder.  If Franchisee  has not reported the Unit's Net Revenues to Pretzel  Time  for any week as  required  herein,  then  Pretzel  Time  shall be authorized  to  debit  Franchisee's  account  in an  amount  equal  to the  fees transferred from Franchisee's  account for the last reporting period for which a report of the Unit's Net  Revenues  was  provided  to Pretzel  Time as  required hereunder.  If,  at any  time,  Pretzel  Time  determines  that  Franchisee  has under-reported the Unit's Net Revenues, or underpaid Royalty or Advertising Fund Fees or other  amounts  due  hereunder,  Pretzel  Time  shall be  authorized  to initiate  immediately a debit to Franchisee's  account in the appropriate amount in  accordance  with the foregoing  procedure,  plus interest as provided for in this  Agreement.  Any  overpayment  shall be  credited to  Franchisee's  account through a credit  effective  as of the first week after  Franchisee  and Pretzel Time  determine  that such credit is due.  Notwithstanding  any  designation  by Franchisee, Pretzel Time shall have the sole discretion to apply any payments by Franchisee to any past  indebtedness  of Franchisee  for Royalty or  Advertising Fund Fees,  purchases from Pretzel Time and/or its  Affiliates,  interest or any other indebtedness,  including,  without  limitation,  payment of rental sums in arrears for the Unit.

         4.I.     LATE CHARGE AND INTEREST.

         To compensate Pretzel Time for the increased  administrative expense of handling late payments,  Pretzel Time may charge Franchisee a $50.00 late charge for each delinquent payment.  All Royalty and Advertising Fund Fees, amounts due for  purchases by  Franchisee  from Pretzel  Time or its  Affiliates,  and other amounts  which  Franchisee  owes to Pretzel  Time or its  Affiliates  shall bear interest  after  their due date at a rate equal to the  lesser of: (1)  eighteen percent (18%) per annum for the number of days which such payment is due; or (2) the highest  applicable  legal rate  permitted  by  applicable  law.  Franchisee acknowledges  that this  Section  shall  not  constitute  Pretzel  Time's or its Affiliates' agreement to accept such payments after they are due or a commitment by Pretzel  Time or its  Affiliates  to extend  credit to or  otherwise  finance operation of the Unit.  Notwithstanding  the  provisions  of this Section  4.I., Franchisee  acknowledges and agrees that his failure to pay all amounts when due shall constitute grounds for termination of this Agreement.

5.       RENEWAL OF FRANCHISE TERM.

         5.A.     FRANCHISEE'S RIGHT TO A SUCCESSOR FRANCHISE.

         Upon the expiration of the initial term of this  Agreement,  Franchisee shall  have the one time  right to obtain a  successor  franchise  to  operate a Pretzel  Time Unit at the Site (a  Successor  Franchise)  for a single term of five (5) years  immediately  following the expiration of the initial term of the Franchise upon giving Pretzel Time six (6) months notice prior to the expiration of the then current term if:

         (1) Franchisee and its Owners have complied with this Agreement and any          amendment  during the initial  term of this  Agreement  in all material          respects; and

         (2) Franchisee  maintains  possession of the Site and agrees to remodel          and/or expand the Unit, add or replace equipment, furnishings, fixtures          and signs and  otherwise  modify  the Unit to bring it into  compliance          with   specifications  and  standards  then  applicable  under  new  or          Successor Franchises for Pretzel Time Units; or if Franchisee is unable          to maintain  possession  of the Site, or if, in the judgment of Pretzel          Time,  the Unit should be  relocated,  Franchisee  secures a substitute          site approved by Pretzel Time and agrees to develop  expeditiously such          substitute  site in compliance with  specifications  and standards then          applicable  under new or successor  franchises  for Pretzel Time units;          and

         (3) Pretzel  Time has not given notice of its election not to renew six          (6) months  prior to the  expiration  of the  initial  twenty (20) year          term; and

         (4)  Franchisee  is not in default of any material term or condition of          the lease  agreement,  or any other agreement  between Pretzel Time and          Franchisee; and

         (5) Franchisee executes Pretzel Time's then current Franchise Agreement          and  other  ancillary  agreements  required  and being  offered  to new          Franchisees on the date of renewal, which agreements shall supersede in          all respects this  Agreement and the terms of which may differ from the          terms of this Agreement,  including,  without limitation,  Royalty Fees          and  Advertising  Fund  Fees,  other  fees  and  charges,   performance          criteria,  and a provision which allows Pretzel Time and its Affiliates          to reserve  the right,  both within and  outside of the  Territory,  to          offer and sell at wholesale or retail, through channels of distribution          distinct  from  those  of a  Franchise,  Products  and  services  which          comprise,  or may in the  future  comprise a part of the  Pretzel  Time          System, which Products may be resold at retail to the general public by          such entities; and

         (6) Franchisee is in full  compliance  with Pretzel  Time's  Operations Manual; and

         (7) On renewal,  Franchisee  agrees to pay the current renewal fee, the          Royalty and  Advertising  Fund fees specified in Pretzel Time's current





         Franchise  Agreement then being offered new  Franchisees on the date of          renewal; and

         (8) Franchisee shall execute general releases,  in form satisfactory to          Pretzel  Time,  of any and all  claims  against  Pretzel  Time  and its          Affiliates and their officers, directors, employees, agents, successors          and assigns arising under this Agreement; and

         (10)   Franchisee   has  complied  with  Pretzel  Time's  then  current          qualification and training requirements.

         Following receipt of Franchisee's election to renew, Pretzel Time shall provide Franchisee with an execution copy of the form of Franchise  Agreement to be entered into for the renewal  term.  If the  Franchisee  does not execute and return the renewal Franchise Agreement within thirty (30) days of receipt,  then Franchisee  shall be deemed to have  withdrawn  its notice of renewal,  and this Agreement shall terminate at the end of the current term.

         Pretzel Time may, at its option, with reasonable cause and upon written notice,  elect not to renew the Franchise  Agreement.  Pretzel Time shall notify Franchisee  of the  nonrenewal  not  less  than  six  (6)  months  prior  to the expiration  of the term of this  Agreement.  If  applicable  law  requires  that Pretzel Time give longer  notice to  Franchisee  prior to the  expiration of the term than is specified in the Franchise Agreement,  the Franchise Agreement will remain in effect on a  month-to-month  basis until the requisite notice has been given.

         5.B.     RELEASES.

         Franchisee  and its Owners  shall  execute  general  releases,  in form satisfactory  to Pretzel Time (the  general form of which is attached  hereto as Exhibit K), of any and all claims against  Pretzel Time and its Affiliates and their  respective  shareholders,   officers,   directors,   employees,   agents, successors and assigns. Failure by Franchisee and its Owners to sign and deliver to Pretzel  Time,  such  agreements  and releases  within thirty (30) days after delivery  thereof to Franchisee shall be deemed an election by Franchisee not to obtain a Successor Franchise.

         5.C.     NOTICES.

         Franchisee  shall give Pretzel  Time written  notice of its election to obtain a Successor  Franchise not more than twelve (12) months and not less than six (6) months prior to the expiration of this Agreement. Pretzel Time agrees to give Franchisee, written notice, not more than thirty (30) days after receipt of Franchisee's notice of (a) Pretzel Time's  determination  whether or not it will grant Franchisee a Successor  Franchise  pursuant to this Section and/or (b) any deficiencies  in  Franchisee's  operation  of the Unit (or any other  failure to comply  with the terms of this  Agreement)  which could  cause  Pretzel  Time to refuse to grant a  Successor  Franchise.  Such notice  shall state what  actions Franchisee  must take to correct  the  deficiencies  and shall  specify the time period in which such  deficiencies  must be  corrected.  Pretzel Time shall give Franchisee written notice of a decision not to grant a Successor Franchise based upon  Franchisee's  failure to cure  deficiencies not less than ninety (90) days prior to the expiration of the initial term of this Agreement. Such notice shall state the reasons for Pretzel Time's refusal to grant a Successor Franchise.  In the event Pretzel Time fails to give  Franchisee (a) notice of  deficiencies  in the Unit or in Franchisee's operation of the Unit, within thirty (30) days after receipt of Franchisee's timely election to obtain a Successor Franchise,  or (b) notice of Pretzel  Time's  decision not to grant a Successor  Franchise at least ninety (90) days prior to the expiration of the term of this Agreement,  Pretzel Time  may  extend  the term of this  Agreement  for  such  period  of time as is necessary in order to provide Franchisee reasonable time to cure deficiencies or to provide ninety (90) days notice of Pretzel Time's  determination not to grant a Successor  Franchise.  The grant of a Successor Franchise shall be conditioned upon Franchisee's continued compliance with all the terms and conditions of this Agreement until the date of expiration.

6.       TRADEMARKS AND LIMITATIONS.

         6.A.     OWNERSHIP OF MARKS.

          Franchisee  acknowledges  that Pretzel Time is the owner of all right, title  and  interest  together  with  all  the  goodwill  in and  to the  Marks. Franchisee  acknowledges  that his right to use the Marks is derived solely from this  Agreement  and is limited to his  conduct of  business  pursuant to and in compliance with this agreement and all applicable standards,  specifications and operating  procedures Pretzel Time prescribes from time to time during its term. Franchisee  shall not have nor assert any right,  title or  interest  in Pretzel Time's Marks or any goodwill of Pretzel Time. Franchisee agrees that he will not register  such  trade  name or marks in his own name or that of any other  firm, person  or  corporation.  The  following  Marks  are  currently  authorized  for Franchisee's use in the Franchised Business as follows:

         Pretzel TimeJ          Pretzel Time Stylized7          Pretzel Time Clock DesignJ          Pretzel Time StorefrontJ          Fitness with a twist.J

         Franchisee  acknowledges  and recognizes  Pretzel  Time's  interest and exclusive   right  to  the   concepts  of  the  Pretzel   Time  System  and  its distinguishing characteristics, including the name and style of the unique decor





of the Pretzel Time  stylized  literature,  display and  promotional  materials, marketing methods, operating procedures, training program and the manufacture of Pretzel Time Products. Pretzel Time makes no representation or warranty, express or implied,  as to the use, exclusive  ownership,  validity or enforceability of the Marks. Pretzel Time reserves the right to develop other trademarks,  service marks,  copyrights  and patents for use in other  businesses.  Pretzel  Time and Franchisee  acknowledge  and agree that it is not required to defend  Franchisee against  a claim  against  his use of  Pretzel  Time  Marks.  Pretzel  Time  may reimburse  Franchisee for his liability and reasonable  costs in connection with defending Pretzel Time's registered  trademarks provided Franchisee has notified Pretzel Time immediately when he learned about the infringement or challenge.

         Franchisee  agrees to use  Pretzel  Time's  trade name and Marks as the sole trade  identification  of the Unit and in connection  with, and exclusively for the  promotion  and conduct of the  Franchise as provided  hereunder  and in accordance with instructions,  rules, and procedures  prescribed by Pretzel Time from  time  to  time  with  respect  thereto.   Notwithstanding  the  foregoing, Franchisee  shall identify  himself as the independent  owner of the Unit in the manner  prescribed  by Pretzel Time.  Franchisee  agrees to give such notices of trademark  and service  mark  registrations  as Pretzel  Time may specify and to obtain such business name registrations as may be required under applicable law. Franchisee  shall not at any time during the term of this Agreement or after its termination, contest the validity or ownership of any of the Marks or assist any other person in contesting the validity or ownership of the Marks.

         6.B.     DISCONTINUANCE OF USE OF MARKS.

         If it becomes advisable at any time, in Pretzel Time's sole discretion, for Pretzel Time or the Unit to modify or  discontinue  use of any Mark,  and/or use of one or more  additional or substitute  trade names,  trademarks,  service marks, or other commercial symbols,  Franchisee shall comply with Pretzel Time's directions  within a reasonable time after notice to Franchisee by Pretzel Time. Neither  Pretzel Time nor its Affiliates  shall have any obligation to reimburse Franchisee for any expenditures  made by Franchisee to modify or discontinue the use of a Mark or to adopt  additional  marks or  substitutes  for a discontinued Mark, including, without limitation, any expenditures relating to advertising or promotional  materials or to compensate  Franchisee for any goodwill  related to the discontinued Mark.

         6.C.     CORPORATE NAME.

         Franchisee  agrees not to use any Mark or trade name of Pretzel Time or any part thereof or with any prefix,  suffix or other  modifying  words,  terms, designs,  or symbols or in any modified  form as part of any  corporate or trade name  nor  shall  Franchisee  use any  Mark in  connection  with the sale of any unauthorized  product or service or in any other manner not expressly authorized in writing by Pretzel Time.

         6.D.     TERMINATION.

         Immediately  upon the  termination  of this  Agreement,  the Franchisee agrees to cease and forever  abstain  from using the Pretzel Time trade name and Marks and return to Pretzel Time all documents, manuals,  instructions,  display items and the like bearing the aforesaid trade names or any of the Marks.

         6.E.     TRADEMARK ENFORCEMENT.

         Pretzel  Time shall  police and enforce its rights with  respect to its trademarks  and other  proprietary  aspects of the Pretzel  Time System with the cooperation of Franchisee,  and shall bring  appropriate  actions or proceedings against infringers or other unlawful users at its sole expense.

         Franchisee  agrees to  immediately  notify  Pretzel  Time of any claim, demand or suit based upon or arising from or of any attempt by any other person, firm or corporation to use Pretzel Time's trademarks, service marks, copyrights, trade secrets,  or Systems licensed hereunder or colorable  variation thereof in which Pretzel Time has a proprietary interest. Pretzel Time will take the action it thinks  appropriate.  In the event Pretzel Time undertakes any prosecution of litigation or defense  relating to the  proprietary  Marks  licensed  hereunder, Franchisee  agrees to execute any and all  documents and do such acts and things as may in Pretzel  Time's  opinion,  be  necessary  to carry out such defense or prosecution.  Franchisee  agrees  that  Pretzel  Time has the  right to  control administrative proceedings or litigation with respect to this issue.

         Franchisee  agrees to participate  and cooperate in the  prosecution of any action to prevent the infringement,  imitation, illegal use or misuse of the Marks and  agrees  to be named as a party in any such  action  if  requested  by Pretzel  Time.  Pretzel  Time  agrees to bear the  legal  expenses  incident  to Franchisee's  participation in such action,  except for the cost of Franchisee's personal legal counsel if Franchisee  elects to be represented by counsel of his own choosing.

         6.F.     USE OF SERVICE MARK.

         Except  with the prior  written  consent  of Pretzel  Time,  Franchisee agrees not to infringe upon, use or imitate Pretzel Time's System, or any of its distinguishing  characteristics,  and  further  agrees not to cause or allow any other person to infringe upon, use or imitate  Pretzel Time's System,  or any of its  distinguishing  characteristics.  Franchisee  agrees to use and display the Marks at all times only in  accordance  with the quality  control  standards set forth in this  Agreement and in the Operations  Manual.  During the term of this Agreement, and renewal term, if any, Franchisee will operate the Unit only under the Marks . Franchisee  will use or display the Marks only within the designated Territory.  Franchisee  will cause a sign  bearing the name  Pretzel  Time which meets Pretzel Time's  specifications for color, design and size, to be installed





on the outside of the retail Unit.  Franchise  shall not, at any time during the term of this  Agreement or after its  termination  or expiration use any Mark in connection with the sale of any unauthorized  product or service or in any other manner not expressly authorized in writing by Pretzel Time.

7.       SELECTION OF FRANCHISE LOCATION.

         7.A.     SITE SELECTION.

         Franchisee  shall be  responsible  for leasing a suitable  site for the Franchise  subject to Pretzel  Time's  approval.  Pretzel  Time agrees to assist Franchisee  in locating and securing a location for the unit which is acceptable to both Pretzel Time and Franchisee.  Franchisee  shall submit to Pretzel Time a list of desired locations on the Location Agreement attached hereto as Exhibit W or if Pretzel  Time  directs on a form  prepared  by Pretzel  Time and  attached hereto as Exhibit F, and  Pretzel  Time shall  contact the  appropriate  leasing representatives to determine the availability of sites at those locations. After obtaining  information from appropriate  leasing  representatives,  Pretzel Time shall notify Franchisee  whether or not the sites made available to Pretzel Time are  acceptable  by Pretzel  Time.  In the event  that a site for the  franchise cannot be located  which is  acceptable  and  suitable to both  Pretzel Time and Franchisee  within One Hundred Twenty (120) days,  then the Franchise  Agreement shall be terminated and all franchise fees paid by Franchisee shall be refunded.

         Pretzel  Time  shall  approve  the site for the unit in  reliance  upon information furnished and representations made by Franchisee with respect to the size, appearance, and other physical characteristics of the site, photographs of the site, demographic characteristics,  traffic patterns, competition from other businesses in the area,  and other  commercial  characteristics.  Pretzel Time's approval of the site  indicates  only that Pretzel Time  believes  that the site falls  within  acceptable  criteria  established  by Pretzel Time as of the time period  encompassing the evaluation.  Franchisee  agrees that Pretzel Time shall not be responsible for the failure of a franchise, site and/or premises approved by Pretzel  Time to meet  expectations  as to potential  revenue or  operational criteria.  Franchisee acknowledges and agrees that his acceptance of a Franchise for the  operation of a Unit in the  Territory  is based on his own  independent investigation of the suitability of the mall location.

         Franchisee  acknowledges  that Pretzel Time's  approval of the lease or sublease  for the Unit does not  constitute  a guarantee  or warranty by Pretzel Time, express or implied, of the successful operation or profitability of a Unit operated at the designated Site. Such approval  indicates only that Pretzel Time believes  that the Unit and the terms of the lease fall  within  the  acceptable criteria  established  by Pretzel  Time as of the time period  encompassing  the evaluation.

         7.B.     LEASE.

         Pretzel  Time and  Franchisee  further  agree that  Pretzel  Time shall negotiate  the  basic  economic  terms  of the  lease in  consultation  with the Franchisee.  Franchisee  agrees to  execute  a letter  of  intent  for the lease premises  which  outlines the basic economic terms of the lease and return it to Pretzel  Time within five (5) days of receipt of same.  Franchisee  acknowledges and agrees that he is  responsible  for reviewing the terms of the agreement and making  any  necessary  changes  to the lease  agreement.  Franchisee  shall not execute any lease  agreement  without the prior approval of Pretzel Time,  which shall be conditioned  upon inclusion of terms in the lease acceptable to Pretzel Time and at Pretzel Time's option shall contain such provisions,  including, but not limited, to:

          (1). Notice to Pretzel  Time of,  and  Pretzel  Time's  right to cure,                Franchisee's default under the lease provided,  however,  that if                Pretzel  Time  cures any such  default,  the total  amount of all                costs and payments incurred by Pretzel Time in effecting the cure                shall be immediately due and owing to Pretzel Time by Franchisee;

          (2). Franchisee's  right to  assign  his  interest  under the lease or                sublease  to Pretzel  Time  without the  lessor's or  sublessor's                consent;

          (3). Allowing  Franchisee  to  transfer  the lease to Pretzel  Time or                another  approved  franchisee in the event that Franchisee  sells                his  business (a copy of the form of the third  party  assignment                agreement that  Franchisee and the  prospective  purchaser  would                sign is attached hereto as Exhibit L);

          (4). Authorizing  and requiring the Lessor or sublessor to disclose to                Pretzel Time, upon its request,  sales and other information that                Franchisee furnishes to the lessor or sublessor; and

          (5). Providing  that  Pretzel  Time (or one of its  Affiliates  or its                Assignee) shall have the right (but not the obligation) to assume                the lease or sublease:

                  (i) Upon termination of this Agreement by Pretzel Time or upon                   expiration of this Agreement (unless a Successor  Franchise is





                  granted to Franchisee), or

                  (ii) If  Franchisee  fails to exercise any options to renew or                   extend the lease or sublease or,

                  (iii) If Franchisee commits a default that gives the lessor or                   sublessor the right to terminate the lease or sublease, or

                  (iv)  If  Pretzel  Time  or  one  of  its  Affiliates  or  its                   designee/assignee purchases the Unit.

          (6). A provision allowing sampling in front of the retail Unit;

          (7). A provision  that the premises are to be used  exclusively  for a                Pretzel Time Unit only; and

          (8). A provision which permits alterations to the premises in a good          and workman-like manner by Franchisee as required by Pretzel Time.

         Franchisee further agrees to execute and return the lease and any other riders,  guaranties or sureties  required by the Landlord  within seven (7) days from receipt of the same and no later than sixty (60) days after signing of this Agreement.  If any lease  expires  prior to the  expiration  of this  Agreement, Franchisee  will be  required to arrange  any  necessary  lease for the Unit and Pretzel Time shall have the right to approve the terms of the renewal  lease for the Unit prior to Franchisee's execution thereof. Franchisee agrees that he will not execute a lease or sublease which Pretzel Time has  disapproved.  Franchisee shall  deliver a copy of the signed  lease to Pretzel  Time for the Unit  within five (5) business days after its full execution.  The copy shall be complete and include copies of all signature pages and exhibits.

         A copy of the form of the sublease  that  Franchisee  shall execute (if Pretzel Time is the tenant  pursuant to the lease) is attached hereto as Exhibit M. A copy of the form of the  collateral  assignement  of lease that  Franchisee shall execute (if  Franchisee  is the tenant  pursuant to the lease) is attached hereto as Exhibit N.

         Franchisee  shall be  responsible  for all terms and  conditions of the lease covering the franchise  location,  including any required security deposit and  prepaid  rent.  Franchisee  agrees  to pay the Unit  rent  directly  to the landlord at the rate and terms  specified in the primary lease between  landlord and Franchisee. Rent is generally paid monthly on the first day of the month and is  non-refundable.  Franchisee  agrees  that the Unit  shall be used  only as a Pretzel Time franchise.

         If  Franchisee  fails to obtain  lawful  possession of an approved Site (through a lease or assignment) within sixty (60) days after delivery of Pretzel Time's approval of the Site, Pretzel Time, may, in its sole discretion, withdraw approval of such Site at any time.

         7.C.     RELOCATION.

         In the event that  Franchisee's  lease is  terminated,  with or without fault of  Franchisee,  if the Site is damaged,  condemned or otherwise  rendered unusable as a Pretzel Time Unit in accordance with this Agreement, or if, in the judgment of Pretzel Time and  Franchisee,  there is a change in the character of the location of the Site sufficiently  detrimental to his business  potential to warrant its relocation,  Pretzel Time will not unreasonably  withhold permission for  relocation  of the  Unit  to  another  Site,  which  meets  Pretzel  Time's then-current  site  criteria,  subject to the rights of  existing  Pretzel  Time franchisees  under their  franchise  agreements  with Pretzel  Time.  Franchisee acknowledges  and agrees that Pretzel Time is under no  obligation  to approve a relocation of the Franchise.  However,  upon written approval from Pretzel Time, Franchisee may relocate the Franchise to another  location.  Such approval shall not be granted unless  Franchisee is in compliance with all terms and conditions of this  Agreement  and  Franchisee  has the  financial  resources  available to relocate the Unit and construct a new and  comparable  Unit according to Pretzel Time's then current design  standards.  Any such  relocation of the Franchise is subject to Pretzel Time's prior  approval of the new Unit  location.  Relocation shall be at  Franchisee's  sole expense and Pretzel Time shall have the right to charge  Franchisee  for  any and all  costs  incurred  by  Pretzel  Time,  and a reasonable  fee  for  its  services,  in  connection  with  any  such  approval, evaluation  and  relocation  of the  Franchise.  The Unit  shall  re-open at the replacement  Site as soon as  reasonably  practicable  but in no event more than ninety (90) days after the closing of the original location.

8.       DEVELOPMENT OF UNIT.

         8.A.     UNIT DESIGN SPECIFICATIONS AND CONSTRUCTION PLANS.

         Franchisee  shall be responsible  for  constructing  and developing the Unit,  including payment of all costs.  Pretzel Time shall furnish to Franchisee prototypical plans and  specifications  for the Unit,  reflecting Pretzel Time's requirements for dimensions,  interior design and decor, layout, image, building materials,  color scheme, exterior and interior finishes,  fixtures,  equipment, furnishings, and signs.

         Franchisee shall promptly after obtaining  approval of the Site for the Franchise:

         (1).  cause to be prepared by a Pretzel  Time  approved  architect  and





         submit for approval by Pretzel Time a site survey and any modifications          to Pretzel Time's basic  architectural plans and specifications for the          Pretzel Time Unit  (including  requirements  for  dimensions,  exterior          design,  materials,  interior design and layout,  equipment,  fixtures,          furniture,  signs and decorating)  required for the construction of the          Franchise at the Site leased  therefor.  Franchisee shall have all such          modifications   approved  by  Pretzel   Time  and  prior  to  obtaining          permitting;

         (2). insure that such plans and  specifications  comply with applicable          ordinances,  building  codes,  and permit  requirements  and with lease          requirements  and  restrictions  and all modification to Pretzel Time's          basic plans and  specifications are modified to the extent necessary to          comply with local  ordinances and state laws,  building  codes,  permit          requirements, lease restrictions and federal law; and

         (3).  Franchisee  shall also submit all revised or as built plans and          specifications  during the course of such  construction upon request of          Pretzel Time.  Franchisee  agrees to pay for any and all architect fees          and pay the architectural fees for the architect to review, approve and          modify the plans.

         8.B.     DEVELOPMENT OF THE UNIT.

         Pretzel  Time shall have the right to approve any  contractor  hired by Franchisee  to develop the Unit.  Within  one-hundred  twenty  (120) days of the execution of the Franchise Agreement, Franchisee agrees, at his sole expense, to do or cause to be done the following with respect to developing the Unit:

          (1). Familiarizing   himself  with  the  physical   condition  of  the                property, local laws, ordinances and          other requirements in connection with the construction of the Unit;

          (2). Secure all financing required to develop and operate the Unit;

          (3). Obtain all required building,  utility, sign, health, sanitation,                business,  environmental  and other permits and licenses required                for construction and operation of the Unit;

          (4). Extending all utilities to the Site and constructing all required                improvements to the Unit and decorate the Unit in compliance with                plans and specifications Pretzel Time approves within four to six                weeks  of  possession  of the  Site  and two  days  prior  to the                commencement date set forth in the lease for the Unit;

          (5). Purchase   and  install  all  required   fixtures,   furnishings,                equipment  and signs  required for the Unit  (provided,  however,                that Pretzel Time shall have the right,  in its sole  discretion,                to install all required  signs at the Unit at  Franchisee's  sole                expense);

          (6). Purchase  an  opening  inventory  of  Products,   materials,  and                supplies;

          (7). In  accordance  with  Pretzel  Time's  standard   specifications,                Franchisee  shall totally equip,  ready and inventory the Site at                its sole cost for opening to the public two (2) days prior to the                opening date specified in the lease; and

          (8). Franchisee  agrees  that it will not  open the Unit for  business                without Pretzel Time's prior approval and training.

         8.C.     EQUIPMENT, FIXTURES, FURNISHINGS, AND SIGNS.

         Franchisee agrees to use in developing and operating the Unit only such fixtures,  furnishings,  equipment, and signs that Pretzel Time requires and has approved for Pretzel Time Units as meeting its  specifications and standards for quality, design, appearance, function and performance. Franchisee further agrees to place or display at the Unit only such signs, emblems,  lettering,  logos and display  materials  that  Pretzel  Time  approves in writing  from time to time; provided,  however,  that  Pretzel  Time  shall  have  the  right,  in its  sole discretion,  to install  all  required  signs at the Unit at  Franchisee's  sole expense.  Franchisee shall purchase or lease approved brands, types or models of fixtures,  furnishings,  equipment and signs only from  suppliers  designated or approved by Pretzel Time (which may include Pretzel Time and/or its Affiliates). Franchisee  further agrees that all fixtures,  furnishings and equipment used in connection  with the operation of the Unit shall be free and clear of all liens, claims and  encumbrances  whatsoever,  except  with  respect to any such  liens, claims or  encumbrances  asserted by Pretzel Time or third party  purchase money security interests.

         8.D.     EXCEPTIONS TO EQUIPMENT OR FURNISHINGS.

         If Franchisee proposes to purchase any brand or type of construction or decorating material, fixture, equipment,  furniture or sign not then approved by Pretzel  Time,  or any such item from a supplier  which is not then  approved by Pretzel Time,  Franchisee shall first notify Pretzel Time, in writing, and shall submit  to  Pretzel   Time,   upon  its  request,   sufficient   specifications, photographs,  drawings and other  information or samples for a determination  by Pretzel  Time of  whether  such  brand  or type of  construction  or  decorating material, fixture, equipment, furniture or sign complies with its specifications and standards or such supplier meets Pretzel Time's approved supplier  criteria, which  determination  shall be made and  communicated  in writing to  Franchisee within a reasonable time.  Additionally,  Franchisee shall pay all fees for said





testing and be responsible for acquiring and submitting  equipment necessary for such testing.

         8.E.     CONSTRUCTION ASSISTANCE.

         Upon request by Franchisee and without  liability,  Pretzel Time agrees to provide construction assistance to Franchisee in one or more of the following areas:

          (1). Assist  Franchisee in finding an architect  for the  construction                and development of the Unit;

          (2). Assist  Franchisee  in  finding  a  general  contractor  for  the                construction and development of the Unit; and

          (3). Respond to a  reasonable  amount of questions  from  Franchisee's                contractor  relating to construction  and development of the Unit                in accordance with the requirements of Pretzel Time.

         8.F.     LIMITATION ON LIABILITY.

         Pretzel Time shall not be liable to Franchisee,  the contractor, or any other person,  and Franchisee  waives all claims for liability or damages of any type  whatsoever  (whether  direct,  indirect,  incidental,   consequential,  or exemplary),  on account of the  rendition  of any  services  by Pretzel  Time in accordance  with  this  Section,  except  to the  extent  caused  by  the  gross negligence  or  intentional  misconduct  of  Pretzel  Time,  and  then  any such liability  or damages  shall be limited to five  thousand  dollars  ($5,000.00). Without  limiting the generality of the  foregoing,  Pretzel Time shall not have liability  with  respect  to any of the  following,  all of  which  are the sole responsibility of Franchisee:

          (1). if   construction   of  the  Unit  does  not  fully  satisfy  the                requirements  (if  any)  of  the  landlord,  the  architect,  the                contractor,  and any governmental  agency having  jurisdiction or                does not fully satisfy the criteria  established  by Pretzel Time                for construction and development of Pretzel Time Units;

          (2). if the Unit improvements are not structurally  sound or free from                defects or deficiencies;

          (3). if there are any construction delays or cost overruns; or

          (4). if  there  are  any  disputes  with  any  landlord,   contractor,                subcontractor,  architect,  supplier or governmental  agency with                respect to any aspect of the design, construction,  provision, or                equipping of the Unit.

9.       UNIT OPENING.

         9.A.     COMMENCEMENT OF OPERATIONS.

         Franchisee shall commence operation of the Franchise the earlier of: 1) one  hundred  fifty (150) days after the  execution  of this  Agreement;  (2) as specified in the lease for the Site; or (3) as otherwise required or approved in writing by Pretzel Time. Failure to open the Unit within the aforementioned time period shall  result in the  termination  of this  Franchise  Agreement  and all franchise fees paid by Franchisee shall be nonrefundable.  Franchisee agrees not to open the Unit for business until the following has occurred:

          (1). Pretzel  Time  approves  the  Unit  pursuant  to its  Pre-Opening                Checklist;

          (2). Pre-opening  training of Franchisee  and Unit  personnel has been                completed to Pretzel Time's satisfaction;

          (3). The  initial  franchise  fee and all  other  amounts  then due to                Pretzel Time have been paid in full;

         (4).  Pretzel  Time has been  furnished  with  copies of all  insurance          policies  required  by  this  Agreement,  or  such  other  evidence  of          insurance  coverage and payment of premiums as Pretzel  Time  requests;          and

     (5) Franchisee has executed Pretzel Time's wire transfer agreement.

         Franchisee  agrees  to open the  Unit for  business  on or  before  the opening date specified in the lease if it has the  Landlord's  approval and only after Pretzel Time notifies Franchisee that the conditions set forth in Sections 8 and 9 have been satisfied.

10.      FRANCHISEE TRAINING.

         10.A.    INITIAL TRAINING.

         Franchisee  acknowledges and agrees that, while Pretzel Time's training program will provide  Franchisee  with the  fundamental  knowledge  necessary to operate a unit,  Franchisee  cannot  expect  success  unless he devotes his best personal efforts to the business and exercises good business judgment in dealing with customers,  suppliers, and employees.  Prior to the Unit's opening, Pretzel Time shall  furnish an initial  training  program on the  operation of a Pretzel Time Unit which shall take place at Pretzel Time's  headquarters  in Harrisburg, Pennsylvania,  or at a location  which will  provide the best  training  for the





Franchisee,  which may or may not be close to Pretzel Time's  headquarters.  The Franchisee agrees that he and his Unit Manager shall attend the initial training session held four (4) to eight (8) weeks prior to the Unit's  projected  opening date. Pretzel Time will not charge for the initial training of the Franchisee or if a corporation or partnership,  the Principal Owners of the Franchisee and the Unit  Manager.  All  incidental  expenses  relative  to the  required  training, including  travel  expenses,  hotel/motel  expenses,  and  meals  shall  be  the responsibility  of  the  Franchisee  while  attending  training.  Prior  to  the commencement  of the  operation  of the Unit,  the  manager  of the Unit  (Unit Manager) and the  Franchisee or if a corporation or  partnership,  one Owner of the Franchisee as identified in Exhibit B, who will be personally overseeing the Unit shall attend and  successfully  complete the Pretzel Time initial  training program to the satisfaction of Pretzel Time.

         The  Franchisee  and his  Unit  Manager  must  satisfactorily  complete Pretzel  Time's  training as  determined  by Pretzel  Time, in its sole opinion, before  Franchisee is allowed to operate the Franchise.  If Pretzel Time, in its sole discretion, determines that Franchisee is unable to satisfactorily complete the  training  program,  Pretzel  Time  shall have the right to  terminate  this Agreement and no franchise fees shall be refunded.  The initial training program shall cover material aspects of the operation of a Pretzel Time Unit,  including financial   controls,   employee  relations,   food  preparation,   service  and operational techniques,  sampling, recipes and cooking procedures, marketing and public  relations,  cleanliness and maintenance  procedures,  and maintenance of Pretzel  Time  System  standards.  Franchisee  shall  receive  one  copy  of the Operations Manual, which cannot be reproduced, in whole or in part. In the event that  the  Franchisee's  copy  is  lost  destroyed  or  significantly   damaged, Franchisee  shall be  obligated  to obtain from Pretzel  Time,  at  Franchisee's expense a replacement copy of the Operations Manual.

         10.B.    EMPLOYEE TRAINING.

         Pretzel  Time may  provide  to  Franchisee,  at  Franchisee's  request, guidance in the selection of a Unit Manager and may provide periodic evaluations of  Franchisee's  Unit,  Managers  and  employees,  but  without  any  liability therefore to Pretzel Time. Franchisee shall hire all employees of the franchise, be exclusively  responsible for the terms of their employment and  compensation, and  implement a training  program for  employees of the  franchise.  Franchisee agrees  to  maintain  a staff  of  trained  employees  to  operate  the  Unit in compliance with Pretzel Time's standards.

         In the event the Unit Manager ceases to hold such full-time position at the  Unit,  Franchisee  shall  have  thirty  (30)  days in  which to  appoint  a substitute  or  replacement  Unit  Manager,  who must  attend  and  successfully complete,  to  Pretzel  Time's  satisfaction  the  initial  training  program as specified  above within sixty (60) days after  employment  as Unit  Manager.  If Pretzel  Time in its sole  discretion  determines  that the Unit  Manager or any subsequently  appointed Unit Manager has failed to  satisfactorily  complete the initial  training  program or any  additional  or  refresher  training  program, Franchisee  agrees to  immediately  hire a substitute  Unit Manager and promptly arrange  for such  person  to  complete  the  initial  training  program  to the satisfaction  of Pretzel Time.  Franchisee  agrees to notify Pretzel Time of any new  Unit  Managers  for the  Unit  within  seven  (7)  business  days of  their employment.  In the event  Franchisee  operates more than one (1) Unit, at least one (1)  trained and  competent  Unit  Manager  referred to above shall act as a full-time manager in each Territory. Franchisee shall keep Pretzel Time informed at all times of the identity of any Unit Manager(s) of the Unit.

         All Unit  Managers  of the Unit must  have  successfully  completed  an initial training program as specified by Pretzel Time at the sole expense of the Franchisee, including, but not limited to, salary and incidental travel expenses attendant to any training provided by Pretzel Time. Franchisee and Unit Managers who  successfully  complete  training will receive a Training  Certificate  from Pretzel Time.  Pretzel Time shall make training  available to Franchisee's  Unit Manager during Pretzel Time's regularly  scheduled training course. In no event, will  Pretzel Time be under any  obligation  to provide  individual  training to Franchisee's  Unit  Managers.  Franchisee  agrees that each Unit  Manager  shall participate at Franchisee's  expense in Pretzel Time's initial  training program and all other mandatory  training  programs which may subsequently be offered by Pretzel Time.

         10.C.  ON-SITE TRAINING.

         Additionally,   Pretzel   Time  will   provide   on-site   training  at Franchisee's  business  location for a period of five (5) days,  generally to be commenced  immediately  prior to  Franchisee's  day of opening and continued the first three (3) days of operation.  Franchisee  herein agrees to notify  Pretzel Time,  in writing,  of his opening  date  twenty (20) days prior  thereto.  This training  will include all  functions  required for the proper  operation of the franchise.

         Should Franchisee  request  additional  assistance from Pretzel Time in order to facilitate  the opening of the  Franchise,  and should Pretzel Time, in its discretion,  deem it necessary,  feasible and appropriate to comply with the request or should Pretzel Time determine that  additional  training is required, Franchisee  shall  reimburse  Pretzel Time at Pretzel  Time's then current daily training  service fee, for the expense of Pretzel Time providing such additional assistance and for its training  related  expenses,  which may include,  travel, room and board.

         10.D.    COMPANY GROWTH.

         Throughout  the  term of  this  Agreement,  Pretzel  Time  may  provide Franchisee  with  information  on company  growth and  operations as well as new





techniques developed to reduce costs and/or enhance sales or profits.

         10.E.    RETRAINING PROGRAMS.

         Pretzel  Time shall  provide  re-training  programs  at a  location  of Pretzel Time's choice from time to time for  experienced  franchisees  and their managers and/or employees.  Pretzel Time may charge fees for refresher  training courses  for  previously  trained  and  experienced  managers.  Fees for special programs will be based upon Pretzel Time's actual costs and attendance  shall be required. Attendance at retraining programs or seminars shall be at Franchisee's sole expense,  provided,  however,  that attendance will not be required at more than two (2) such  programs  in any  calendar  year and shall  not  collectively exceed ten (10) business days in duration during any calendar year.

         10.F.    OTHER GUIDANCE.

         Pretzel  Time may  advise  Franchisee  from  time to time of  operating problems of the Unit which come to Pretzel Time's attention and, at Franchisee's request but without any liability  therefore to Pretzel Time, Pretzel Time shall furnish to Franchisee guidance in connection with:                             (i)  Methods,  standards,   specifications  and  operating  procedures                utilized by Pretzel Time Units;

          (ii) Purchasing  required  fixtures,  furnishings,  equipment,  signs,                Products, materials and supplies;

          (iii) Advertising and Promotional programs;

          (iv) Employee training; and

          (v)  Administrative, bookkeeping, accounting and general operating and                management procedures.

Such guidance shall, in Pretzel Time's  discretion,  be furnished in the form of Pretzel  Time's  Operations  Manual,  bulletins  and  other  written  materials, electronic computer messages,  telephone  conversations  and/or consultations at Pretzel Time's offices or at the Unit. Pretzel Time will make no separate charge to  Franchisee  for  such  operating  assistance  as  Pretzel  Time  customarily provides.  From time to time, Pretzel Time may make special assistance  programs available to  Franchisee,  however,  Franchisee  will be required to pay the per diem fees and charges that Pretzel Time  establishes  from time to time for such special assistance programs.

11.      ADVERTISING AND OTHER PROMOTIONS.

         11.A.    PROVIDING OF ADVERTISING MATERIALS.

         Franchisee  and Pretzel Time agree and  recognize  the value of uniform advertising to the goodwill and public image of Pretzel Time Units. Pretzel Time has  instituted  and  maintains and  administers  an  advertising  fund for such advertising  or  public  relations   programs  as  Pretzel  Time,  in  its  sole discretion,  may deem  necessary  or  appropriate  to  advertise  or promote the Pretzel Time System,  nationally or regionally.  Pretzel Time will  periodically provide Franchisee with programs,  promotional  concepts,  and other information designed to enhance the operation of the  Franchise.  In addition,  Pretzel Time may  provide  optional  special  promotions  from time to time  which will be at Franchisee's cost, which may be mandatory. At its initial opening, Pretzel Time, at  Franchisee's  expense,  shall  designate  and supply an initial  quantity of forms,  literature,   display,  and  promotional  materials.  Pretzel  Time,  in consideration of the Advertising Fund Fee, shall periodically provide Franchisee with  camera  ready  advertising  materials.   Multiple  copies  of  advertising materials will be furnished to Franchisee for an additional  fee,  including any related shipping, handling and storage charges.

         11.B.    CONTROL OF ADVERTISING PROGRAMS AND CONCEPTS.

         Pretzel Time shall direct all such programs,  with sole discretion over the creative concepts, materials,  endorsements, and media used therein, and the placement  and  allocation  thereof.   The  manner,   media  and  cost  of  such advertising,  public  relations  and  promotional  mailings  shall be solely and completely  within the  discretion of Pretzel Time.  Pretzel Time shall have the right to determine, in its sole discretion,  the target and market areas for the development  and  implementation  of such  programs.  Pretzel  Time may  expend, disburse and use funds from the Advertising  Fund, in its sole  discretion,  for the following purposes:

                  (1) The  creation  and  development  of nonlocal  advertising,          promotional campaigns,  and public relations to promote and enhance the          value of the Service  Marks and the  business  of all the Pretzel  Time          retail establishments;

                  (2) Payments to Pretzel Time of such reasonable sums as may be          necessary  for actual  costs of  advertising  production,  direct  mail          purchases, and other media marketing tools;

                  (3) Payment of salaries and  benefits  for staff  personnel in          the  marketing  and  public  relations  department  as  well  as  other          administrative  costs and overhead expenses of the department  incurred          by Pretzel Time;

                  (4) The  costs of  employing  advertising,  marketing,  public          relations and promotion  agencies to assist in preparing and conducting          media programs and activities and supporting public  relations,  market





         research and other advertising, promotion and marketing activities;

                  (5) Market  research  expenditures  related to the development          and evaluation of the effectiveness of advertising and sales promotion;          and

                  (6)  Costs  of  organizing   and  providing   facilities   for          international, national, or regional franchisee conferences.

         Franchisee  understands and  acknowledges  that the Advertising Fund is intended to maximize  recognition  of the Marks and  patronage  of Pretzel  Time Units.  Although  Pretzel Time will endeavor to utilize the Advertising  Fund to develop   advertising  and  marketing   materials  and  programs  and  to  place advertising that will benefit all Pretzel Time Units, Pretzel Time undertakes no obligation to ensure that  expenditures by the Advertising  Fund in or affecting any geographic area are  proportionate or equivalent to the contributions to the Advertising Fund by Pretzel Time Units operating in that geographic area or that any  Pretzel  Time  Units  will  benefit   directly  or  in  proportion  to  its contribution  to the  Advertising  Fund from the  development of advertising and marketing materials or the placement of Advertising.

         11.C.    SEGREGATION OF ADVERTISING FUND.

         Pretzel  Time  herein   agrees  to   administratively   segregate   the Advertising  Fund on its books and  records.  Fees paid by  Franchisee  into the advertising  fund  shall  not  under any  circumstance  be used for the  general operating  expenses of Pretzel Time but shall and will be used  exclusively  for advertising  as outlined  herein.  Pretzel  Time may spend in any fiscal year an amount greater or less than the aggregate  contributions  of the  franchisees to the fund in that  year and  Pretzel  Time  may  make  loans to the fund  bearing reasonable  interest  to cover  any  deficits  of the fund and cause the fund to invest any surplus for future use by the fund. It is anticipated,  and it is the intent of Pretzel Time that all  contributions to the Fund shall be expended for advertising  and  promotional  purposes during Pretzel Time's fiscal year within which  contributions  are made.  Any monies not  expended  in the fiscal year in which they were  contributed  shall be applied and used for Fund expenses in the following year.

                   11.D. SUSPENSION OF ADVERTISING FUND FEES.

         Pretzel  Time  reserves  the right to  suspend  contributions/fees  and operations of the  Advertising  Fund for one or more  periods,  and the right to terminate the  Advertising  Fund, upon thirty (30) days' prior written notice to Franchisee.  All unspent monies on the date of termination  shall be distributed to Pretzel Time's  franchisees and Pretzel Time, its Affiliates and designees in proportion to their  respective  contributions  to the Advertising Fund upon the same terms and  conditions set forth herein upon thirty (30) days' prior written notice Franchisee.

         11.E.    FRANCHISEE'S REQUIRED ADVERTISING EXPENDITURES.

         In addition to any contributions by Franchisee to the Advertising Fund, Franchisee is required to spend on marketing and related programs such amount as is  required  pursuant  to the terms and  conditions  of  Franchisee's  lease or sublease.  Franchisee  acknowledges  such amounts will vary from lease to lease, and therefore, all Pretzel Time Unit franchisees will not be obligated to expend the same amount on local advertising and marketing of the Unit.

         11.F.    USE OF TRADEMARK REFERENCES AND APPROVAL                   OF FRANCHISEE'S MARKETING.

         Franchisee further agrees that all advertising, promotion and marketing by Franchisee shall be completely clear and factual and not misleading and shall conform to the highest  standards of ethical  marketing and  promotion  policies which may be prescribed from time to time by Pretzel Time.  Franchisee agrees to use the  registration  symbol of R within a circle (7 ) in connection with its use of the Marks.  Franchisee  agrees to refrain  from any business or marketing practice  which may be  injurious  to the  business of Pretzel Time and the good will associated with the Marks and other Pretzel Time Units.  Prior to their use by  Franchisee,  all  press  releases,  literature,  and  samples  of all  local advertising, marketing, point-of-purchase, and related materials not prepared or previously  approved  by Pretzel  Time shall be  submitted  to Pretzel  Time for approval,  which shall not be unreasonably  withheld.  If written disapproval is not received within twenty (20) days from the date of receipt by Pretzel Time of such  materials,  Pretzel Time shall be deemed to have  approved the  materials. Franchisee  agrees not to use  promotional or advertising  materials  which have been  disapproved  by Pretzel Time or that have not been approved for use within the preceding twelve months.

         In  addition,  any  pamphlets,  brochures,  cards or other  promotional materials  offering  free Products may only be used if prepared by Pretzel Time, unless  otherwise  approved  in  advance by Pretzel  Time.  Notwithstanding  the foregoing, Pretzel Time will give favorable consideration to Franchisee's use of free product cards developed by Franchisee, if the cards clearly state that they may only be  redeemed  at Pretzel  Time Units  owned by  Franchisee.  Franchisee agrees to list and advertise the Franchise in the regular white pages  telephone directories distributed within Franchisee's metropolitan area.

         Franchisee  agrees to distribute and display at Franchisee's  location, literature,  display and promotional  materials  including  special  promotional materials  as  Pretzel  Time may from  time to time make  available.  Franchisee agrees that only those advertising,  promotional  materials,  or items which are authorized  by  Pretzel  Time in  writing  prior to use  shall be used,  sold or





distributed,  and no  alternate  display or use of the Pretzel Time Service Mark shall be made without the prior written permission of Pretzel Time.  Replacement or updated literature, display,  point-of-purchase and promotional materials may be obtained from Pretzel Time for a fee including shipping.

12.      ADHERENCE TO UNIFORM STANDARDS.

         12.A.    STANDARDS AND OPERATIONS MANUAL.

         Franchisee  acknowledges  and agrees that the  operation of the Pretzel Time Unit in accordance with the specifications, standards, operating procedures and rules Pretzel Time prescribes for the operation of Pretzel Time Units is the essence of this Agreement and is essential to preserve the goodwill of the Marks and all  Pretzel  Time  Units.  Franchisee  agrees to operate his Unit in strict compliance and adhere to Pretzel Time's Unit design,  signage,  interior  decor, equipment and  inventory  requirements  and rules and  standards and  procedures (hereinafter  referred to as Standards) set forth in any Operations  Manual or Training  Manual,  as periodically  modified and supplemented by Pretzel Time in its  discretion  during the term of this  Agreement  (Operations  Manual)  and acknowledges that the same are reasonable,  necessary and essential to the image and success of each Unit and the  Pretzel  Time System and agrees to comply with all such  requirements  and  procedures.  The  Operations  Manual shall  contain mandatory and suggested specifications,  standards and operating procedures that Pretzel Time prescribes from time to time for Pretzel Time Units and information relating to Franchisee's other obligations under this Agreement.  The Operations Manual  sets forth  Standards  regulating  and  relating  to  certain  important obligations  on  the  part  of  franchisees   and  sanctions  in  the  event  of noncompliance  with such  obligations.  Pretzel Time may regulate,  designate or approve any one or more of the following with respect to the Pretzel Time Unit:

         (1) Design, layout, decor, appearance and lighting;  periodic and daily          maintenance,  cleaning  and  sanitation;  replacement  of  obsolete  or          worn-out  fixtures,  furnishings,  equipment and signs; use of interior          and exterior signs,  emblems,  lettering and logos and the illumination          thereof;

         (2) Types,  models,  brands,  maintenance  and  replacement of required          equipment, fixtures, furnishings and signs;

         (3) Approved,  disapproved and required  Products and other items to be offered for sale;

         (4) Designated and approved  suppliers  (including  Pretzel Time and/or          its Affiliates) of equipment, fixtures,  furnishings,  signs, Products,          materials and supplies;

         (5)      Use and operation of an approved point of sale register;

         (6) Payment of vendors;  terms and  conditions  of sale and delivery of          and payment for  Products,  materials,  supplies and  services  sold by          Pretzel Time, its Affiliates or unaffiliated suppliers;

         (7) Marketing,  advertising  and  promotional  activities and materials required or authorized for use;

          (8)  Use of the Marks;

          (9)  Qualifications,  training,  dress,  appearance  and  staffing  of                employees;

          (10) Minimum hours of operation;

          (11) Participation  in market  research  and  testing  and Product and                service development programs prescribed by Pretzel Time;

          (12) Management  by Unit  Managers  who  have  successfully  completed                Pretzel Time's initial training program; communication to Pretzel                Time of the  identities  of such Unit  Managers;  replacement  of                managers whom Pretzel Time determines to be unqualified to manage                the  Pretzel  Time  Unit;  and  other  matters  relating  to  the                management of the Pretzel Time Unit and its management personnel;

          (13) Use of a designated  computer  hardware  and software  system and                equipment  with  telecommunications  capability,   including  the                procedures for providing sales information of the Unit to Pretzel                Time;

          (14) Bookkeeping,  accounting,  data  processing  and  record  keeping                systems and forms,  methods,  formats,  content and  frequency of                reports to Pretzel Time of sales, revenues, financial performance                and  condition;  operational  information;  tax returns and other                operating   and   financial   information,    including   without                limitation, audited yearly financial statements;

          (15) Types,  amounts,  terms and conditions and approved  underwriters                and          brokers of public, product, business interruption, crime loss, fire and          other  required  insurance  coverage;  Pretzel Time's rights under such          policies as an  additional  named  insured;  required or  impermissible          insurance contract  provisions;  assignment of policy rights to Pretzel          Time; Pretzel Time's right to obtain insurance coverage for the Unit at          Franchisee's  expense if Franchisee fails to obtain required  coverage;          Pretzel Time's right to defend claims;  and similar matters relating to





         insured and uninsured claims;

          (16) Compliance with applicable laws;  obtaining required licenses and                permits;  adherence to good business  practices;  observing  high                standards  of  honesty,   integrity,  fair  dealing  and  ethical                business  conduct in all dealings with  customers,  suppliers and                Pretzel   Time  and  its   Affiliates   and/or   designees;   and                notification  of Pretzel  Time in the event any  action,  suit or                proceeding  is commenced  against  Franchisee  or relating to the                Unit; and

          (17) Regulation of such other elements and aspects of the  appearance,                operation  of and conduct of business  by,  Pretzel Time Units as                Pretzel  Time   determines   from  time  to  time,  in  its  sole                discretion,  to be required to preserve or enhance the  efficient                operation, image or goodwill of Pretzel Time Units and the Marks.

         12.B.    CONFIDENTIALITY OF OPERATIONS MANUAL.

         Pretzel Time will make  available to Franchisee  during the term of the Franchise (1) copy of the Operations  Manual by loaning a copy of the Operations Manual to Franchisee. Franchisee acknowledges and agrees that all manuals loaned to Franchisee contain  confidential and proprietary  material and information of Pretzel  Time  provided  to  Franchisee  is to be  used  by  Franchisee  only in connection  with the  operation of the  franchised  Unit and other  Pretzel Time Units. The Operations Manual contains trade secrets and confidential information and will  remain the  property  of Pretzel  Time and shall be  returned to it on termination of this Agreement.  Franchisee  covenants not to reveal the contents of the Operations  Manual to  unauthorized  persons.  Franchisee may not, at any time,  copy the Operations  Manual,  in whole or in part,  either  physically or electronically. In the event Franchisee's copy of the Operations Manual is lost, destroyed or significantly damaged, Franchisee shall be obligated to obtain from Pretzel Time, at Pretzel Time's then applicable  charge,  a replacement  copy of the Operations Manual.

         12.C.    INCORPORATION OF OPERATIONS MANUAL INTO AGREEMENT.

         The  Operations  Manual's  specifications,   standards,  and  operating procedures  communicated to Franchisee in writing shall be deemed a part of this Agreement and are  incorporated  herein by  reference.  Such  Operations  Manual provisions and all reasonable  modifications shall be binding upon Franchisee to the same extent as if set forth verbatim in this Franchise  Agreement,  and such provisions  may be  changed  from  time to time by  Pretzel  Time,  in its  sole discretion,  provided that changes are  reasonably  designed to enhance  Pretzel Time's  Products,  the Pretzel  Time  System,  or  franchise  operation  and are uniformly  applied  with  respect  to all  franchisees.  Any  administrative  or financial  Section set forth in the  Operations  Manual shall be in addition to, and not in derogation or limitation  of, any right or remedy  granted to Pretzel Time  under  the  Franchise  Agreement,  the  Operations  Manual,  or any  other document,  or  otherwise  available  to  Pretzel  Time,  at  law  or in  equity, including,  without limitation,  the right to terminate a franchise in the event of certain defaults or delinquencies.

         12.D.    MODIFICATIONS/UPDATES OF OPERATIONS MANUAL.

          Franchisee  understands  and agrees  that the  Pretzel  Time System is constantly  being  modified  and  improved,  and  that  such  modifications  and improvements  require  changes  from time to time in the  system of  operations. Franchisee  further  agrees  to  accept  and  comply  with  such  modifications, revisions,  and additions to the Pretzel Time System and Operations Manual which Pretzel Time in the good faith exercise of its judgment believes to be desirable and reasonably necessary in the time period indicated by Pretzel Time.

         Franchisee  agrees  that  Standards  may be  periodically  modified  by Pretzel  Time and that such  modifications  may  obligate  Franchisee  to invest additional capital in the Unit and/or incur higher operating costs. Pretzel Time will not obligate  Franchisee to invest  additional  capital at a time when such investment cannot in Pretzel Time's reasonable  judgment be amortized during the remaining term of this  Agreement.  Franchisee  hereby agrees that standards and specifications  prescribed  from  time  to  time in the  Operations  Manual,  or otherwise  communicated  to  Franchisee  in  writing  or  electronically,  shall constitute provisions of this Agreement as if fully set forth herein.

13.      UNIT IMAGE AND OPERATION.

         13.A.    CONDITION AND APPEARANCE OF UNIT.

         Franchisee agrees that:

                  (1) neither the Unit nor the Site will be used for any purpose          other than the operation of a Pretzel Time Unit in full compliance with          this Agreement or other agreements with Pretzel Time; and

                  (2)  Franchisee  will maintain the condition and appearance of          the Unit, its equipment, furnishings, fixtures, and signs in accordance          with the  specifications  and standards of Pretzel Time and  consistent          with  the  image  of a  Pretzel  Time  Unit  as a  first-class,  clean,          sanitary,  attractive and efficiently  operated food service  business;          and

                  (3)  Franchisee  will  perform  such  maintenance  (including,          without limitation,  maintenance  procedures and routines which Pretzel          Time  prescribes  from  time  to  time)  with  respect  to  the  decor,





         equipment, fixtures,  furnishings,  vehicles, and signs of the Unit and          the Site,  as may be required or directed by Pretzel  Time from time to          time to maintain such condition,  appearance,  and efficient operation,          including, without limitation:

          (a)  continuous  and thorough  cleaning and sanitation of the interior                and exterior of the Unit;

          (b)  thorough repainting and redecorating of the interior and exterior                of the Unit and/or the Site at reasonable intervals;

          (c)  interior and exterior repair of the Unit and/or Site; and

          (d)  repair or replacement of damaged, worn out or obsolete                   furnishings,  equipment,  fixtures  and signs,  provided  that                   Pretzel  Time  will not  require  Franchisee  to  replace  any                   obsolete equipment unless Pretzel Time has initiated a program                   to  replace  such  equipment  as it becomes  necessary  in its                   company-owned Pretzel Time Units; and

                  (4) Franchisee  will not make any material  alterations to the          Site or to the appearance of the Unit as originally developed,  without          prior approval in writing by Pretzel Time; and

                  (5) Upon notice from Pretzel  Time,  Franchisee  shall remodel          and conform  Franchisee's  building design, Trade Dress, color schemes,          and  presentation  of Marks to Pretzel Time's then current public image          within a  reasonable  amount of time,  which  shall not  exceed six (6)          months.  Such a remodeling may include extensive  structural changes to          the Unit  fixtures and  improvements  as well as such other  changes as          Pretzel Time may direct and Franchisee  shall  undertake such a program          promptly upon notice from Pretzel Time;  provided the remodeling  shall          not be  required  until  such time as  Pretzel  Time has  commenced  or          completed a similar  program in at least fifty  percent  (50%) of those          Pretzel Time Units owned and operated by Pretzel Time. This requirement          shall not apply in the  event  notice  from  Pretzel  Time is  received          during the last year of the term hereof or the term of any agreement by          virtue of which Franchisee occupies the Unit.

         In addition to Pretzel Time's rights to terminate this Agreement as set forth herein,  if Franchisee  does not maintain the condition and  appearance of the Unit as herein  required,  Pretzel  Time,  may,  upon not less than ten (10) days'  written  notice  (or, in cases of health or  sanitation  hazards or other public endangerment, immediately on oral or written notice) to Franchisee:

          (i)  arrange  for  the  necessary  cleaning  or  sanitation,   repair,                remodeling, upgrading, painting or decorating; or

          (ii) replace the necessary fixtures, furnishings, equipment, signs.

         If Franchisee  fails or refuses to initiate  within ten (10) days after receipt  of  a  notice  that  the  general  state  of  repair,  appearance,  and cleanliness of your store does not meet Pretzel Time's standards, and thereafter continue in good faith and with due  diligence a bona fide  program to undertake and complete required  maintenance or refurbishing,  Pretzel Time has the right, but is not  obligated,  to enter upon the  premises  of the Unit and effect such maintenance and  refurbishing on Franchisee's  behalf,  and Franchisee shall pay the entire cost thereof to Pretzel Time on demand.

         13.B.  UNIT MENU.

         Franchisee  agrees that the Unit shall offer for sale all  Products and no other  products,  which Pretzel Time, in its sole  discretion,  may authorize and/or require from time to time for the Unit.  Franchisee  agrees that the Unit shall not offer for sale or sell any  Products  or  services at or from the Unit which have not been  approved in writing by Pretzel Time or use the Site or Unit for any purpose  other than the  operation  of a Pretzel  Time Unit.  Franchisee agrees that the Unit shall not sell any  Products at, from or away from the Site until Pretzel Time, in its sole discretion,  has approved the same, provided the foregoing  shall not limit  Franchisee  to sample in front of the lease  line as limited in  Franchisee's  lease.  Pretzel Time  reserves the right to change the types of  authorized  Products and require  Franchisee to offer to sell and sell the  new,  modified  or  substituted  Products.  Pretzel  Time may  develop  new Products,  methods  of  operations,  and  standards  and may  provide  you  with information about developments.  Franchisee also acknowledges and agrees that if Pretzel Time requires the Unit to use new or  substitute  products not currently offered at Pretzel  Time  Units,  Franchisee  agrees to offer such  Products  in compliance  with  Pretzel  Time's   specifications,   standards  and  procedures prescribed in the  Operations  Manuals or otherwise in writing and to diligently pursue  obtaining  any  permits  and  take  such  actions  (including,   without limitation,  constructing  improvements  and  acquiring  fixtures,  furnishings, equipment,  supplies, and materials) required to offer such Products. Franchisee acknowledges  and  understands  that such  modifications  to the  Products to be offered  by the Unit  may  require  Franchisee  to incur  additional  costs  and expenses to operate the Unit, including, without limitation, the purchase and/or lease of additional or substitute furnishings,  furniture, fixtures or equipment and Franchisee agrees to incur such expenses in connection therewith.

         13.C.    ADHERENCE TO APPROVED ITEMS.





         The  reputation  and goodwill of all Pretzel Time Units are based upon, and can only be maintained by, the sale of  distinctive,  high-quality  Products and the  presentation,  packaging  and service of Products in an  efficient  and appealing  manner.  Pretzel  Time has  developed  and shall  continue to develop certain  proprietary food products which will be prepared by or for Pretzel Time according to Pretzel Time's recipes and formulas. Pretzel Time has developed and shall continue to develop  standards and  specifications  for fresh  hand-rolled pretzels, frozen pretzels,  pretzel toppings,  beverages and other healthy snack food  products,   materials  and  supplies   incorporated  in  or  used  in  the preparation, baking, or serving of Products authorized by Pretzel Time. The need for quality and quantity control in the Products offered for sale at the Unit is acknowledged  by  Franchisee.  All  Products  offered by  Franchisee  must be of uniform  quality and quantity  and offered for sale to the public in  accordance with Pretzel Time's  specifications  as set forth in Pretzel  Time's  Operations Manual and as may be amended from time to time.

         Pretzel  Time has  approved  and shall  review and  continue to approve suppliers and  distributors  of the  foregoing  Products,  supplies,  materials, equipment,  fixtures  and  machines  that  meet  Pretzel  Time's  standards  and requirements  including,  without  limitation,  quality,  quantity and portions, prices,  output requirements,  distribution methods and locations,  standards of service, financial capability,  customer service and other criteria.  Franchisee agrees that minimum standards for items of inventory,  Products,  machines,  and equipment  may  be  recognized  by  brand  name  rather  than  by  technical  or engineering description.

         Franchisee  agrees  that  it  will  use  all  equipment  and  Products, including, without limitation, food products,  smallwares,  equipment, and paper products as designated by Pretzel Time and shall purchase Pretzel Time's private label  food  products,   materials,  supplies  and  proprietary  food  products, ingredients,  spices, sauces, mixes,  beverages,  materials and supplies used in the  preparation of Products  developed by or for Pretzel Time or its Affiliates whether or not pursuant to a special recipe or formula or bearing the Marks only from Pretzel  Time,  its  Affiliates  or  non-affiliated  sources  designated by Pretzel Time.  Franchisee  further agrees to purchase only from distributors and suppliers  approved  or  required by Pretzel  Time.  Franchisee  agrees that the approved Products, equipment, smallwares, and inventory used on the premises may alter from time to time as Pretzel Time reasonably deems  necessary.  Franchisee agrees to offer for sale only those  Products  approved  by Pretzel  Time and no others without the prior written approval of Pretzel Time. Franchisee shall not, after receipt in writing of any modification of an approved or required supplier or distributor,  manufacturer  of equipment,  products,  materials,  supplies or other items  reorder any product  from any  supplier or  distributor  that is no longer  approved.  Pretzel Time may approve or require a single  distributor  or supplier  for any  Products,  materials or supplies and may approve or require a distributor or supplier only as to certain products, materials and supplies, and such approval may be temporary pending a further  evaluation of such distributor or supplier by Pretzel Time. Pretzel Time may concentrate  purchases with one or more distributors or suppliers to obtain lower prices and/or advertising support and/or  services for the benefit of Pretzel Time, the Pretzel Time System and/or Pretzel Time Units.

         Pretzel Time will loan to Franchisee a list of approved  brand Products for use during the term of this  Franchise  Agreement  at the  initial  training session.  Franchisee  agrees to not copy the list.  Franchisee will,  during the term of this Agreement and after its  termination  or  expiration,  maintain the list  and its  contents  in  strict  confidence,  and  upon  the  expiration  or termination of this Franchise Agreement,  whichever is earlier, will immediately return it to Pretzel Time.  Pretzel Time shall promptly provide  Franchisee with any  amendments to the  designated  list of inventory of available  Products and supplies to be carried and sold at Franchisee's  location.  Franchisee  shall at all times  maintain an adequate  inventory of approved  Products  sufficient  in quality and variety to realize the full potential of the Unit.

         13.D.    EXCEPTION PROCESS.

         If   Franchisee   proposes  to  purchase   materials  or  supplies  not theretofore  approved by Pretzel Time as meeting its  specifications,  or from a supplier or  distributor  not  previously  approved by Pretzel Time,  Franchisee shall first notify Pretzel Time and request  Pretzel  Time's  approval using the special exception form provided to Franchisee in its Operations  Manual, and pay any reasonable fees that Pretzel Time designates therefor.  Further,  Franchisee agrees to use all forms  specified and developed by Pretzel Time for  requesting any exceptions in products or suppliers.  Pretzel Time may require submission of sufficient information and samples to determine whether such materials, supplies or suppliers meet its specifications as well as financial  information regarding the  supplier.  Pretzel Time will advise  Franchisee  within a  reasonable  time whether such

materials or supplies meet its specifications.  Pretzel Time does not maintain a formal criteria for approving materials,  supplies or suppliers.  All approvals, disapprovals  and  revocations of approval of suppliers will be  communicated to Franchisee,  in writing,  and shall be in the sole  discretion  of Pretzel Time. Franchisee  must  comply  with  the  following  conditions  in  order  to seek a substitution for a Pretzel Time approved Product:

                  (1) Franchisee  shall submit a written request to Pretzel Time





                  for approval of a non-approved supplier or product;

                  (2)  Franchisee  and  supplier  shall  demonstrate  to Pretzel                   Time's  reasonable  satisfaction that it is able to supply the                   commodity  which  meets  Pretzel  Time's   specifications   to                   Franchisee; and

                  (3)  The  supplier   shall   demonstrate   to  Pretzel  Time's                   reasonable  satisfaction that the supplier is of good standing                   in the  business  community  with  respect  to  its  financial                   soundness and the  reliability  of its product and service and                   shall  request  in  writing  to  Pretzel  Time to be  named an                   approved supplier.

         13.E.  PROMOTIONAL ALLOWANCES.

         Franchisee  acknowledges  and agrees that Pretzel Time may, in its sole discretion,  collect  and  retain all  allowances,  benefits,  credits,  monies, payments  or  rebates   (collectively   Promotional   Rebates),   whether  for promotional,  advertising  or other  purposes,  offered to Franchisee or Pretzel Time or its Affiliates by manufacturers,  suppliers and distributors  based upon Franchisee's  purchases of Products or other products and materials.  Franchisee assigns to Pretzel  Time or its designee all of  Franchisee's  right,  title and interest  in and to any and  all  such  Promotional  Allowances  and  authorizes Pretzel  Time or its  designee to collect any such  Promotional  Allowances  for remission to the general operating funds of Pretzel Time.

14.      FRANCHISEE OPERATIONS.

         14.A.    MANAGEMENT.

         Franchisee agrees that he will at all times faithfully,  honestly,  and diligently  perform his obligations  hereunder,  that he will continuously exert his best efforts and shall  continually  train and  supervise  his  personnel to Pretzel Time's  reasonable  standards,  in  furtherance  of the mutual  business interests of both Pretzel Time and Franchisee and that he will not engage in any other business or activity that may conflict with his obligations  hereunder.  A Unit  shall be under  the  direct,  on-premises  supervision  of a  trained  and competent  Franchisee  or a  trained  and  competent  employee  acting as a Unit Manager  at  all  times.  Franchisee  shall  remain  active  in  overseeing  the operations of the Unit  conducted  under the  supervision  of such Unit Manager. Pretzel  Time shall have the right to deal with the Unit  Manager and  assistant managers on matters  pertaining to the  day-to-day  operations of, and reporting requirements  for the Unit.  Franchisee shall be required to notify Pretzel Time within seven (7) business days of changing Unit Managers.  Franchisee shall hire all employees of the Unit and shall be exclusively  responsible for the terms of their  employment and compensation and for the proper training of such employees in the operation of the Unit.

         If the Unit at any time is not being  managed by you or a Unit  Manager who shall have satisfactorily completed Pretzel Time's training program, Pretzel Time is  authorized,  but is not  required to  immediately  appoint a Manager to maintain  the  operations  of the Unit for you.  Pretzel  Time has the  right to change a reasonable fee for such management  services,  not to exceed our costs, and to cease to provide such  management  services at any time.  Pretzel  Time's right to manage a Unit and obtain  reimbursement  for costs also  applies in the event of your death or disability.

         14.B.  SUFFICIENT WORKING CAPITAL.

         Franchisee shall maintain an adequate sales force to serve properly all customers,  and shall  carry at all times a stock of  merchandise  of such size, character,  quality and price to produce the maximum return to Franchisee and so as to produce all of the gross  revenue  which may be produced by such manner of operation.

         14.C.  FILING OF OPERATIONS AND SALES REPORTS.

         Franchisee's  net revenues and operational  analysis are to be reported on or before Tuesday at 12:00 P.M.  Eastern  Standard Time (or Eastern  Daylight Savings  Time) or any other  time  reasonably  designated  by Pretzel  Time,  to Pretzel Time on forms  designated by Pretzel Time for the immediately  preceding week.  If the gross sales report is not submitted as herein  specified,  Pretzel Time may, at its option,  charge a late fee of $50.00 to Franchisee.  There will only be one late fee for each late report.

         14.D.    EMPLOYEE DRESS AND CUSTOMER SERVICE.

         The  presentation  of an uniform  image is  essential  to a  successful franchise  system.  Franchisee  shall cause all  employees of  Franchisee  while working  at the  franchise  location  to dress  appropriately  (in the  specific uniform  approved and  designated  by Pretzel  Time) in keeping with the Pretzel Time image,  as Pretzel Time may designate  from time to time, to present a neat and clean  appearance  and to render  confident  and  courteous  service  to the Franchise's customers.

         14.E.  COMPLIANCE WITH LAWS AND GOOD BUSINESS PRACTICES.

         Franchisee  shall secure and maintain in force in his name all required licenses,  permits,  and  certificates  relating to the conduct of his  business pursuant to this  Agreement.  Franchisee  will  conduct the  Franchise in strict compliance  with  all  applicable  laws,  ordinances,   regulations,  and  other requirements  of any federal,  state,  county,  municipal  or other  government, including,   without  limitation,  those  laws  and  regulations  pertaining  to preparation,  purchase  and  handling of food  products,  occupational  hazards,





health,  safety and sanitation,  worker's compensation  insurance,  unemployment insurance,  and  withholding  and payment of all taxes.  While  Pretzel Time may advise  Franchisee  as  a  courtesy  on  any  applicable  laws,  ordinances,  or regulations,  Pretzel Time  undertakes  no duty to do so and  Franchisee  hereby acknowledges  it is Franchisee's  sole duty to inquire  regarding and concerning all laws,  ordinances,  and  regulations  affecting  the Unit,  its  operations, employees and Franchisee.

         Franchisee shall in all dealings with its customers, suppliers, Pretzel Time, and public officials adhere to high standards of honesty,  integrity, fair dealing and ethical conduct.  Franchisee  agrees to refrain from any business or advertising  practice which may be injurious to the business of Pretzel Time and the goodwill associated with the Marks and other Pretzel Time Units.

         Franchisee  shall notify  Pretzel  Time within three (3) business  days after the commencement of any action, suit, proceeding or issuance of any order, writ, injunction, award or court decree which may adversely affect the operation or financial  condition of Franchisee or the unit or immediately  notify Pretzel Time of any notice of health or sanitation violation.

         14.F.    PAYMENT OF TAXES.

         Franchisee  shall be  solely  responsible  for  payment  of all  taxes, including, but not limited to, real estate, sales, payroll,  franchise,  income, personal  property,  and gross  receipts taxes which are assessed as a result of Franchisee's operation of the Franchise.

         14.G.    SALE OF PRODUCT.

         Franchisee agrees not to sell or offer to sell any materials, supplies, or  inventory  used in the  preparation  of any of the  Products  other  than to Pretzel  Time and that he shall  not  sell,  dispense,  give  away or  otherwise provide without Pretzel Time's prior written consent any product except by means of retail sales in the  franchise  location.  Franchisee  may only sell finished Products  and may not sell any Products to any person or entity  purchasing  the Products for resale.  Notwithstanding  the foregoing,  Franchisee may offer free samples of  Products  at or  directly  in front of the Unit to retail  customers only.

         14.H.    COOPERATION.

         Franchisee  agrees that he shall  cooperate with Pretzel Time in taking any action, or refraining from any action, which in the judgment of Pretzel Time is  necessary or desirable to promote and enhance the quality of the products of the Franchise location, the service provided by the Franchisee,  or the image of the Franchise in the community.

         14.I.    INSURANCE.

         Franchisee shall maintain at Franchisee's expense, in form, amounts and with insurers  satisfactory  to Pretzel Time,  which  insurers must have an A.M. Best  Company  rating of A- or better and naming  Pretzel  Time an  additional insured,  insurance  against all types of public  liability with personal injury coverage and property damage coverage. In addition to coverage as aforesaid such insurance  shall  include  coverages as set forth in the  Operations  Manual and shall contain a provision  obligating  all insurers to provide a written  notice Pretzel Time of any  cancellation  or  modification  of coverage at least thirty (30) days prior to the effective date of such modification or cancellation.

         The insurance afforded by the policy or policies  respecting  liability shall  not be  limited  in any  way by  reason  of any  insurance  which  may be maintained  by  Pretzel  Time.  Within  sixty  (60) days of the  signing of this Agreement,  but in no event later than the date on which Franchisee  acquires an interest in the real  property  (by lease or  purchase) on which it will develop and operate the Franchise,  a Certificate of Insurance  showing  compliance with the foregoing  requirements shall be furnished by Franchisee to Pretzel Time for approval.  Such certificate shall state that said policy or policies will not be canceled or altered  without at least thirty (30) days prior  written  notice to Pretzel Time and shall reflect proof of payment of premiums. Maintenance of such insurance  and the  performance  by  Franchisee  of the  obligations  under this Section shall not relieve Franchisee of liability under the indemnity  provision set forth in this  Agreement.  Minimum  limits as required above may be modified from time to time, as conditions require by written notice to Franchisee.

         Should  Franchisee not procure and maintain such insurance  coverage as required  by Pretzel  Time,  Pretzel  Time  shall have the right and  authority, without any obligation to do so, immediately procure such insurance coverage and to charge same to Franchisee,  which charges  together with a reasonable fee for expenses incurred by Pretzel Time in connection with such procurement,  shall be payable by Franchisee immediately upon notice.

         Franchisee  shall fully  cooperate  with Pretzel Time in its efforts to obtain  such  insurance  policies,  promptly  execute  all forms or  instruments required to obtain or maintain such insurance policies, allow inspections of the Unit or vehicles  which are  required to obtain and maintain  insurance  and pay Pretzel Time on demand for any costs or premiums.

         14.J.    SUGGESTED RETAIL PRICES.

         Pretzel  Time  may  from  time to time  advise  or  offer  guidance  to Franchisee  relative to prices for Products  offered for sale by Franchisee that in Pretzel Time's judgment  constitute good business practice.  Franchisee shall not be  obligated  to accept any such advice or guidance and shall have the sole right  to  determine  and to sell  products  at any  price  that it  determines.





Whenever Pretzel Time recommends a retail price, such  recommendations are based on Pretzel  Time's  experience  concerning  all factors that enter into a proper price, but such recommendation is in no manner binding on Franchisee and no such advice or guidance  shall be deemed or construed to impose upon  Franchisee  any obligation  to charge any  fixed,  minimum  or  maximum  prices for any  product offered for sale by the Franchise.  Pretzel Time reserves the right to advertise retail  prices of Pretzel Time  Products,  provided  that such retail prices are qualified as suggested. The parties understand and agree that such advertising shall not be  construed  as  requiring  Franchisee  to adhere to such prices but Franchisee shall have complete freedom to establish retail prices.

15.      ACCOUNTING, REPORTS AND FINANCIAL STATEMENTS.

         15.A.  ESTABLISHMENT OF ACCOUNTING SYSTEM.

         Franchisee  shall  establish at his own expense a complete and accurate bookkeeping,  accounting,  record keeping and data processing system prepared in accordance with generally accepted  accounting  principles and conforming to the requirements and formats that Pretzel Time prescribes from time to time. Pretzel Time shall provide  Franchisee with forms on which to maintain certain sales and operational  data.  Franchisee  shall furnish to Pretzel Time on said forms that Pretzel Time prescribes from time to time:

         (i) On Tuesday of each week,  a report on the Unit's net  revenues  and          sales and operations for the previous week;

         (ii) Every six calendar month period,  a balance sheet and a profit and          loss statement for the Unit for the previous  semi-annual  period and a          year to-date  statement  of  financial  condition as of the end of such          previous period; and

         (iii) Within  thirty (30) days after  Franchisee's  year end, an annual financial report.

The reports  required in Section 15.A. (ii) and (iii) if not audited,  should be signed  by the  Franchisee  or its  financial  officer,  attesting  that (1) the reports are true and accurate,  (2) they are prepared in accordance with GAPP on a basis  consistent  with prior periods,  (3) they fully describe and completely disclose the information sought, and (4) the signer has made diligent efforts to ascertain the truth and completeness of the information.

         15.B.   MAINTENANCE OF RECORDS.

         Franchisee  agrees, at all times, he shall keep and maintain  adequate, accurate,  true, and proper records, books, reports, data, and accounts relative to the  franchise  in the English  language  and in  accordance  with  generally accepted accounting principles, and retain the records for a period of three (3) years  after  the date they  were  prepared,  from  which  there may be  readily determined the  information  required in the operating  reports to be filed with Pretzel Time. Such records include, without limitation, daily cash reports, cash receipts  journal  and general  ledger,  cash  disbursements  journal and weekly payroll register,  monthly bank statements and daily deposit slips and cancelled checks;  tax returns,  supplier  invoices,  dated cash  register  tapes,  weekly inventories, sales reports, financial statements and tax returns.

         Franchisee hereby authorizes  Pretzel Time to utilize the data supplied by  Franchisee  under this  Section  in any  publication,  discovery  statement, Offering  Circular,  or  advertisements  related  to the sale of  Franchises  or related  entities  by Pretzel  Time,  anywhere,  at any time,  without  specific compensation therefor.

16.      AUDITS AND INSPECTIONS.

         16.A.    AUDITS.

         Pretzel  Time or its  designee  shall have the right at any time during business  hours and without prior notice to  Franchisee,  to inspect,  audit and copy or the right to cause to be  inspected,  audited and copied,  the  business records,  bookkeeping and accounting  records,  sales and income tax records and returns and other records of the Franchised Business,  including but not limited to,  daily  cash  reports,  cash  receipts  journal  and  general  ledger,  cash disbursements  journal and weekly payroll register,  monthly bank statements and daily deposit slips and cancelled checks; tax returns,  supplier invoices, dated cash register tapes, weekly inventories, sales reports, financial statements and tax returns and the books and records of any  corporation or  partnership  which holds the Franchise  including the personal financial records and tax returns of the Franchisee during and after the term of the Franchise Agreement.  Franchisee agrees to maintain on the premises  all sales and  operational  information  for four weeks.

         Any such  inspection  or audit will take place at a time which will not interfere with  Franchisee's  normal business.  Franchisee shall fully cooperate with Pretzel Time's representatives and independent accountants hired by Pretzel Time to conduct any such inspection or audit.  If Pretzel Time deems  necessary, Franchisee shall deliver to Pretzel Time or its designated  agents copies of all bookkeeping  records not already in the  possession of Pretzel  Time,  including customer  records,  cash  register  tapes,  sales and  purchase  records and tax records,  to enable Pretzel Time or its representative or designee to adequately audit Franchisee's  gross sales.  Franchisee hereby waives any right to withhold tax records relative to the Franchise as privileged information. Each report and





financial  statement  shall be signed and verified by  Franchisee  in the manner Pretzel Time prescribes.  Pretzel Time reserves the right to require  Franchisee to have audited or reviewed financial statements prepared on an annual basis.

         In the event  that an audit  discloses  that  Franchisee's  actual  net revenues exceed  Franchisee's  reported net revenues by two percent (2%) or more for any thirty day  period,  Franchisee  is  obligated  to pay to Pretzel  Time, within  fifteen (15) days after receipt of the  inspection or audit report,  the royalty of seven percent (7%) and the  Advertising  Fund Fee of one percent (1%) of the amount of such  understatement  plus interest from the date such payments were originally due. The audit will be conducted at the expense of Pretzel Time, provided that if an audit  disclosed an  understatement  of two percent (2%), as described above,  Franchisee will bear the cost of the audit,  including without limitation,  the charges of attorneys  and any  independent  accountants,  their travel   expenses,   room  and  board,   and   compensation  of  Pretzel  Time's representatives  and  independent  accountants.  Providing  that in no case will Franchisee be obligated to pay more than ten thousand dollars ($10,000) for such inspection  or audit  costs.  The  foregoing  remedies  shall be in  addition to Pretzel Time's other remedies and rights under this Agreement or applicable law.

         16.B.    RIGHT OF ENTRY AND INSPECTION.

         To determine  whether  Franchisee  and the Unit are complying with this Agreement and with all Pretzel Time's  standards and operations as prescribed by Pretzel Time,  Pretzel Time or its designated agents shall have the right at any reasonable time and without prior notice to Franchisee to:

         a.  Inspect the Unit;

         b. Observe,  photograph  and video tape the Unit's  operations for such          consecutive or intermittent periods as Pretzel Time deems necessary;

         c. Remove  samples of any  Products,  materials or supplies for testing and analysis;

         d.  Interview personnel of the Unit;

         e.  Interview customers of the Unit; and

         f. Inspect and copy any books,  records and  documents  relating to the          operation  of the Unit.  Franchisee  agrees  to  cooperate  fully  with          Pretzel Time in connection with any such inspections, observations,  photographing,  video  taping,  Product  removal and  interviews. Franchisee  shall present to his customers  such comment or evaluation  forms as Pretzel Time periodically  prescribes and shall  participate  and/or request his customers  to  participate  in any surveys  performed by or on behalf of Pretzel Time. At the conclusion of his inspection,  Pretzel Time's field  representative shall prepare a written report which shall contain all of his  observations  and conclusions.  If the field representative  determines that a condition amounting to a default of this Agreement has occurred or exists,  this conclusion shall be promptly communicated to Franchisee and Pretzel Time.

17.      TRANSFER, ASSIGNMENT AND REPURCHASE.

         17.A.  BY PRETZEL TIME.

         This Agreement is fully transferable by Pretzel Time and shall inure to the benefit of any  assignee,  transferee  or other legal  successor  to Pretzel Time's interest  herein.  If Pretzel Time's assignee will perform any of Pretzel Time's obligations under this Agreement,  then that assignee must be financially capable of performing  those  obligations and the assignee must expressly assume and agree to perform  them.  Franchisee  agrees that Pretzel Time shall have the right,  from time to time, to delegate the  performance of any portion or all of its obligations and duties under this Agreement.

         17.B.  BY FRANCHISEE.

         Franchisee  understands  and  acknowledges  that the  rights and duties created by this Franchise Agreement are personal to Franchisee (or if Franchisee is a  corporation  or  partnership,  to its  Owners) and that  Pretzel  Time has granted the Franchise to Franchisee in reliance upon Pretzel Time's  perceptions of the individual or collective character,  skill, aptitude,  attitude, business ability and  financial  capacity of  Franchisee  (or its  Owners).  Accordingly, Franchisee agrees no Transfer shall be made without Pretzel Time's prior written approval.  Any Transfer  without such approval shall constitute a breach of this Agreement  and shall be void and of no  effect.  Pretzel  Time's  consent to the assignment  shall  neither  constitute  a  novation  or change  in  Franchisee's obligations under this agreement,  nor constitute a waiver of any claims Pretzel Time may have  against  Franchisee  (or its  Owners)  nor be  deemed a waiver of Pretzel Time's right to demand the transferee's exact compliance with all of the terms or conditions of this Agreement.

         17.C.  CONDITIONS FOR APPROVAL OF TRANSFER.

         If  Franchisee  is in full  compliance  with this  Agreement  (and,  if Franchisee is a corporation or  partnership,  its Owners are in full  compliance with this Agreement),  Pretzel Time shall not unreasonably withhold its approval of a Transfer that meets all of the following requirements:

         (1) The  transferee  and its  Owners  must  meet  Pretzel  Time's  then          applicable  standards for Pretzel Time Unit  franchisees  and must have          had sufficient business experience,  aptitude,  and financial resources          to operate the Unit;





         (2) Franchisee has paid such royalty,  advertising  fund fees,  amounts          owed for purchases by Franchisee  from Pretzel Time and its  Affiliates          and all other amounts owed to Pretzel Time or its  Affiliates and third          party  creditors and shall have  submitted to Pretzel Time all required          reports and statements;

         (3)  Franchisee or the  transferee has paid Pretzel Time's then current          transfer fee to defray expenses  Pretzel Time incurs in connection with          the  transfer,  except that if the  proposed  Transfer  is, to or among          Owners of Franchisee, this provision shall not apply;

         (4) The  Transferee  and/or its Unit  Manager  have  agreed to complete          Pretzel  Time's  training  program to Pretzel Time's  satisfaction  and          prior to the date of transfer;

         (5) The  Transferee  has  agreed  to be bound by all of the  terms  and          conditions of this Agreement and executes a current Franchise Agreement          and other franchise documents, a sublease agreement,  if any, and other          documents required by Pretzel Time;

         (6) Franchisee  (and its  transferring  Owners) have executed a general          release,  in form  satisfactory  to Pretzel Time, of any and all claims          against Pretzel Time and its Affiliates and their officers,  directors,          employees and agents;

         (7) Pretzel Time has approved the material terms and conditions of such          Transfer,  including,  without limitation,  that the price and terms of          payment are not so burdensome as to affect  adversely the  transferee's          operation of the Unit; provided,  however, that Pretzel Time's approval          of such Transfer does not ensure the transferee's  success as a Pretzel          Time Unit  franchisee,  nor should  the  transferee  rely upon  Pretzel          Time's  approval  of such  Transfer in  determining  whether to acquire          Franchisee's  Pretzel Time Unit; (8) If Franchisee  (and/or its Owners)          finances  any  part of the  sale  price  of the  transferred  interest,          Franchisee  and/or its Owners have agreed that all  obligations  of the          transferee  under or pursuant to any  promissory  notes,  agreements or          security  interests  reserved by Franchisee or its Owners in the assets          of the Unit or the Premises shall be  subordinate  to the  transferee's          obligations  to pay royalty and service  fees and other  amounts due to          Pretzel  Time and its  Affiliates  and  otherwise  to comply  with this          Agreement;

         (9) Franchisee (and its Owners) have executed a noncompetition covenant          in favor of Pretzel Time and the transferee agreeing that, for a period          of twelve (12) months commencing on the effective date of the Transfer,          Franchisee,  its  Owners  and  members  of the  immediate  families  of          Franchisee  and each of its Owners will not hold any direct or indirect          interest  as  a  disclosed  or  beneficial  owner,  investor,  partner,          director,  officer manager,  employee,  consultant,  representative  or          agent, or in any other capacity,  in a Competitive  Business located or          operating  within  three (3) miles of the Unit,  and  within  three (3)          miles of any other Pretzel Time Unit;

         (10) If consent is required, the lessor of the Premises consents to the          assignment or sublease of the Premises to the transferee;

         (11)  Franchisee  has complied with all of its  obligations  to Pretzel          Time, its Affiliates,  suppliers,  and distributors,  and Franchisee is          not in default under this Agreement or any other Agreement with Pretzel          Time or Pretzel Time's Affiliates;

         (12)  All  improvements,  including  refurbishings,   remodelings,  new          equipment must be made prior to the Transfer; and

         (13)  Franchisee  (and its Owners) has agreed that he will not directly          or  indirectly  at any time or in any manner  (except  with  respect to          Pretzel Time Units owned and operated by Franchisee)  identify  himself          or any  business  as a current or former  Pretzel  Time  Unit,  or as a          franchisee,  licensee or dealer of Pretzel Time or its Affiliates,  use          any Mark, any colorable imitation thereof or other indicia of a Pretzel          Time Unit in any manner or for any  purpose or utilize  for any purpose          any tradename,  trade or service mark or other  commercial  symbol that          suggests or indicates a connection or association  with Pretzel Time or          its Affiliates.

         17.D.    TRANSFER TO A WHOLLY-OWNED CORPORATION.

         Notwithstanding Section 17.B., if Franchisee is in full compliance with this  Agreement,  Franchisee may transfer this Agreement to a corporation  which conducts no business  other than the Pretzel  Time Unit and in which  Franchisee maintains management control and owns and controls one hundred percent (100%) of the equity  and  voting  power of all  issued  and  outstanding  capital  stock. Transfers of shares of such  corporation  will be subject to the  provisions  of Section 17.C.(2) and 17.C.(8).  Notwithstanding anything to the contrary herein, Franchisee  shall  remain  personally  liable  under  this  Agreement  as if the Transfer to such  corporation had not occurred.  The articles of  incorporation, by-laws and other organizational documents of such corporation shall recite that the issuance and  assignment of any interest  therein is restricted by the terms of Section 17 of this Franchise Agreement,  and all issued and outstanding stock certificates  of such  corporation  shall bear a legend reciting or referring to the restrictions hereof.

         17.E.  FORMATION OF A CORPORATION.





         In the event,  Franchisee  desires to form a  corporation  for the sole purpose of acting as a  Franchisee  under this  Agreement,  in  addition  to the conditions  imposed under Section 17, the following terms and conditions must be complied with, unless otherwise agreed in writing by Pretzel Time:

                  (1) Franchisee  must be the owner of the majority  interest in                   the  voting  stock  of  the   corporation  and  the  principal                   executive officer thereof;

                  (2)  Franchisee's  shareholders  shall enter into an agreement                   under seal with Pretzel Time, on Pretzel Time's standard form,                   guaranteeing  the  full  payment  of the  corporation's  money                   obligations to Pretzel Time as individual  surety and agreeing                   to be bound  individually  by the  non-competition  obligation                   stated herein; and

                  (3) Franchisee and all shareholders  must continue to meet its                   obligations  under  the  noncompetition   provisions  of  this                   Agreement.

         In  the  event   Franchisee  or  its  successor  is  a  corporation  or partnership or similar entity, it is agreed as follows:

                  (1) That the  Articles  of  Incorporation  and  By-Laws or the                   Partnership  Agreement,  shall  reflect  that the issuance and                   transfer of voting stock or other ownership  interest therein,                   is restricted by the terms of this Agreement. Franchisee shall                   furnish  Pretzel  Time at the  time of the  execution  of this                   Agreement or of assignment to the  corporation  or partners of                   Franchisee, a written agreement stating that no stockholder or                   partner  will  sell,  assign  or  transfer  voluntarily  or by                   operation  of law  any  securities  of  Franchisee,  or  other                   ownership  interest  in  Franchisee,  to any  person or entity                   other than existing shareholders or partnership, to the extent                   permitted  hereunder,  without  the prior  written  consent of                   Pretzel Time.  All securities  issued by Franchisee  will bear                   the  following  legend  which  shall be  printed  legibly  and                   conspicuously  on each stock  certificate or other evidence of                   Ownership Interest:

                    The  transfer of these  securities  is subject to the terms                     and  conditions of a Franchise  Agreement with Pretzel Time,                     Inc.  dated , 199____.  Reference is made to said  Agreement                     and to  the  restrictive  provisions  of  the  Articles  and                     By-laws or Shareholders or Partnership Agreement.

                  (2) That if Franchisee or a successor,  is a corporation,  the                   majority of the capital stock thereof shall not at any time or                   in the  aggregate  be sold,  assigned,  pledged,  mortgaged or                   transferred without the prior written consent of Pretzel Time.

                  (3) Franchisee  represents and warrants that its Owners are as                   set  forth  on  Exhibit  B  attached  to  this  Agreement  and                   covenants that it will not vary from that ownership  structure                   without the prior written approval of Pretzel Time.

         17.F.  DEATH OR DISABILITY OF FRANCHISEE.

         Upon the death or Permanent  Disability of Franchisee or, if Franchisee is a  corporation  or  partnership,  the  Owner  of a  Controlling  Interest  in Franchisee, the executor, administrator, conservator, guardian or other personal representative  of such  person  shall  transfer  Franchisee's  interest in this Agreement or such interest in  Franchisee  to a third party  approved by Pretzel Time.  Such  disposition  of this  Agreement  or  such  interest  in  Franchisee (including,  without  limitation,  transfer by bequest or inheritance)  shall be completed  within a reasonable  time, not to exceed six (6) months from the date of death or  Permanent  Disability,  and shall be  subject  to all the terms and conditions  applicable to Transfers contained in Section 17.B. and 17.C. Failure to transfer the interest in this Agreement or such interest in Franchisee within said period of time shall constitute a breach of this Agreement.

         17.G.    PRETZEL TIME'S FIRST RIGHT OF REFUSAL.

          If  Franchisee  (or its Owners)  shall at any time  determine to sell, assign or transfer for consideration  this Agreement or an Ownership Interest in Franchisee  or the Unit,  Franchisee  (or its Owners)  shall obtain a bona fide, executed  written offer and earnest  money deposit from a responsible  and fully disclosed purchaser (including lists of the Owners of record and beneficially of any corporate  offeror and all general and limited  partners of any  partnership offeror and, in the case of a publicly-held  corporation or limited partnership, copies of the most current annual and quarterly  reports) and shall  immediately submit to Pretzel  Time a true and  complete  copy of such  offer,  which  shall include  details of the payment  terms of the proposed  sale and the sources and terms of any financing for the proposed purchase price. To be a valid, bona fide offer, the proposed purchase price shall be denominated in a dollar amount.  The offer must apply only to an interest in this  Agreement,  Franchisee or the Unit and may not  include  an offer to  purchase  any  other  property  or  rights of Franchisee (or its Owners).  However,  if the offeror  proposes to buy any other property  or  rights  from   Franchisee   (or  its  Owners)  under  a  separate, contemporaneous offer, the price and terms of purchase offered to Franchisee (or its Owners) for the  interest in this  Agreement,  Franchisee  or the Unit shall reflect the bona fide price  offered  therefore  and shall not reflect any value for any other property or rights.





          Pretzel  Time  shall  have the right,  exercisable  by written  notice delivered to Franchisee  (or its Owners) within sixty (60) days from the date of delivery  of an exact copy of such  offer to  Pretzel  Time,  to  purchase  such interest for the price and on the terms and conditions  contained in such offer, provided that Pretzel Time may substitute cash for any form of payment  proposed in such offer,  Pretzel Time's credit shall be deemed equal to the credit of any proposed  purchaser and Pretzel Time shall have not less than sixty (60) days to prepare  for  closing.  Without  regard to the  representations  and  warranties demanded by the proposed  purchaser,  if any,  Pretzel Time shall be entitled to purchase such interest subject to all customary  representations  and warranties given by the  Franchisee,  seller of the assets of a business or voting stock of an  incorporated  business,  as  applicable,   including,   without  limitation, representations  and  warranties as to ownership,  condition and title to stock, and /or assets,  liens and  encumbrances  relating to the stock  and/or  assets, validity  of  contracts  and  liabilities  of the  corporation  whose  stock  is purchased and affecting the assets, contingent or otherwise.

         If Pretzel Time exercises its right of first refusal,  Franchisee  (and its Owners)  agrees that,  for a period of twelve (12) months  commencing on the date of the closing,  neither  Franchisee (nor its Owners) shall have any direct or indirect interest  (through a member of the immediate  families of Franchisee or its Owners of  otherwise)  as a  disclosed  or  beneficial  owner,  investor, partner, director, officer, employee, consultant, representative, or agent or in any other capacity in any Competitive Business located or operating within three (3) miles of the Unit,  and/or  three (3) miles of any other  Pretzel Time Unit. The  restrictions  of this Section  shall not be  applicable to the ownership of shares  of a class of  securities  listed on a stock  exchange  or traded on the over-the-counter market that represent two percent (2%) or less of the number of shares of that class of  securities  issued  and  outstanding.  If Pretzel  Time exercises its right of first refusal, Franchisee (and its Owners) further agrees that he will abide by the restrictions of Section 17.C.(13).

          If  Pretzel  Time  does not  exercise  its  right  of  first  refusal, Franchisee or its Owners may complete the sale to such purchaser pursuant to and on the exact  terms of such  offer,  subject to Pretzel  Time's  approval of the Transfer as provided in Section 17,  provided that if the sale to such purchaser is not completed  within 120 days after  delivery of such offer to Pretzel Time, or if there is a  material  change  in the terms of the sale  (which  Franchisee shall  promptly  communicate  to Pretzel  Time),  Pretzel  Time's right to first refusal shall be extended for thirty (30) days after the  expiration of such 120 day period or after the material change in the terms of the sale so communicated to Pretzel Time.

         17.H.    PUBLIC OR PRIVATE OFFERINGS.

         In the event  Franchisee (or any of its Owners)  shall,  subject to the restrictions  and  conditions  of Transfer  contained in Section 17,  attempt to raise or secure funds by the sale of securities (including,  without limitation, common or preferred stock,  bonds,  debentures or general or limited partnership interests) in Franchisee or any affiliate of Franchisee, Franchisee, recognizing that the written information may reflect upon Pretzel Time, agrees to submit any such written information used with respect thereto prior to its inclusion in any registration  statement,  prospectus or similar offering  circular or memorandum and to obtain Pretzel Time's written consent to the method of financing prior to any offering or sale of such securities. Pretzel Time's written consent pursuant to this Section  shall not imply or  constitute  Pretzel  Time's  approval  with respect to the sale of the  securities,  the  offering  literature  submitted to Pretzel  Time or any other aspect of the  offering.  No  information  respecting Pretzel  Time  shall  be  included  in  any  disclosure   document  unless  such information  has  been  furnished  by  Pretzel  Time  in  writing   pursuant  to Franchisee's  written request,  in which Franchisee states the specific purposes for  which the  information  is to be used.  Should  Pretzel  Time,  in its sole discretion, object to any reference to it or its business or to the relationship of  Franchisee  or  a  controlled  affiliate  in  such  offering  literature  or prospectus,  such  literature or  prospectus  shall not be used unless and until Pretzel Time's objections are withdrawn.  Pretzel Time assumes no responsibility whatsoever for any offering.  Franchisee  shall pay Pretzel  Time's  expenses in connection with the offering or proposed offering.

         The prospectus or other literature  utilized in any such offering shall contain the  following  language in  bold-face  type on the first  textual  page thereof:

         PRETZEL  TIME,  INC. IS NOT  DIRECTLY OR  INDIRECTLY  THE ISSUER OF THE          SECURITIES OFFERED HEREBY AND ASSUMES NO RESPONSIBILITY WITH RESPECT TO          THIS OFFERING AND/OR THE SUFFICIENCY OR ACCURACY OF THE INFORMATION SET          FORTH HEREIN,  INCLUDING ANY  STATEMENTS  WITH RESPECT TO PRETZEL TIME,          INC.  PRETZEL TIME,  INC.  DOES NOT ENDORSE OR MAKE ANY  RECOMMENDATION          WITH RESPECT TO THE INVESTMENT CONTEMPLATED BY THIS OFFERING.

         Franchisee  (and each of its Owners)  agrees to  indemnify,  defend and hold harmless Pretzel Time, its parent company, subsidiaries, and Affiliates and their officers, directors, employees and agents from any and all claims, demands and  liabilities,  and all costs and expenses  (including,  without  limitation, reasonable  attorneys' fees) incurred in defending against such claims,  demands or  liabilities,  arising  from the  offer or sale of such  securities,  whether asserted  by a  purchaser  of any such  security  or by a  governmental  agency. Pretzel  Time shall have the right (but not the  obligation)  to defend any such claims,  demands or  liabilities  and/or to  participate  in the  defense of any action to which it is named as a party.

18.      TERMINATION OF AGREEMENT BY FRANCHISEE.





         18.A.  FRANCHISEE'S RIGHT TO TERMINATE.

         If  Franchisee is in  substantial  compliance  with this  Agreement and Pretzel Time  substantially  breaches a material provision of this Agreement and (1) fails to cure such  breach  within  thirty  (30) days after  written  notice thereof is delivered to Pretzel Time or (2) if such breach cannot  reasonably be cured  within  thirty (30) days after  Pretzel  Time's  receipt of such  notice, undertake  (within  thirty (30) days after Pretzel Time's receipt of such notice and  continue  until  completion),  reasonable  efforts  to  cure  such  breach, Franchisee may terminate this Agreement. Such termination shall be effective ten (10) days after delivery to Pretzel Time of notice that such breach has not been cured and Franchisee  elects to terminate this Agreement.  A termination of this Agreement  by  Franchisee  for any reason other than a  substantial  breach of a material provision of this Agreement by Pretzel Time, and Pretzel Time's failure to cure  such  breach  as  provided  above  shall  be  deemed a  termination  by Franchisee without cause.

19.      DEFAULT AND TERMINATION.

         19.A.  EXACT AND COMPLETE PERFORMANCE REQUIRED.

         Franchisee  acknowledges that complete  performance of all the terms of this  Agreement  is  necessary  for  the  protection  of  Pretzel  Time  and its franchisees.  It is therefore agreed that complete and exact  performance by the Franchisee  of each of his  promises  contained  herein  is a  condition  to the continuance of this Franchise.

         19.B.    DEFAULT AND RIGHT TO CURE.

         If Franchisee  defaults in the  performance of any of the terms of this Agreement  or the  Operations  Manual,  Pretzel  Time,  in addition to all other remedies  available to it at law or in equity and without prejudice to any other rights or remedies,  may  immediately  terminate  this Agreement by delivering a written notice to Franchisee of any breach of this Agreement and a notice period of  forty-five  (45) days shall be given to  Franchisee,  unless such default is cured by the  Franchisee  within thirty (30) days after written  notice  thereof from Pretzel Time to Franchisee.  Notwithstanding the foregoing,  if the default is other  than a failure to pay a monetary  obligation  to Pretzel  Time or to a related  company and of a nature that more than thirty (30) days are  reasonably required to cure,  Franchisee  shall  commence  to cure the default  within said thirty (30) day period and shall proceed with such cure with due diligence  with a view to accomplishing the cure at the earliest possible moment, and within the period,  if any,  designated  by Pretzel Time as the allowable  additional  time within which the cure must be accomplished.

         19.C.  EXTENSION OF NOTICE.

         If any  applicable  law or rule  requires  a  greater  prior  notice of termination,  the prior notice required by such law or rule shall be substituted for the notice requirements herein.

         19.D.  REPEATED BREACHES.

         Further,   notwithstanding  anything  herein  elsewhere  contained,  if Franchisee shall repeatedly fail to comply with the terms of this Agreement,  or any of them,  of any nature,  even though such  failures may be cured within the applicable  grace  periods,  Pretzel Time shall have the right by written notice given to Franchisee  immediately  to declare this  Agreement  terminated,  which right shall be in addition to and without prejudice to any other right or remedy to which Pretzel Time may be entitled  under this  Agreement or otherwise  under applicable law. As used in this Agreement the term repeatedly  fail shall mean three (3) defaults within any twelve (12) month period, even if the defaults are later cured.          19.E.    EVENTS OF DEFAULT - 30 DAYS NOTICE - CURABLE DEFAULTS.

         The  occurrence of any one of the following  events shall  constitute a default under this Agreement  requiring a 30 day notice period of termination by Pretzel Time to Franchisee:

                  (i) Franchisee  fails to pay money when due to Pretzel Time as                   required  under the Franchise  Agreement,  including,  without                   limitation,  the franchise  fee, the renewal fee, the transfer                   fee, royalties, and the advertising fund fee; or

                  (ii) If Franchisee or his Unit Manager fails to satisfactorily                   complete any mandatory  training  programs (except the initial                   training  in  which  case,  the  Franchise  Agreement  can  be                   terminated upon notice) offered by Pretzel Time; or

                  (iii) If Franchisee  fails to submit to Pretzel Time financial                   or other  information  when required  under this  Agreement or                   submits a financial statement which materially understates net                   revenues; or

                  (iv) If  Franchisee  fails to develop or construct the Unit in                   accordance  with  this  Agreement;  Pretzel  Time's  plans and                   specifications  or fails to equip and furnish the  location in                   accordance with Pretzel Time's plans and specifications; or

                  (v) A final judgment against Franchisee remains unsatisfied of                   record for thirty  (30) days,  unless a  supersedeas  or other                   appeal bond has been filed; or

                  (vi) Franchisee or any of its Owners  abandons,  surrenders or





                  transfers  control of the  operation  of the Unit  without the                   prior  written  approval  of Pretzel  Time,  or  threatens  to                   abandon the same; or

                  (vii) Franchisee fails to use Pretzel Time approved  marketing                   and  promotional  materials  or  Franchisee  fails to  receive                   Pretzel  Time's prior  approval of marketing  and  promotional                   materials; or

                  (viii) Failure to obtain Pretzel Time's prior written  consent                   or  approval  where   expressly   required  by  the  Franchise                   Agreement; or

                  (ix) If Franchisee  operates the franchise in such a manner so                   as  to  affect   materially  and  adversely  the  goodwill  or                   reputation  of  Pretzel  Time  or its  System  or any  product                   manufactured by any Affiliate; or

                  (x)  Franchisee  denies  Pretzel Time the right to inspect the                   Unit or to examine or audit his books; or

                  (xi)  Franchisee  misuses  Pretzel Time's Marks or asserts any                   interest  in  Pretzel   Time's  Marks;   uses  Pretzel  Time's                   tradename  or any  part  thereof  as part to of its  corporate                   name;  does not cooperate in the  enforcement  of any Mark; or                   challenges or seeks to challenge the validity of the Marks; or

                  (xii)  Franchisee  fails to  maintain  and operate the Unit in                   accordance  with standards and  specifications  established by                   Pretzel Time as to the services or  maintenance  of inventory;                   or

                  (xiii)  Franchisee  fails to obtain  all  permits,  insurance,                   licenses and other necessary  documents for the opening of the                   Unit; or

                  (xiv)  Franchisee  fails to maintain  uniform  Unit design and                   image,  and/or  fails to  refurbish  or remodel as required by                   Pretzel Time; or

                  (xv) Franchisee attempts or does mortgage, pledge or otherwise                   assign as security the premises,  any equipment,  furnishings,                   fixtures or any interest Franchisee may have; or

                  (xvi) Conduct by  Franchisee  which is of such a nature that a                   reasonably   objective   person  would  consider  same  to  be                   deleterious  to or to reflect  unfavorably  on Pretzel Time or                   the Pretzel Time Unit System; or

                  (xvii) Failure by Franchisee to maintain a responsible  credit                   rating by failing to make prompt payment of undisputed  bills,                   invoices and  statements  from  suppliers or  distributors  of                   goods and services to the Unit; or

                  (xviii)  Failure  to  comply  with  all  of the  terms  of the                   Operations  Manual as amended from time to time, the standards                   and  specifications  required  by  Pretzel  Time or any  other                   agreement between the Franchisee and Pretzel Time; or

                  (xix) Fails to pay any federal or state income, sales or other                   taxes due on the Unit's  operations  unless  Franchisee  is in                   good faith contesting his liability for such taxes; or

                  (xx)  Franchisee  knowingly  sells any product or service that                   does not  conform to Pretzel  Time's  specifications,  uses or                   sells products other

                  than  in  strict  accordance  with  the  requirements  of  the                   Franchise  Agreement or the Operations  Manual;  fails to sell                   products  or services  approved by Pretzel  Time or deals with                   vendors and suppliers not approved by Pretzel Time.

                  (xxi) Franchisee fails to pay any subcontractor, contractor or                   other  person  to whom  money is due and  that  subcontractor,                   contractor  or other  person  demands  said money from Pretzel                   Time.

                  (xxii)  Franchisee is late in paying rent to the landlord more                   than 2 times in any twleve month period.

         19.F.    EVENTS OF DEFAULT - IMMEDIATE TERMINATION - NO RIGHT TO CURE.

         The  following  acts of  default  will  result  in  termination  of the Franchise  effective  immediately upon delivery and receipt of written notice of same to Franchisee  and with no right to cure where the grounds for  termination or cancellation are:

          (i)  Franchisee or a Owner fails to complete all phases of the initial                training program to Pretzel Time's satisfaction; or





          (ii) Franchisee  fails to  commence  operation  of the Unit within the                time specified in this Agreement; or

          (iii) Any affirmative act of bankruptcy or insolvency by                   Franchisee,  or the filing by  Franchisee  of any  petition or                   action in bankruptcy or  insolvency,  or for  appointment of a                   receiver  or  trustee,   Franchisee   admits  in  writing  his                   inability to pay his debts or an assignment by Franchisee  for                   the benefit of creditors,  or the failure to vacate or dismiss                   within  five  (5)  days  after  filing  any  such  proceedings                   commenced  against  Franchisee  by a third  party.  Franchisee                   expressly  and  knowingly  waives any rights  that he may have                   under the provisions of the  Bankruptcy  Rules and consents to                   the  termination  of this  Agreement or any other relief which                   may be sought in a complaint filed by Pretzel Time to lift the                   provisions  of the  automatic  stay of the  Bankruptcy  Rules.                   Additionally Franchisee agrees not to seek an injunction order                   from any court in any  jurisdiction  relating  to  insolvency,                   reorganization of arrangement proceedings which would have the                   effect of staying or enjoining this provision.  THIS PROVISION                   MAY  NOT BE  ENFORCEABLE  UNDER  FEDERAL  BANKRUPTCY  LAW  (11                   U.S.C.A. Sec. 101 et seq.); or

                  (iv)  Failure to cure  within  seventy-two  (72)  hours  after                   delivery  of  written  notice of default  under the  Franchise                   Agreement  which  materially  impairs the goodwill  associated                   with Pretzel  Time's trade names,  trademarks,  service marks,                   logo types or other commercial

                    symbols or the use by Franchisee of any name,  mark,  system                     insignia or symbol not authorized by Pretzel Time; or

                  (v) The conviction of Franchisee,  or any if its principals if                   it is a partnership or corporation,  of a crime related to the                   business conducted pursuant to the franchise which may tend to                   affect  adversely the goodwill or  reputation  of  Franchisee,                   Pretzel Time or its System or the  products of Pretzel  Time's                   Affiliates; or

                  (vi)  Abandonment  of the  Franchise.  For  purposes  of  this                   agreement Abandonment shall mean Franchisee's failure (other                   than with Pretzel  Time's prior written  approval) to keep the                   franchise  open and operating for business  during the minimum                   opening hours specified in this Agreement or Lease  Agreement;                   or

                  (vii) Franchisee ceases to occupy the premises. If the loss of                   possession in the result of  governmental  exercise of eminent                   domain,  destruction  of the  site,  or  termination  of lease                   (except by reason of Franchisee's fault), Franchisee may (with                   Pretzel Time's consent and subject to  availability)  relocate                   to  other  premises  in  a  comparable  location.  Failure  to                   relocate to other Pretzel  Time-approved  premises  within the                   time specified in this Agreement  after loss of possession due                   to eminent  domain,  destruction of premises or termination of                   lease without  Franchisee's  fault shall  constitute an act of                   Default with no right to cure and immediate  termination  upon                   notice; or

                  (viii) The existence of an imminent danger to public health or                   safety or fails or refuses to comply with  standards  relating                   to the  cleanliness  or sanitation of the Unit or violates any                   health, safety or sanitation,  law ordinance or regulation and                   does not correct such  noncompliance  within  forty-eight (48)                   hours after written notice thereof is delivered to Franchisee;                   or

                  (ix) The loss of the right to occupy the  premises  from which                   the  franchise  is  operated by either  Franchisee  or Pretzel                   Time; or

                    (x) Material  falsification  of business records and reports                     required by Pretzel Time; or

                  (xi)  Franchisee  (or any of its Owners) makes an  assignment,                   surrenders  or  transfers  control of the Unit's  operation in                   violation of this Agreement; or

                  (xii)  Franchisee (or any of its Owners) has made any material                   misrepresentation  or  omission  in the  application  for  the                   Franchise or in materials submitted relating to a transfer; or

                  (xiii)  Franchisee,  (or  its  Owners)  or  members  of  their                   immediate  family violate the restrictions on the operation of                   Competitive Businesses during the term of this Agreement; or

                  (xiv)  Franchisee (or any of its Owners or employees) makes an                   unauthorized  use or disclosure  of or duplicates  any copy of





                  any Confidential  Information or uses, duplicates or discloses                   any  portion of the  Operations  Manual in  violation  of this                   Agreement; or

                  (xv) Failure on two (2) or more separate  occasions within any                   period  of  twelve  (12)  consecutive  months  or on three (3)                   occasions during the term of this Agreement to submit when due                   reports or other data, information or supporting records or to                   pay when due the  Royalty  and fees or other  payments  due to                   Pretzel Time or its  Affiliates  or otherwise  fails to comply                   with this  Agreement,  whether or not such  failures to comply                   with this Agreement,  Advertising Fund Fee are corrected after                   notice thereof is delivered to Franchisee; or

                  (xvi) Fails to cure a default under this Agreement  within the                   time specified or provide proof  acceptable to Pretzel Time of                   efforts  which  are  reasonably  calculated  to  correct  such                   failure within a reasonable  time,  which shall in no event be                   more than sixty (60) days after such  notice,  if such failure                   cannot  reasonably be corrected  within twenty (20) days after                   written  notice of such  notice of  default  is  delivered  to                   Franchisee; or

                  (xvii) Franchisee terminates this Agreement without cause; or

                  (xviii) Franchisee  understates the Unit's net revenues in any                   report or financial  statement  by an amount  greater than two                   (2) percent; or

                  (xix)  Franchisee  causes or permits to exist a default  under                   the  lease or  sublease  for the Site and  fails to cure  such                   default  within the  applicable  cure  period set forth in the                   lease or sublease; or

                  (xx)  Franchisee  (or any of its Owners) fails on three (3) or                   more separate  occasions within any period of twenty-four (24)                   consecutive  months to comply with this  Agreement  whether or                   not such  failures  to comply are  corrected  after  notice of                   default  is  given,  or  failure  on two (2) or more  separate                   occasions within any period of twelve (12) consecutive  months                   to comply within the same  requirement  under this  Agreement,                   whether or not such  failures  to comply are  corrected  after                   notice of default is given.

20. RIGHTS AND  OBLIGATIONS OF PRETZEL TIME AND FRANCHISEE  UPON  TERMINATION OR EXPIRATION OF THE FRANCHISE.

         20.A.  AMOUNTS OWED.

         Unless otherwise authorized by Pretzel Time in writing, in the event of expiration or termination  of this  Agreement for any reason,  or upon the sale, transfer or  assignment  of the  Franchise by  Franchisee,  all of  Franchisee's rights  hereunder  shall  terminate  and  Franchisee  shall cease to operate the Franchise.  Franchisee agrees to pay Pretzel Time within fifteen (15) days after the effective date of termination or expiration of this Agreement, or such later date that the amounts due to Pretzel Time are  determined,  such  Royalty  Fees, Advertising  Fund Fees,  amounts owed for purchases by  Franchisee  from Pretzel Time or its  Affiliates,  interest  due on any of the  foregoing  and all  other amounts owed to Pretzel Time or its Affiliates which are then unpaid.

         Expiration or  termination  of this  Agreement for any reason shall not affect,  modify, or discharge any note, account receivable,  or debt, contingent or otherwise,  existing or arising under this Agreement, or any prior agreement, contract, or dealing between Pretzel Time and Franchisee.

         20.B.    DISCONTINUANCE OF MARKS.

         Franchisee  agrees to immediately  discontinue  all use of trade names, trademarks,  logotypes,  forms of advertising  and other  commercial  symbols of Pretzel Time, and forms of advertising indicative of Pretzel Time and cancel all assumed  name  registrations.  Franchisee  further  shall  remove or cause to be removed all signs and  structures  indicative  of a Pretzel  Time Unit and shall alter the premises occupied by Franchisee so as to distinguish the same from its former appearance and from a Pretzel Time franchise.  Further,  Franchisee shall discontinue  the use of any and all printed goods and materials using said trade names,  trademarks,  logos and other  commercial  symbols  of Pretzel  Time.  If Franchisee  refuses to comply  with the terms of this  Section 20 after  Pretzel Time  requests  compliance,  Pretzel  Time  shall  have the right to enter  upon Franchisee's  premises  without being deemed guilty of  trespassing or any other offense,  and make or cause to be made such  changes  at  Franchisee's  expense, which Franchisee agrees to pay upon demand.

         Franchisee  agrees to not directly or  indirectly at any time or in any manner (except with respect to other Pretzel Time Units owned by the Franchisee) identify himself or any business as a current or former Pretzel Time Unit, or as a franchisee,  licensee or dealer of Pretzel Time or its Affiliates.  Franchisee further  agrees to not use any Mark,  any colorable  imitation  thereof or other indicia of a Pretzel  Time Unit in any manner or for any  purpose or utilize for any purpose any trade name,  trade or service  mark or other  commercial  symbol that suggests or indicates a connection or association  with Pretzel Time or its Affiliates.  Franchisee (or any of its Owners) agrees after  termination he will not do  business  under any name or in any  manner  that  might tend to give the general  public the  impression  that he is  associated,  affiliated,  licensed, franchised by or related to Pretzel Time.  The Franchisee (or any of its Owners) may not thereafter  use any name,  logo type, or symbol  confusingly  similar to





Pretzel  Time's  Service  Mark,  logo type or symbol.  If  Franchisee  continues operating a business at the franchised  location it will exert every  reasonable effort to inform the public of his new status,  including a change of  telephone number and advertising materials.

         The Franchise granted to Franchisee  hereunder to sell Products bearing Pretzel Time's Marks does not include the right to sell or advertise for sale of Franchisee's  Franchise itself or of its business location.  No advertisement by Franchisee  or  other  public  solicitation  for  sale of his  interest  in this Agreement  may  include a  representation  of Pretzel  Time's  trademark  or any reference to Pretzel Time or its trademark system.

         20.C.    RETURN OF MATERIALS.

         Franchisee  agrees to return to  Pretzel  Time all  signs,  sign-faces, forms,  invoices,  letterhead,  and  other  materials  containing  any  Mark  or otherwise identifying or relating to a Pretzel Time Unit and allow Pretzel Time, without liability to remove all such items from the Unit. Franchisee also agrees to return all  materials  and  confidential  information  loaned to  Franchisee, including,  without limitation,  all Operations Manuals and Training Manuals and videos. Franchisee agrees to return all materials and supplies identified by the Marks in full cases or  packages  to Pretzel  Time for credit and dispose of all other materials and supplies, but not equipment,  identified by the Marks within thirty (30) days after the effective  date of  termination or expiration of this Agreement.

         20.D.    TELEPHONE COMPANY.

         Franchisee  agrees to notify the  telephone  company and all  telephone directory  publishers of the termination or expiration of Franchisee's  right to use any  telephone  and telecopy  numbers and any regular,  classified  or other telephone  directory  listings  associated  with any Mark and to  authorize  the transfer  thereof to Pretzel Time or at its direction.  Franchisee  acknowledges and agrees  that as between  him and  Pretzel  Time,  Pretzel  Time has the sole rights to and  interest in all  telephone  and  telecopy  numbers and  directory listings  associated  with any Mark.  Franchisee  authorizes  Pretzel Time,  and hereby appoints Pretzel Time and any of its officers as Franchisee's attorney in fact, to direct the telephone company and all telephone directory  publishers to transfer any telephone and telecopy numbers and directory  listings  relating to the Pretzel Time Units to Pretzel Time or at its  direction,  should  Franchisee fail or refuse to do so, and the telephone  company and all telephone  directory publishers  may accept such direction or this agreement as conclusive of Pretzel Time's  exclusive  rights in such  telephone and telecopy  numbers and directory listings  and Pretzel  Time's  authority to direct  their  transfer.  Franchisee agrees to execute a  collateral  assignment  of  telephone  numbers and listings agreement  which is attached hereto as Exhibit G. In no event shall Pretzel Time be responsible  for any charges  incurred by Franchisee and associated  with the telephone company prior to the date of transfer.

         20.E.    CONFIDENTIAL INFORMATION.

         Franchisee (and its Owners) agrees that upon  termination or expiration of this Agreement, he will immediately cease to use any Confidential Information of Pretzel Time or its Affiliates disclosed to him pursuant to this Agreement in any business or otherwise.  This  provision is also  applicable to the Owners if the Franchise is a corporation or partnership.

         20.F.    LEASING.

         If Franchisee  has leased the  premises,  Pretzel Time may, in its sole discretion  and without any  obligation to do so,  assume the lease.  Franchisee will not be entitled to any refund of the initial franchise fee,  royalties,  or Advertising Fund Fees.

         20.G.    COVENANT NOT TO COMPETE.

         Upon  termination of this  Agreement,  in accordance with its terms and conditions or by Franchisee  without cause, or upon expiration of this Agreement (unless the Franchise is renewed as provided for in this Agreement),  Franchisee and its Owners agree that for a period of TWELVE (12) months  commencing  on the effective  date of  termination  or expiration  or the date on which  Franchisee complies  with this Section,  whichever is later,  neither  Franchisee,  nor its Owners,  nor any person or entity  affiliated  with  Franchisee or  Franchisee's shareholders or partners shall have any direct or indirect  interest  (through a member of the immediate  families of Franchisee or its Owners or otherwise) as a disclosed or beneficial owner, investor,  partner, director,  officer, employee, consultant,  representative,  agent or in any other capacity in any  Competitive Business  located or operating:  (1) at the Site;  (2) within three (3) miles of the Unit;  and/or (3) within  three (3) miles of any other  Pretzel Time Unit in operation  or  under  development  on  the  effective  date  of  termination  or expiration of this  agreement for a period of one year after the  termination or expiration.  The  restrictions  of this Section  shall not be  applicable to the ownership  of shares of a class of  securities  listed  on a stock  exchange  or traded on the over-the-counter market that represent two percent (2%) or less of the  number  of shares  of that  class of  securities  issued  and  outstanding. Franchisee  and its Owners  expressly  acknowledge  that they possess skills and abilities of a general nature and have other  opportunities  for exploiting such skills. Consequently, enforcement of the covenants made in this Section will not deprive the Franchisee or its Owners or shareholders of their personal  goodwill or ability to earn a living.

The Franchise  Agreement contains a covenant not to compete which extends beyond





the termination of the franchise. Franchisee and its Owners acknowledge that the covenant  not to compete is fair and  reasonable,  and will not impose any undue hardship,  since the Franchisee (and its Owners) has other considerable  skills, experience and education  which will afford him the opportunity to derive income from other endeavors.

Neither  Franchisee  nor any of its Owners shall divert or attempt to divert any business or any customers of any Pretzel Time Unit to any  Competitive  Business or employ or seek to employ any  person who is  employed  by Pretzel  Time,  its Affiliates  or a franchisee  of Pretzel Time nor induce or attempt to induce any such person to leave said  employment  without the prior written consent of such person's employer.

         20.H.  PRETZEL TIME'S RIGHT TO PURCHASE ASSETS OF THE UNIT.

         Upon  termination of this Agreement by Pretzel Time in accordance  with its terms and  conditions or by Franchisee  without cause or upon  expiration of this  Agreement  (unless the franchise  has been  renewed),  Pretzel  Time,  its Affiliates  or  its  assignee  shall  have  the  option  (not  the  obligation), exercisable  by giving  written  notice  thereof within sixty (60) days from the date of such  expiration  or  termination,  to acquire from  Franchisee  all the assets  in the Unit  including  the  equipment,  furnishings,  signs,  leasehold improvements,  usable  inventory  of  Products,  materials,  supplies  and other tangible assets of the Unit and an assignment of the lease for the Unit. Pretzel Time  shall  have the  unrestricted  right to assign  this  option to  purchase. Pretzel Time or its assignee  shall be entitled to all customary  warranties and representations  in  connection  with its  asset  purchase,  including,  without limitation,  representations  and  warranties as to ownership,  condition of and title to assets, no liens and encumbrances on the assets,  validity of contracts and agreements and liabilities  inuring to Pretzel Time or affecting the assets, contingent or otherwise.

         (1) The purchase price for the assets of the Unit shall be equal to the greater of:

                  The sum of the book  value  of the  Unit's  assets  (including                   furnishings,  fixtures, equipment, and leasehold improvements)                   amortized on a straight-line basis over a five (5) year period                   plus the lesser of costs and the then-current wholesale market                   value of all  usable  inventory  of  Products,  materials  and                   supplies (i.e. in good and saleable condition and not obsolete                   or discontinued), or

                  The  product of the Unit's  average  cash flow for the two (2)                   most recently  completed  fiscal years  multiplied by two (2).                   Cash  flow  represents  the  Unit's  net  revenues  less all                   pretzel  unit-related  costs (i.e., cost of goods sold, labor,                   occupancy   and  other  Unit   expenses)  as  well  as  annual                   administrative  costs of ten thousand dollars ($10,000.00) and                   royalty and  service  fees,  but not  including  interest  and                   depreciation.

         (2)  Pretzel  Time and its  Affiliates  shall have the right to set off against and reduce the purchase  price by any and all amounts owed by Franchisee to Pretzel  Time and its  Affiliates.  Pretzel  Time may exclude from the assets purchased  hereunder any  equipment,  furnishings,  signs,  usable  inventory of Products,  materials  or supplies of the Unit that Pretzel Time has not approved as meeting its standards for Pretzel Time Unit,  and the purchase price shall be reduced by the  replacement  costs of such excluded  items which are required in the operation of the Unit.

         (3) The  purchase  price  shall be paid in cash at the  closing  of the purchase, which shall take place no later than ninety (90) days after receipt by Franchisee  of Pretzel  Time's notice of exercise of this option to purchase the Unit, at which time Franchisee shall deliver instruments transferring to Pretzel Time or its assignee good and merchantable  title to the assets purchased,  free and clear of all liens and encumbrances  with all sales and other transfer taxes paid by  Franchisee,  and all  licenses  or  permits  of the Unit  which  may be assigned or transferred. In the event the closing of the purchase does not occur within said ninety (90) day period because Franchisee fails to act diligently in connection therewith,  the purchase price shall be reduced by ten percent (10%). Franchisee  further agrees that the purchase  price shall be further  reduced by ten percent (10%) per month for each subsequent  month  Franchisee  fails to act diligently to consummate this  transaction.  In the event that Franchisee cannot deliver clear title to all of the purchased assets as aforesaid, or in the event there are other unresolved  issues, at Pretzel Time's option,  the losing of the sale shall be accomplished through an escrow.  Prior to closing,  Franchisee and Pretzel  Time shall  comply with the  applicable  Bulk Sales  provisions  of the Uniform Commercial Code as enacted in the state in which the Unit is located.

         (4) If Pretzel Time or its assignee  exercises this option to purchase, pending  the  closing of such  purchase,  Pretzel  Time may appoint a manager to maintain the operation of the Unit, at its option,  require  Franchisee to close the Unit during such time period  without  removing any assets.  If Pretzel Time appoints a manager to maintain the operation of the Unit pending closing of such purchase, all funds from the Unit's operation during the period of management by a  Pretzel  Time  appointed  manager  shall be kept in a  separate  fund and all expenses of the Unit, including compensation,  other costs and travel and living expenses of the Pretzel Time appointed  manager,  shall be charged to such fund. As compensation for the management services provided,  Pretzel Time shall charge such fund ten  percent  (10%) of the  Unit's net  revenues  during the period of Pretzel Time's management. Operation of the Unit during any such period shall be for and on behalf of  Franchisee,  provided  that Pretzel Time shall have a duty only to utilize its good faith  efforts and shall not be liable to Franchisee or





its Owners for any debts,  losses or obligations  incurred by the Unit or to any creditor  of  Franchisee  for any  merchandise  materials,  supplies  or service purchased by the Unit during any period in which it is managed by Pretzel Time's appointed  manager.  Franchisee  shall maintain in force all insurance  policies required for the Unit until the date of closing.

21.      RELATIONSHIP OF THE PARTIES/INDEMNIFICATION.

         21.A.    EXCLUSIVE RELATIONSHIP.

         Franchisee acknowledges and agrees that Pretzel Time would be unable to protect  Confidential  Information  against  unauthorized  use or disclosure and would be unable to  encourage  a free  exchange of ideas and  information  among Pretzel Time Units if  Franchisees  of Pretzel Time Units were permitted to hold interests in or perform services for a Competitive  Business except as specified in Exhibit C.  Franchisee  also  acknowledges  that Pretzel Time has granted the Franchise to  Franchisee  in  consideration  of and reliance  upon  Franchisee's agreement to deal  exclusively  with Pretzel Time.  Franchisee  therefore agrees that  during the term of the  Franchise  Agreement,  or the period of time which Franchisee operates a Unit under this Agreement,  whichever is shorter,  neither Franchisee  nor  any  Affiliate,  immediate  family  member,  or  in  the  event Franchisee is a corporation

any Owner thereof and member of his immediate  family or in the event  Franchise is a partnership any partner  (general or limited) thereof and any member of his immediate family, shall:

         (1) Have  any  direct  or  indirect  interest  as an  owner,  investor,          partner, director, officer, employee, consultant, representative, agent          or in  any  other  capacity  in any  Competitive  Business  located  or          operating  at the Site or within  three (3) miles of any  Pretzel  Time          Unit  in  operation  or  under  development  on the  effective  date of          termination or expiration of this Agreement, except a Pretzel Time Unit          operated by Franchisee under Franchise Agreements with Pretzel Time; or

         (2) Recruit or hire any employee who, within the immediately  preceding          six (6) month period,  was employed by Pretzel Time or any Pretzel Time          Unit operated by Pretzel Time, its Affiliates or another  franchisee or          licensee  of  Pretzel  Time,   without   obtaining  the  prior  written          permission of Pretzel Time or such franchisee.

         Notwithstanding the foregoing,  Franchisee shall not be prohibited from owning securities  listed on a stock exchange or traded on the  over-the-counter market that represents two percent (2%) or less of that class of securities.

         Covenants contained in this Section shall be construed as severable and independent,   and  shall  be  interpreted  and  applied   consistent  with  the requirements  of  reasonableness.  Any judicial  reformation of these  covenants consistent  with this  interpretation  shall be enforceable as though  contained herein  and shall not affect any other  provisions  or terms of this  Agreement. This non-compete provision may not be enforceable under the laws of your state.

         21.B.  NO LIABILITY FOR ACTS OF OTHER PARTY.

         Franchisee shall not employ any of the Marks in signing any contract or applying  for any  franchise or permit or in a manner that may result in Pretzel Time's  liability for any of Franchisee's  indebtedness or obligations,  nor may Franchisee  use the Marks in any way not  expressly  authorized by Pretzel Time. Except as expressly  authorized in writing,  neither Pretzel Time nor Franchisee shall  make  any  express  or  implied  agreements,  warranties,  guarantees  or representations  or  incur  any  debt in the  name or on  behalf  of the  other, represent that their relationship is other than Pretzel Time and franchisee,  or be obligated by or have any liability  under any  agreements or  representations made by the other that are not  expressly  authorized  in writing.  Pretzel Time shall not be  obligated  for any damages to any person or  property  directly or indirectly  arising out of the  operation of the Unit or  Franchisee's  business authorized by or conducted pursuant to this Agreement.

         21.C.    TAXES.

         Pretzel  Time shall have no  liability  for any  sales,  use,  service, occupation,  excise,  gross receipts,  income,  property or other taxes, whether levied upon Franchisee, the Unit, Franchisee's property or upon Pretzel Time, in connection with the sales made or business  conducted by Franchisee.  Payment of all such taxes shall be Franchisee's responsibility.

         21.D.    INDEMNIFICATION.

         Franchisee   agrees  to  indemnify   and  hold  Pretzel  Time  and  its subsidiaries,  Affiliates, stockholders,  directors, officers, employees, agents and assignees harmless against, and to reimburse them for, any loss,  liability, judgment  or damages  (actual or  consequential)  and all  reasonable  costs and expenses of  defending  any claim  brought  against any of them or any action in which any of them is named as a party (including, without limitation, reasonable accountants,  attorneys' and expert witness fees, costs of investigation,  court costs, other litigation expenses,  damages to Pretzel Time's reputation and good will, travel expenses) which any of them may suffer,  sustain or incur by reason of, arising from or in connection  with  Franchisee's  ownership or operation of the Unit, unless such loss, liability or damage is only due to the negligence of Pretzel  Time  (or  its  Affiliates,  subsidiaries).  Pretzel  Time's  right  to indemnity  under  this  agreement  shall  arise  notwithstanding  that  joint or concurrent  liability  may be  imposed on Pretzel  Time by  statute,  ordinance, regulation or other law.  Franchisee  acknowledges and agrees that any action or inaction by any third party which is not an  Affiliate of Pretzel Time shall not





be attributable to or constitute negligence of Pretzel Time. The indemnities and assumptions of liabilities and  obligations  herein shall continue in full force and effect  subsequent to and  notwithstanding  the expiration or termination of this Agreement.

         Pretzel Time shall notify Franchisee of any claims and Franchisee shall be given the  opportunity  to assume the  defense of the matter.  If  Franchisee fails to assume the defense  within  three (3) days of notice  thereof,  Pretzel Time may defend the action in the manner reasonably appropriate,  and Franchisee shall pay to Pretzel Time all reasonable  costs,  including  without  limitation attorney's  fees,  court  costs,  expert  witness  fees,  travel  and  telephone expenses, incurred by Pretzel Time in effecting such defense, in addition to any such sum which Pretzel Time may pay by reason of any settlement agreed to by the parties or reasonably  negotiated by Pretzel Time in the event  Franchisee fails to assume the defense, or judgment against Pretzel Time.

         21.E.  INDEPENDENT CONTRACTOR.

         It is understood and agreed by the parties hereto that Franchisee is an independent contractor and is not an agent, partner, joint venturer, or employee of  Pretzel  Time.  Pretzel  Time and  Franchisee  agree  that  nothing  in this Agreement  is  intended  to  create  a  fiduciary   relationship  between  them. Franchisee  shall have no right to bind or obligate  Pretzel Time in any way nor shall he  represent  that he has any right to do so.  Pretzel Time shall have no control over the terms and conditions of employment of Franchisee's employees.

         In all public records and in his  relationship  with other persons,  on stationery, business forms and checks, Franchisee shall indicate his independent ownership of the  franchised  Unit and that he is a franchisee  of Pretzel Time. Franchisee  shall exhibit on the premises in such places as may be designated by Pretzel  Time,  a Pretzel  Time  approved  notice  that the  franchised  Unit is operated by an  independent  operator and not by Pretzel Time or Pretzel  Time's Affiliates,  which operate company owned  franchises.  Franchisee shall take all legal  steps  such as a  fictitious  name  registration  to ensure  Franchisee's independent business status.

22.      PROTECTION OF TRADE SECRETS.

         22.A.  CONFIDENTIAL INFORMATION.

         Pretzel Time  possesses  and will further  develop and acquire  certain confidential  and  proprietary  information  and trade  secrets  relating to the operation  of  Pretzel  Time  Units,  which  includes,  but not  limited  to the following  categories  of  information,  methods,  techniques,  procedures,  and knowledge  developed or to be  developed by Pretzel  Time,  its  consultants  or contractors,  its Affiliates or its designees, and/or franchisees (Confidential Information):

         (1)  methods,   techniques,   equipment,   specifications,   standards,          policies, procedures, information, concepts and systems relating to and          knowledge  of  and  experience  in  the   development,   operation  and          franchising of Pretzel Time Units:

         (2) site selection criteria;

         (3) marketing and promotional programs for Pretzel Time Units;

         (4) recipes, ingredients,  formulas, mixes, spices, seasonings, sauces,          recipes for, and methods for the preparation,  cooking,  and serving of          the Products;

         (5)  techniques,  formats,  specifications,  systems,  procedures,  and          knowledge of and experience in the development and operation of Pretzel          Time Units;

         (6) knowledge of specifications  for and suppliers of certain Products,          materials, supplies, equipment, furnishings and fixtures;

         (7) sales data and information  concerning  inventory  requirements for          Products,  materials and supplies, and specifications for and knowledge          of suppliers of certain materials,  equipment, and fixtures for Pretzel          Time Units;

         (8) employee selection procedures, training and staffing levels;

         (9) Operations Manual and other Manuals prepared by Pretzel Time; and

         (10) information concerning Product sales, operating results, financial          performance and other financial data of Pretzel Time Units.

         Pretzel Time will disclose such parts of the  Confidential  Information as  Pretzel  Time deems  necessary  or  advisable  from time to time in its sole discretion  for the  operation  of a  Pretzel  Time  Unit to  Franchisee  during training, and in guidance and assistance furnished to Franchisee during the term of the Franchise, and Franchisee may learn or otherwise obtain from Pretzel Time additional  Confidential  Information  of  Pretzel  Time  during the term of the Franchise.  Franchisee acknowledges that the foregoing Confidential  Information is highly  confidential.  Franchisee  acknowledges  and agrees  that he will not acquire  any  interest  in  Confidential  Information,  other  than the right to utilize Confidential Information disclosed to Franchisee in the operation of the Pretzel  Time  Unit  during  the  term of this  Agreement,  and  that the use or duplication  of  any  Confidential  Information  in  any  other  business  would constitute an unfair method of competition. Franchisee, including its directors,





officers,  shareholders,  and partners agree(s) that Confidential Information is proprietary,  includes  trade  secrets  of  Pretzel  Time  and is  disclosed  to Franchisee solely on the condition that Franchisee  agrees,  and Franchisee (and its Owners) does hereby agree, that he:

         (1) shall not disclose any  information  pertaining to the Pretzel Time          System,  directly or indirectly,  to any person,  natural or corporate,          without the express prior written  consent of Pretzel Time.  Franchisee          may disclose to its Unit Manager such  information  deemed necessary to          disclose,  provided  such Unit  Manager  has  agreed to  maintain  such          information in confidence in Pretzel Time's  confidentiality  agreement          and Pretzel Time has received such executed agreement  (attached hereto          as Exhibit H);

         (2) Will not use  Confidential  Information  in any other  business  or capacity;

         (3)  Will  maintain  the  absolute   confidentiality   of  Confidential          Information during and after the term of this Agreement;

         (4) Will not make  unauthorized  copies of any portion of  Confidential          Information disclosed in written or other tangible form; and

         (5) Will adopt and implement  all  reasonable  procedures  that Pretzel          Time  prescribes  from  time  to time to  prevent  unauthorized  use or          disclosure of Confidential Information,  including, without limitation,          restrictions on disclosure thereof to his employees.

         This  confidentiality  requirement  shall  not apply in a  judicial  or administrative  proceeding  to the extent  Franchisee  is legally  compelled  to disclose such information,  provided Franchisee shall have used his best efforts and shall have afforded  Pretzel Time the  opportunity  to obtain an appropriate protective order or other assurance satisfactory to Pretzel Time of confidential treatment for the information required to be so disclosed.  This restrictions on Franchisee's  disclosure and use of the Confidential  Information shall also not apply to the  disclosure of  information,  methods,  procedures,  techniques and knowledge which are or become  generally  known in the food service  business in the Territory, other than through disclosure (whether deliberate or inadvertent) by Franchisee.

         Notwithstanding   the  foregoing  and  any  other   provision  of  this Agreement,  Franchisee may use the  Confidential  Information in connection with the operation of other Pretzel Time Units (in addition to the Unit)  pursuant to other Franchise Agreements with Pretzel Time.

         22.B.  DISCLOSURE OF IDEAS AND NEW PROCEDURES.

         Franchisee  shall  fully and  promptly  disclose to Pretzel  Time,  all ideas,  concepts,  methods  and  techniques  relating  to  the  development  and operation  of a dessert or snack food  business  conceived  or  developed by the Franchisee  and/or  Franchisee's  employees  during the term of this  Agreement. Franchisee  agrees and grants to Pretzel Time and its Affiliates a perpetual and worldwide  right to use and  authorize  other  Pretzel  Time Units or other food service businesses  operated by Pretzel Time or its Affiliates,  franchisees and designees  to  use  such  ideas,  recipes,  formulas,   concepts,  methods,  and techniques  relating to the development  and/or  operation of a dessert or snack food business.  If incorporated into the Pretzel Time System for the development and/or operation of Pretzel Time Units, such ideas, recipes, formulas, concepts, methods and techniques  shall become the sole and exclusive  property of Pretzel Time without any further consideration to Franchisee. Pretzel Time shall have no obligation to make any lump sum or on-going  payments to Franchisee with respect to any such idea, concept, method, technique or product.  Franchisee agrees that Franchisee  will not use nor will it allow any other person or entity to use any such concept,  method,  technique or product  without  obtaining  Pretzel Time's prior written approval.

23.      ENFORCEMENT.

         23.A.    UNAVOIDABLE DELAYS.

         Delays in the  performance  of any duties  hereunder  which are not the fault of, and not within the reasonable  preventive control of, the party due to perform,  including but not limited to, fire,  flood,  labor  disputes,  natural disasters, acts of God, civil disorders, riots,  insurrections,  work stoppages, slowdowns or disputes,  or other  similar  events,  shall not cause a default in said  performance,  but the parties shall extend the time of  performance  for a period of time equivalent to the length of delay,  or for such other  reasonable period of time as agreed by the parties.

         23.B.    RIGHTS OF PARTIES ARE CUMULATIVE.

         The rights of Pretzel Time and Franchisee  hereunder are cumulative and no exercise or  enforcement by Pretzel Time or Franchisee of any right or remedy hereunder  shall  preclude  the  exercise  or  enforcement  by  Pretzel  Time or Franchisee  of any  other  right  or  remedy  herein  or which  Pretzel  Time or Franchisee is entitled by law to enforce.

         23.C.    WAIVER OF OBLIGATIONS.

         Pretzel Time may by written instrument unilaterally waive or reduce any obligation  of  or  restriction  upon  Franchisee  under  this  Agreement,   and Franchisee may by written instrument unilaterally waive or reduce any obligation of or  restriction  upon  Pretzel  Time under  this  Agreement,  effective  upon delivery of written  notice  thereof to the other or such other  effective  date stated on the notice of waiver.  Whenever this Agreement requires Pretzel Time's





prior  approval  or  consent,  Franchisee  shall make a timely  written  request therefore, and such approval shall be obtained in writing. Pretzel Time makes no warranties  or  guaranties  upon  which  Franchisee  may rely,  and  assumes  no liability or  obligation  to  Franchisee,  by granting  any waiver,  approval or consent to  Franchisee,  or by reason of any  neglect,  delay,  or denial of any request therefore. Any waiver granted by Pretzel Time shall be without prejudice to any other rights Pretzel Time may have, will be subject

to continuing review by Pretzel Time, and may be revoked, in Pretzel Time's sole discretion,  at any  time  and  for  any  reason,  effective  upon  delivery  to Franchisee of ten (10) days' prior written notice.

         23.D.    CONTINUING OBLIGATIONS.

          All  obligations of Pretzel Time and Franchisee  which expressly or by their very nature survive the expiration or termination of this Agreement  shall continue  in  full  force  and  effect  subsequent  to and  notwithstanding  its expiration  or  termination  and until  they are  satisfied  or by their  nature expire.

         23.E.    INVALID OR UNENFORCEABLE PROVISIONS.

         If any provisions of this  Agreement,  or its application to any person or  circumstance,  is deemed  invalid or  unenforceable  by a court of competent jurisdiction,  then the remainder of this  Agreement or the  application of such provision  to other  persons or  circumstances  shall not be  affected  thereby, provided,  however,  that if any provision or application  thereof is invalid or unenforceable,  the court shall  substitute a suitable and  equitable  provision therefore  in order to carry out,  so far as may be valid and  enforceable,  the intent and purpose of the invalid or unenforceable provision.

         If any applicable and binding law or rule of any jurisdiction  requires a  greater  prior  notice  of the  termination  of or  refusal  to enter  into a successor Franchise  Agreement to this Agreement than is required hereunder,  or the  taking of some  other  action  not  required  hereunder,  or if,  under any applicable  and binding law or rule of any  jurisdiction,  any provision of this Agreement  or any  standard or procedure  outlined in the  Operations  Manual is invalid or unenforceable,  the prior notice and/or other action required by such law or rule shall be  substituted  for the  comparable  provisions  hereof,  and Pretzel  Time shall  have the  right,  in its sole  discretion,  to modify  such invalid or unenforceable operations procedure or standard to the extent required to be valid and enforceable.

         23.F.  INJUNCTIVE RELIEF.

         Franchisee  recognizes and  acknowledges the unique value and secondary meaning  attached to the Pretzel Time system,  its  trademarks,  service  marks, standards of operation and Pretzel Time's property.  Franchisee acknowledges and agrees that any noncompliance with the restrictive  covenants  contained herein, including  without  limitation  those provisions  pertaining to  noncompetition, confidentiality  and the improper or  unauthorized  use of Pretzel  Time's Marks will cause  irreparable  damage to Pretzel Time and its franchisees.  Franchisee therefore agrees that should it violate any restrictive covenant, or threaten to breach the  restrictive  covenants,  then Pretzel Time shall be entitled to both permanent  and temporary  injunctive  relief,  without  bond,  from any court of competent  jurisdiction  in addition to any other remedies to which Pretzel Time may be entitled,  at law or in equity,  under this agreement or otherwise  under applicable law.

         23.G.    APPLICABLE LAW.

         Except to the extent governed by the U.S. Trademark Act of 1946 (Lanham Act, 15 U.S.C.  1051 et seq.),  this Agreement,  the other agreements  referred herein,  and the offer and the sale of the  franchise  shall be  governed in all respects  and  aspects  by the  laws of the  Commonwealth  of  Pennsylvania  and expressly  excluding  the laws  pertaining  to the choice of law and conflict of laws.

         23.H.    ENTIRE STATUS OF AGREEMENT.

         This Agreement  contains the entire  agreement of the parties and there are no other oral or written  understandings or agreements  between Pretzel Time and Franchisee  relating to the subject matter of this agreement,  except as set forth in Pretzel  Time's  Offering  Circular  required by Rule under the Federal Trade  Commission  Act, a copy of which has been provided to  Franchisee  and of which   Franchisee   acknowledges   receipt,   there  are  no   representations, inducements, promises, agreements arrangements or undertakings, oral or written, between  the  parties  hereto  other than those set forth and duly  executed  in writing.  No agreement of any kind shall be binding upon either party unless and until the same has been made in writing and duly executed by both parties.

         Upon  acceptance  of this  Agreement  by  Pretzel  Time,  all  previous agreements,  contracts,  arrangements  or  understandings  of any kind,  oral or written,  relative to the franchise granted herein are cancelled, and all claims and demands  thereon are fully  satisfied.  This  agreement,  although  drawn by Pretzel Time,  shall be construed  fairly and reasonable,  and not more strictly against one party than against the other party hereto.

         23.I.    AMENDMENT OF AGREEMENT.

         This  Agreement  shall not be  modified  or  amended  except by written





agreement  executed by both parties hereto.  No oral amendment or waiver will be effective and that this provision cannot be orally amended or waived.  No waiver of default or rights will be effective unless in writing.

         23.J.    HEIRS, SUCCESSORS AND ASSIGNS.

         Subject to the provisions  hereof  relating to transfer and assignment, this Agreement is intended to and does bind the heirs, executors, administrators and successors of any or all of the parties hereto.

         23.K.    CONDITIONS AND CONTINGENCIES.

         The obligations of the parties hereunder are expressly  conditional and contingent  upon the full execution of and performance of all obligations by the parties  under this  Agreement.  This  Agreement is expressly  conditional  upon Franchisee  executing all documents  required by this Agreement  within ten (10) days of receipt of the document.  Failure by Franchisee to execute any documents shall result in the Agreement being null and void.

         In addition during Franchisee's  training,  all documents pertaining to the  franchising of Franchisee as a Pretzel Time Unit shall be held in escrow by Pretzel Time. Title in and to the Pretzel Time Unit shall not pass to Franchisee until  Franchisee  has  been  trained  as  a  Pretzel  Time  franchisee  to  the satisfaction  of Pretzel Time. If Franchisee  fails to  satisfactorily  complete Pretzel Time initial  training,  the appointment of Franchisee as a Pretzel Time franchisee  and the granting of the franchise  business to  Franchisee  shall be null and void, all documents executed between Franchisee and Pretzel Time or its designees with respect to the transaction shall be terminated and cancelled. The Franchisee acknowledges and agrees that no portion of the Franchise fee shall be refunded if Franchisee  fails to complete  Pretzel Time's initial training class to the  satisfaction  of Pretzel Time. If the  Franchisee  completes the initial training to the  satisfaction  of Pretzel  Time,  Pretzel  Time will  provide to Franchisee fully signed copies of the Franchise Agreement.

         It is  understood  and agreed by the parties  that the  granting of the franchise  and all  contracts  and  agreements  entered  into by and between the parties with respect to the Unit are specifically contingent upon the signing of a lease for the Site.  In the event that a lease for the Site cannot be obtained on or before sixty (60) days after  delivery of Pretzel  Time's  approval of the Site at no fault  or delay by  Franchisee,  then all  contracts  and  agreements entered into by Pretzel Time, and  Franchisee  shall become null and void and of no effect,  and all monies  deposited by Franchisee less a nonrefundable  fee of $2,500 shall be refunded.

         23.L.    WAIVER BY PRETZEL TIME.

         No waiver by  Pretzel  Time of any  default  or  failure  to perform by Franchisee,  or of any  breach of the  terms of this  Agreement  or no  failure, refusal or neglect of Pretzel Time to exercise any right,  option or power given it under this Agreement,  shall preclude Pretzel Time from thereafter  requiring strict  compliance or from declaring  this  Agreement and the franchise  granted herein  revoke or  terminated.  The failure of Pretzel  Time to  terminate  this Agreement upon the occurrence of one or more Acts of Default will not constitute a waiver  or  otherwise  affect  the right of  Pretzel  Time to  terminate  this Franchise  because of a continuing or subsequent  failure to cure one or more of the aforesaid events of default or any other default.

         23.M.    COSTS AND EXPENSES OF ENFORCEMENT.

         If a claim  for  amounts  owed by  Franchisee  to  Pretzel  Time or its Affiliates  is  asserted  in any  judicial or  arbitration  proceeding  or later appeal,  or if Pretzel Time is required to enforce the Franchise  Agreement in a judicial or arbitration proceeding or later appeal, the prevailing party will be entitled  to  reimbursement  of its costs  and  expenses,  including  reasonable arbitrators',  accountants'  and  legal  fees,  whether  incurred  prior  to, in preparation for or in contemplation of the filing of any written demand,  claim, action,  hearing or  proceeding  to enforce  the  obligations  of the  Franchise Agreement.  If Pretzel Time incurs  expenses in connection  with your failure to pay when due amounts  owing to Pretzel  Time,  to submit  when due any  reports, information  or  supporting  records or otherwise  to comply with the  Franchise Agreement,  including,  but not limited to legal,  arbitrators'  and  accounting fees, you are required to reimburse Pretzel Time for any such costs and expenses which it incurs.          23.N.    RIGHTS OF PARTIES ARE CUMULATIVE

         THE  RIGHTS  OF  FRANCHISEE  AND  PRETZEL  TIME ARE  CUMULATIVE  AND NO EXERCISE OR  ENFORCEMENT  BY PRETZEL TIME OR  FRANCHISEE  OF ANY RIGHT OR REMEDY HEREUNDER  SHALL  PRECLUDE  THE  EXERCISE  OR  ENFORCEMENT  BY  PRETZEL  TIME OR FRANCHISEE OF ANY OTHER RIGHT OR REMEDY TO WHICH THE PARTY IS ENTITLED.

         23.O.    WAIVER OF JURY TRIAL.

     BOTH PRETZEL TIME AND THE  FRANCHISEE  IRREVOCABLY  WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM,  WHETHER AT LAW OR IN EQUITY, BROUGHT BY EITHER PARTY.  THE PARTIES  FURTHER AGREE THAT NEITHER SHALL DEMAND A JURY TRIAL IN THE EVENT OF LITIGATION.

         23.P.  WAIVER OF PUNITIVE DAMAGES.

         EXCEPT WITH RESPECT TO  FRANCHISEE'S  OBLIGATION  TO INDEMNIFY  PRETZEL TIME, THE PARTIES WAIVE TO THE FULLEST  EXTENT  PERMITTED BY LAW ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER AND AGREE THAT, IN THE EVENT OF A DISPUTE  BETWEEN THEM,  THE PARTY MAKING A CLAIM SHALL BE LIMITED TO RECOVERY OF ANY ACTUAL DAMAGES IT SUSTAINS.





         23.Q.  EXCLUSIVE JURISDICTION.

         BOTH PRETZEL TIME AND  FRANCHISEE  AGREE THAT ANY ACTION ARISING OUT OF OR RELATING  TO THIS  AGREEMENT,  INCLUDING  WITHOUT  LIMITATION,  THE OFFER AND GRANTING OF THE FRANCHISE  RIGHTS  HEREUNDER  SHALL BE INSTITUTED AND MAINTAINED ONLY IN A STATE OR FEDERAL  COURT OF  GENERAL  JURISDICTION  IN DAUPHIN  COUNTY, PENNSYLVANIA  OR THE COUNTY IN WHICH PRETZEL TIME MAINTAINS ITS PRINCIPAL  PLACE OF BUSINESS.

         FRANCHISEE  IRREVOCABLY  SUBMITS TO THE  JURISDICTION OF SAID COURT AND WAIVES ANY OBJECTION  FRANCHISEE MAY HAVE TO EITHER THE JURISDICTION OR VENUE OF SUCH COURT.

         23.R.    LIMITATIONS OF CLAIMS

         EXCEPT FOR CLAIMS  BROUGHT BY PRETZEL TIME WITH REGARD TO  FRANCHISEE'S OBLIGATIONS  TO MAKE PAYMENTS TO PRETZEL TIME  PURSUANT TO THIS  AGREEMENT OR TO INDEMNIFY  PRETZEL TIME PURSUANT TO THIS  AGREEMENT,  ANY AND ALL CLAIMS ARISING OUT OF OR RELATING TO THIS  AGREEMENT  OR THE  RELATIONSHIP  OF  FRANCHISEE  AND PRETZEL  TIME  PURSUANT TO THIS  AGREEMENT  SHALL BE BARRED  UNLESS AN ACTION IS COMMENCED  WITHIN:  (1) TWO (2)  YEARS  FROM THE DATE ON WHICH  THE ACT OR EVENT GIVING  RISE TO THE  CLAIM  OCCURRED  OR (2) ONE (1) YEAR FROM THE DATE ON WHICH FRANCHISEE  OR  PRETZEL  TIME KNEW OR SHOULD  HAVE  KNOWN,  IN THE  EXERCISE  OF REASONABLE  DILIGENCE OF THE FACTS GIVEN RISE TO SUCH CLAIMS,  WHICHEVER  OCCURS FIRST.

24.      ACKNOWLEDGMENTS AND REPRESENTATIONS.

         Franchisee  acknowledges  that he has read this  Agreement  and that he understands  and accepts the terms,  conditions and covenants  contained in this Agreement as being reasonably  necessary to maintain Pretzel Time's high quality and service and the uniformity of those  standards at all Pretzel Time Units and thereby to protect and preserve the goodwill of the Marks.

         Pretzel Time  disclaims  and  Franchisee  acknowledges  that he has not received or relied upon any representations, promises, guarantees or warranties, expressed  or  implied,  made to induce the  execution  hereof or in  connection herewith which is not expressly contained herein or in the disclosure statement. More specifically,  Franchisee  acknowledges and agrees that no person acting on behalf of Pretzel Time or its affiliated  companies has made any written or oral claim,  statement,  assurance,  promise or projection of any sort  regarding the actual  or  prospective  sales,  earnings,  gross  profit  or net  profit of the franchise,  which is the subject of this agreement.  Franchisee acknowledges and agrees that Pretzel Time's officers, directors, employees and agents act only in a representative  and not in a personal capacity in connection with any of their dealings with  Franchisee.  Franchisee  recognizes that neither Pretzel Time nor any other person can guarantee  Franchisee's success in the franchised business. Franchisee  further  represents  to Pretzel  Time, as an inducement to its entry into this  Agreement,  that all statements in  Franchisee's  application for the Franchise   are  accurate  and  complete  and  that   Franchisee   has  made  no misrepresentations or material omissions in obtaining the franchise.

25.      CONSTRUCTION.

         25.A.    HEADINGS.

         The Section headings  throughout this Agreement are for the convenience and reference only of the parties and their  attorneys,  and the words contained therein shall not be held to expand,  modify,  limit, define,  amplify or aid in the interpretation, construction or meaning of this Agreement.

         25.B.  TERMINOLOGY.

         All terms and words used in this  Agreement,  regardless  of the number and gender in which they are used,  shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine,  feminine, or neuter,  as the  context  or sense of this  Agreement  or any  Section or clause herein may require,  as if such word had been fully and properly  written in the appropriate number and gender.          The  term  Franchisee  as  used  herein  is  applicable  to one or more persons,  a  corporation  or a  partnership,  as the case may be. If two or more persons are at any time Franchisee hereunder,  their obligations and liabilities to  Pretzel  Time  shall be joint and  several.  References  to  Franchisee  and assignee  which are  applicable to an individual or  individuals  shall mean the Owners of  Franchisee or the  assignee,  if the  Franchisee or the assignee is a corporation nor partnership.

         25.C.    COUNTERPARTS.

         This Agreement may be executed in one or more counterparts, any and all of which shall constitute one and the same instrument.

         25.D.  REASONABLENESS.

         Pretzel Time and  Franchisee  agree to act  reasonably  in all dealings with each other pursuant to this Agreement.  Whenever the consent or approval of either party is required or  contemplated,  the party whose  consent is required agrees not to unreasonably  withhold the same,  unless such consent is expressly subject to such party's sole discretion pursuant to the terms of this Agreement. In no event shall Pretzel Time's withholding of consent allow Franchisee a claim for money damages.

26.      SECURITY AGREEMENT.





         26.A.    SECURITY INTEREST.

         In order  to  secure  full and  prompt  payment  of the fees and  other charges to be paid by Franchisee to Pretzel Time,  and to secure  performance of the other  obligations  and covenants to be performed by Franchisee,  under this Agreement,  Franchisee hereby grants Pretzel Time a valid and effectual security interest  in,  lien  upon,  and  right of set off  against  all of  Franchisee's interest  in  the  improvements,  fixtures,  inventory,  goods,  appliances  and equipment now or hereafter owned and located at the Unit (whether annexed to the Premises or not) or used in connection with the business  conducted at the Unit, including,  without in any manner limiting the generality of the foregoing,  all machinery,  materials,  appliances and fixtures for  generating or  distributing air, water, heat,  electricity,  light, fuel or refrigeration,  for ventilating, cooling or sanitary purposes, for the exclusion of vermin or insects and for the removal  of  dust,   refuse  or  garbage;   all   engines,   machinery,   ovens, refrigerators,   freezers,  furnaces,   partitions,  doors,  vaults,  sprinkling systems, light fixtures,  fire hoses, fire brackets,  fire boxes, alarm systems, brackets,  screens,  floor tile,  linoleum,  carpets,  plumbing,  water systems, appliances,  walk-in refrigerator boxes, cabinets,  dishwashers,  stoves, set-up tables,  rolling  counters,   kitchen  ranges,  display  counters  and  shelves, humidified  cabinets,  computers and computer software,  and other equipment and installations;  all other and  further  installations  and  appliances;  all raw materials,   work  in  process,  finished  goods  and  all  inventory;  and  all replacements  thereof,  attachments,   additions  and  accessions  thereto,  and products  and  proceeds  thereof  in any  form,  including  but not  limited  to insurance proceeds and any claims against third parties for loss or damage to or destruction  of any or all of the foregoing  (collectively,  the  Collateral). Without the prior  written  consent of Pretzel Time,  Franchisee  agrees that no lien upon or security  interest in the  Collateral  or any item  thereof will be created or suffered  to be created  and that no lease will be entered  into with respect to any item of Collateral. Franchisee will not sell or otherwise dispose of any item of Collateral,  or remove any Collateral  from the Premises,  unless the same is replaced by a similar item of equal or greater value, and except for the sale of  inventory in the  ordinary  course of  business,  without the prior written  consent  of Pretzel  Time.  Franchisee  agrees to give to Pretzel  Time advance notice in writing of any proposed change in Franchisee's name,  identity or structure and not to make any such change  without the prior written  consent of Pretzel Time and compliance with the provisions of this Agreement. Franchisee agrees  to  execute  for  filing  such  financing  statements  and  continuation statements as Pretzel Time may require from time to time. Pretzel Time agrees to pay all filing  fees,  including  fees for  filing  continuation  statements  in connection with such financing statements.

         26.B.  DEFAULT REMEDIES UNDER U.C.C.

         In the event of a default by Franchisee  under this Agreement,  Pretzel Time  shall  have the  remedies  and rights  available  as a secured  party with respect to the Collateral  under the Uniform  Commercial  Code as in effect from time to time in the  state  where the  premises  are  located.  The grant of the security interest to Franchisee  pursuant to this Section shall not be construed to derogate  from or impair any other rights  which  Pretzel Time may have under this Agreement or otherwise at law or equity.

27.      NOTICES.

         27.A.    DELIVERY OF NOTICES.

         All  written  notices  permitted  or required  to be  delivered  by the provisions  of this  Agreement  or of the  Operations  Manual shall be deemed so delivered to the Franchisee:

         a.   At the time delivered by hand; or

         b.  One  business  day  after  transmission  by  facsimile,   telecopy, telegraph or other electronic system;

         c. One  business  day after being  placed in the hands of a  commercial          carrier service for next business day delivery; or

         d. Three (3) business days after placement in the United States mail by          registered or certified mail, return receipt requested, postage prepaid          and addressed to the party to be notified at the addresses listed below          or the most current  business  address of which the notifying party has          been notified.  If Franchisee  refuses delivery of the same then notice          shall be deemed delivered when refused by Franchisee.

         IF TO PRETZEL TIME:

                  Pretzel Time, Inc.                   Attn:  Martin Lisiewski, CEO                   4800 Linglestown Road, Suite 202                   Harrisburg, Pennsylvania 17112

         WITH COPIES TO:

                  Rashti and Mitchell                   Attorneys at Law                   Attn:  Timothy T. Mitchell                   4422 Ridgeside Drive                   Dallas, Texas 75244





         IF TO FRANCHISEE:

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first written above.

WITNESSES:                                           PRETZEL TIME, INC.                                                               FRANCHISOR

- -----------------------                                                               BY:

_______________________                           NAME:  ____________________

                                                 TITLE:  _____________________

WITNESSES:                                  FRANCHISEE:                                                   ----------------------------

                                                              BY:

______________________                           NAME:  _____________________

                                                TITLE:

                                              CORPORATE ACKNOWLEDGMENT

STATE OF                                        )                                                      : ' COUNTY OF                                     )

On this _____ day of ___________, 19 __, before me, (Name of Notary)

     the undersigned  officer,  personally appeared and , known personally to me to be the Presidentand Secretary,  respectively, of the above-named corporation, and that  they,  as such  officers,  being  authorized  to do so,  executed  the foregoing  instrument for the purpose therein contained,  by signing the name of the corporation for themselves as such officers.

         IN WITNESS WHEREOF I have hereunto set my hand and official seal.

                                                              (Notary Public)

My Commission Expires:

(Notary Seal)

                INDIVIDUAL OR PARTNERSHIP ACKNOWLEDGMENT

STATE OF                                        )                                                      : ' COUNTY OF                                     )

         On this _____ day of ___________, 19 __, before me,                                 (Name of Notary)

     the undersigned  officer,  personally  appeared to me personally  known and known to me to be the same  person(s)  whose  name(s)  is  (are)  signed  to the foregoing  instrument,  and acknowledged the execution  thereof for the uses and purposes therein set forth.

         IN WITNESS WHEREOF I have hereunto set my hand and official seal.

                                                              (Notary Public)

My Commission Expires:





(Notary Seal)

FRAN.AGT 6.5.96                                FRANCHISE AGREEMENT

                                 By and between

          Pretzel Time, Inc., a Pennsylvania corporation as Franchisor

                                       and

                                  , Franchisee

                                    EXHIBIT C                             TO THE OFFERING CIRCULAR                               OF PRETZEL TIME, INC.

                               FRANCHISE AGREEMENT

                                   Exhibit M

                                    Sublease

           [Substitute 2 page short form - Karen to send Tim the disk]
Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty’s ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?

Execution version

Exhibit 10.3

CONFIDENTIAL TREATMENT REQUESTED - REDACTED COPY Confidential Treatment has been requested for portions of this Exhibit. Confidential portions of this Exhibit are designated by [*****]. A complete version of this Exhibit has been filed separately with the Securities and Exchange Commission.

GLOBAL MAINTENANCE AGREEMENT Contract No. DS/CS-3957/14 issue 7

Between

AZUL LINHAS AÉREAS BRASILEIRAS S/A (as Company)

and

AVIONS DE TRANSPORT REGIONAL, G.I.E. (as Repairer)

March 9th, 2015

    AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 1/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONTENTS   Clause   Page  1.   SUBJECT-MATTER OF THE AGREEMENT     6  2.   DEFINITIONS AND INTERPRETATION     6  3.   DURATION AND RENEWAL     15  4.   EXCUSABLE DELAY     15  5.   SERVICES, LEASE AND OBLIGATIONS OF THE PARTIES     16  6.   DELIVERIES     18  7.   WORK ORDERS     20  8.   INSURANCES     21  9.   WARRANTIES     22  10.  PRICES     22  11.   RECONCILIATION     22  12.  INVOICING AND PAYMENT TERMS     23  13.  SECURITY DEPOSIT     26  14.  DISCLAIMER     27  15.  LIABILITY AND INDEMNITY     27  16.  TERMINATION     28  17.  CONDITIONS PRECEDENT     31  18.  EXPORT CONTROL     31  19.  NOTICES     31  20.  CONFIDENTIALITY     32  21.  TAXES     34  22.  ASSIGNMENT     34  23.  MISCELLANEOUS     35  24.  GOVERNING LAW AND ARBITRATION     37      AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 2/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version     EXECUTION PAGE     39  EXHIBIT 1 - LIST OF ATR AIRCRAFT COVERED UNDER THIS AGREEMENT     40  EXHIBIT 2 - LIST OF SERVICES PROVIDED UNDER THIS AGREEMENT     42  EXHIBIT 3 - MAIN ELEMENTS COVERED UNDER THE AGREEMENT     43  EXHIBIT 4 - LIST OF LANDING GEAR ON CONDITION PARTS     44  EXHIBIT 5 - STOCK     45  EXHIBIT 6 - LRUS COVERED BY REPAIR AND STANDARD EXCHANGE SERVICES     61  EXHIBIT 7 - REPAIRER STANDARD WORK ORDER FORMS     70  EXHIBIT 8 - LEASE OF THE STOCK     74  EXHIBIT 9 - SPARE PARTS STANDARD EXCHANGE SERVICE     80  EXHIBIT 10 - LRUS REPAIR SERVICE     84  EXHIBIT 11 - MAIN ELEMENTS SERVICES     86  EXHIBIT 12 - INTENTIONALLY LEFT BLANK     92  EXHIBIT 13 - FORM OF STANDBY LETTER OF CREDIT     93  EXHIBIT 14 - PRICE CONDITIONS     94  EXHIBIT 15 - ADVANCED POOL SERVICE    101  EXHIBIT 16 - ADVANCED POOL STOCK    106  EXHIBIT 17 - INSURANCE CERTIFICATES    108  EXHIBIT 18 - NOTA FISCAL REPORTING    109      AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 3/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   THIS GLOBAL MAINTENANCE AGREEMENT (HEREINAFTER REFERRED TO AS THE AGREEMENT OR GMMA) IS MADE ON March 9th 2015:

BETWEEN:

AZUL LINHAS AÉREAS BRASILEIRAS S/A, a company incorporated under the laws of Brazil, the registered office of which is located at Avenida Marcos Penteado de Ulhôa Rodrigues, 939 - Edif. Castello Branco Office Park - Torre Jatobá - 9° andar - CEP 06460-040 - Alphaville Industrial - Barueri - São Paulo - Brazil, identified under Cadastro Nacional de pessoa Juridica (CNPJ) number 09.296.295/0001-60.

Hereafter referred to as the Company or AZUL,

on the one part,

AND:

AVIONS DE TRANSPORT REGIONAL, G.I.E., a French groupement d'intérêt économique established under articles L.251-1 to L251-23 of the French Commercial Code, whose registered office is at 1 allée Pierre Nadot, 31712 Blagnac, France identified under Corporate and Trade Register of Toulouse number 323 932 236,

Hereafter referred to as the Repaireror ATR,

on the other part.

Hereinafter individually referred to as the Party or collectively as the Parties, as the context requires.     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 4/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   RECITALS:

  1) WHEREAS AZUL and ATR have entered into a Global Maintenance Agreement ref DS/CC-2612/10 (dated December 24t h, 2010) to support AZUL ATR aircraft fleet for operational support tasks as well as scheduled and unscheduled maintenance, as amended from time to time (GMA AZUL); and,

  2) WHEREAS TRIP and ATR have entered into a Global Maintenance Agreement ref DS/C- 2883/09 (dated September 10t h, 2010) to support TRIP ATR aircraft fleet for operational support tasks as well as scheduled and unscheduled maintenance, as amended from time to time (GMA TRIP); and,



3) WHEREAS pursuant to an investment agreement dated on May 25, 2012, entered into between Trip shareholders and Azul S.A., TRIP became a wholly owned subsidiary of the latter, integrating the Azul Group which already includes AZUL, an operating company, as duly approved in due time by their respective corporate governing bodies and the relevant authorities (National Civil Aviation Agency-ANAC-and Brazilian Antitrust Authority-CADE); and     4) WHEREAS further to operation as detailed above in 3), AZUL progressively operated an enlarged fleet of Aircraft coming from TRIP;and,

  5) WHEREAS, in consideration of the local repair service in Brazil and the Aircraft fleet now solely operated by AZUL, the Parties wish to terminate the GMA TRIP and the GMA AZUL, and to enter into negotiation for a new GMLA between ATR and AZUL, on the terms and conditions set forth herein.

NOW THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 5/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version

1. SUBJECT-MATTER OF THE AGREEMENT

This Agreement describes the terms and conditions according to which the Repairer (i) shall provide, or cause its Subcontractors to provide, Services for the Company's Aircraft fleet; and (ii) agrees to lease the Stock to the Company and the Company agrees to take the Stock on lease, subject to the terms and conditions set forth on Exhibit 8.

  2. DEFINITIONS AND INTERPRETATION

2.1 Unless otherwise defined, capitalised terms, singular or plural, used in this Agreement shall have the meaning set out below:   Abnormal Use



means any usage, maintenance, storage, handling of the Aircraft, or its sub-assemblies, or its systems, or Items fitted on it including LRUs, Main Elements, Spare Main Elements, that does not comply with all applicable technical documentation and any other instructions issued by the manufacturers and which is not attributable to the Repairer or Subcontractors, including:   (i) Any failure by the Company to correctly comply with any Repairer and/or OEM instructions or recommendations, technical directives, or any workmanship defect, lack of qualification, non- approved repair and/or maintenance method; or,   (ii) Any negligence or failure to exercise reasonable effort(s) made to initiate corrective action(s), or lateness or total or partial failure in undertaking corrective action(s), for Aircraft or LRU(s) or Main Element(s) malfunctions which should have been reasonably identified by the Company; or,   (iii) Any Aircraft, LRU(s) or Main Element(s) suffering damage or premature removal arising out of or in connection with any defective storage, inappropriate Packaging or transport by the Company or its forwarder agent, or gross negligence or wilful misconduct of the Company(or its subcontractors or agents); or   (iv) Any events or circumstances, including: FOD, abnormal wear, hard contact, material drop or shock, engine fire or submersion, lightning strike, hard landing, hail (including on storage position), partial or total destruction or loss of Aircraft, LRU(s) or, Main Element(s);

Affiliates   means with respect to any entity, any entity Controlled by, Controlling or under Common Control with, the first entity, and/or their respective lawful successors and/or assigns;

Agreement   has the meaning set forth in page four (4) here above;

Aircraft



means collectively or individually as the context requires the ATR aircraft listed in Exhibit 1 (List of ATR Aircraft covered under this Agreement), amended from time to time by way of notice sent to the Company , as relevant, by Repairer in order to cover any further ATR aircraft entering the Company's fleet, including the airframe, engines, propellers and landing gears and parts installed on the Aircraft, when solely operated by the Company ;     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 6/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     Airworthiness Authority



means, in respect of any jurisdiction, the Government Entity, which under the laws of such jurisdiction, has control over civil aviation or the registration, airworthiness, operation of aircraft in such jurisdiction, including, in the European Union, the European Aviation Safety Agency (the EASA) and, in the United States of America, the Federal Aviation Administration (the FAA);

Airworthiness Directives or AD   means enforceable rules issued by the relevant Airworthiness Authorities that have a mandatory impact on Aircraft operation and/or maintenance;

Aircraft Maintenance Manual or AMM

means the customized manual, drafted in compliance with the ATA100 specifications, issued by ATR, as Aircraft manufacturer, and which is split into three (3) separate parts, namely: the Description and Operation Manual, the Trouble Shooting Manual and the Job Instruction Cards; the purpose of which is to provide all information required for Aircraft maintenance, while ensuring personnel and flight safety;

Aircraft On Ground or AOG

means the highest priority designation to process a requirement for an LRU and/or maintenance action; when applied to an Aircraft, such term indicates that such Aircraft is unable to continue or to be returned to revenue service until that appropriate action is taken;

ANAC   means Agência Nacional de Aviação Civil, the Brazilian Civil Aviation Authority;

ATA   means Air Transport Association of America Inc.;

ATA 300



means documentation issued by ATA (as amended from time to time, or any other ATA's substituted documentation) reviews the design, development and procurement of effective packaging of supplies shipped by either Party to the other Party; it provides packaging instructions for repairable and expendable units and components, included packaging standards for kits, preparation of hazardous materials for shipment and handling of electrostatic discharge sensitive devices.

BER or Beyond Economical Repair

means the case in which the repair cost of any unserviceable Item is greater than [*****] of the price for a brand new identical LRU and/or Main Element;

BUR or Basic Unscheduled Removal



means any basic unplanned removal, premature removal of a LRU or a Main Element, due to a sub- component or accessory induced malfunction. Likewise, removal of a LRU and/or a Main Element, component or accessory due to a problem which could have been rectified using troubleshooting and/or corrective line maintenance actions as specified in the applicable AMM is not considered to be a BUR;

Business Day   means a day, other than a Saturday or a Sunday, on which banks are open for the transaction of domestic and foreign exchange business in Paris (France) and São Paulo (Brazil);

CMM or Component Maintenance Manuals

means a manual issued either by any relevant OEM and containing instruction concerning the overhaul and/or repair of components together with procedures for restoring such components to a fully serviceable condition. These manuals shall be compliant with ATA100 Specification;     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 7/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version     Confidential Information



means all and/or any part of any information and/or data disclosed to and/or obtained by either Party from the other Party during the Term relating to or in connection with the performance of this Agreement; such information is conclusively considered as confidential without it being necessary to mention at the moment of its disclosure, and includes: (i) technical information, such as instructional know-how, academic and/or practical maintenance courses and/or aircraft piloting courses, programs, software, manufacturing secrets, processes, prototypes, research work, studies, plans, sketches, formulae, samples, specifications, diagrams, etc., (ii) commercial information, such as list of customers, suppliers, etc., (iii) financial (tariffs, margins, market parts, etc.), (iv) legal information, such as the Agreement, Exhibits, contracts, amendments, appendices, contractual relations, negotiations, partners, etc. and (v) written, electronic or oral information (hard copy, computer, digital, etc.);

Control, Controlled, Controlling and Common Control



are to be interpreted as follows:   I. A company is deemed to control another company:   (i) When it directly or indirectly holds a fraction of the capital that gives it a majority of the voting rights at that company's general meetings;   (ii) When it alone holds a majority of the voting rights in that company by virtue of an agreement entered into with other partners or shareholders and this is not contrary to the company's interests;   (iii) When it effectively determines the decisions taken at that company's general meetings through the voting rights it holds;   (iv) When it is a partner in, or shareholder of, that company and has the power to appoint or dismiss the majority of the members of that company's administrative, management or supervisory structures.   II.—It is presumed to exercise such control when it directly or indirectly holds a fraction of the voting rights above 40% and no other partner or shareholder directly or indirectly holds a fraction larger than its own.   III.—For the purposes of the same sections of the present chapter, two or more companies acting jointly are deemed to jointly control another company when they effectively determine the decisions taken at its general meetings.

Core Unit   means any unserviceable LRU returned by the Company to the Repairer as a counterpart to standard exchange;

Credit Note   Credit Note Means the credit note to be issued by the Repairer in accordance with Clause 11 (Reconciliation) of this Agreement.

CSN   means the accrued Cycles Since New;

CSO   means the accrued Cycles Since Overhaul;

CY or Cycle   means a completed Aircraft takeoff and landing sequence;

Day   means a calendar day;     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 8/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version     Default   means any failure by either Party to perform or observe any material obligation under this Agreement, including as set forth with Clause 16.1 b) and including Abnormal Use;

Delivery   means the act of the Repairer putting at the Company's disposal any Item at Delivery Location according to the terms of this Agreement;

Delivery Location   means the Repairer's facility as defined under Clause 6 (Deliveries) of this Agreement;

Early Event



concerns LRU and/or Main Element and/or Aircraft airframe maintenance subject to Scheduled Event and designates a situation where a Scheduled Event takes place before it is scheduled pursuant to Exhibit 11 Clause 1.2 for the Main Element and/or to the CMM for the LRU when applicable;

End Date



means the date on which this Agreement is terminated or expires, and shall be the earlier to occur of the following, as appropriate:   (i) the end of the Initial Term as defined in Clause 3.1of this Agreement; or,   (ii) the end of the term of each annual renewal of this Agreement as per Clause 3.2 of this Agreement; or,   (iii) the date on which all or part of this Agreement is terminated as per Clause 16 (Termination);

Euros or €   designates the legal currency of the member countries of the European Union who have adhered to the European Monetary Union;

Excusable Delay   has the meaning set forth in Clause 4.1 of this Agreement;

Fleet Turnover   means the amount normally invoiced under this Agreement using the Standard Operations and all applicable prices in Exhibit 14 (Price conditions);

FHor Flight Hour   means airborne flight hour, the unit of measure of each Aircraft flight activity for the time elapsed between Aircraft take-off and Aircraft landing;

FOD



stands for Foreign Object Damage and means any damage, whether direct or indirect, to any Item and/or the airframe caused as a result of or related to any foreign object not forming part of any Item and/or the airframe;

Government Entity   means any national government, political subdivision thereof, or local jurisdiction thereof;

Incoterms   means the international rules for the interpretation of trade terms published by the International Chamber of Commerce (ICC), 2000 edition;

Initial Term   has the meaning set forth in Clause 3.1 of this Agreement;

Item



means, as the case may be, any LRU, Main Element, Spare Main Element, any of their sub- assembly or sub-component, any part of the Stock, or for the sake of clarity any part covered under this Agreement;     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 9/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     Law   means any applicable law, order, statute, statutory instrument, regulation, decree, directive or instrument of equivalent effect;

LIBOR



stands for London Interbank Offered Rate, which designates the annual rate equal to one month in Eurodollars quoted at 11:00 hours or approximately 11:00 hours (London time), as indicated on Reuters screen LIBOR01page, for an amount and period selected by the Repairer, which is available to the subscribers to the Telerate electronic display terminal, [*****] prior to the corresponding period;

LOC or StandBy Letter of Credit



means an irrevocable letter of credit in the form or substantial form stipulated by Exhibit 13 (Form of StandBy Letter of Credit), in accordance with Uniform Customs and Practice (UCP) for the documentary credit, 2007 revision, ICC publication n°600, issued by a major international bank, confirmed by and domiciliated in NATIXIS, Paris, France, provided by the Company to the Repairer in accordance with Clause 13 (Security Deposit) of this Agreement;

Loss



means any and all losses, costs, charges, expenses, interests (including default interest), fees (including legal fees and value-added tax thereon if applicable), payments, demands, liabilities, claims, actions, proceedings (including stamp, documentary, registration or other duties, taxes or any charges incurred by and/or in connection with proceedings), penalties, damages, adverse judgments, orders or other sanctions;

Lost Potential   with respect to LRU and/or Main Elements subject to Scheduled Events, designates, in the case of an Early Event, [*****];

LRU(s) or Line Replaceable Unit(s)

means any equipment that can be replaced on line by the Company's technicians and listed into Exhibit 6 (LRUs covered by repair and standard exchange Services);

Main Element



means a propeller and/or a landing gear and/or an engine as listed in Exhibit 3 (Main Elements and part numbers covered by this Agreement) and/or in Exhibit 5 (Stock), or any of their respective sub-assemblies;

MMEL or Master Minimum Equipment List

means a document provided by ATR providing operating and maintenance procedures for a categorized list of systems, instruments and equipment on an ATR aircraft that may be inoperative for flight;

Mean Time Between Unscheduled Removals or MTBUR

means a figure for assessing performance calculated by dividing the total number of FH of the ATR aircraft worldwide fleet during a given period, by the number of unscheduled removals of LRUs recorded during the same period on the same fleet;

    [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 10/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version     MPD or Maintenance Planning Document

means the documents issued by the Aircraft manufacturer, providing periodic maintenance requirements data necessary to plan and conduct the Aircraft maintenance checks and inspections, in force on the Signing Date;

MRBR



means the Maintenance Review Board Report, which outlines the initial minimum maintenance requirements to be used in the development of an approved continuous airworthiness maintenance program for the Aircraft, and which is issued by the Maintenance Review Board (MRB);

Measured Removal Rate(s) or MRR



designates, for the Aircraft and depending on the Aircraft age, the quantity of LRU removals per one thousand (1,000) FH, established in units and tens, to be measured during each period of three (3) consecutive Months of Aircraft activity during the Term for all LRUs listed into Exhibit 6 (LRUs covered by repair and standard exchange Services) excluding Main Elements and/or Main Element subassemblies, repair warranty and Rogue units;

Month



refers to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month (and references to months shall be construed accordingly) save that, where any such period would otherwise end on a non-Business Day, it shall end on the next Business Day, provided that if a period starts on the last Business Day in a calendar month or if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that later month;

NFF or No Fault Found



means any event where an Item removed from an Aircraft by the Company and returned to the Repairer for repair is declared serviceable with non-confirmed fault by the latter through strip report or where a serviceable Item removed from the Pool by the Repairer and delivered to the Company under the standard exchange Service set out in Exhibit 9 (Spare parts standard exchange Service) is returned by the Company to the Repairer unused;

Notice



means any notice or communication pertaining to this Agreement which shall be given in writing delivered by hand and/or by courier service with proof of delivery and/or by fax, and:   a) if delivered by hand, shall have been deemed received when so delivered; or,   b) if delivered by registered mail, shall be deemed to have been received by the addressee on the Day on which it shall have signed as received; or,   c) if delivered by fax, shall be deemed to have been received by the addressee on the next Business Day following electronic acknowledgement.   In the event a Party chooses to give a Notice by several of the aforesaid means, the earliest of the receipt dates will be considered.   In any case, any notice or communication shall be also transmitted by an e-mail with attached copy of such (in format PDF or similar support)n, for courtesy purpose only.     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 11/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version     OEM or Original Equipment Manufacturer

means a manufacturer of parts other than ATR manufactured parts including the engine manufacturer, the propeller manufacturer, the landing gear manufacturer or an LRU manufacturer;

Packaging or Packed



means packaging of any Item or packed Item, as relevant, shipped by either Party to other Party under the Agreement, in compliance with the following:   (i) Repairer's and/or its suppliers' and/or its Subcontractors' and/or OEM's recommendations, as relevant; and   (ii) ATA 300 specifications for air transport; and/or   (iii) International Carriage Of Dangerous Goods By Road (ADR) regulation for good and reusable condition; and/or,   (iv) International Air Transport Association (IATA) Dangerous Goods Regulations, for any shipment of dangerous Items.   Person   means any state, division of a state, Government Entity, individual or corporate body or any association of any one or more of the foregoing;

Pool



designates a stock of serviceable LRUs listed in Exhibit 6 (LRUs covered by repair and standard exchange Services), available on a non-exclusive basis to the Company under standard exchange Service as per Exhibit 9 (Spare parts standard exchange Service); such Pool may be amended from time to time by the Repairer by way of Notice sent to the Company, in compliance with this Agreement, subject to Company's approval.

Repair Shop   means any FAA/EASA part 145 or ANAC approved repair shop selected by the Repairer and acting as its Subcontractor;

Repairer Indemnified Parties

means the Repairer and/or ATR, as relevant, and/or their Affiliates and/or their respective lawful successors and/or assigns and/or their respective subsidiaries, officers, directors, employees, agents or Subcontractors;

Reference Removal Rate(s) or RRR



designates the standard reference rate of LRU removals per one thousand (1,000) FH, established in units and tens, during each period of six (6) consecutive Months of Aircraft activity during the Term for all LRUs listed into Exhibit 6 (LRUs covered by repair and standard exchange Services) excluding Main Elements and/or Main Element sub-assemblies, and indicated in Clause 1.3.1 of the Exhibit 14 (Price conditions);

Rogue Units



designates a LRU for which the same serial number has been removed from an Aircraft on three (3) or more occasions for similar discrepancies (except regarding specific services not covered by the Services and except to the extent caused by Company's Default), or four (4) NFF based on official Repair Shop data within a twelve (12) Month period, with confirmation of approved trouble shooting as per the CMM and/or the AMM;     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 12/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version     Scheduled Event



with respect to LRUs and/or Main Elements and/or Aircraft airframe that are subject to programmed overhauls and/or inspections, designates such overhaul and/or inspections that shall take place after a specified number of accrued FH and/or Cycles or Months as set out in Exhibit 11 (Main Elements Services) for the Main Elements and in the CMM for the relevant LRUs;

Security Deposit



designates the cash payment and/or the LOC issued, as security for the Company's performance of all of its obligations under this Agreement, in compliance with Clause 13 (Security Deposit) of this Agreement;

Service



means any and all operational support tasks to be carried out by the Repairer and/or its Subcontractors under this Agreement, as defined in Exhibit 2 (List of Services provided under this Agreement);

Signing Date   means the date indicated on page four (4) of this Agreement and refers to the date on which this Agreement is signed by both Parties;

Spare Main Element   means the spare Main Element(s) the Repairer makes available to the Company during Main Element maintenance according to Exhibit 11 (Main Elements Services);

Standard Operations   has the meaning set forth in Clause 3.2 of Exhibit 14 (Price conditions);

Start Date   means the date occurring thirty (30) Days after the Signing Date, subject to fulfilment of the conditions set out in Clause 17 (Conditions precedent);

Stock   means all or part of the Items, as relevant, listed in Exhibit 5 (Stock);

Storage Location   means Company's facilities where the Stock is located as defined in Exhibit 8 (Lease of the Stock);

Subcontractor   means any Person, including a Repair Shop, engaged by the Repairer to support the Repairer in the performance of its contractual obligations under this Agreement;

SWIFT   stands for the Society for Worldwide Interbank Financial Telecommunication;

Taxe(s)



mean any and all present or future fees (including license, recording, documentation and registration fees), taxes [including income taxes, gross receipts taxes, capital taxes, franchise taxes, net worth taxes, gross profits taxes, sales taxes, rental taxes, use taxes, turnover taxes, value added taxes, ad valorem taxes, property taxes (tangible and intangible), excise taxes, customs or import duty, documentary and stamp taxes], licenses, levies, imposts, duties, charges, assessments or withholdings of any nature whatsoever, whether now existing or hereafter adopted, enacted or amended, howsoever imposed, levied or asserted by any Government Entity or taxing authority together with any and all penalties, fines, additions to tax and interest thereon;

TBO   stands for Time Between Overhaul and means the FH or CY elapsed between two (2) consecutive overhauls;

Term   means the period of time starting from the Signing Date and ending on the End Date;     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 13/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version     Time and Material

means any sale of goods and services, not covered by the scope of this Agreement and charged to the Company, which is subject to the ATR General Terms and Conditions for the Sale of Goods and Services;

TNR or Technically Non Reparable

means where an unserviceable Item (i) is not repairable according to ATA 100 and/or (ii) for which no technical repair can be considered;

TSN or Time Since New   means the FH elapsed since new;

TSO or Time Since Overhaul   means the FH elapsed since the last overhaul;

US Dollar or $   designates the legal currency of the United States of America;

Vendor Warranty Manual

means the manual giving details of the warranties granted by an OEM with respect to certain parts of Aircraft, provided by the said OEM;

Week   means a period of seven (7) Days;

Work Order   means any order issued by the Company to the Repairer for any of the Services and being one of the forms set out in Exhibit 7 ([Repairer standard Work Order forms), as applicable.

  2.2 In this Agreement, save as otherwise expressly indicated to the contrary, any reference to:     2.2.1 this Agreement or any other agreement or document shall be construed as a reference to this Agreement or such other agreement ordocument as amended, novated or supplemented from time to time; any reference to this Agreement includes its Exhibits; and,     2.2.2 any Clause shall be construed as a reference to a clause of this Agreement and/or of an Exhibit to this Agreement, as relevant; and,       2.2.3 any Exhibit shall be construed as a reference to an Exhibit to this Agreement; and,     2.2.4 Headings: Clauses and Exhibits headings and sub-headings are used in this Agreement only for the ease of reading. They are notintended to affect its meaning and should not be used for the sake of its construction; and,     2.2.5 includingshall be construed as a reference to … including, without limitation,… or … including but not limited to…; and,     2.2.6 Singular and plural: wherever the context so requires, the singular shall include the plural and vice versa; and,     2.2.7 a date will be by reference to the Gregorian calendar; and,     2.2.8 in writing includes any modes of reproducing words in a legible and non-transitory form but does not include e-mail (but caninclude the copy PDF of any document sent   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 14/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     by e-mail); and,

  3. DURATION AND RENEWAL

3.1 The Agreement enters into force on the Signing Date; it will have a duration of [*****] as from the Start Date (the Initial Term).   3.2 Upon expiry of the Initial Term, this Agreement [*****] unless a Notice of non-renewal is given by either Party to the other Party [*****] prior to the expiry of the Initial Term or the end of a renewal period, if any.   3.3 The Agreement shall end on the End Date without any further action, unless otherwise provided under this Agreement.

  4. EXCUSABLE DELAY

4.1 If a Party (the Affected Party) is prevented, hindered or delayed from or in performing any of its obligations under this Agreement by an event which is unpredictable and unavoidable, including war or civil or foreign armed aggression, riots, fires, floods, explosions, earthquakes or accidents, epidemics or quarantine restrictions, any act of a Government Entity, embargoes, export prohibitions, failure by a subcontractor and/or vendor to furnish supplies or parts or delay the same, strikes or labour troubles causing cessation of work, such event will be referred to as an Excusable Delay.   4.2 The Affected Party will give Notice to the other Party (the Non-Affected Party) of such Excusable Delay as soon as reasonably possible after it becomes aware thereof, and the Affected Party will use its reasonable endeavours to mitigate the effects of such Excusable Delay, without being obliged however to incur any unreasonable costs.   4.3 Neither Party shall be held liable, or deemed to be in Default, if it fails to perform its obligations under this Agreement due to an Excusable Delay; without prejudice to Clause 4.5 hereinafter, the time fixed for the performance by the Affected Party of its obligations affected by the Excusable Delay shall be equivalent to the time set out under this Agreement plus a grace period equivalent to the time lost further to the occurrence of and because of the Excusable Delay.   4.4 As soon as reasonably possible after the end of the Excusable Delay, the Affected Party shall give Notice to the Non-Affected Party that the Excusable Delay has ended.   4.5 If the Excusable Delay continues for more than [*****] as from the receipt by the Non-Affected Party of the Notice as per Clause 4.2, each Party shall be entitled to terminate this Agreement according to the terms of Clause 16.4 hereof.

  5. SERVICES AND OBLIGATIONS OF THE PARTIES

5.1 Services       [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 15/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   The Repairer shall provide the Company with the Services listed in Exhibit 2 (List of Services provided under this Agreement).   5.2 General conditions of the Services

  5.2.1 The Services shall comply with the applicable AMM, MRBR and MPD issued by ATR, as Aircraft manufacturer, and the relevant CMM in force as of the Signing Date, and with the EASA and/or FAA or ANAC regulations in force at the time of performance of such Services

  5.2.2 Should the AMM, MRBR or the MPD be modified in a manner that is likely to modify or impact the performance of the Services, the Parties hereby agree to negotiate in good faith the consequences of such modifications and impacts on this Agreement (including on the prices set out in Exhibit 14 Price conditions).



5.2.3 Audit of the Repair: Company shall have the right, under EUR OPS or PART M equivalent applicable regulation approval, to audit the management and the performance of the Services provided by the Repairer under this Agreement, subject to giving a [*****] prior Notice to the Repairer. The cost of any such audits by the Company's representative(s) shall be borne by the Company unless if, as a result of that audit, the Repairer is found to be in Default, in which cases the cost of such audit will be borne by the Repairer.     5.2.4 Company's audit: at any time during the Term, the Repairer may:     (i) audit the management and the performance of the Company's maintenance activities which are still under Company'sresponsibility; and/or,     (ii) arrange for operational visits, in order to check that the Company complies with its obligations under this Agreement; and/or,     (iii) investigate in any place, with the assistance of the Company, the causes of any abnormal removal or failure rate of any Itemand/or Abnormal Use.

The Repairer shall give a Notice to the Company no later than [*****] prior to such audit or operational visit.

The Company shall provide at no cost for the Repairer all necessary support to the Repairer's representative(s) and give access to:     (i) the Company's facilities or any other place where the Aircraft and/or any data or document related to Aircraft maintenance andoperations that the Repairer may require may be located; and,     (ii) the exact number of accumulated FH and Cycles for any Aircraft and Items operating or maintenance records.

Unless otherwise agreed between the Parties, any operational visit shall be conducted during the scheduled operations of the Aircraft and the Repairer or its representative(s) shall use its reasonable endeavors not to disrupt the Company's scheduled operations.

The cost incurred by the Repairer to conduct such audits and visits will be borne by the Repairer unless (i) a Company's Default (as defined in Clause 16 Termination) has occurred and/or (ii) as a result of that audit or visit, the Company is found to be in Default, in which cases the cost of such audit or operational visit will be borne by the Company .

The Repairer has no duty or obligation to perform any audit or operational visit and shall   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 16/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   not incur any obligation or liability if it does not perform any of its audit or operational visit rights referred to in this Clause 5.2.4.

The Repairer shall notify the Company of the outcome of any such audit or operational visit and of any remedial action that the Company shall perform to comply with its obligations under this Agreement. The Company shall carry out all such remedial actions within a mutually agreed time period , otherwise the Company shall be deemed in Default.

It is acknowledged and agreed that any audit or operational visit by the Repairer will be conducted by the Repairer for its own purposes in connection with this Agreement and the Repairer shall have no responsibility, liability or obligations with respect to the safety compliance with any AD, operation or, except as otherwise provided herein, maintenance of any Aircraft, all of which shall be the sole responsibility, liability and obligation of the Company.   5.3 Obligations of the Parties       5.3.1 Obligations of the Company

  5.3.1.1 As a counterpart to the terms and conditions (including pricing conditions) agreed between the Parties under this Agreement [*****]. In the event, the Company fails to do so, the Repairer shall be entitled to revise such terms and conditions in order to take into account such failure.     5.3.1.2 During the Term, the Company shall:     (i) operate and maintain the Aircraft in compliance with all applicable technical documentation and any otherinstructions issued by ATR and the OEM; and,     (ii) remove and install LRUs and Main Elements from and on Aircraft; and,

  (iii) comply with any AD, and order such incorporation or modifications from the Repairer; and consequently manage the update of Aircraft, LRUs and Main Elements mandatory or regulatory technical notices and log books and deliver to the Repairer a copy of such documentation upon each maintenance event or upon Repairer's request; and,     (iv) promptly inform the Repairer in case the Company or their insurer intends to attend any LRU or Main Element tear-down at the Repair Shop; and,

  (v) provide the Repairer not later than the tenth (10t h) Day of each Month with an activity report relating to each Aircraft and each Main Element serial number, and containing at least FH and Cycles performed during the preceding Month, the TSN, CSN, TSO, CSO, and the removals/installations events during such Month; and,     (vi) preserve the Aircraft, any Main Elements and/or any and all sub-assemblies in accordance with the AMM in caseany Aircraft is temporarily unused by the Company for any reason whatsoever.     5.3.2 Obligations of the Repairer

During the Term, the Repairer shall use its reasonable commercial endeavors, in accordance   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 17/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   with this Agreement:     (i) to carry out the Services pursuant to the Work Order(s) placed by the Company ; and,     (ii) to ensure that the Services provided to Company shall comply with EASA, FAA or ANAC regulations in force, as applicable     (iii) in the event of specific or exceptional circumstances affecting the Company or the Repairer, to obtain the assistance of anyone or several third Parties servicers or suppliers of spare parts, subject to the Company s prior approval; and     (iv) to administer LRUs and Main Elements warranty claims issued by the Company.

  6. DELIVERIES

The Delivery Location shall be one of the addresses set out in Clauses 6.1 and 6.2 hereafter as the context requires.   6.1 Items delivered by the Repairer to the Company

Unless otherwise set forth in this Agreement, the Repairer shall deliver to the Company:     6.1.1 any Item as relevant in accordance with Exhibits 8 (Lease of the Stock), , 11 (Main Elements Services) and 15 (Advanced PoolStock), [*****] and Packed at the following address:

ATR Customer Support C/O DHL Solutions ZA du Pont Yblon 95500 Bonneuil en France

And;

any Item from the List A of the Exhibit 6 (LRUs covered by repair and standard exchange services), as relevant in accordance with Exhibit 9 (Spare parts standard exchange Service) and Exhibit 10 (LRUs repair Service), [*****] and Packed at the following address:

ATR Customer Support C/O DHL Solutions ZA du Pont Yblon 95500 Bonneuil en France

And:

any Item from the List B of the Exhibit 6 (LRUs covered by repair and standard exchange services), as relevant in accordance with Exhibit 9 (Spare parts standard exchange Service) and Exhibit 10 (LRUs repair Service), [*****] and Packed at the following address:

Helibras - Helicópteros do Brasil - Air Bus Helicopters Rodovia Dom Pedro I - Km 87 - Pista Norte Condomínio Barão de Mauá - Atibaia - São Paulo   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 18/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   or at any other address the Repairer may from time to time notify to the Company.     6.1.2 Intentionally left blank     6.2 Items returned by the Company to the Repairer

The Company shall return to the Repairer:     6.2.1 any Item as relevant, in accordance with Exhibits 8 (Lease of the Stock), 11 (Main Elements Services) and 15 (Advanced PoolStock), [*****] and Packed at the following address:

ATR Customer Support C/O DHL Solutions ZA du Pont Yblon 95500 Bonneuil en France

And;

any Item from the List A of the Exhibit 6 (LRUs covered by repair and standard exchange services) as relevant in accordance with Exhibit 9 (Spare parts standard exchange Service) and Exhibit 10 (LRUs repair Service), [*****] and Packed at the following address:

ATR Customer Support C/O DHL Solutions ZA du Pont Yblon 95500 Bonneuil en France

And:

any Item from the List B of the Exhibit 6 (LRUs covered by repair and standard exchange services) as relevant in accordance with 9 (Spare parts standard exchange Service) and 10 (LRUs repair Service), [*****] and Packed at the following address:

Helibras - Helicópteros do Brasil - Air Bus Helicopters Rodovia Dom Pedro I - Km 87 - Pista Norte Condomínio Barão de Mauá - Atibaia - São Paulo

or at any other address the Repairer may from time to time notify to the Company.     6.2.2 Intentionally left blank    6.3 Nota fiscal reporting

Regarding the Items flow between the Stock and the Pool and vice et versa, as set forth under Clause 6 hereof, the Parties shall have the following obligations:     - From Stock to Pool: the Company shall issue in due time any necessary document or required by the Repairer, including the NotaFiscal which shall comprise full, accurate   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 19/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   and complete information (as further detailed here below) and be in a form and substance compliant with applicable laws and regulations.



- From Pool to Stock: subject to receipt from the Company of any necessary document or required by the Repairer as set forth here above, as relevant, the Repairer shall issue or have issued by third party in due time any necessary document or required by the Company in the frame of the Services, including the Nota Fiscal which shall comprise full, accurate and complete information (as further detailed here below) and be in a form and substance compliant with applicable laws and regulations. In addition, the Repairer shall provide or have provided by third party, a weekly reporting to the Company regarding the traceability of the Items and promptly answer to any request from the Company related thereto, in a form and substance in accordance with the form attached in Exhibit 18 (Nota fiscal reporting).

For the avoidance of doubt, each Nota Fiscal shall be established in compliance with the relevant CFOP code according to the latest revision of SINIEF (Sistema Nacional Integrado de Informações Econômico-Fiscais), the current version is 07/01, which shall notably comprise the following element:     - Seller of the goods: Name, address, contact information, Federal registration number, State Registration number   - Acquirer of the goods: Name, address, contact information, Federal registration number, State Registration number   - Transaction: type of transaction, nature of the transaction, transaction code, date of the transaction   - Product: description, code, quantity, value, serial number of the relevant Item   - Taxes : calculation basis, tax rate   - Other information: freight, insurance, other costs   - Additional information: in case of special taxation

  7. WORK ORDERS

During the Term, the Company shall use the appropriate Work Order form (Exhibit 7 Repairer Standard Work Order Forms), depending on the nature of the Service requested, and send the Work Order to the Repairer according to the notice details below or any other contact the Repairer may from time to time notify to the Company.       For any Services   ATR SPARES DISTRIBUTION DESK   requested in standard   Tel: (33) 5 62 21 60 80   conditions (including   Fax: (33) 5 62 21 62 80   routine and critical):   e-mail: spares.orders@atr.fr

    For any Services     A.O.G. DESK:   requested in AOG   Tel: (33) 5 62 21 62 00   conditions:   Fax: (33) 5 62 21 62 62     e-mail: aog.toulouse@atr.fr   8. INSURANCES

8.1 Without prejudice to any term and condition under this Agreement, the Company shall maintain in force, at all times during the Term and [*****], at its own costs and expenses, with insurers of internationally recognized   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 20/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   reputation reasonably acceptable to the Repairer, insurances in accordance with industry standards with respect to the undertakings of the Company in Clause 15 (Liability and Indemnity) of this Agreement including:     (i) Aircraft Hull and Spares All Risks Insurances (including, to the extent usually available war and allied perils); and,

  (ii) Comprehensive General Third Party Legal Liability and Aircraft Passengers and Third Party Legal Liability Insurance in respect of incidents involving Aircraft to the extent usually available, having a Combined Single Limit of not less than [*****] any one occurrence; and,     (iii) Employer's liability insurance; and,     (iv) Repairer's values to be insured, including:     - Lease of Stock (Exhibit 8 Clause 2.2) and Advanced Pool Service (Exhibit 15): the Items of the Stock shall be insured by theCompany under Spares All Risk Insurance for not less than the full replacement value; and,



- Main Elements Service (Exhibit 11): each Spare Main Element to be delivered by the Repairer to the Company shall be insured by the Company, for not less than its full replacement value, under the Hull Insurance when installed on the Aircraft in addition to the agreed value of such Aircraft and under the Spares All Risk Insurance while in Stock prior to attachment or following removal and replacement from the Aircraft, including transportation to and from the Company.   8.2 In respect of Hull and Spares All Risk Insurances, the Repairer shall be named as additional insured and loss payee for their respective rights and interests, to the extent required under Clause 15 (Liability and Indemnity) of this Agreement.   8.3 In respect of Liability Insurance, the Repairer shall be named as additional insured and loss payee, as relevant, to the extent required under Clause 15 (Liability and Indemnity), with severability of interest and confirmation that the Company policy shall be primary without right of contribution.   8.4 In respect of all of the above insurances to contain breach or warranty provisions and confirmation the policies shall not be cancelled or materially changed without [*****] prior written notice [*****] or such lesser period in respect of War and Allied Peril).   8.5 Any applicable deductible shall be borne by the Company with respect to the above insurances.   8.6 At the latest upon the Signing Date, the Company shall provide the Repairer with relevant insurance certificates, in English, evidencing insurance requirements of this Clause 8, in a form reasonably acceptable to the Repairer, to be attached to this Agreement in the Exhibit 17 (Insurance certificates).

Upon each renewal of the relevant insurance policies, the Company shall on reasonable request provide the Repairer with relevant insurance certificates in order to evidence insurance is maintained in accordance with this Clause 8. The Company also agrees to promptly pay each premium in respect of the aforesaid insurances and in the event of its failure to take out or maintain any such insurance then, without prejudice to any other rights it may have in respect of such failure, the Repairer may do so in its place and recover the cost   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 21/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   of doing so from the Company.

8.7 The Repairer shall at its own expense procure and maintain in force, with insurers of internationally recognized reputation acceptable to the Company an Aviation Liability insurance which should include:

  (i) Aviation Products Liability insurance: the Repairer shall maintain or shall cause its Subcontractors to maintain a Products Liability Insurance during the performance of the Services up to an amount not less than [*****] per occurrence and in the annual aggregate; and,     (ii) Hangar Keeper Liability insurance: the Repairer shall maintain or shall cause its Subcontractors to maintain during the performance ofthe Services an Hangar Keeper Liability Insurance in an amount of not less than [*****] any one occurrence.

The Repairer shall, at the latest upon the Signing Date, provide the Company with evidence of the insurance maintained in accordance with this Clause 8.7.

  9. WARRANTIES

Upon Delivery, and subject to the terms of this Agreement, including the disclaimers and limitations on liability set forth in such warranties and in Clause 14 (Disclaimer) of this Agreement, the Company shall be entitled to the benefit of the following warranties:     i) For new LRUs or Main Elements, the terms and conditions set into the related Vendor Warranty Manual and in ATR72-600 Aircraft inthe relevant clauses of the relevant Aircraft sale and purchase agreement, shall apply.

  ii) For used LRUs and Main Elements repaired and overhauled by the Repairer, the warranty period shall start on the date of Delivery and shall end [*****] thereafter, whichever occurs the earliest, and such warranty shall be subject to the exclusions of warranty set forth in Exhibit 10 (LRUs Repair Service) and in Exhibit 11 (Main Elements Services).

  10. PRICES

The Company shall pay to the Repairer the prices for the Services set out in Exhibit 14 (Price conditions).

  11. RECONCILIATION

11.1 Reconciliation: Every [*****] as from the Start Date and throughout the Term, the Parties will record the actual number of FH and Cycles [*****] of the preceding [*****] period, in order to reconcile (i) the amount effectively due to the Repairer with (ii) the total amount already paid by the Company , as relevant, as per Clause 12.1 (ii) hereafter, with respect of such period, as follows:     (i) In case the amount effectively due to the Repairer with respect of the number   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 22/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   of FH and Cycles accumulated during the considered [*****] period is higher than the total amount already paid by the Company for the said period, the Repairer shall then issue an additional invoice in an amount equal to the difference between these amounts, to be paid by the Company as per Clause 12 (Invoicing and payment terms); or,

  (ii) In case the amount effectively due to the Repairer with respect of the number of FH and Cycles accumulated during the considered [*****] period is lower than the total amount already paid by the Company for said period, the Repairer shall issue a credit in an amount equal to the difference between these amounts; and/or,

  (iii) In case MRR is above RRR, the Repairer shall invoice an amount equal to the price set out in Clauses 2.2 and 3 of the Exhibit 14 (Price conditions), multiplied by the Aircraft fleet FH accrued during the [*****] reference period, multiplied by the difference between the MRR and the RRR; or,

  (iv) In case MRR is less than RRR, the Repairer shall issue a credit in an amount equal to the price set out in Clauses 2.2 and 3 of the Exhibit 14 (Price conditions), multiplied by the Aircraft fleet FH accrued during the [*****] reference period, multiplied by the difference between the RRR and the MRR, with a maximum allowed difference of [*****].

Each reconciliation shall be independent and shall have no impact on any subsequent reconciliation and/or invoicing.   11.2 Final reconciliation: within [*****] as from the End Date and without prejudice to Clause 6 of Exhibit 14 (Price conditions) when applicable, a final reconciliation shall be performed by the Repairer as per this Clause 11 (Reconciliation).

Any Credit Note resulting from this final reconciliation and due by the Repairer to the Company shall be issued within [*****] as from the effective End Date, subject to Clause 11.3 of this Agreement.   11.3 Each time a Credit Note results from any reconciliation, the Repairer shall issue such Credit Note to the Company, provided that the Company, is not in Default.

  12. INVOICING AND PAYMENT TERMS

12.1 The Repairer shall invoice the Company:     (i) [*****]     (ii) [*****]     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 23/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   [*****]   [*****] [*****]   [*****]   [*****]   [*****] [*****]   [*****]   [*****]   [*****]   [*****] [*****]   [*****]   (iii) [*****]     (iv) [*****]     (v) [*****]     (vi) [*****]     (vii) [*****]     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 24/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

  (viii) [*****]     (ix) [*****]     (x) [*****]     (xi) [*****]   12.2 Unless otherwise set out herein, the Company shall pay all invoices issued by the Repairer pursuant to this Agreement, as follows:     (i) within thirty (30) Days from the date of issuance of the Repairer's invoice; and,   (ii) in US Dollars; and,   (iii) by SWIFT wire transfer; and,   (iv) to the following bank account :

NATIXIS PARIS 30 Avenue Pierre Mendès-France - 75013 PARIS - FRANCE Bank Code: [*****] Branch Code: [*****] Beneficiary: Avions de Transport Régional G.I.E. Bank Account: [*****] Key: [*****] IBAN Code: [*****]

or such other account as the Repairer may from time to time notify to the Company.

For the sake of clarity, the Repairer shall issue any invoice at least ten (10) Days before the first Day of the Month of reference for the Services.   12.3 Payments due to the Repairer herein shall be made in full, without set-off, counterclaim, deduction or withholding of any kind. Consequently, the Company shall procure that the sums received by the Repairer under this Agreement shall be equal to the full amounts expressed to be due to the Repairer herein, without deduction or withholding on account of and free from any and all Taxes (including all applicable sales, use, transfer and value added taxes and any tax required to be deducted or paid under the Laws of the country the Services are provided in respect of amounts paid by the Company to the Repairer), levies, imposts, dues or charges of whatever nature.   12.4 If any payment due to the Repairer (the Unpaid Amount) remains unpaid after the date on which it is payable (the Due Date), without prejudice to any other rights or remedies that it may have at Law and/or under this Agreement, the Repairer shall be entitled to charge interests on such overdue sum from the Due Date until the actual date of payment of such sum at a rate per annum equal to the aggregate of [*****], such interest being calculated on a monthly basis. In any case, such interest rate shall not be lower than the highest of the three (3) following rates:     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 25/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

  (i) [*****]     (ii) [*****]     (iii) [*****]

In addition to the foregoing, and in compliance with Article L441-6 of the French Commercial Code, the Company shall pay a minimum fixed sum of forty (40) euros for compensation of recovery costs and reimburse all costs and expenses (including legal costs) incurred by the Repairer in the collection of any Unpaid Amount.   12.5 Invoice dispute: any invoice disputed by the Company shall have to be issued by Notice duly documented to the Repairer within [*****] from the date of its issuance. For the sake of clarity, the undisputed portion of such invoice shall be paid pursuant to this Agreement. Any invoice not disputed by the Company within said [*****] period, shall be deemed to be accepted by the Company.

  13. SECURITY DEPOSIT

13.1 As per provisions of Clause 17 (Conditions precedent), and unless otherwise agreed by the Parties, the Company shall pay the Security Deposit to the Repairer in an amount equal to the aggregate of:     (i) [*****], as per Exhibit 14 (Price conditions); and,     (ii) [*****] of the value of the Stock.

For the sake of clarity, the global amount of Security Deposit payable at the time of the Signing Date shall be [*****].   13.2 Such Security Deposit shall be constituted either, as follows, at the option of the Company:     (i) a cash deposit by SWIFT wire transfer to the bank account indicated in Clause 12.2 (iv); or,

  (ii) one (1) LOC with a validity of at least [*****], acceptable to the Repairer acting reasonably. Such LOC shall be renewed and its confirmation extended, at the latest [*****] before the expiry of each previous LOC; all costs incurred as a result of the issuance and confirmation of the LOC shall be borne by the Company.

It is agreed that the Security Deposit must be available for the period ending [*****] after the Term; such Security Deposit shall be the property of the Repairer and shall be non-refundable except as set out in this Agreement.

Provided the Company is not in Default under this Agreement and/or any other agreement entered into between the Parties and subject to the prior written approval of the Repairer, the Company shall be entitled to substitute the LOC by a cash deposit, and vice et versa, subject to the terms of this Clause 13.   13.3 In the event that the LOC is not renewed or extended as per the terms of Clause 13.2 here above, the cash deposit shall become immediately due and payable and the Repairer shall be entitled to draw such LOC, in order for the Repairer to receive an amount equal to the Security Deposit.     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 26/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     13.4 If, during the Term, the Company is in Default under this Agreement or under any other agreement entered into between the Repairer and the Company, and without prejudice to any rights and remedies available at Law and/or under this Agreement, the Repairer shall be entitled to forthwith use, apply or retain all or any portion of the Security Deposit, in order to remedy such Default, including the failure to pay any due sums, the compensation or otherwise reimbursement of any sums which the Repairer may in its discretion advance or expend as a result of said failure.

If the Repairer so uses, applies or retains all or any portion of the Security Deposit, such use, application or retention shall not be deemed a cure or waiver of its rights hereunder and/or at Law as a consequence of any such Default, unless such use, application or retention has discharged in full the relevant sums then due and owed to the Repairer by the Company, and the Company shall voluntarily or promptly upon written demand provide to the Repairer additional security in an amount sufficient to restore the Security Deposit.   13.5 At the maximum at the end of the period of [*****] following the Term, (or such early date as the Company has made all payments due hereunder at the Repairer satisfaction), and provided that the Company is not in Default under this Agreement or any other agreement entered into between the Parties, the Repairer shall pay to the Company an amount equal to the balance of the Security Deposit, if any.

  14. DISCLAIMER

TO THE EXTENT PERMITTED BY LAW, THE TERMS AND CONDITIONS SET OUT IN THIS AGREEMENT SET OUT THE REPAIRER'S ENTIRE LIABILITY WITH RESPECT TO ALL GOODS AND SERVICES SUPPLIED HEREUNDER AND THE COMPANY AGREES THAT ALL OTHER CONDITIONS, WARRANTIES AND TERMS EXPRESSED OR IMPLIED BY LAW, STATUTE OR OTHERWISE, ARE HEREBY EXPRESSLY EXCLUDED.

  15. LIABILITY AND INDEMNITY

15.1 SUBJECT TO CLAUSE 15.2 BELOW, THE REPAIRER, SHALL NOT BE LIABLE TO THE COMPANY FOR ANY OF THE FOLLOWING TYPES OF LOSS OR DAMAGE ARISING UNDER OR IN RELATION TO THIS AGREEMENT (WHETHER ARISING FOR BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF STATUTORY DUTY, MISREPRESENTATION OR OTHERWISE):

[*****]

[*****]   15.2 NOTHING IN THIS AGREEMENT SHALL EXCLUDE OR RESTRICT ANY LIABILITY   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 27/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   OF THE REPAIRER FOR DEATH OR PERSONAL INJURY ARISING OUT OF NEGLIGENCE OR MISCONDUCT,, OR FOR ANY OTHER LIABILITY WHICH CANNOT BE EXCLUDED OR LIMITED BY LAW.   15.3 WITHOUT PREJUDICE TO CLAUSES 15.1 AND 15.2, THE COMPANY SHALL, EXCEPT IN CASE OF GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF THE REPAIRER, BE LIABLE FOR AND SHALL INDEMNIFY AND HOLD HARMLESS THE REPAIRER INDEMNIFIED PARTIES FROM AND AGAINST ALL LIABILITIES, CLAIMS, DAMAGES, LOSSES, SUITS, ACTIONS, PROCEEDINGS, JUDGEMENTS, COSTS AND EXPENSES INCIDENT THERETO (INCLUDING LEGAL EXPENSES AND ATTORNEY FEES INCIDENT THERETO OR INCIDENT TO SUCCESSFULLY ESTABLISHING THE RIGHT TO INDEMNIFICATION), FOR INJURY TO OR DEATH OF ANY PERSON AND/OR FOR LOSS OF OR DAMAGE TO ANY PROPERTY AND/OR FOR LOSS OF USE THEREOF ARISING (INCLUDING THE AIRCRAFT), CAUSED BY OR IN ANY WAY CONNECTED TO THE PERFORMANCE OF THIS AGREEMENT.

  16. TERMINATION

16.1 Termination events: without prejudice to any other rights under this Agreement and/or at Law, either Party shall be entitled to terminate all or part of this Agreement by Notice of termination, as per Clauses 16.4 (Termination procedure) and 16.6 (Consequences of termination), in the following events:



a) Insolvency: the other Party becomes insolvent or goes into liquidation or ceases paying its debts as they fall due or makes an assignment for the benefit of creditors or if such Party being a limited Company passes a resolution for its winding up or if a petition for its winding up is presented or it files for protection from its creditors under any applicable Law relating to bankruptcy or insolvency or any analogous event in any jurisdiction shall take place; and/or     b) Default: the other Party is in Default and does not remedy the same within [*****], or such extended period granted by the non-defaulting Party, from Notice of default specifying the failure and requiring the remedy of such, from the non-defaulting Party.

For the purpose of this Clause 16.1.b), will be deemed as material obligations under this Agreement, without the following being exhaustive:     (i) the compliance by the Company with any of its payment obligations;     (ii) the compliance by the Company with the provisions of Clause 17 (Conditions precedent) of this Agreement;     (iii) the operation by the Company of at least one (1) Aircraft;

  (iv) the use by the Company of any Item, delivered by the Repairer to the Company pursuant to Exhibits 8 (Lease of the Stock), 9 (Spare parts standard exchange Service), 10 (LRU repair Service), 11 (Main Elements Services) and 15 (Advanced Pool Stock) exclusively on Aircraft and to benefit of the Parties;     (v) the return by the Company to the Repairer of any unserviceable Item which should be exclusively removed from an Aircraft;     (vi) the compliance by the Repairer with its Delivery obligations;     (vii) the compliance by the Parties with any of the insurance obligations as per Clause 8 (Insurances) of this Agreement;     (viii) the compliance by either Party with any other of its obligations which by its   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 28/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     nature and/or context is intended to be material.     c) Excusable Delay: an Excusable Delay event lasting for more than [*****] in accordance with Clause 4.5 of this Agreement.   16.2 Left intentionally blank     16.3 Suspension procedure: notwithstanding the terms of Clause 16.4 below, in the event of a Company's Default as per Clause 16.1.b), the Repairer shall be entitled to suspend all or part of this Agreement by way of Notice of suspension which shall specify:     (i) the Services for which such suspension shall be immediately effective until such Company's Default is corrected; and     (ii) that any pending Work Order and/or placed as from the Notice of suspension will be provided upon specific commercial proposalsubject to Payment In Advance procedure (and/or any additional conditions to be agreed upon by the Parties, as relevant).

For the sake of clarity, such Notice of suspension shall not be construed as a waiver by the Repairer of its rights regarding (i) the obligation of the Company to perform each and every of its obligations under this Agreement and/or (ii) the right of the Repairer to enforce each and every of such Company's obligations and/or (iii) the right of the Repairer to terminate this Agreement, as per this Clause 16 (Termination) of this Agreement.   16.4 Termination procedure: to the fullest extent permitted by Law and/or under this Agreement, the termination of all or part of this Agreement, for any reason whatsoever, as per Clauses 3 (Duration and renewal) and 16 (Termination), shall become effective as from the receipt by the relevant Party of a Notice of termination from the other Party, or any other period to be granted by such other Party, without it being necessary to take any further action or to seek any consent from the relevant Party or any court having jurisdiction.

The right of a Party to terminate all or part of this Agreement as per this Clause 16 shall be without prejudice to its other rights and remedies available at Law and/or under this Agreement to seek termination of all or part of this Agreement before any court having jurisdiction, following arbitration proceedings consistent with Clause 24 (Governing law and arbitration) of this Agreement.

In case of termination of part of this Agreement, the Notice of termination shall specify the Services that shall be terminated on the date of such termination.

Any Work Order placed prior to the termination of all or part of this Agreement shall remain valid, provided that (i) any sum due by the Company to the Repairer under the Agreement and/or any other agreement between (i) the Repairer and (ii) the Company has been paid and (ii) when applicable, the Company having paid in advance the relevant Work Order price.

In the cases set forth within Clause 16.1.b) above, the non-defaulting Party shall be entitled to proceed by appropriate court action or actions, following arbitration proceedings consistent with Clause 24 (Governing law and arbitration) of this Agreement., to enforce performance of this Agreement, and/or to recover damages, without incurring any liability whatsoever and without prejudice to any other rights it may have at Law and/or under this Agreement, and specifically its right to terminate all or part of this Agreement.   16.5 Early termination fee: subject to not being in breach of any of its obligation under the Agreement, the Company may terminate this Agreement for convenience by way of Notice of termination; the Agreement shall be then terminated following a [*****] period as from   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 29/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   the receipt of such Notice by the Repairer or any other lesser period to be granted by the Repairer.

Notwithstanding this Clause 16 (Termination), upon receipt of such Notice of termination and without prejudice to any rights it may have at Law, the Repairer shall invoice to the Company an early termination fee equivalent to [*****], which shall be paid within [*****] as from the issuance date of the said invoice and/or set off against any outstanding or due payment to the Company, at the Repairer's discretion.

  16.6 Consequences of termination

  16.6.1 Upon the End Date and without prejudice to any right that either Party may have at Law and/or under this Agreement [notably as perClause 13 (Security Deposit)], the termination and/or expiry of the Agreement shall have the following consequences:



a) Payment and reimbursement: subject to the provision of reasonable documentary evidence, any outstanding and/or due amounts by either Party to the other Party under this Agreement shall be promptly paid, and any and all legal fees and out- of-pocket expenses of the Party which terminates this Agreement for the other Party's Default including stamp, documentary, registration or other like duties, taxes or any charges incurred and/or in connection with enforcing, perfecting, protecting or preserving (or attempting to enforce, perfect, protect or preserve) any of its rights, or in suing for or recovering any sum, under this Agreement shall be forthwith reimbursed; and/or,     b) Return of the Items: the Repairer shall be entitled, in accordance with the terms and conditions of this Agreement, includingClause 6 (Deliveries), to:



(i) direct the Company to forthwith return the Items (excluding the Stock which, for the sake of clarity, shall be treated as per terms and conditions of Clause 6 (Return of the Stock) of the Exhibit 8 and Clause 7 (Purchase or return of the Advanced Pool Stock) of the Exhibit 15 to the address hereafter and/or any other address the Repairer may notify from time to time to the Company: [*****] and/or;     (ii) repossess the Items and the Company agrees that the Repairer may enter onto the Company's premises where suchItems may be located; and/or,     (iii) carry out any work, repair, re-certification, overhaul or replacement required to put such Items in serviceablecondition.

In any case under this Clause 16.6.1.b) (Return of the Items), the Company shall forthwith reimburse and pay any Loss incurred and/or suffered by the Repairer.     c) Termination for Default: in addition to the provisions of Clause 16.6.1.a) and b) here above, the defaulting Party shallindemnify and/or pay any Loss the other Party may sustain and/or incur as a result of such Default.

  d) In addition to the provisions of Clause 16.6.1.a) and b) and 16.6.1.c) here above, in the event the Repairer terminates the Agreement further to the occurrence of the event set out in Clause 16.1.b) (iii), the Company shall indemnify and/or pay for any Loss the   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 30/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     Repairer may sustain and/or incur as a result of such termination     16.6.2 Mitigation

In case of termination of all or part for any reason whatsoever and/or expiry of this Agreement, either Party shall use reasonable endeavours to mitigate its Loss (to the extent within its control to do so), but it shall not be obliged to consult with the other Party concerning any proposed course of action or to notify such other Party of the taking of any particular action.

  17. CONDITIONS PRECEDENT

The Repairer's obligations under this Agreement shall be subject to each of the following conditions precedent having been met (or expressly waived by the Repairer) to the Repairer's satisfaction at the latest the [*****] Day from the Signing Date:     (ii) the Security Deposit being available as per Clause 13 (Security Deposit);and,     (iii) a statement signed by a duly authorized officer of AZUL recording the status (serial number, TSN, TSO, CSN, CSO, as applicable) ofeach Main Element as of the Signing Date; and,     (iv) a fully executed original of this Agreement;     (v) the phase-in as per Clause 5 of the Exhibit 14 (Price conditions).

  18. EXPORT CONTROL

The Company warrants that the Items, the Aircraft and Services shall be used for commercial purposes only, and shall be used and/or re- exported (where relevant) in compliance with all export control laws and regulations (hereinafter referred to as Export Laws), including those applicable to parts and components of the Items and the Aircraft. The Company acknowledges that the Repairer's obligations under this Agreement are subject to all such Export Laws, and that the Repairer shall in no event be liable in the event that the performance by the Repairer of any of its obligations under this Agreement is affected or impaired by Export Laws.

  19. NOTICES

No Notice shall be deemed to have been duly given by a Party to the other unless addressed as follows or to such other place or Person as the Parties may respectively designate in writing.

The Repairer shall be addressed at:

AVIONS DE TRANSPORT REGIONAL, G.I.E. 1, allée Pierre Nadot 31712 Blagnac CEDEX France

Attention:  Mr Cyril DUPUY

 E-mail: cyril.dupuy@atr.fr

Fax +00 33 5 62 21 67 40     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 31/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   The Company shall be addressed at:     AZUL

  Avenida Marcos Penteado de Ulhoa Rodrigues, 939, Castello Branco Office - Park - Torre Jatobá - 9° andar - CEP 06460-040 - Alphaville Industrial, Barueri, SaoPaulo, Brazil   Attention   Evandro Braga de Oliveira-   :   Technical officer     E-mail: evandro.oliveira@voeazul.com.br       Fax   55 11 4134-9890

  20. CONFIDENTIALITY

20.1 Confidentiality obligations

Unless otherwise provided in this Agreement, any Confidential Information released by either of the Parties (the Disclosing Party) to the other Party (the Receiving Party) shall not be released in whole or in part to any third party.

In particular, the Receiving Party undertakes:     - to keep the Confidential Information strictly confidential, not to deliver, disclose or publish it to any third party including subsidiarycompanies and companies having an interest in its capital, except as otherwise agreed in writing by the Disclosing Party;

  - to use the Confidential Information solely for the purpose of this Agreement and except as otherwise expressly agreed in writing by theDisclosing Party, not to use the same or permit its use for any other purpose;



- to disclose the Confidential Information only to those of its direct employees having a need to know such Confidential Information in order to make permitted use thereof, after having beforehand clearly informed such employees of the strictly confidential nature of the Confidential Information and caused them to observe said conditions of confidentiality. The Receiving Party shall be responsible for the correct performance of said obligations of confidentiality by its employees and shall keep up to date the list of its personnel, to whom Confidential Information is communicated, which list shall be made available to the Disclosing Party at its request;   - not to duplicate the Confidential Information nor to copy or reproduce the same beyond the purpose of the Agreement;

  - not to disclose Confidential Information to any third party, unless such third party is acting at the instruction of the Receiving Party and such disclosure is reasonably necessary to accomplish the purpose of the Agreement, provided however, that prior to any such disclosure both of the following conditions are satisfied:

  (i) each of such third parties, shall have signed an acknowledgement to keep such Confidential Information as strictly confidential;and,

  (ii) the Receiving Party shall have obtained written prior approval of the Disclosing Party of such proposed disclosure, whichapproval may be not unreasonably withheld or delayed.

  - promptly notify the Disclosing Party if a disclosure of Confidential Information is required by a Government Entity or by Law and to useall reasonable effort to assist the Disclosing Party in limiting such disclosure to the extent permitted by Law;

  - upon discovery of any disclosure of Confidential Information, regardless of whether such discovery is intentional or inadvertent, the Receiving Party shall promptly notify the Disclosing Party and take all reasonable actions (i) to retrieve the disclosed Confidential Information, (ii) to destroy any unauthorized copies thereof and (iii) to   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 32/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version     stop further disclosure.   20.2 Non application of confidentiality obligations

The obligations of Receiving Party with respect to Confidential Information as set forth in this Clause 20.1 above shall not be applicable to information which:     (a) upon the Signing Date was part of the public domain or became part of the public domain after the disclosure, other than by a violationof the Agreement or any other non-disclosure agreement or the applicable Law of any jurisdiction; or     (b) was already lawfully known by the Receiving Party, as evidenced by written records bearing an unquestionable date, prior the SigningDate by the Disclosing Party and was unrestricted; or     (c) was lawfully disclosed to the Receiving Party subsequently to the signature of the Agreement by a third party which had not receivedthe same directly or indirectly from the Disclosing Party and that such disclosure does not violate any non-disclosure agreement.   20.3 Permitted disclosure of Confidential Information

Notwithstanding any provision to the contrary in the Agreement, the Receiving Party shall be entitled to disclose Confidential Information if required to do so:     (a) by order of a court or government agency of competent jurisdiction; or     (b) by any applicable Law,

provided, however, that prior to making such disclosure, the Receiving Party shall if possible advise the Disclosing Party of the circumstances requiring such disclosure in order to afford the Disclosing Party sufficient advance notice to permit to raise any objections that it may deem appropriate.   20.4 Disclosing Party's proprietary rights

Any Confidential Information shall remain the property of the Disclosing Party. The Agreement shall not be construed as granting or conferring to the Receiving Party, either expressly or by implication, any license or proprietary interest in or to any Confidential Information nor any right of use beyond the purpose of this Agreement.

The Repairer, its Affiliates and/or its Subcontractors as applicable shall remain the exclusive owner of any intellectual property right related to the Services including: design of the LRUs, Main Elements, job cards, task cards, operating manual or industrial process, as relevant. No title to or other ownership interest in the Confidential Information is transferred except as specifically stated in the Agreement, and the Receiving Party hereby expressly disclaims any such rights or interests.

The Receiving Party hereby acknowledges and recognises that Confidential Information is protected by copyright Laws and related international treaty provisions, as the case may be.     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 33/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     20.5 For the sake of clarity, and for the purpose of this Clause 20 and this Agreement, any of the receiving Party's Affiliates and their Subcontractors shall not be considered as third party and shall be entitled to have access to any Confidential Information disclosed by the disclosing Party in connection with this Agreement.   20.6 This Clause 20 shall survive termination or expiry of this Agreement for a period of five (5) years following such End Date.

  21. TAXES

The prices set out in this Agreement [*****] and the [*****] shall not be required to pay and the [*****] shall bear, any present or future Taxes in any country of the Delivery [*****] pursuant to the requirements of this Agreement including the following:     i) Taxes levied on goods imported into or services to be delivered under this Agreement; and,     ii) Taxes levied on materials, equipment, tools and documentation imported temporarily which are required for the performance of thisAgreement; and,     iii) Taxes levied in Company's country for goods or services delivered by the Repairer to the Company; and,     iv) Value added taxes, sales tax, services tax, or any similar taxes imposed in any country, on goods or services delivered to the Company.

In the event any of the Items above are levied upon the [*****], the [*****] shall promptly issue a Notice to the [*****]. The [*****], within [*****] of receipt of such notification from the [*****] shall either cause the charge to be waived or pay the charges directly. For those Items above that the [*****] is required by Law to pay, the [*****] shall charge the [*****] and the [*****] shall reimburse the [*****] in an amount which leaves the [*****] in the same economic situation as if such payment of charges and reimbursement thereof had not been required.

If the Company is required by Law to make a withholding of taxes on the payments due to the Repairer under this Agreement, the Company shall gross up the payment so that the payment received by the Repairer after such withholding tax shall be the same amount of the prices described herein.

For sake of clarity, the Repairer shall bear income tax assessed on the Repairer's income and net profits in its country.

For Items delivered by the Repairer to the Company, the final customs clearance on flow between any Repairer's Affiliate located abroad and warehouse located in Brazil, as notably set forth in Clause 6, shall be borne by the Company. Customs duties, IPI, ISS, ICMS and other similar taxes shall be paid by the Company.

In addition, the Company shall provide the Repairer with the << import declarations >> pertaining to any import activities performed by the Company.

  22. ASSIGNMENT

There are no beneficiaries of this Agreement other than the Parties hereto and their Affiliates and Subcontractors to the extent provided herein.     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 34/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   This Agreement shall be binding on the successors and permitted assignees of the Parties hereto.



a) This Agreement has been entered into between the Parties in consideration of and based on characteristics specific to the Parties. Consequently either this Agreement or any of the respective rights or obligations of the Parties hereunder may be assigned or otherwise transferred, in whole or in part, in any form whatsoever (including by way of change of Control), by either Party subject to the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed, and any attempt to do so without such consent shall be null and void.     b) Notwithstanding the above:



(i) the Parties may at any time assign or transfer all or part of its rights and obligations under this Agreement to any of its Affiliates provided that such assignment or transfer is previously notified to the other Party. In such event, any reference in this Agreement to the assigning Party shall be deemed to constitute a reference to the assignee with respect to the part of this Agreement that is assigned; and,

  (ii) nothing in this Agreement shall in any way restrict any change in shareholding or control of the Parties or its Affiliates or the Repairer's rights to delegate obligations of it hereunder to a Subcontractor. provided that, in such case, the Repairer will remain responsible for the provision of the Services in accordance with the terms of this Agreement.

provided such assignment or transfer, change in shareholding or control has no material adverse effect on any of the Company's rights and obligations under this Agreement.

  23. MISCELLANEOUS

23.1 The time stipulated in this Agreement for all payments by the Company to the Repairer under this Agreement shall be of the essence.   23.2 Survival: notwithstanding anything to the contrary stated in this Agreement, no termination or expiry of this Agreement shall affect the following rights or obligations of any Party hereto:     (a) with respect to any payment hereunder actually owed by either Party to the other under this Agreement prior to the End Date; and/or,

  (b) pursuant to Clauses 2 - Definitions and interpretation, 4 - Excusable Delay, 8 - Insurances, 9 - Warranties, 14 - Disclaimer, 15 - Liability and indemnity, 16 - Termination, 20 - Confidentiality, 23.2 - Survival, 23.5 - No waiver, 23.8 - Severability, and 24 - Governing law and arbitration; and/or,     (c) pursuant to any other provisions of this Agreement that, by their nature and context, are intended to survive termination of thisAgreement.   23.3 Representations: each Party represents to the other Party that:     23.3.1 It is a legal entity duly incorporated and validly existing under the laws of the jurisdiction indicated in this Agreement;     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 35/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

  23.3.2 The entering into and performance by it of its obligations in this Agreement are within its corporate powers and have been duly authorized by all necessary corporate action and are not in violation of any applicable Law or documents, and do not require the consent or approval of, or registration or filing with, any Government Entity other than those already obtained or effected;     23.3.3 The signatory executing this Agreement on such Party's behalf has been vested with the necessary authority and power to enterinto this Agreement on its behalf;     23.3.4 This Agreement constitutes the Parties' legal, valid and binding obligation;     23.3.5 Subject to Clause 20 (Confidentiality), it will furnish all information relating to the provisions of the Services hereunder reasonablyrequired by the other Party and/or any Government Entity;   23.4 Left intentionally blank     23.5 No waiver: the failure by either Party to enforce at any time any of the provisions of this Agreement, or to require at any time the performance by the other Party of any of the provisions hereof, shall not be construed to be a waiver of such provisions, nor in any way affect the validity of this Agreement or any part thereof, or the right of such Party thereafter to enforce each and every such provision.   23.6 Independent contractors: neither Party is the representative or agent of the other Party for the purposes of this Agreement and nothing herein shall be construed as authorizing either Party to act as the other Party's representative or agent. Notwithstanding any other provisions of this Agreement, this Agreement shall not be construed as a joint venture, partnership, agency, incorporation or business association. Each Party hereto shall remain an independent contractor.   23.7 Amendments: this Agreement shall only be varied or amended by a written document duly signed by duly authorized representatives of both Parties. Notwithstanding the foregoing, Exhibit 1 (List of ATR aircraft covered under this Agreement) and the Pool may be amended from time to time by the Repairer by way of Notice sent to the Company, unless, for LRU's reference suppression/replacement, the Company does not agree the same by way of Notice within [*****] as from the receipt date of the said Notice from the Repairer, in compliance with this Agreement and provided that it has no material economic impact to the Company.   23.8 Severability: if any term or provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms and provisions hereof shall remain in full force and effect, and the Parties shall negotiate in good faith in order to modify this Agreement with a provision having substantially the same legal and commercial effect as the severed provision.   23.9 Entire Agreement: this Agreement constitutes the entire agreement between the Parties and supersedes and replaces all prior discussions, representations, understandings or agreements whether verbal or written, between the Parties hereto or their agents with respect to or in connection with the subject matter hereto, save and except for the provisions of any agreements which by their nature or wording are intended to remain in full force and effect (including pre-existing confidentiality or non-disclosure undertakings not otherwise covered herein). No other documents and agreements, including either Party's standard terms and conditions, whether existing or future, will apply between the Parties with respect to the subject matter of this   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 36/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   Agreement, unless where otherwise expressly provided for in this Agreement.

Each Party acknowledges that, in entering into this Agreement, it has not relied on, and shall have no right or remedy (other than for breach of contract) in respect of any statement, representation, insurance or warranty (whether made negligently or innocently) other than as expressly set out in this Agreement.

Nothing in this Clause shall limit or exclude any liability of either Party arising out of its pre-contract fraudulent misrepresentation or fraudulent concealment.   23.10Language: the Parties declare that they have requested and hereby confirm their express wish that this Agreement and any and all related documents be drawn up in the English language (or, if not in English, with a certified English translation).   23.11Costs and expenses: except where this Agreement provides otherwise, each Party shall pay its own costs relating to the negotiation, preparation, execution and implementation of this Agreement and of any document related hereto.   23.12Counterparts: this Agreement shall be signed in several counterparts, each of such counterparts so signed shall constitute an original, and all counterparts together shall constitute a single instrument. Any executed version delivered via facsimile transmission or electronic mail (PDF format) shall be binding to the same extent as an original. Any Party who delivers such an executed version agrees to subsequently deliver an original counterpart to any Party that requests it.   23.13Publicity and public announcements: the Parties shall not make public announcements, press releases and/or advertise on the signature and/or the existence of this Agreement (but not its contents) without the prior written consent of the other Party.

The Repairer is entitled to use the Company's name and associated logos as a business reference for its marketing activities in relation with the Services, provided such use (i) has no adverse impact on, such as but not limited to, Company's reputation and image and (ii) complies with graphic design policy of the Company.   23.14Company's audited financial statements: during the Term of this Agreement, the Company undertakes to provide promptly the Repairer with (i) its audited financial statements and (ii) any other financial information it shall request, acting reasonably, for each relevant financial year. It is hereby agreed that any such information shall be prepared in accordance with the applicable accounting policies.   23.15For the sake of clarity and transparency, the Services to be provided under this Agreement by the Repairer will not involve the transfer of know-how to the Company by no means whatsoever. The Services shall be performed without the presence of any Company's technician and no technical report shall be delivered by the Repairer in connection therewith (except if expressly required by the Company, as foreseen on Clause 23.3.5).

  24. GOVERNING LAW AND ARBITRATION

24.1 Governing law: Pursuant to and in accordance with Section 5-1401 of the New York General Obligations Law, the Parties hereto agree that this Agreement in all respects, and any claim or cause of action based upon or arising out of this Agreement, or any dealing between the Parties   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 37/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   relating to the subject matter of this Agreement or the transactions contemplated hereby or the Company/Repairer relationship being established, shall be governed by, and construed in accordance with, the laws of the State of New York, U.S.A. as applied to contracts to be performed wholly within the State of New York (Exclusive of Section 7-101 of the New York General Obligations Law which is inapplicable to this Agreement).   24.2 Arbitration: in the event of a dispute arising out of or relating to this Agreement, including without limitation disputes regarding the existence, validity or termination of this Agreement (a Dispute), either Party may notify such Dispute to the other through service of a written notice (the Notice of Dispute). The Parties shall make their reasonable endeavours to settle the Dispute amicably by a committee composed of one (1) management representative of each Party (the Representatives). Such committee shall be created by the Parties within [*****] from the date of receipt of the Notice of Dispute.



24.2.1 Subject to sub-Clause 24.2.5 below and in the event the Representatives (i) fail to create such committee or (ii) do not agree on an amicable settlement within [*****] from the date the committee referred to in this sub-Clause 24.2 has been created or such longer period as may be agreed upon in writing by the Representatives (the Amicable Settlement Period), the Dispute shall be exclusively and finally settled under the Rules and Conciliation of Arbitration of the International Chamber of Commerce (the ICC) by an arbitral tribunal composed of three (3) arbitrators; each Party shall then appoint one (1) arbitrator within [*****] from the last day of the Amicable Settlement Period and the third arbitrator, who will act as President, will be appointed by the other two (2) arbitrators. In case the two (2) arbitrators appointed by the Parties do not agree on this choice with [*****] from the date the last arbitrator is appointed, the third arbitrator will be appointed by the ICC Court.

  24.2.2 The arbitration, and any proceedings, and meetings incidental to or related to the arbitration process, shall take place in New York, U.S.A, and the language to be used in the arbitral proceedings shall be English; arbitral award shall be final and binding upon the Parties.



24.2.3 The arbitration shall be kept confidential and the existence of the proceeding and any element of it shall not be disclosed to any third party. Any information relating to and/or documents generated for the purpose of or produced in the arbitration, including any awards, shall remain confidential between the Parties, the arbitrators and any other Person involved in the arbitration proceedings, except to the extent that disclosure may be required pursuant to any order of court or other competent authority or tribunal, or to protect or pursue a legal rights or to enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority.     24.2.4 During any period of negotiation or arbitration, the Parties shall continue to meet their respective obligations in accordance with theprovisions of the Agreement.     24.2.5 Notwithstanding any provision of this Clause 24.2 the Parties may, at any time, seek and decide to settle a Dispute either throughdirect negotiations or in accordance with the ICC rules in respect of the alternative dispute resolution.   24.3 Judgment upon any award may be entered in any court having jurisdiction or application may be made to the court for a judicial recognition of the award or an order of enforcement, as the case may be.   24.4 Recourse to jurisdictions is expressly excluded except as provided for in the ICC Rules of Conciliation and Arbitration concerning Conservatory and Interim measures.     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 38/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 39/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   EXECUTION PAGE

This Agreement has been executed in two (2) original copies in the English language on the Signing Date.   On behalf of:     On behalf of:     AZUL LINHAS AÉREAS BRASILEIRAS   AVIONS DE TRANSPORT REGIONAL (Company)     (Repairer)     Signed by:   /s/ Amir Nasruddin   Signed by:   /s/ Massimo Castorina       Function:   Attorney in fact   Function:   Vice-President Commercial             Product Support & Services     AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 40/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 1 - LIST OF ATR AIRCRAFT COVERED UNDER THIS AGREEMENT

[*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 41/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   [*****]

This list may be amended from time to time by way of Notice sent to the Company by Repairer in order to cover any further ATR aircraft entering the Company's fleet, including the airframe, engines, propellers and landing gears and parts installed on the Aircraft, when solely operated by the Company.

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 42/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 2 - LIST OF SERVICES PROVIDED UNDER THIS AGREEMENT

The Repairer shall provide the Company with the following Services:

[*****]

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 43/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 3 - MAIN ELEMENTS COVERED UNDER THE AGREEMENT

[*****]

Part number of each assembly and subcomponent to be provided by the Company.

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 44/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 4 - LIST OF LANDING GEAR ON CONDITION PARTS

[*****]

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 45/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 5 - STOCK

The following Exhibit is composed of sixteen (16) pages, into which are listed [*****] part numbers.   [*****]   DESCRIPTION   [*****] [*****]   EXCHANGER-HEAT,DUAL   [*****] [*****]   CONDENSER   [*****] [*****]   COOLING UNIT   [*****] [*****]   VALVE-TURBINE INLET CONTROL   [*****] [*****]   FLIGHT DATA ACQUISITION UNIT   [*****] [*****]   FLIGHT GUIDANCE CONTROL PANEL   [*****] [*****]   AUTO PILOT SERVO-ACTUATOR   [*****] [*****]   AUTO PILOT CAPSTAN   [*****] [*****]   CVR-SOLID STATE   [*****] [*****]   CONTROL UNIT-CVR   [*****] [*****]   AUDIO CONTROL PANEL   [*****] [*****]   AMPLIFIER-PASSENGER ADDRESS   [*****] [*****]   STARTER GENERATOR-DC   [*****] [*****]   CONTROL UNIT-GENERATOR,AC   [*****] [*****]   CONTROL UNIT-BUS POWER,AC   [*****] [*****]   CONTACTOR-ACW   [*****] [*****]   ATTENDANT PANEL   [*****] [*****]   ATTENDANT PANEL   [*****] [*****]   ATTENDANT PANEL USB KEY   [*****] [*****]   HANDLE-ENG1 FIRE   [*****] [*****]   ROD-DYNAMOMETRIC,ROLL   [*****] [*****]   SWITCH UNIT-FLAP CONTROL   [*****] [*****]   ACTUATOR-ELEVATOR   [*****] [*****]   ACTUATOR-TRIM   [*****] [*****]   VALVE BLOCK-FLAP   [*****] [*****]   RESTRICTOR-FLAP VLV BLOCK FLOW, EXTN LINE   [*****] [*****]   ACTUATOR-STICK PUSHER   [*****] [*****]   VALVE BLOCK-SPOILER   [*****] [*****]   SHAKER-STICK   [*****] [*****]   ACTUATOR-SPOILER   [*****] [*****]   CABLE-TENSION REGULATOR   [*****] [*****]   COUPLING-REFUEL/DEFUEL   [*****] [*****]   CONTROLLER-HORN ANTI ICING   [*****] [*****]   RESISTOR-HORN ANTI ICING,LH ELEVATOR  [*****] [*****]   RESISTOR-HORN ANTI-ICING,RH ELEVATOR   [*****] [*****]   RESISTOR-HORN ANTI-ICING,RUDDER   [*****] [*****]   RESISTOR-HORN ANTI ICING,LH AILERON   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 46/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   RESISTOR-HORN ANTI ICING,RH AILERON   [*****] [*****]   VALVE-DE ICING DUAL DISTRIBUTOR   [*****] [*****]   PROBE-CCAS ALPHA   [*****] [*****]   ACCELEROMETER-THREE AXIS   [*****] [*****]   TRANSMITTER-POSITION SYNCHRO   [*****] [*****]   RESERVOIR-BRAKE   [*****] [*****]   CYLINDER-MASTER   [*****] [*****]   VALVE-SELECTOR,LG   [*****] [*****]   ACCUMULATOR-PARKING   [*****] [*****]   ABSORBER-SHOCK   [*****] [*****]   VALVE-PARKING   [*****] [*****]   VALVE-BRAKE   [*****] [*****]   VALVE-RELIEF,LOW PRESSURE   [*****] [*****]   VALVE-BRAKE   [*****] [*****]   VALVE-DIFFERENTIAL CONTROL   [*****] [*****]   SELECTOR   [*****]   BOX-UPLOCK   [*****] [*****]   FLUX VALVE   [*****] [*****]   VALVE-FEED STOP   [*****] [*****]   PUMP-PROPELLER FEATHERING   [*****] [*****]   PUSH-PULL CABLE-PROP CONDITION   [*****] [*****]   PUMP GOVERNOR-PROPELLER   [*****]   OVERSPEED   [*****] [*****]   EXCITER—IGNITION I.C.   [*****] [*****]   EJECTOR, FUEL WASTE   [*****] [*****]   SERVO VALVE   [*****] [*****]   FUEL PUMP   [*****] [*****]   PUSH-PULL CABLE-PROPELLER POWER   [*****] [*****]   ACTUATOR-OIL COOLER FLAP   [*****] [*****]   COOLER-OIL   [*****] [*****]   REFERENCE UNIT-ATTITUDE AND HEADING   [*****] [*****]   GROUND COOLING FAN   [*****] [*****]   SMOKE DETECTOR   [*****] [*****]   TOTAL [*****]   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 47/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   CONTROLLER-DIGITAL   [*****] [*****]   COOLING UNIT   [*****] [*****]   FAN-AIR EXTRACTION   [*****] [*****]   VALVE-ELECTROPNEUMATIC OUTFLOW   [*****] [*****]   VALVE-PACK FLOW CONTROL   [*****] [*****]   VALVE-PNEUMATIC OUTFLOW   [*****] [*****]   VALVE-SHUTOFF TURBOFAN   [*****] [*****]   VALVE-TRIM AIR   [*****] [*****]   VALVE-TURBINE INLET CONTROL   [*****] [*****]   COUPLER HF ANTENNA   [*****] [*****]   ECU-3000   [*****] [*****]   HANDSET-CABIN ATTENDANT   [*****] [*****]   MANAGEMENT UNIT-ACARS   [*****] [*****]   TRANSCEIVER-HF   [*****] [*****]   VHF/COMM TRANSCEIVER   [*****] [*****]   VHF-4000-8,33 KHZ   [*****] [*****]   CONTROL UNIT-BUS POWER,DC   [*****] [*****]   CONTROL UNIT-GENERATOR,DC   [*****] [*****]   GENERATOR-AC   [*****] [*****]   SENSOR-HALL EFFECT   [*****] [*****]   STATIC INVERTER   [*****] [*****]   TRANSFORMER RECTIFIER UNIT   [*****] [*****]   TRANSMITTER-EMERGENCY LOCATOR   [*****] [*****]   DETECTOR UNIT   [*****] [*****]   HANDLE-ENG2 FIRE   [*****] [*****]   ACTUATOR-FLAP   [*****] [*****]   DAMPER-RUDDER   [*****] [*****]   REFUEL CONTROL PANEL   [*****] [*****]   INDICATOR LEVEL SWITCH   [*****] [*****]   PUMP-ELECTRIC,AC   [*****] [*****]   DETECTOR-ICE   [*****] [*****]   VALVE-ANTI ICING PRESS REG AND   [*****]   SHUTOFF   [*****] [*****]   VALVE-ANTI ICING SHUTOFF   [*****] [*****]   VALVE-DE ICING DUAL DISTRIBUTOR   [*****] [*****]   CLOCK   [*****] [*****]   DIGITAL FLIGHT DATA RECORDER   [*****] [*****]   EFIS CONTROL PANEL LH SIDE   [*****] [*****]   EFIS CONTROL PANEL RH SIDE   [*****] [*****]   INDEX CONTROL PANEL   [*****] [*****]   INTEGRATED AVIONICS DISPLAY   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 48/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   MPC-ED36   [*****] [*****]   MULTIFUNCTION COMPUTER   [*****] [*****]   MULTI-FUNCTION CONTROL PANEL   [*****] [*****]   MULTIPURPOSE CONTROL & DISPLAY UNIT   [*****] [*****]   SENSOR-WHEEL SPEED   [*****] [*****]   VALVE-DIFFERENTIAL CONTROL SELECTOR   [*****] [*****]   VALVE-SELECTOR,SWIVEL   [*****] [*****]   EMERGENCY LIGHTING POWER SUPPLY MODULE   [*****] [*****]   LIGHT-ANTICOLLISION,WHITE   [*****] [*****]   LIGHT-ANTI COLLISION,RED   [*****] [*****]   LIGHT-LANDING   [*****] [*****]   LIGHT-STROBE   [*****] [*****]   POWER SUPPLY-UNIT ANTI COLLISION LIGHT   [*****] [*****]   POWER SUPPLY-UNIT ANTI COLLISION LIGHT   [*****] [*****]   AIR DATA COMPUTER   [*****] [*****]   ATC TRANSPONDER   [*****] [*****]   ATTITUDE HEADING REF UNIT   [*****] [*****]   FLUX VALVE   [*****] [*****]   INTEGRATED ELEC STAND-BY EQUIP   [*****] [*****]   INTERROGATOR-DME   [*****] [*****]   NAVIGATOR PROCESSOR UNIT (GPS RECEIVER)   [*****] [*****]   PROBE-AIR TEMPERATURE   [*****] [*****]   PROBE-PITOT   [*****] [*****]   RADIO-ALTIMETER TRANSCEIVER   [*****] [*****]   RECEIVER-VOR/ILS/MKR   [*****] [*****]   T2CAS COMPUTER   [*****] [*****]   TRANSCEIVER-WEATHER RADAR   [*****] [*****]   VOR/ILS/MKR RECEIVER   [*****] [*****]   WX RADAR CONTROL PANEL   [*****] [*****]   TRANSMITTER/REGULATOR—OXYGEN PRESS   [*****] [*****]   DUCT-DISCHARGE DOWNSTREAM VALVE   [*****] [*****]   VALVE ASSY-SHUTOFF   [*****] [*****]   VALVE-XFEED,AIR BLEED   [*****] [*****]   CAC SWM   [*****] [*****]   CORE AVIONICS CABINET I/P O/P MODULE AP   [*****] [*****]   CORE AVIONICS CABINET I/P O/P MODULE-S  [*****] [*****]   CORE AVIONICS CABINET I/P O/P MODULE- DC   [*****] [*****]   INTEGRATED CORE PROCESSING   [*****]   MODULE   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 49/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   PROPELLER BLADES   [*****] [*****]   PROPELLER ASSEMBLY   [*****] [*****]   BRUSH BLOCK ASSY   [*****] [*****]   CONTROL ELECTRONIC-PROPELLER   [*****] [*****]   GOVERNOR-PROPELLER OVERSPEED   [*****] [*****]   MODULE VALVE PROPELLER   [*****] [*****]   SWITCH-PRESSURE,HYDRAULIC   [*****] [*****]   PIPE-EXHAUST   [*****] [*****]   TRANSMITTER-FUEL FLOW   [*****] [*****]   ENGINE ELECTRONIC CONTROL   [*****] [*****]   SENSOR TORQUE METER   [*****] [*****]   VALVE ASSY,INTERCOMPRESS BLEED   [*****] [*****]   VALVE INTERCOMPRESSOR BLEED   [*****]   MFC   [*****] [*****]   CONTROL,AUTOFEATHER   [*****] [*****]   COOLER - OIL   [*****] [*****]   FLOW DIVIDER & DUMP VALVE   [*****] [*****]   FUEL HEATER   [*****] [*****]   TOTAL [*****]   [*****]   [*****]   DESCRIPTION   [*****] [*****]   COOLING UNIT   [*****] [*****]   EXCHANGER-HEAT,DUAL   [*****] [*****]   VALVE-PACK FLOW CONTROL   [*****] [*****]   VALVE-PNEUMATIC OUTFLOW   [*****] [*****]   VALVE-TRIM AIR   [*****] [*****]   VALVE-TURBINE INLET CONTROL   [*****] [*****]   AMPLIFIER-PASSENGER ADDRESS   [*****] [*****]   AUDIO CONTROL PANEL   [*****] [*****]   COUPLER HF ANTENNA   [*****] [*****]   CVR-SOLID STATE   [*****] [*****]   REMOTE CONTROL AUDIO UNIT   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 50/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   TRANSCEIVER-HF   [*****] [*****]   CONTROL UNIT-BUS POWER,AC   [*****] [*****]   CONTROL UNIT-BUS POWER,DC   [*****] [*****]   CONTROL UNIT-GENERATOR,AC   [*****] [*****]   CONTROL UNIT-GENERATOR,DC   [*****] [*****]   GENERATOR-AC   [*****] [*****]   INVERTER-STATIC   [*****] [*****]   SENSOR-HALL EFFECT   [*****] [*****]   STARTER GENERATOR-DC   [*****] [*****]   TRANSMITTER-EMERGENCY LOCATOR   [*****] [*****]   DETECTOR-SMOKE   [*****] [*****]   ACTUATOR-TRIM   [*****] [*****]   VALVE BLOCK-FLAP   [*****] [*****]   VALVE BLOCK-SPOILER   [*****] [*****]   PUMP-FUEL ELECTRIC   [*****] [*****]   PUMP-ELECTRIC,AUXILIARY,DC   [*****] [*****]   DETECTOR-ICE   [*****] [*****]   VALVE-DE ICING DUAL DISTRIBUTOR   [*****] [*****]   MULTIFUNCTION COMPUTER   [*****] [*****]   PROBE-CCAS ALPHA   [*****] [*****]   BOX-UPLOCK   [*****] [*****]   CONTROL UNIT-ANTISKID SYSTEM   [*****] [*****]   SENSOR-WHEEL SPEED   [*****] [*****]   VALVE-SELECTOR,SWIVEL   [*****] [*****]   EMERGENCY LIGHTING POWER SUPPLY MODULE   [*****] [*****]   LIGHT-ANTICOLLISION,WHITE   [*****] [*****]   LIGHT-LANDING   [*****] [*****]   LIGHT-STROBE   [*****] [*****]   POWER SUPPLY UNIT-STROBE LIGHT   [*****] [*****]   PROBE-PITOT   [*****] [*****]   TRANSMITTER/REGULATOR - OXYGEN PRESS   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 51/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   DUCT-DISCHARGE DOWNSTREAM VALVE   [*****] [*****]   VALVE ASSY-SHUTOFF   [*****] [*****]   VALVE-HP AIR BLEED   [*****] [*****]   VALVE-HP AIR BLEED   [*****] [*****]   VALVE-XFEED,AIR BLEED   [*****] [*****]   PUMP-PROPELLER FEATHERING   [*****] [*****]   SWITCH-PRESSURE,HYDRAULIC   [*****] [*****]   PIPE-EXHAUST   [*****] [*****]   TRANSMITTER-FUEL FLOW   [*****] [*****]   PUSH-PULL CABLE-PROPELLER POWER   [*****] [*****]   ACTUATOR-OIL COOLER FLAP   [*****] [*****]   COOLER-OIL   [*****] [*****]   BRAKE, PROPELLER   [*****] [*****]   EXCITER—IGNITION I.C.   [*****] [*****]   EJECTOR, FUEL WASTE   [*****] [*****]   COOLER - OIL   [*****] [*****]   SERVO VALVE   [*****] [*****]   VALVE INTERCOMPRESSOR BLEED   [*****] [*****]   FUEL HEATER   [*****] [*****]   FUEL PUMP   [*****] [*****]   TOTAL [*****]   [*****]   [*****]   DESCRIPTION   [*****] [*****]   PROPELLER ASSY   [*****] [*****]   PROPELLER ASSY   [*****] [*****]   MULTIFONCTION COMPUTER   [*****] [*****]   PROPELLER ASSY   [*****] [*****]   MFC   [*****] [*****]   MFC   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 52/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   BRAKE, PROPELLER   [*****] [*****]   BRAKE, PROPELLER   [*****] [*****]   AIR DATA COMPUTER   [*****] [*****]   STARTER GENERATOR-DC   [*****] [*****]   BLADE PROPELLER   [*****] [*****]   TRANSCEIVER-TCAS   [*****] [*****]   BRAKE, PROPELLER   [*****] [*****]   BRAKE, PROPELLER   [*****] [*****]   MODULE VALVE PROPELLER   [*****] [*****]   MODULE VALVE PROPELLER   [*****] [*****]   ACTUATOR-NOSE   [*****] [*****]   FCU-HYDRO MECHANICAL   [*****] [*****]   ELECTRONIC ENGINE CONTROL UNIT   [*****] [*****]   COMPUTER-AFCS   [*****] [*****]   REMOTE CONTROL AUDIO UNIT   [*****] [*****]   REMOTE CONTROL AUDIO UNIT   [*****] [*****]   TRANSCEIVER-RADIO ALTIMETER   [*****] [*****]   GROUND PROXIMITY WARNING   [*****]   COMPUTER   [*****] [*****]   VALVE-HP AIR BLEED   [*****] [*****]   INDICATOR-VERTICAL SPEED   [*****] [*****]   GENERATOR-AC   [*****] [*****]   COOLER-OIL   [*****] [*****]   REMOTE CONTROL AUDIO UNIT   [*****] [*****]   VALVE-DIFFERENTIAL CONTROL   [*****]   SELECTOR   [*****] [*****]   VALVE INTERCOMPRESSOR BLEED   [*****] [*****]   FLIGHT DATA ACQUISITION UNIT   [*****] [*****]   FLIGHT DATA ACQUISITION UNIT   [*****] [*****]   FLIGHT DATA ACQUISITION UNIT   [*****] [*****]   ACTUATOR-MAIN   [*****] [*****]   ACTUATOR-MAIN RH   [*****] [*****]   ADVISORY DISPLAY UNIT-AFCS   [*****] [*****]   VALVE ASSY-P2.5,P3 AIR PRESS.VALVE   [*****] [*****]   CONDENSER   [*****] [*****]   TRANSFORMER RECTIFIER UNIT   [*****] [*****]   CONTROL,AUTOFEATHER   [*****] [*****]   VALVE BLOCK-FLAP   [*****] [*****]   VALVE BLOCK-FLAP   [*****] [*****]   FUEL HEATER   [*****] [*****]   ACTUATOR-MAIN   [*****] [*****]   PROBE-CCAS ALPHA   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 53/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   PROBE-CCAS ALPHA   [*****] [*****]   COUPLER-HF ANTENNA   [*****] [*****]   GOVERNOR-PROPELLER OVSP   [*****] [*****]   DUCT-DISCHARGE DOWNSTREAM VALVE   [*****] [*****]   CONTROLLER-DIGITAL   [*****] [*****]   RECEIVER-VOR/ILS/MKR   [*****] [*****]   FUEL PUMP   [*****] [*****]   VALVE-ELECTROPNEUMATIC OUTFLOW   [*****] [*****]   MOUNT ANTENNA-WEATHER RADAR   [*****] [*****]   PUMP, HYDRAULIC, OVSP GOV   [*****] [*****]   CONTROL ELECTRONIC-PROPELLER   [*****] [*****]   BOBBIN   [*****] [*****]   DATA COLLECTION UNIT   [*****] [*****]   PUMP-ELECTRIC,AC   [*****] [*****]   TRANSCEIVER-HF   [*****] [*****]   RESISTOR-HORN ANTI ICING,LH   [*****]   ELEVATOR   [*****] [*****]   RESISTOR-HORN ANTI-ICING,RH   [*****]   ELEVATOR   [*****] [*****]   ACTUATOR-CARGO DOOR   [*****] [*****]   INTERROGATOR-DME   [*****] [*****]   INDICATOR-CAB PRESS   [*****] [*****]   VALVE-ANTI ICING PRESS REGULATOR AND SHUTOFF   [*****] [*****]   VALVE-SELECTOR,SWIVEL   [*****] [*****]   SOLID STATE FLIGHT DATA RECORDER   [*****] [*****]   ANTENNA-TCAS   [*****] [*****]   CONTROL PANEL-AFCS   [*****] [*****]   PUMP-ELECTRIC,AUXILIARY,DC   [*****] [*****]   TRANSCEIVER-VHF   [*****] [*****]   ASSISTER-FREE FALL,MLG   [*****] [*****]   CONTROLLER-INSTRUMENT REMOTE   [*****] [*****]   COUPLER HF ANTENNA   [*****] [*****]   SEAT-DISABLED PASSENGER,RH   [*****] [*****]   SEAT-DISABLED PASSENGER,LH   [*****] [*****]   CONTROLLER-INSTRUMENT REMOTE   [*****] [*****]   DAMPER-RUDDER   [*****] [*****]   BAR ASSY-TORQUE   [*****] [*****]   HANDLE-ENG1 FIRE   [*****] [*****]   HANDLE-ENG2 FIRE   [*****] [*****]   INDICATOR-TAS/TEMP   [*****] [*****]   CONTROL PANEL-EFIS   [*****] [*****]   PROBE-AIR TEMPERATURE   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 54/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   SENSOR-HALL EFFECT   [*****] [*****]   HANDSET-CABIN ATTENDANT   [*****] [*****]   JOINT   [*****] [*****]   INDICATOR-FUEL FLOW/FUEL USED,KG   [*****] [*****]   CLOCK   [*****] [*****]   VALVE-SELECTOR,LG   [*****] [*****]   HOCKMOUNT-AFT LATERAL,RH   [*****] [*****]   EXCITER-IGNITION I.C.   [*****] [*****]   SENSOR TORQUE METER   [*****] [*****]   SENSOR TORQUE METER   [*****] [*****]   INDICATOR-FUEL QUANTITY,KG   [*****] [*****]   INDICATOR-FUEL QUANTITY,KG   [*****] [*****]   VALVE-DE ICING DUAL DISTRIBUTOR   [*****] [*****]   MASK ASSY-REGULATOR,OXYGEN   [*****] [*****]   CONTROL BOX-WEATHER RADAR   [*****] [*****]   DETECTOR UNIT   [*****] [*****]   TRANSCEIVER-VHF   [*****] [*****]   VALVE-DE ICING DUAL DISTRIBUTOR   [*****] [*****]   BATTERY-MAIN   [*****] [*****]   ACCELEROMETER-THREE AXIS   [*****] [*****]   PUMP-PROPELLER FEATHERING   [*****] [*****]   MOTOR-WIPER,F/O   [*****] [*****]   MOTOR-WIPER,CAPTAIN   [*****] [*****]   INDICATOR-PRESSURE,TRIPLE   [*****] [*****]   ACTUATOR-UNLOCKING,MLG   [*****] [*****]   PANEL-ATTENDANT   [*****] [*****]   SENSOR, TORQUE MONITOR   [*****] [*****]   INDICATOR-ITT   [*****] [*****]   CONTROL UNIT-TCAS   [*****] [*****]   SWITCH-PROXIMITY   [*****] [*****]   SERVO VALVE   [*****] [*****]   SWITCH-PROXIMITY   [*****] [*****]   VALVE-REFUEL/DEFUEL   [*****] [*****]   SWITCH-OVERTEMPERATURE   [*****] [*****]   CYLINDER-MASTER   [*****] [*****]   INDICATOR-AIRSPEED,STANDBY   [*****] [*****]   COMPENSATOR-COLD JUNCTION   [*****] [*****]   COMPENSATOR-COLD JUNCTION   [*****] [*****]   TRANSMITTER-FUEL FLOW   [*****] [*****]   COMPENSATOR-COLD JUNCTION   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 55/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   TANK-FUEL DRAIN AND EJECTOR PUMP   [*****] [*****]   EJECTOR, FUEL WASTE   [*****] [*****]   SENSOR-WHEEL SPEED   [*****] [*****]   CONTROL UNIT-DUAL ATC   [*****] [*****]   LEVER-CONTROL,L/G   [*****] [*****]   CONTROL UNIT-OVEN   [*****] [*****]   INDICATOR-ITT   [*****] [*****]   CLOCK   [*****] [*****]   CLOCK   [*****] [*****]   CONTROL UNIT-VHF   [*****] [*****]   VALVE-FLUX   [*****] [*****]   LIGHT-STROBE   [*****] [*****]   CONTROL UNIT-VOR/ILS/DME   [*****] [*****]   CONTROL UNIT-ADF   [*****] [*****]   SWITCH-PRESSURE   [*****] [*****]   MASK ASSY-REGULATOR,OXYGEN   [*****] [*****]   FLOW DIVIDER & DUMP VALVE   [*****] [*****]   TRANSMITTER-EMERGENCY LOCATOR   [*****] [*****]   INDICATOR-OIL TEMP/PRESS   [*****] [*****]   VALVE-TWO WAY AND WATER DRAIN   [*****] [*****]   SWITCH-PROXIMITY   [*****] [*****]   CONTACTOR-ACW   [*****] [*****]   SWITCH-PROXIMITY   [*****] [*****]   ACTUATOR-OIL COOLER FLAP   [*****] [*****]   LIGHT-LANDING   [*****] [*****]   EMERGENCY LIGHTING POWER SUPPLY MODULE   [*****] [*****]   SWITCH-OVERTEMPERATURE   [*****] [*****]   SWITCH-PRESSURE,HYDRAULIC   [*****] [*****]   VALVE-CHECK   [*****] [*****]   PROBE-PITOT   [*****] [*****]   INDICATOR-FUEL TEMPERATURE   [*****] [*****]   ANTENNA-RADIO-ALTIMETER RECEPTION  [*****] [*****]   CONTROL UNIT-ATC   [*****] [*****]   CONTROL UNIT-VHF   [*****] [*****]   STATIC INVERTER   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 56/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   EXCHANGER-HEAT,DUAL   [*****] [*****]   TRANSCEIVER-TCAS   [*****] [*****]   PLAYER-CASSETTE   [*****] [*****]   CONTROLLER-WINDSHIELD TEMPERATURE   [*****] [*****]   FAN-GROUND COOLING   [*****] [*****]   FAN-RECIRCULATION   [*****] [*****]   TOTAL [*****]   [*****]   [*****]   DESCRIPTION   [*****] [*****]   AUTO PILOT CAPSTAN   [*****] [*****]   AUTO PILOT SERVO-ACTUATOR   [*****] [*****]   FLIGHT GUIDANCE CONTROL PANEL   [*****] [*****]   VHF/COMM TRANSCEIVER   [*****] [*****]   POWER TRIM BOX   [*****] [*****]   CLOCK   [*****] [*****]   DIGITAL FLIGHT DATA RECORDER   [*****] [*****]   EFIS CONTROL PANEL LH SIDE   [*****] [*****]   EFIS CONTROL PANEL RH SIDE   [*****] [*****]   INDEX CONTROL PANEL   [*****] [*****]   INTEGRATED AVIONICS DISPLAY   [*****] [*****]   MPC-ED36   [*****] [*****]   MULTI-FUNCTION CONTROL PANEL   [*****] [*****]   MULTIPURPOSE CONTROL & DISPLAY UNIT   [*****] [*****]   AIR DATA COMPUTER   [*****] [*****]   ATC TRANSPONDER   [*****] [*****]   ATTITUDE HEADING REF UNIT   [*****] [*****]   FLUX VALVE   [*****] [*****]   INTEGRATED ELEC.STAND-BY EQUIP   [*****] [*****]   INTERROGATOR-DME   [*****] [*****]   NAVIGATOR PROCESSOR UNIT (GPS RECEIVER)   [*****] [*****]   RADIO-ALTIMETER TRANSCEIVER   [*****] [*****]   RECEIVER-VOR/ILS/MKR   [*****] [*****]   T2CAS COMPUTER   [*****] [*****]   WX RADAR CONTROL PANEL   [*****] [*****]   CAC SWM   [*****] [*****]   CORE AVIONICS CABINET INPUT OUPUT MODULE AUTO PILOT   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 57/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   CORE AVIONICS CABINET INPUT OUPUT MODULE-DC   [*****] [*****]   CORE AVIONICS CABINET INPUT OUTPUT MODULE-S   [*****] [*****]   INTEGRATED CORE PROCESSING MODULE   [*****] [*****]   PRINTER   [*****] [*****]   ICP 110VM   [*****] [*****]   ICP 111VM   [*****] [*****]   ICP 111VM   [*****] [*****]   ICP 112VM   [*****] [*****]   ICP 114VM   [*****] [*****]   ICP 131VM   [*****] [*****]   ICP 131VM   [*****] [*****]   ICP 132VM   [*****] [*****]   ICP 400VM   [*****] [*****]   ICP 401VM   [*****] [*****]   ICP 402VM   [*****] [*****]   ICP 404VM   [*****] [*****]   ICP 6VM   [*****] [*****]   ICP 811VM   [*****] [*****]   CENTRAL MAIN INSTRUMENT   [*****] [*****]   PANEL LIGHT   [*****] [*****]   LIGHT MANAGEMENT UNIT   [*****] [*****]   TCAS DIRECTIONAL ANTENNA   [*****] [*****]   TOTAL [*****]   [*****]   [*****]   DESCRIPTION   [*****] [*****]   T2CAS Computer   [*****] [*****]   T2CAS Computer   [*****] [*****]   TOTAL [*****]   [*****]   [*****]   DESCRIPTION   [*****] [*****]   PROBE-PITOT   [*****] [*****]   EJECTION DUCT   [*****] [*****]   BUS POWER CONTROL UNIT   [*****] [*****]   BATTERY-EMERGENCY   [*****] [*****]   AFTER ROLLER BLIND   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 58/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   OXYGEN CYLINDER ASSY   [*****] [*****]   DIGITAL FLT DATA RECORDER   [*****] [*****]   ATTITUDE HEADING REF UNIT   [*****] [*****]   PCMCIA   [*****] [*****]   POWER SUPPLY UNIT   [*****] [*****]   FUSELAGE GROUND LIGHT   [*****] [*****]   EMERGENCY POWER SUPPLY   [*****] [*****]   INTERCOMPRESSOR BLEED VALVE   [*****] [*****]   BATTERY-MAIN   [*****] [*****]   MOTOR AND PUMP ASSEMBLY   [*****] [*****]   FIRE EXTINGUISHER   [*****] [*****]   TRIM INDICATOR   [*****] [*****]   AISLE MARKING EMERGENCY   [*****] [*****]   INTERTURBINE TEMP.INDICATOR   [*****] [*****]   INTERTURBINE TEMP.INDICATOR   [*****] [*****]   PROPELLER SPEED INDICATOR   [*****] [*****]   VHF/COMM TRANSCEIVER   [*****] [*****]   STANDBY ALTIMETER   [*****] [*****]   AIR DATA COMPUTER   [*****] [*****]   AIRSPEED INDICATOR   [*****] [*****]   REFUEL CONTROL PANEL   [*****] [*****]   ELECTRONIC ENGINE   [*****]   CONTROL   [*****] [*****]   VHF/COMM CONTROL PANEL   [*****] [*****]   T2CAS COMPUTER   [*****] [*****]   FWD SIDE LH ISOLATOR   [*****] [*****]   EFIS CONTROL PANEL RH   [*****] [*****]   EFIS CONTROL PANEL LH   [*****] [*****]   INDEX CONTROL PANEL   [*****] [*****]   INTEGRATED CORE PROCESSING MOD   [*****] [*****]   PROPELLER VALVE MODULE   [*****] [*****]   REMOTE CONTROL AUDIO UNIT   [*****] [*****]   REMOTE CONTROL AUDIO UNIT   [*****] [*****]   LP CHECK VALVE   [*****] [*****]   MPC   [*****] [*****]   EMERGENCY LOCATOR BEACON   [*****] [*****]   EMERGENCY POWER SUPPLY   [*****] [*****]   PRESSURE REG & S/O VALVE   [*****] [*****]   PRESSURE REG & S/O VALVE   [*****] [*****]   HALL EFFECT CURRENT   [*****] [*****]   TOTAL [*****]   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 59/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   TRIM ACTUATOR   [*****] [*****]   T.I.C. VALVE   [*****] [*****]   AIR CYCLE UNIT   [*****] [*****]   LP CHECK VALVE   [*****] [*****]   DUAL DISTRIBUTOR VALVE   [*****] [*****]   HALL EFFECT CURRENT   [*****]   [*****]   DESCRIPTION   [*****] [*****]   AUTO PILOT SERVO-ACTUATOR   [*****] [*****]   EXCHANGER   [*****] [*****]   CHECK VALVE   [*****] [*****]   PRESSURE REG AND S/O VALVE   [*****] [*****]   PRESSURE REG AND S/O VALVE   [*****] [*****]   INTEGRATED CORE PROCESSING MOD   [*****] [*****]   TOTAL [*****]   [*****]   [*****]   DESCRIPTION   [*****] [*****]   VALVE BLOCK-FLAP   [*****] [*****]   DUCT-DISCHARGE DOWNSTREAM VALVE   [*****] [*****]   DUCT-DISCHARGE DOWNSTREAM VALVE   [*****] [*****]   VALVE-SELECTOR,SWIVEL   [*****] [*****]   VALVE-SELECTOR,SWIVEL   [*****] [*****]   JOINT   [*****] [*****]   LIGHT-LANDING   [*****] [*****]   ICP 112VM   [*****] [*****]   ICP 114VM   [*****] [*****]   TCAS DIRECTIONAL ANTENNA   [*****] [*****]   TCAS DIRECTIONAL ANTENNA   [*****] [*****]   SERVO VALVE   [*****] [*****]   TOTAL [*****]   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 60/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   PROBE-PITOT   [*****]

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 61/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 6 - LRUs COVERED BY REPAIR AND STANDARD EXCHANGE SERVICES

The following Exhibit is composed of eight (8) pages, into which are listed [*****] part numbers.     1. List A

The following list of LRUs contains [*****] part numbers.   [*****]   Description [*****]   WATER EXTRACTOR [*****]   AIR CYCLE UNIT [*****]   DIGITAL CONTROLLER [*****]   CONDITIONED AIR CHECK VALVE [*****]   REGULATOR-PRESSURE [*****]   PRESSURE REG AND S/O VALVE [*****]   BUTTERFLY MODULATING VALVE [*****]   CHECK VALVE [*****]   CHECK VALVE [*****]   PRESSURIZATION INDICATOR [*****]   DUAL TEMPERATURE INDICATOR [*****]   CONTROLLER-TEMP [*****]   OVERTEMP. SWITCH [*****]   VLV-U/FLOOR ISOL/VEN [*****]   CONDENSER [*****]   CONTROLLER-MANUAL [*****]   VLV-SHUTOFF TURBOFAN [*****]   TEMPERATURE CONTROL VALVE [*****]   RECIRCULATION FAN ASSY [*****]   GROUND COOLING FAN [*****]   E/E COOLING FAN [*****]   AMBIANT PRESSURE UNIT [*****]   UNDER FLOOR VALVE [*****]   GND OUTFLOW VALVE [*****]   ROD-DYNAMOMETRIC ELE [*****]   ROD-DYNAMOMTRC RUDDR [*****]   FORCE DETECTOR ROD [*****]   ROD-DYNAMOMETRIC ELE [*****]   AP.SERVO ACTUATOR [*****]   ADVISORY DISPLAY [*****]   AUTOPILOT COMPUTER [*****]   AUTOPILOT COMPUTER [*****]   AP/FD CONTROL PANEL [*****]   FLIGHT GUIDANCE CONTROL PANEL [*****]   FLIGHT GUIDANCE CONTROL PANEL [*****]   FLIGHT GUIDANCE CONTROL PANEL   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 62/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   Description [*****]   AUTO PILOT SERVO-ACTUATOR [*****]   CAPSTAN [*****]   DIGITAL PLAYER [*****]   MONITOR [*****]   COCKPIT VOICE RECORDER [*****]   VHF/COMM TRANSCEIVER [*****]   DUAL SYSTEM ADAPTER [*****]   HF/COMM TRANSCEIVER [*****]   AUTOMATIC ANTENNA COUPLER [*****]   HF/COMM CONTROL PANEL [*****]   AUTOMATIC ANTENNA COUPLER [*****]   HF/COMM TRANSCEIVER [*****]   VHF/COMM TRANSCEIVER [*****]   VHF/COMM TRANSCEIVER [*****]   VHF COMM TRANSCEIVER [*****]   VHF-4000-8,33 KHZ [*****]   VHF 4000 [*****]   MANAGEMNT UNIT-ACARS [*****]   VHF/COMM CONTROL PANEL [*****]   VHF/COMM CONTROL PANEL [*****]   ATTENDANT HANDSET [*****]   ATTENDANT HANDSET [*****]   ATTENDANT HANDSET [*****]   SELECTION PNL-SELCAL [*****]   REMOTE CONTROL AUDIO UNIT [*****]   REMOTE CONTROL AUDIO UNIT [*****]   REMOTE CONTROL AUDIO UNIT [*****]   PASSENGER ADDRESS AMPLIFIER [*****]   SELCAL DECODER [*****]   STATIC INVERTER [*****]   TRANSFORMER RECTIFIER UNIT [*****]   GENERATOR CONTROL UNIT [*****]   HALL EFFECT CURRENT [*****]   CURRENT TRANSFORMER [*****]   BATTERY CH/DISCH.AMMETER [*****]   GENERATOR CONTROL UNIT [*****]   ELEC.POWER MESURING ASSY [*****]   BUS POWER CONTROL UNIT [*****]   AC.CONTACTOR [*****]   TRANSFORMER RECTIFIER UNIT [*****]   DC CONTACTOR [*****]   EMERGENCY LOCATOR BEACON [*****]   TOILET-PSU [*****]   EMERGENCY LOCATOR BEACON   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 63/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   Description [*****]   LF.FIRE-SHUT-OFF CTL.PANEL [*****]   RH.FIRE-SHUT-OFF CTL.PANEL [*****]   FIRE DETECTION CONTROL UNIT [*****]   FAN SMOKE DETECTION [*****]   SMOKE DETECTOR [*****]   DETECTION BOX [*****]   CONTROL BOX [*****]   SMOKE DETECTOR [*****]   SMOKE DETECTOR [*****]   POSITION TRANSMITTER [*****]   RELEASABLE CENTRING UNIT [*****]   CABLE TENSION REGULATOR [*****]   FLAPS POSITION INDICATOR [*****]   FLAPS POSITION INDICATOR [*****]   TRIM INDICATOR [*****]   TRIM INDICATOR [*****]   SHAFT-FLEXIBLE [*****]   FLAP CONTROL SWITCH UNIT [*****]   ELECTROMECHANICAL ACTUATOR [*****]   STICK PUSHER [*****]   FLAP VALVE BLOCK [*****]   SPOILER VALVE BLOCK [*****]   ALPHA PROBE [*****]   POWER TRIM BOX [*****]   RUDDER DAMPER [*****]   RESTRICTOR UNIT [*****]   RESTRICTOR UNIT [*****]   RUDDER DAMPER [*****]   FLAP ACTUATOR [*****]   FLAP ACTUATOR [*****]   STICK SHAKER [*****]   AILERON GUST-LOCK ACTUATOR [*****]   SPOILER ACTUATOR [*****]   FIRE SHUT-OFF VALVE [*****]   CROSSFEED VALVE [*****]   MOTIVE FLOW VALVE [*****]   ACTUATOR-FUEL LP VLV [*****]   ACTUATOR-FUEL CROSSF [*****]   GRAVITY FILLER CAP [*****]   FUEL TANK TEMP.INDICATOR [*****]   FUEL CONTROL UNIT [*****]   REFUEL CONTROL PANEL [*****]   FUEL QUANTITY REPEATER [*****]   FUEL QUANTITY INDICATOR   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 64/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   Description [*****]   FUEL QUANTITY INDICATOR [*****]   FUEL PROBE(N1) [*****]   FUEL QUANTITY PRESELECTOR [*****]   FUEL QUANTITY PRESELECTOR [*****]   CLINOMETER-ROLL ATT [*****]   FUEL ELECTROPUMP [*****]   FUEL ELECTROPUMP [*****]   JET PUMP [*****]   ENGINE FEED JET PUMP [*****]   FUEL PUMP CANISTER [*****]   REFUEL/DEFUEL COUPLING [*****]   REFUELLING ASSEMBLY [*****]   REFUELLING ASSEMBLY [*****]   RESERVOIR [*****]   LINE ACCUMULATOR [*****]   PRESSURE MODULE [*****]   LOW LEVEL SWITCH [*****]   AC MOTOR DRIVEN PUMP [*****]   DC HYDRAULIC PUMP [*****]   TRIPLE INDIC [*****]   ICE DETECTOR [*****]   WIPER MOTOR CONVERTER [*****]   WIPER MOTOR CONVERTER [*****]   MAIN WINDSHIELD CONTROLLER [*****]   STBY DE ICING CTL UNIT [*****]   DUAL DISTRIBUTOR VALVE [*****]   REGULATOR/SHUTOFF VALVE [*****]   SHUT OFF VALVE [*****]   ANTI-ICING CONTROLLER [*****]   LEFT ELEVATOR HORN [*****]   RIGHT ELEVATOR HORN [*****]   RUDDER HORN [*****]   LEFT AILERON HORN [*****]   RIGHT AILERON HORN [*****]   LEFT AILERON HORN [*****]   RIGHT AILERON HORN [*****]   ATTENDANT PANEL [*****]   QUICK ACCESS RECORDER [*****]   APIU [*****]   DIGITAL FLT DATA RECORDER [*****]   DIGITAL FLT DATA RECORDER [*****]   LINEAR ACCELEROMETER [*****]   MPC-ED36 [*****]   ATTENDANT PANEL   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 65/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   Description [*****]   ATTENDANT PANEL [*****]   ROD-DYNAMOMETRIC,ROL [*****]   CREW ALERTING PANEL [*****]   ENTRY PANEL-FLT DATA [*****]   CLOCK [*****]   EFIS CONTROL PANEL RH SIDE [*****]   EFIS CONTROL PANEL RH SIDE [*****]   EFIS CONTROL PANEL LH SIDE [*****]   EFIS CONTROL PANEL LH SIDE [*****]   INDEX CONTROL PANEL [*****]   INDEX CONTROL PANEL [*****]   MULTI-FUNCTION CONTROL PANEL [*****]   MULTI-FUNCTION CONTROL PANEL [*****]   INTEGRATED AVIONICS DISPLAY [*****]   FDAU [*****]   FDAU [*****]   MPC [*****]   CLOCK [*****]   MULTIPURPOSE CONTROL & DISPLAY UNIT [*****]   MULTIFUNCTION COMPUTER [*****]   CLOCK [*****]   PARKING VALVE [*****]   BRAKING RESERVOIR [*****]   MASTER CYLINDER [*****]   LANDING GEAR CONTROL VALVE [*****]   PARKING ACCUMULATOR [*****]   HYDRAULIC DUMPER [*****]   NORMAL METERING VALVE [*****]   WHEEL SPEED TRANSD ASSY [*****]   PARKING VALVE [*****]   NORMAL METERING VALVE [*****]   MODULE-ANTISKIP [*****]   ANTISKID VALVE MANIFOLD [*****]   ANTISKID CONTROL UNIT [*****]   ANTISKID CONTROL UNIT [*****]   VLV-RELIEF LOW PRESS [*****]   RESTRICTOR VALVE [*****]   SOLENOID VALVE NLG [*****]   SWIVEL SELECTOR VALVE [*****]   DIFF CONTROL SELECT VALVE [*****]   UP LOCK BOX [*****]   LANDING GEAR SELECTOR [*****]   ANTICOLL.LTG POWER SPLY UNIT   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 66/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   Description [*****]   TRANSFORMER-115V/5V- [*****]   LIGHT-LOGO [*****]   WING-ENG SCAN LIGHT LH [*****]   WING-ENG SCAN LIGHT LH [*****]   WING-ENG SCAN LIGHT RH [*****]   WING-ENG SCAN LIGHT LH [*****]   LANDING LIGHT [*****]   ANTICOLL.LTG POWER SPLY UNIT [*****]   ANTICOLL. LIGHT [*****]   TOTAL AIR TEMP SENSOR [*****]   FLUX VALVE COMPENSATOR [*****]   FLUX VALVE [*****]   ATTITUDE HEADING REF UNIT [*****]   VSI/TCAS INDICATOR [*****]   ALTIMETER [*****]   VSI/TCAS INDICATOR [*****]   PROBE-PITOT [*****]   RADIOMAGNETIC INDICATOR [*****]   ADF.RECEIVER [*****]   VOR/ILS/MKR.RECEIVER [*****]   DME RECEIVER [*****]   ATC CONTROL PANEL [*****]   DME INDICATOR [*****]   ADAPTER [*****]   ATC TRANSPONDER [*****]   ATC TRANSPONDER [*****]   ATC TRANSPONDER [*****]   IND-AIRSPEED STDBY [*****]   STANDBY ALTIMETER [*****]   AIR DATA COMPUTER [*****]   INDICATOR-TAS/TEMP [*****]   AIRSPEED INDICATOR [*****]   ATTITUDE HEADING REF UNIT [*****]   EFIS SYMBOL GENERATOR [*****]   EFIS.CONTROL PANEL [*****]   CRS/HDG.REMOTE CONTROLLER [*****]   CRS/ALT.REMOTE CONTROLLER [*****]   WX.RADAR CONTROL PANEL [*****]   WX.RADAR CONTROL PANEL [*****]   WX.RADAR CONTROL PANEL [*****]   RADAR RECEIVER TRANSCEIVER [*****]   ATC TRANSPONDER [*****]   MULTI. CONTROL & DISPLAY UNIT [*****]   TRANSCEIVER RECEIVER TCAS   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 67/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   Description [*****]   VOR/ILS/MKR.RECEIVER [*****]   DME TRANSCEIVER [*****]   VOR/ILS/MKR.RECEIVER [*****]   ATC CONTROL PANEL [*****]   VOR/ILS/DME.CONTROL PANEL [*****]   ADF.CONTROL PANEL [*****]   TCAS CONTROL PANEL [*****]   NAVIGATOR PROCESSOR UNIT [*****]   NAVIGATOR PROCESSOR UNIT [*****]   T2CAS COMPUTER [*****]   RADIO-ALTIMETER TRANSCEIVER [*****]   RADIO-ALTIMETER TRANSCEIVER [*****]   EGPWS MK8 COMPUTER [*****]   GPWS MK2 COMPUTER [*****]   INTEGRATED ELEC.STAND-BY EQUIP [*****]   AIR DATA COMPUTER [*****]   GPS RECEIVER [*****]   GPS RECEIVER [*****]   STANDBY HORIZON [*****]   RADAR RECEIVER TRANSCEIVER [*****]   OXYGEN SOLENOID VALVE [*****]   OXYGEN REGULATOR MASK ASSY [*****]   OXYGEN REGULATOR MASK ASSY [*****]   OXYGEN PRESS.XMTR/REG [*****]   DUCT DISCHARGE DOWNSTREAM VALV [*****]   CHECK VALVE [*****]   PRESSURE REG & S/O VALVE [*****]   BLEED AIR SHUTOFF VALVE [*****]   ISOLATION VALVE [*****]   INTEGRATED CORE PROCESSING MOD [*****]   IOM - S [*****]   CAC SWM [*****]   IOM - DATA CONCENTRATOR [*****]   CORE AVIONICS CABINET RACK [*****]   IOM - AUTO PILOT [*****]   CARGO DOOR ACTUATOR [*****]   COCKPIT DOOR CONTROL UNIT [*****]   HYDRAULIC PRESSURE SWITCH [*****]   MOTOR AND PUMP ASSEMBLY [*****]   PROPELLER COND.PUSH-PULL [*****]   PROPELLER SPEED INDICATOR [*****]   OVERSPEED GOVERNOR [*****]   OIL PUMP [*****]   ELECTRONIC PROPELLER CONTROL   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 68/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   Description [*****]   PROPELLER VALVE MODULE [*****]   ELECTROVALVE [*****]   PROPELLER BLADE [*****]   EJECTION DUCT [*****]   EJECTION DUCT [*****]   IND-FUEL TEMP [*****]   FUEL FLOW INDICATOR [*****]   FUEL FLOW TRANSMITTER [*****]   ENGINE POWER PUSH-PULL [*****]   HP SPEED INDICATOR [*****]   TORQUE INDICATOR [*****]   INTERTURBINE TEMP.INDICATOR [*****]   PROPELLER TORQUE INDICATOR [*****]   OIL COOLER FLAP ACTUATOR [*****]   THERMOSTATIC VALVE [*****]   OIL COOLER [*****]   OIL TEMP/PRESS.INDICATOR [*****]   OIL PRESSURE SENSOR [*****]   CONTROL ENGINE ELECTRONIC [*****]   EXCITER-IGNITION [*****]   EJECTOR-FUEL WASTE [*****]   VALVE ASSY-INTERCOMPRESSOR BLEED [*****]   VALVE ASSY-INTERCOMPRESSOR BLEED [*****]   AUTOFEATHER CONTROL [*****]   FUEL CONTROL-MECHANICAL [*****]   COOLER-OIL, FUEL COOLED [*****]   FLOW DIVIDER AND DUMP VALVE [*****]   VALVE ASSY-SERVO [*****]   PUMP-FUEL [*****]   BRAKE HYDROMECHANICAL ASSY [*****]   EFIS.CATHODE RAY TUBE   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 69/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

    2. List B

The following list of LRUs contains [*****] part numbers.   [*****]   Description [*****]   T.I.C. VALVE [*****]   EXCHANGER [*****]   AUDIO CONTROL PANEL [*****]   BUS POWER CONTROL UNIT [*****]   AC GENERATOR [*****]   DC STARTER GENERATOR [*****]   TRIM ACTUATOR [*****]   DUAL DISTRIBUTOR VALVE [*****]   ANTICOLL. LIGHT [*****]   STROBE LIGHTS [*****]   POWER SUPPLY UNIT [*****]   EMERGENCY POWER SUPPLY [*****]   HEATER-OIL TO FUEL

For sake of clarity, the above lists may be amended from time to time by way of Notice sent to the Company by the Repairer.

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 70/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   EXHIBIT 7 - REPAIRER STANDARD WORK ORDER FORMS

7-1 Standard exchange order:

    AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 71/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   7-2 Repair order:

  Agreement ref.: code client-GMA-01     SHIPPING DATE:   PAGE: 1 / 1

REPAIR ORDER

(THIS FORM MUST BE ENCLOSED INSIDE THE BOX WITH THE UNIT)   FROM:       TO (Shipping address):  COMPANY NAME Sender:

  Tel: Fax:





  ATR CUSTOMER SUPPORT c/o DHL Solutions ZA du Pont Yblon 95 500 Bonneuil en France FRANCE

                        REPAIR ORDER NUMBER :   DATA RELATED TO REMOVED UNIT A/C DATA   TYPE:   MSN:   FH:   REGISTRATION:     CY:

UNIT DATA

  PART NUMBER:   TSN:   AMENDMENT:   CSN:   SERIAL NBR:   TSO:   DESIGNATION:PAGE:   CSO:   WARRANTY COVERAGE INSTALLATION DATE:   VENDOR (O.E.M.):   YES   NO REMOVAL DATE:   A.C.S. REPAIR:   YES   NO   REASON FOR REMOVAL                         REQUESTED WORK REPAIR OVERHAUL BENCH TEST CALIBRATION

MODIFICATION



(Please indicate the requested SB and final PN)

OTHER WORKS TO INCORPORATE / REMARKS       ATR—Global Maintenance Agreement     ATR form ref. 7-2      AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 72/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   7-3 Standard exchange Core Unit returned to ATR Pool:

  Agreement ref.: code client-GMA-01     SHIPPING DATE:   PAGE: 1 / 1

STANDARD EXCHANGE CORE UNIT RETURNED TO ATR POOL

(THIS FORM MUST BE ENCLOSED INSIDE THE BOX WITH THE UNIT)   FROM:       TO (Shipping address):  COMPANY NAME

  Sender: Tel: Fax:





  ATR CUSTOMER SUPPORT c/o DHL Solutions ZA du Pont Yblon 95 500 Bonneuil en France FRANCE

                        EXCHANGE ORDER REFERENCE:     UNIT DELIVERED BY ACS:     PART NUMBER:   SERIAL NBR:   DATA RELATED TO REMOVED UNIT A/C DATA   TYPE:   MSN:   FH:   REGISTRATION:     CY:

CORE UNIT DATA

  PART NUMBER:   TSN:   AMENDMENT:   CSN:   SERIAL NBR:   TSO:   DESIGNATION:   CSO:   WARRANTY COVERAGE INSTALLATION DATE:   VENDOR (O.E.M.):   YES   NO REMOVAL DATE:   A.C.S. REPAIR:   YES   NO   REASON FOR REMOVAL                         REMARKS                   ATR - Global Maintenance Agreement     ATR form ref. 7-3        AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 73/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version

  Agreement ref.: code client-GMA-01     DATE:   PAGE: 1 / 1

LOAN ORDER

FOR MAIN ELEMENT AVAILABILTY UNDER GMA   FROM:       TO:  COMPANY NAME:

  Sender:   Tel: Fax:





  A.C.S.-ATR CUSTOMER SUPPORT   Attn:   Tel for routine orders: (33) 5 62 21 60 80 Tel for AOG orders: (33) 5 62 21 62 00 Fax for routine orders: (33) 5 62 21 62 80 Fax for AOG orders: (33) 5 62 21 62 62



            REQUEST FOR A/C TYPE:       RGSTN:   MSN:   LOAN ORDER NUMBER   DELIVERY LEAD TIME:   A.O.G. CRITICAL         REQUESTED PART NUMBER     DESCRIPTION   REASON

                DATA RELATED TO PART NUMBER REMOVED FROM AIRCRAFT

PART NUMBER   S / N   Removal date

  COMMENTS                   SHIPPING ADDRESS IF SPECIFIC (Different from standard shipping address)         REMARKS                                 ATR - Global Maintenance Agreement     ATR form ref. 7-4    AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 74/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 8 - LEASE OF THE STOCK

1. Lease of the Stock

The Repairer agrees to lease the Stock to the Company and the Company agree to take the Stock on lease, subject to the terms and conditions of this Agreement.

2. Content and value of the Stock

2.1 Content: the Stock listed in Exhibit 5 (Stock) contains serviceable Items, either brand new or used, depending on availability of such Items by the Repairer at the time of their respective Delivery.     2.2 Value: the Stock total value for brand new Items, under economic conditions prevailing in two thousand fourteen (2014), shall be:

For the initial AZUL stock delivered under economic conditions 2010, [*****]

For the stock delivered under the AZUL amendment 3 under economic conditions 2011, [*****]

For the stock delivered under the AZUL amendment 4 under economic conditions 2011, [*****]

For the first batch, stock delivered under the GMA TRIP under economic conditions 2011 [*****]

For the second batch limited to the parts not recommended by the repairer, stock delivered under the GMA TRIP under economic conditions 2011 [*****]

For the sake of clarity, parts of the Stock contained into the second batch that are recommended by Repairer, are provided [*****] delivered under the GMA TRIP under economic conditions 2011 [*****]

For the batch related to the Amendment 5, stock delivered under economic conditions 2013 [*****]

For the batch related to the Amendment 6, stock delivered under economic conditions 2014 [*****]

For the batch related to the Amendment 7, stock delivered under economic conditions 2014 [*****]

For the batch related to the 2014 OSS replenishment, stock delivered under economic conditions 2014 [*****]

For the batch related to the Pitot exchange, stock delivered under economic conditions 2014 [*****]     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 75/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   [*****]

For the sake of clarity,

The total Stock value of Exhibit 5 list shall be:

[*****]

And the lease fee payable in Exhibit 14 (Price conditions)shall be based on the value of [*****] corresponding to parts of the Stock contained into the TRIP second batch that are recommended by Repairer, i.e. [*****]

In the event the Repairer delivers used Items to the Company, the value of each such used Item shall be quoted at [*****] of the brand new value indicated in Exhibit 5 (Stock) and the total value of the Stock shall be adjusted accordingly by way of Notice sent by the Repairer to the Company.   2.3 Modification of the Stock: on the first anniversary date of the Start Date, the Parties may review the content of the Stock and shall, in case of a variation in the contents of the Stock, amend the Agreement accordingly by way of Notice sent by the Repairer to the Company. Following such amendment, the Company shall return to the Repairer any Item of the Stock, or request the Repairer to replace any Item within the Stock subject to the following conditions:     a) the Item returned by the Company (i) has never been used by the Company since the Start Date, (ii) is in serviceable condition, (iii) isdelivered in its original Packaging and with all appropriate airworthiness documents; and,

  b) the Item shall be returned as per Clause 6.2 of this Agreement; and,

  c) if an Item is returned to the Repairer, the value of the Stock shall be modified by deduction of the initial value of the relevant Itemapplicable at the time of its Delivery; and,     d) if an Item is added to the Stock, the value of the Stock shall be increased according to the ATR spare parts catalogue price for the addedItem at the economic conditions corresponding to the time when the Stock is modified.

The Company shall be responsible for and pay any costs incurred by and/or in connection with the return to the Repairer and/or replacement of such Items of the Stock, including transportation costs, customs duties, formalities and commissions, re-certification fees if documents are missing or damages are found or the conditions of this Clause 2.3 are otherwise not complied with by the Company.   2.4 Inventory of the Stock: the Repairer or any representative it designates shall have the right to inspect the Stock and to audit any records relating thereto at any reasonable time upon giving prior Notice to the Company, which shall provide full access to such Stock to enable the Repairer to conduct periodic inventory inspections and/or any audit of the Stock.

Should any Item of the Stock be missing, partially or totally damaged, or not have its appropriate airworthiness documentation at the time the Repairer or its representative carries out its inspection and/or audit, and if the Company cannot justify such Item as being under repair, the Company shall have [*****] to remedy the situation to the satisfaction of the Repairer, failing which, the Repairer shall invoice the Company the price for any such lost or damaged Item at the ATR spare parts catalogue price applicable on the date of such invoice for a new part initially delivered by the Repairer. In the event the Repairer initially delivered used Items to the Company, each such used lost Item shall be invoiced at [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 76/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   [*****] of the brand new value at the ATR spare parts catalogue price applicable on the date of such invoice.

3. Stock Delivery     3.1 Provided the Company has met each of the conditions precedent as per Clause 17 (Conditions precedent) of the Agreement, the Stock shall be delivered to the Company by the Repairer with the relevant airworthiness documents (certificate of conformity, ANAC SEGVOO 003 or EASA Form 1 or FAA Form 8130-3), [*****] to the Repairer stores located at the address set forth in Clause 6.1 of this Agreement, or such other location as the Repairer may from time to time notify to the Company .   3.2 The Repairer shall use its reasonable endeavours to deliver [*****] in quantity of the Stock within [*****] as from the Start Date.   3.3 As from the Delivery of the Stock, the Company is appointed as the custodian of the Stock and, all risks relating to or arising in connection with the Stock shall be transferred to, vested in and borne by the Company, which shall promptly notify the Repairer of any loss or damage to the Stock.   3.4 Within [*****] as from the date of Delivery of any Item of the Stock, the Company shall be responsible for obtaining and shall provide the Repairer with evidence in respect of (i) custom clearance, including payment fees, customs duties, and (ii) customs declarations, with respect to the relevant Stock Item.

4. Storage Location of the Stock       (i) The Storage Location shall be:

Rodovia Santos Dumont, Km 66, Jardim Itatinga, Campinas - São Paulo, Brazil CEP 13052-970.

And

Av Portugal, 5139, Itapoa - Belo Horizonte, Minas Genais, Brazil

or any other address notified from time to time by the Company to the Repairer, or by default the address of the Company as indicated in page four (4) of this Agreement.

  (ii) The Stock shall be kept with its corresponding documentation in secured warehouse facilities at the Storage Location, which shall be separated from any area used to store any other equipment, and each Item shall be clearly identified as belonging to the Repairer and/or the Stock owner with the inscription ATR PROPERTY.

  (iii) The Company shall notify to the Repairer the name and address of the owner or landlord of the Storage Location, if relevant, and each time such owner or landlord changes; the Company shall notify the said new owner or landlord, if relevant, of the Repairer's property of the Stock and copy the Repairer of such notification.     (iv) The Company shall be liable for maintaining the Stock by applying the best methods for storage and maintenance as required byapplicable EASA or   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 77/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   ANAC regulations at its own costs, particularly for parts subject to limited shelf life or cure date.   5. Use and repair of the Stock

  (i) Each Item listed in Exhibit 3 (Main Elements covered under this Agreement) and Exhibit 6 (LRUs covered by repair and standardexchange Services) withdrawn from the Stock and used by the Company shall be exclusively repaired by the Repairer.

  (ii) The Company shall be entitled to withdraw and use Items from the Stock in accordance with its operational needs, to remedy to any corresponding unserviceable Item fitted on the Aircraft covered under this Agreement (Exhibit 1 List of ATR Aircraft covered under this Agreement).     (iii) In such case, the Company shall return to the Repairer such unserviceable Item removed from the Aircraft with a Work Order for repairin the form set out in Exhibit 7-2 within [*****] from the withdrawal of the corresponding Item from the Stock.

The Repairer shall then repair, as relevant, such unserviceable Item in accordance with the provisions of Exhibits 10 and/or 11 and re- deliver to the Company a serviceable Item with the relevant associated airworthiness documentation (i.e. a certificate of conformity, ANAC SEGVOO 003 and EASA Form 1 or FAA Form 8130-3,and when applicable the log book duly filled with any technical information).

The Company shall then place such serviceable Item into the Stock.



(iv) In the event that the unserviceable Item removed from the Aircraft is declared BER or TNR (copy of the Repair Shop report will be given to the Company ), and is not covered by Services as defined in Exhibit 10 and/or Exhibit 11, the Repairer will invoice such unserviceable Item to the Company , except if the Company replaces such unserviceable Item with an equivalent serviceable Item which shall be placed into the Stock.

  (v) Should the Company place a standard exchange Work Order, as per Exhibit 9 to replace any Item withdrawn from the Stock to replace an equivalent unserviceable Item removed from any Aircraft, then after repair and/or overhaul of such unserviceable Item, the Repairer will place such repaired and/or overhauled Item into the Pool and will not deliver it to the Company .     (vi) [*****].

In the event the Company purchases any Item of the Stock, the Parties agrees to modify accordingly the price indicated in Clause 1.1 of the Exhibit 14 (Price conditions), to take into account monthly lease rental only for the remaining Items of the Stock.     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 78/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

  6. Return of the Stock     6.1 Within [*****] as from the End Date, the Company shall notify the Repairer of its decision to either:     (a) [*****] and/or,     (b) return the Stock to the Repairer as per Clause 6.2 of the Agreement in accordance with the following terms and conditions; such returnshall have to be performed within [*****] following such Notice.

If the Company fails to notify the Repairer as provided here above, the Repairer shall either (i) invoice as per (a) here above and/or (ii) direct the Company to return the Stock within [*****] following the term of the aforesaid [*****] period and/or (iii) repossess the Stock, at its discretion.   6.2 If the Company fails to return the Stock as provided here above, the Company shall be charged interest at a rate equal to [*****] of the value of the non-returned Items, per Day as from the end of the aforesaid [*****] period, until the non-returned Items are duly received or repossessed by the Repairer.

The Repairer shall be entitled to set off such late return interests with the Security Deposit pursuant to Clause 13 (Security Deposit).   6.3 In the event any Item of the Stock is not returned to or repossessed by the Repairer within [*****] period as from the End Date, the Repairer may consider, at its discretion, such Item as lost and shall then invoice such Item to the Company at the ATR spare parts catalogue price in force at the time of such invoice.

The Repairer shall be entitled, at its sole discretion, to set off the corresponding amount(s) with the Security Deposit as specified in Clause 13 (Security Deposit).   6.4 In the event that (i) any Item is returned to the Repairer without the appropriate airworthiness documentation, or (ii) whenever the Items are returned without the original documents supplied by the Repairer, or (iii) if the Repairer has to test, to replace or to repair such returned Item(s) due to damage or deterioration as a result of incorrect storage, inappropriate Packaging and/or transport, or (iv) for any other reason whatsoever, the Company shall bear any associated re-certification, repair, overhaul, and/or replacement costs for such Items at the ATR spare parts catalogue prices applicable on the date of return of such Item to the Repairer.   6.5 Conditions for the return of the Main Elements: when returned or repossessed, if the TSO of the Main Element is different from the TSO at the time of its Delivery, the Repairer shall invoice to the Company the Lost Potential as per the conditions of this Agreement.

In case the maintenance of the Main Elements is not covered by this Agreement, the Company shall return any Main Element with the same TSO as the one at the time of its Delivery. If such TSO is higher, the Repairer shall invoice to the Company the works necessary to restore such TSO based on Time and Material conditions.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 79/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   7. Payment and transfer of the property title     7.1 Save as otherwise set out in this Agreement, the purchase price for any Item of the Stock shall be paid in accordance with the provisions of Clause 12 (Invoicing and payment terms).   7.2 Notwithstanding the provisions of Clause 5 above, title to the Stock shall remain with Stock owner at all times until the Stock has been purchased by the Company as per Clause 6 above and provided that any amount of the corresponding invoice has been fully received by the Repairer in accordance with Clause 12 (Invoicing and payment terms).

The Company specifically agrees that it shall not acquire any interest, equity or share of the Stock, or pledge or create any lien of any sort whatsoever prior to the transfer of title to the Stock to it in accordance with this Agreement and shall fully indemnify the Stock Owner and/or the Repairer with respect to any consequence of a non-compliance with its obligations under this Clause 7.2.   7.3 The Company may not, under any circumstances, perform or permit any action to be taken that may be detrimental to the Repairer's and/or Stock owner's property title to the Stock, including:     i) The Company must not transfer, sell, charge, pawn, mortgage, negotiate, dispose of, or intend to negotiate or dispose of the Stock; and,



ii) The Company shall take the necessary measures in order to prevent the Stock from being seized or taken away, or to check the Stock in the event of a seizure by distress or any other similar legal process. However, if the Stock is seized or taken away, the Company must immediately notify the Repairer and indemnify the Repairer and/or the Stock owner for any Loss incurred by the Repairer and/or the Stock owner as a result of the above-mentioned events, and shall mitigate any such Loss by using its reasonable endeavours to re- possess the Stock or to re-acquire the Stock.   7.4 Case of use of the Stock as per Clause 5 of the Exhibit 8 (Lease of the Stock): the title to the Item withdrawn from the Stock shall pass to the Company upon installation of such Item on the Aircraft, subject to (i) full and complete payment of any and all sums due by the Company in connection with this Agreement and (ii) the completion of all of its obligations under Clause 5 of the Exhibit 8 (Lease of the Stock).

The title to the Item removed from the Aircraft and sent to the Repairer for repair as per Clause 5 hereof shall pass to the Repairer and/or the Stock owner, as relevant, upon such removal.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 80/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 9 - SPARE PARTS STANDARD EXCHANGE SERVICE

The Company shall granted access to the Pool on a standard exchange basis where the Company may order any LRU listed in Exhibit 6 and provide the Repairer in return with an equivalent (same part number or same standard interchangeable) unserviceable LRU removed from the Aircraft. This right of access to the Pool is not exclusive to the Company.   1. Pool content

The Pool is a set of serviceable LRUs listed in Exhibit 6 (LRUs covered by repair and standard exchange Services) available upon the Start Date, provided the Company has complied with its obligations pursuant to Clause 17 (Conditions precedent).

In the event of any Aircraft technical modification and upon the Company 's written request, the Repairer may update the list set forth in Exhibit 6 (LRUs covered by repair and standard exchange Services), in which case, the price set out in Clause 1.2 of the Exhibit 14 (Price conditions) shall be adjusted accordingly.   2. Access to the Pool

To access the Pool and take Delivery of the requested LRU, the Company must place a written standard exchange Work Order (by filling the form ref 7-1 in Exhibit 7) with the Repairer.   3. Repairer's obligations     3.1 Pool management

The Repairer shall be responsible for managing and maintaining the Pool at his own expense and in compliance with the relevant OEM recommendations.

Any LRU from the Pool delivered to the Company by the Repairer or any Repair Shop shall comply with the applicable Aircraft technical specifications.   3.2 Dispatching the Items

  (i) Any LRU from the Pool shall be delivered to the Company pursuant to Clause 6.1 of the Agreement within [*****] for routine orders, within [*****] for critical orders or within [*****] for AOG orders (limited to classified no-go and go if LRUs according to MMEL) as the case may be, starting from the Day of receipt by the Repairer of a standard exchange Work Order.     (ii) The dispatch lead times set forth in Clause 3.2 (i) above remain subject to:     (a) reception by the Repairer of written standard exchange Work Order 7.1 duly filled in by the Company; and,   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 81/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

  (b) the availability in the Company 's facilities of a stock of critical Items at least at the level of Repairer's recommendations for theAircraft fleet; and,     (c) the number of AOG standard exchange Work Orders being less than [*****] of the total number of standard exchange WorkOrders placed by the Company over the last [*****]; and,     (d) The Company not being in breach of any of its obligations under this Agreement, including Clause 4.1 (i) of this Exhibit 9.



(iii) Provided the conditions set out in Clause 3.2 (ii) of this Exhibit 9 are met and the Company placed an A.O.G. standard exchange Work Order with the Provider, should the Company be obligated, after Provider's approval, to lease similar LRU from a third Party servicer due to the unavailability of the requested LRU in the Pool, then the Provider will reimburse to the Company, for [*****] until the date of delivery of the requested unit by the Provider to the Company. The Provider shall not under any circumstances have any liability whatsoever (including liability of any consequential loss or damage) in respect of any late delivery of any part other than the liability set forth in this Clause 3.2(iii) . (iv) Any LRU of the Pool will be provided at its latest standard or fully interchangeable standard with the relevant certificate of conformity and, ANAC SEGVOO 003 and EASA form 1/FAA form 8130-3 dual release.     (v) LRUs delivered from the Pool are covered by the provisions of Clause 9 (Warranties).     (vi) Any LRU of the Pool subject to TBO event shall be delivered to the Company with no less than [*****] of life remaining to the nextscheduled overhaul.   4. Core Unit return    4.1 Return lead time



(i) The Company shall return to the Repairer's facilities indicated in Clause 6 (Deliveries) any Core Unit with the Work Order form ref 7-3 duly filled-in, as standard exchange counterparts, within a maximum [*****] as from the Delivery Date of the LRU from the Pool for any Items from the list A of the Exhibit 6 (LRUs covered by repair and standard exchange services) and within a maximum of [*****] as from the Delivery Date of the LRU from the Pool for any Items from the list B of the Exhibit 6 (LRUs covered by repair and standard exchange services).

For sake of clarity, in the event a Core Unit is not returned by the Company to the right Delivery Location as specified in the Clause 6 (Deliveries), the Repairer shall be entitled to charge the Company transportation costs, associated taxes and Customs duties due to the re-exportation of such Core Unit to the right Delivery Location.     (ii) Prior to dispatching any Core Unit, the Company will also send by fax or by email all the data related to the dispatch (including the dateof dispatch and the carrier's name).

  (iii) Notwithstanding the above provision in sub-clause 4.1 (i), in the event a Core Unit is not received by the Repairer within [*****] after Delivery date of the LRU for by the Repairer to the Company for any Items from the list A of the Exhibit 6 (LRUs covered by repair and standard   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 82/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   exchange services) and within a maximum [*****] as from the Delivery Date of the LRU from the Pool for any Items from the list B of the Exhibit 6 (LRUs covered by repair and standard exchange services), the Repairer shall be entitled to charge the Company , as the case may be, late fee equivalent to [*****] of the value of the part per Day starting the [*****] up to maximum the [*****] for any Items from the list A of the Exhibit 6 (LRUs covered by repair and standard exchange services) and starting the [*****] up to maximum the [*****] for any Items from the list B of the Exhibit 6 (LRUs covered by repair and standard exchange services) after the Company's standard exchange Work Order date, as the case may be. In the event the Core Unit is not returned by the [*****] for any Items from the list A of the Exhibit 6 (LRUs covered by repair and standard exchange services) or by the [*****] for any Items from the list B of the Exhibit 6 (LRUs covered by repair and standard exchange services) after the Company's standard exchange Work Order date, as the case may be, the Repairer will declare the Core Unit as lost in exchange as lost and shall be entitled to invoice to the Company , as the case may be, the amount corresponding to the value of the serviceable LRU primarily delivered by the Repairer according to spare parts catalogue price in force on the date of its Delivery. Title to such serviceable LRU shall pass to the Company, as the case may be, upon full payment of the Repairer's invoice. The Repairer shall be entitled to withdraw without delay the related amount from the Security Deposit as per Clause 13 (Security Deposit).     (iv) In case of accumulated not returned Core Units pursuant to sub-clause 4.1 (iii) above, the Repairer shall be entitled, subject to a [*****]prior Notice, to suspend the Company's Pool access.   4.2 Any Core Unit shall be repaired in accordance with Exhibit 10 (LRUs repair Service).   5. Specific services not covered by standard exchange Service

The following services and their related costs (labor and parts) are not eligible to the standard exchange Service, and shall be managed on Time and Material conditions:

  (i) services performed for LRU(s) fitted on Aircraft to comply with Aircraft redelivery conditions or delivery conditions of a third party. For sake of clarity, Aircraft redelivery conditions or delivery conditions of a third party will have to be declared by the Company to the Repairer in anticipation [*****] before the stop of the Aircraft;     (ii) services performed for any part of the Company's own inventory if any, to be replaced, or maintained, re-certified, tested, checked, forinventory management and/or maintenance reasons (shelf life, cure dates…).   6. Transfer of title and risks     6.1 Title to the Items featured in the Pool, or in the Stock in the event of Clause 5 (v) of the Exhibit 8 (Lease of the Stock), or the Advanced Pool Stock of Clause 7 of the Exhibit 15 (Advanced Pool Service), remains at all times with the Repairer until:     (a) receipt by the Repairer of the corresponding Core Unit in compliance with Clause 4.1 of this Exhibit 9 and of a confirmation from theRepair Shop that such Core Unit is repairable; and,     (b) full and complete discharge of any and all sums due by the Company under or in connection with this Agreement.

Title to the corresponding Core Unit shall pass to the Repairer and/or the Stock owner free from any lien, security or other encumbrance upon removal of such Core Unit from the Aircraft.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 83/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   For the sake of clarity, in the event of Clause 5 (v) of the Exhibit 8 (Lease of the Stock) and Clause 7 of the Exhibit 15 (Advanced Pool Service), the Repairer and/or the Stock Owner shall remain the owner of the serviceable LRU sent from the Pool to the Stock and to the Advanced Pool Stock, as replacement.   6.2 Notwithstanding the above, in the event the Core Unit is invoiced to the Company as per Clause 4.2 above, the transfer of title to the serviceable LRU primarily delivered from the Pool shall take place upon receipt by the Repairer of the full payment for the invoice relating to such serviceable LRU.   6.3 The Company hereby represents and warrants that (i) it is the lawful owner of the Core Unit and/or (ii) it is duly entitled to transfer the title to such Core Unit in accordance with Clause 6.1 above.   6.4 In any event, all risks whatsoever and howsoever relating to or arising in connection with any serviceable LRU of the Pool shall be transferred to, vested in and borne by the Company , as from Delivery thereof pursuant to Clause 6 (Deliveries).   7. THIS EXHIBIT IS PART OF THE AGREEMENT AND ALL APPLICABLE PROVISIONS THEREOF ARE APPLICABLE HERETO. WITHOUT LIMITING THE FOREGOING, ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT AND TO THE DISCLAIMERS AND LIMITATIONS ON WARRANTIES AND DAMAGES, INCLUDING CONSEQUENTIAL DAMAGES, SET FORTH THEREIN.   8. FURTHER ASSURANCES

The Repairer retains title to any serviceable LRU until payment therefor as provided above. As a precautionary measure however, the Company agrees that the Repairer shall have all rights and remedies afforded to a secured party upon the default of a debtor as provided in the UCC and grants a security interest to the Repairer in all of the Company's right, title and interest in each serviceable LRU and the proceeds thereof and all general (including payment) intangibles related thereto or arising therefrom to secure the prompt and punctual payment and performance when due of all obligations of the Company under this Agreement, including this Exhibit.

The Company shall do all acts and things necessary or advisable, including execute and deliver all documents, to ensure that the Repairer's right, title and interest in and to the serviceable LRUs is perfected in all applicable jurisdictions and otherwise protected against the current or future claims of any third-party, including the Company's creditors, mortgagees, lessors, financing parties, trade creditors, any owner of an aircraft and other Persons. Such acts and things shall include obtaining such consents and approvals from, and execution, delivery, registration, recordation and filing of such UCC financing statements (including continuation statements and amendments), FAA mortgages and other documents with, such registries, governmental authorities and third parties as the Repairer may reasonably request.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 84/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 10 - LRUs REPAIR SERVICE   1. Definition of repair

Any unserviceable LRU, not declared BER or TNR, shall be repaired or overhauled by the Repairer in compliance with the relevant CMM and according to ANAC or EASA/FAA part 145 regulations.

If the Company receives from the Repairer a LRU repaired or overhauled under ANAC regulation only with associated ANAC SEGVOO 003 release, the Company may have the right in case of Aircraft redelivery for replacement of such part by another one with relevant certificate of conformity EASA form 1/FAA form 8130-3 dual release. The Repairer shall make its best efforts to provide to the Company the Services in compliance with EASA and FAA for all LRU repaired or overhauled by the local repair shops by end of December of 2015;

[*****].

If the Repairer receives from the Company an excessive number of unserviceable LRUs compared to the MTBUR for such LRU, the Repairer may assist the Company in investigating the causes of such situation, and each Party shall take all necessary corrective actions to the satisfaction of the other Party acting reasonably.   2. Information concerning unserviceable LRUs returned to the Repairer

The Company shall send to the Repairer any unserviceable LRU, as relevant, with a Work Order in the form set out in Exhibit 7-2 (for any single repair) or in the form attached as Exhibit 7-3 (for the repair of any Core Unit).   3. Documents provided with the repaired or overhauled LRU

The following documents shall be provided by the Repairer to the Company with any repaired or overhauled LRU under this Agreement:     (i) EASA form 1 certificate or FAA form 8130-3 or, if applicable, ANAC SEGVOO 003,     (ii) Strip report issued by the Repair Shop, and     (iii) An invoice, if such repair service is not covered by the scope of this Agreement.   4. Specific services not covered by LRU repair Service

The following repairs and their related costs (labor and parts) are not covered by the prices set out in Clause 1.3.1 of the Exhibit 14 (Price conditions) and shall be managed on Time and Material conditions:     (i) all costs of technical modifications that may be incurred due to the embodiment on LRUs of Airworthiness Directives, service bulletins,optional or recommended modifications.     (ii) the repair of an unserviceable LRU or additional costs resulting from Items received in damaged conditions due to Abnormal Use,mishandling, corrosion, abrasion, FOD and/or missing Items,   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 85/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

  (iii) any additional costs in repairing or overhauling any unserviceable LRU due to Company's failure to produce data as requiredhereunder,,

  (iv) any cost and expense, direct and/or indirect, that may arise out of or connected with any additional technical expertise and/or counter expertise to be performed on any LRU, at the Company's request, in the event the Company challenges the Repairer's primary expertise, or repair cost estimation, or repair solution,     (v) replacement or repair of LRUs' sub-components unapproved by the OEM,     (vi) the maintenance costs relating to any failure of the Company to observe or comply with its obligations under this Agreement,     (vii) all battery repairs or replacements,     (viii) propeller brake disk replacements,     (ix) CVR and DFDR memory and/or tape analysis and/or read outs.   5. Discarding the LRUs

The Parties acknowledge that under normal operating conditions any unserviceable LRU may be BER or TNR.

The Repairer shall notify the Company in case of BER or TNR status of any unserviceable LRU, and shall request the Company's approval to discard such unserviceable LRU.

If the Company denies such approval, the unserviceable LRU shall be delivered back to it at the [*****] costs and risks.

The Company's failure to respond to such Repairer's request within [*****] following the Repairer's notification of BER or TNR shall constitute an approval for the Repairer to discard the relevant unserviceable LRU.

If the discarded unserviceable LRU has been replaced with a serviceable LRU of the Pool or of the Stock pursuant to the provisions of Exhibits 8 (Lease of the Stock) or 9 (Spare parts standard exchange Service), the Repairer shall invoice and the Company shall pay for the price of such serviceable LRU of the Pool or of the Stock, based on the ATR spare parts catalogue sales price applicable at the date of such invoice for brand new or used LRU, as the case may be.

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 86/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 11 - MAIN ELEMENTS SERVICES

  1. Field of application

1.1 The Repairer shall provide the Company with a Main Elements' maintenance (as per Clause 2 of this Exhibit 11) and availability (as per Clause 3 of this Exhibit 11) Service.

This Service is applicable to:     a) Main Elements listed in Exhibit 3 (Main Elements and parts numbers covered by the Agreement) when installed on an Aircraft, and     b) any Main Elements in the Stock as relevant, and     c) any Spare Main Element.

The Services provided to the Company by the Repairer in accordance with this Exhibit 11 cover off-Aircraft tasks and works performed by the Repairer. For the sake of clarity and unless otherwise agreed between the Parties, standard exchange Service shall not be available for Main Elements under this Agreement, except for propeller blades and slip ring as per Clause 3 of this Exhibit 11.   1.2 Main Elements' maintenance program (Scheduled Events)

At the date of entry into force of this Agreement, the Parties acknowledge and agree that applicable intervals for inspections / overhauls on Main Elements are:     i) for propellers:

[*****].     ii) for landing gears:

[*****].

The Repairer reserves its rights to require the Company to modify the above Main Elements maintenance program in accordance with the Aircraft manufacturer MRBR and/or MPD, to optimize the Company 's Aircraft dispatch reliability, provided the Company's Airworthiness Authorities enable so.

  2. Main Elements' maintenance Service description

2.1 Any off-Aircraft maintenance task and work to be performed on Main Elements and Spare Main Elements shall be carried out in accordance with the relevant CMM for each Main Element. Such maintenance tasks with respect to each Aircraft comprise the following services   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 87/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   on which are based the prices set out in Clause 1.3.2 of the Exhibit 14 (Price conditions):

[*****]   2.2 Maintenance for Scheduled Events

The Repairer shall provide the maintenance Service for Scheduled Events, in accordance with the applicable maintenance program of each Main Element described at Clause 1.2 of Exhibit 11.

In the event that the Main Element's maintenance program set out in Clause 1.2 of this Exhibit 11 shall be changed, the Parties hereby agree that the Repairer may modify the price conditions set out in Clause 1.3.2 of the Exhibit 14 (Price conditions), as relevant.   2.3 Basic Unscheduled Removals

The repair of Main Elements due to BUR shall be performed by the Repairer according to the relevant CMMV and provided that:     - The Company has fulfilled its obligations as per Clause 5 of this Exhibit; and,     - the maintenance tasks are related to normal Aircraft operation in accordance with all technical documentation and any otherinstructions issued by ATR or the OEM; and,     - the maintenance tasks are not related to specific conditions as per Clause 6 of this Exhibit.

  3. Spare Main Elements availability Service description

3.1 With respect to each Aircraft, prices set out in Clause 1.3 of the Exhibit 14 (Price conditions) comprise the availability of Spare Main Element for Scheduled Events and BUR according to the provisions of sub-clause 3.2 hereof.

For the sake of clarity, propeller blades and slip rings may be available through the standard exchange Service, as per the Exhibit 9 (Spare parts standard exchange Service).

.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 88/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

3.2 Availability of Spare Main Element(s) for Scheduled Events and BUR:       3.2.1. Such Service includes, at any time and for the entire fleet,     - [*****] propellers,     - [*****] landing gear,

In the event the Company requires any additional Spare Main Element, the Repairer will make a proposal on Time and Material conditions.     3.2.2 Subject to the Company having complied with its obligations as per Clause 5 of this Exhibit 11, the Repairer shall make available suchSpare Main Element(s) during the period necessary for the maintenance for Scheduled Events and BUR of Aircraft Main Element(s).   3.3 The Repairer will make Spare Main Element(s) available to the Company during maintenance for BUR of Main Elements within [*****] from the date of receipt by the Repairer of the Company's Work Order in the form set out in Exhibit 7-4.

  4. Return to the Repairer of the Main Element or Spare Main Element

At the time the Repairer delivers to the Company a Spare Main Element or returns any repaired or overhauled Main Element to the Company , for fitment on the Company 's Aircraft, the Company will deliver back to the Repairer the Main Element removed for repair or overhaul or the Spare Main Element previously obtained from the Repairer, with required technical documentation on a date (the Due Date) within a time period of [*****] starting from the Delivery date of the Spare Main Element or the repaired or overhauled Main Element. When the Main Element removed for repair or overhaul is replaced by a Spare Main Element of the Stock or a spare of the Company 's property, the Company shall return to the Repairer or the designated Repair Shop such removed Main Element, with required technical documentation within a time period of [*****], starting from the removal date of the Spare Main Element.

For returning the Main Elements and Spare Main Elements to the Repairer, the Company shall use adapted container or when applicable the containers received from the Repairer. Any container received by the Repairer or its approved Repair Shop in incomplete or damaged condition from the Company shall be subject to refurbishment or replacement at Company's cost and expense in addition to the prices specified in the Exhibit 14 (Price conditions).

Should the Company fail to deliver the Main Element removed for repair or overhaul or the Spare Main Element(s) back to the Repairer or the Repair Shop on the above Due Date and without prejudice to other rights the Repairer may have at Law and/or under this Agreement, the Repairer may charge late return fees to the Company in an aggregate amount of:     - [*****]     - [*****]

per [*****] of delay, as from the Due Date until the Spare Main Element or the Main Element is duly received by the Repairer or the Repair Shop. The Repairer shall be entitled to withdraw such late return fees from the Security Deposit pursuant to Clause 13 (Security Deposit).

  5. Company's obligations

In order to allow the Repairer to perform the maintenance tasks defined in Clause 2.1 of this Exhibit 11 in compliance with the relevant OEM's technical specifications, the Company   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 89/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   agrees:     to provide the Repairer every [*****] with a detailed status of the Main Elements showing the Scheduled Events for the next [*****];     to send to the Repairer a Work Order for the Services at the latest [*****] before the event, either for maintenance Service and/or foravailability Service;     to send to the Repairer the log book, log card and back to birth certificate of the landing gears removed for repair or overhaul or sparelanding gear;     that, to be eligible for availability Service, no Main Element within the Stock pursuant to Exhibit 8 (Lease of the Stock) and/or theCompany 's own on-site stock shall be available in the Company s premises, as per the Repairer's initial provisioning recommendation.

Moreover, the Company shall:   5.1 In respect of the propellers:       (i) perform line checks (not limited to lubricant levels, blade balancing, blade anti-erosion film replacements, etc...) and the requiredconsumable spare parts replacements during the Aircraft's entire service life;     (ii) procure all the tools necessary for the line maintenance of the propellers including the propeller balancing tool; and     (iii) initiate and pursue an efficient staggering program to ensure a smooth schedule removal plan for shop maintenance.   5.2 In respect of the landing gears:       (i) perform the line checks (including Messier best practices service letter 631-32-218) and the required consumable spare partsreplacements during the Aircraft's entire service life, on landing gears, wheels and tires; and     (ii) procure all the tools necessary for the line maintenance of the landing gear including the appropriate tooling used for wheelsreplacement. If required, the Repairer will have to assist the Company in procuring these tools (buying, hiring, etc.); and     (iii) initiate and pursue an efficient staggering program to ensure a smooth schedule removal plan for shop maintenance.   5.3 Left intentionally blank     5.4 On-Aircraft tasks

All scheduled and unscheduled on-Aircraft maintenance activities, tasks and works and line maintenance, including the following, are under and at the Company's responsibility, risks, costs and expenses:     (i) line maintenance tasks associated with engines, propellers, landing gears, wheels, brakes and tires,     (ii) Main Elements removals and installations for BUR and Scheduled Events,     (iii) Main Elements accessories removals and installations,     (iv) Main Elements conditioning for storage,     (v) grease and lubricant refilling, seals, gaskets, hardware and consumable parts replacement,     (vi) propellers balancing, blades removals and installations,     (vii) ensure that log books are reflecting the updated maintenance status of each Main Element.     (viii) engine fuel nozzles removals and installations,     (ix) engine control trend monitoring performance and analysis,   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 90/110

Source: AZUL SA, F-1/A, 3/3/2017





Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

  (x) regular cleaning of the engines,     (xi) inspection of internal parts (boroscopic inspection).

  6. Specific services not covered by Main Elements' Service

The following services and their related costs (labor and parts) are not covered by the prices set out in Clause 1.3.2 of the Exhibit 14 (Price conditions) and shall be managed on Time and Material conditions:     (i) all costs of technical modifications that may be incurred due to the embodiment on Main Elements of Airworthiness Directives, servicebulletins, optional or recommended modifications,     (ii) replacement or repair of Main Elements' sub-Items costs relating to any failure of the Company to comply with its obligations under thisAgreement,     (iii) the replacement cost of a Main Element and/or its sub-assemblies that is declared BER or TNR,     (iv) any additional costs in connection with the repair or overhaul of any Main Element serial number due to Company's failure to producedata as required hereunder,

  (v) Items and/or any sub-Items received in damaged conditions due to Abnormal Use, mishandling, incorrect storage, lightning strike, FOD, corrosion, abrasion or erosion, dropped or water immersion, over-torque condition or over-speed in excess of transient or over- temperature

  (vi) Services performed on Main Element(s) fitted on Aircraft to comply with Aircraft redelivery conditions or delivery conditions to a third party, . For sake of clarity, Aircraft redelivery conditions or delivery conditions of a third party will have to be declared by the Company to the Repairer in anticipation [*****] before the stop of the Aircraft,     (vii) the replacement of missing parts and parts unapproved by the OEM,     (viii) the repair of damages or replacements resulting from previous repair and/or overhaul not performed pursuant to this Agreement,

  (ix) for the landing gears, the replacement of life limited parts, repair and/or replacement of On Condition Parts listed in Exhibit 4, replacement of any part (including expendables) which vendor price exceeds [*****] with the exception of parts listed in Exhibit 11 Clause 2.1 (ii),     (x) for the propellers, replacement of dome, repair of armbore, replacement of de-icer and replacement of nickel sheath.

  7. Discarding the Main Elements

The Parties acknowledge that under normal operating conditions any Main Element may be declared BER or TNR.

The Repairer shall notify the Company in case of BER or TNR status of any Main Element, and shall request the Companys approval to discard such Main Element.

If the Company denies such approval, the Main Element shall be delivered back to the Company at its costs and risks.

The Parties agree that the absence of a response by the Company to such Repairer's request within [*****] from the sending of the Repairer's notification of BER or TNR constitutes an approval for the Repairer to discard the relevant Main Element.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 91/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   In the event the Repairer shall discard any unserviceable Main Element, the Company shall pay the applicable price for test and/or scrap, as the case may be.

In case of the discarded Main Element is an unserviceable propeller blade that has been replaced with a serviceable propeller blade of the Pool or of the Stock pursuant to the provisions of Exhibits 8 (Lease of the Stock) or 9 (Spare parts standard exchange Service), the Repairer shall invoice and the Company shall pay for the price of such serviceable propeller blade of the Pool or of the Stock, based on the ATR spare parts catalogue sales price applicable at the date of such invoice for brand new or used, as the case may be.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 92/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   EXHIBIT 12 - INTENTIONALLY LEFT BLANK   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 93/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   EXHIBIT 13 - FORM OF STANDBY LETTER OF CREDIT

By swift message to our addressee BANK NATIXIS (SWIFT Code: CCBPFRPP)

Issuing Bank: (NAME AND ADDRESS) Issuing Bank SWIFT Code: Confirming Bank: Applicant: Beneficiary: ATR

StandBy Letter of Credit reference:

By order of [AZUL NAME], located at [AZUL ADDRESS], we hereby issue our irrevocable and confirmed StandBy Letter of Credit in favour of Avions de Transport Régional, located 1 allée Pierre Nadot 31712 Blagnac, France (ATR), for the aggregate amount of USD XXXX (XXX USD) available for the period ending twelve (12) Months after the Term of the GMA (as defined below);

Available by payment at sight by NATIXIS against your written demand bearing the Clause drawn under irrevocable StandBy Letter of credit (letter of credit reference) issued by (issuing bank name and address) accompanied by the following document:   - Beneficiary's signed certificate specifying the amount drawn and stating:     (1) that the amount claimed is due and payable by [AZUL NAME] in connection with the Global Maintenance Agreement between ATR asthe Repairer and [AZUL NAME] as the Company executed on (date) for the XXX [Services] (the GMA); and,     (2) that the Beneficiary has requested payment of the amount claimed from [AZUL NAME] who is in default.

Partial drawings are permitted.

The Beneficiary shall not be entitled to assign or transfer any right, title or interest in this StandBy Letter of Credit to any other party.

All banking charges and commissions are for the account of the Applicant.

This StandBy Letter of Credit is subject to the 2007 revision of the Uniform Customs and Practices for Documentary Credits of the International Chamber of Commerce Publication 600.

This StandBy Letter of Credit will take effect on the (date).   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 94/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 14 - PRICE CONDITIONS

  1. Prices

The price payable for the Services shall be the sum of the prices set out in this Agreement and established in accordance with the economic conditions prevailing in two thousand and fifteen (2015).   1.1 The lease fee payable for the lease of the Stock (based on the Stock technical contents defined in Exhibits 5 [Stock] and 8 [Lease of the Stock]), as from the Start Date is [*****]:     (i) an amount of [*****] corresponding to [*****] of the Stock value which is set in Exhibit 8 (Lease of the Stock), Clause 2.2 ; or



(ii) in the event the Repairer delivers used Items to the Company as per Clause 2.2 of the Exhibit 8 (Lease of the Stock), the [*****] set forth in 1.1 (i) here above shall be payable from the Start Date until the date on which the last Item of the Stock is delivered. On such latter mentioned date, the Repairer will notify to the Company the exact and definitive Stock value, and the accordingly revised monthly lease payment based upon [*****] of such exact and definitive Stock value. Upon Delivery of the last Item of the Stock, the Repairer shall issue a credit equal to the difference between:     a. the total amount of lease payments actually paid by the Company since the Start Date according to Clause 1.1 (i) here above,and     b. the price the Company should have paid for the used Items delivered by the Repairer according to Clause 1.1 (ii) here above.   1.2 The price payable [*****] per Aircraft by the Company to the Repairer for the standard exchange Service set out in Exhibit 9 (Spare parts standard exchange Service) is as follows (with unlimited POOL access):     [*****]      [*****]      [*****]     [*****]     [*****]    1.3 The prices per airborne FH per Aircraft payable by the Company to the Repairer for the repairs and overhauls of the LRUs and the Main Elements set out in this Agreement are:

    1.3.1 For LRU repair and overhaul:     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 95/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]      [*****]      [*****]     [*****]     [*****]     [*****]      1.3.2 For the Main Element Services as per Exhibit 11 (Main Elements Services):     i) propellers [*****] per Aircraft):     (a) For maintenance     - [*****]     - [*****]

The above propellers maintenance provisions and availability prices are defined as a result of the following repartition related to the maintenance of the following propeller hub, actuator, transfer tube and blades composing each propeller assembly:

        Blades   Hub   Actuator   Transfer Tube   Adjusting Nut [*****]

  [*****] [*****]   [*****]     [*****]     [*****]     [*****]     [*****]

  [*****] [*****]   [*****]     [*****]   &bbsp; [*****]     [*****]     [*****]       (b) For availability [*****]     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 96/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

    ii) left intentionally blank     iii) landing gears (per shipset):

For 42-500, 72-500, 72-600 landing gears:     (a) For maintenance:     [*****]     [*****]

plus     (b) For availability     [*****]     [*****]

The above landing gear maintenance provisions and availability prices are defined as a result of the following repartition related to the maintenance of the following sub-assemblies composing each landing gear assembly            [*****]   [*****]       NLG   [*****]   [*****]     Drag Brace   [*****]   [*****]     MGL   [*****]   [*****]     Side Brace   [*****]   [*****]

Life limited parts repair or replacement will be subject to a case by case quotation.     1.3.3 Additional flat rates:

Additional flat rates here under shall be applied for the following operations, as applicable:     a) for [*****], a flat rate of :

For [*****]: [*****]     b) for [*****], a flat rate of :

For [*****]: [*****]   2. Reconciliation conditions

2.1 Left intentionally blank     2.2 Price adjustment for LRUs removal rate reconciliation    [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 97/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   Any difference, to be measured in units and tens, between the RRR and the MRR pursuant to the conditions set out in Clause 11.1 (iii) and (iv) of the Agreement, shall be invoiced or credited, provided the Company is not in Default of any of its obligations pursuant to this Agreement, per airborne FH on the basis of:

for [*****]

[*****] [*****]

for [*****]

[*****] [*****]

for [*****] [*****]

[*****] [*****]

In addition, at each reconciliation based on the actual flown flight hours, the Repairer shall credit back:

[*****]   2.3 Early Events

The Parties agree that the prices for each Service subject to Scheduled Events are based on the achievement of the applicable maintenance program(s), expressed in [*****].

In case of deviation of the Scheduled Event maintenance program parameters by a number of [*****] shall be considered an Early Event.

For any Early Event, whichever the context, the Repairer shall invoice the Company an amount equal to the Lost Potential multiplied by the applicable price mentioned in Clause 1.3 of this Exhibit.   2.4 Calendar Limits

For propellers and landing gears, the prices given in Clause 1.3.2 of this Exhibit 14 are subject to the achievement of the applicable [*****] specified in Clause 1.2 of Exhibit 11 (Main Elements Services) hereto. In case a maintenance event is necessary to comply with a calendar limit, the Company shall settle the applicable prices in Clauses 1.3.2 and 3 of this Exhibit 14 at the time of the event, multiplied by the full interval specified in Clause 1.2 of Exhibit 11 (Main Elements Services) hereto less the amount already paid by the Company to the Repairer for the number of [*****] accrued since the last overhaul.

  3. Prices adjustment

For the sake of clarity, the adjustment conditions set out in Clauses 3.1 and 3.2 below [*****].   3.1 Commercial conditions for price adjustment      3.1.1 For Lease of the Stock, standard exchange Service and LRUs repair Service

The prices set out in this Agreement will be increased, if applicable, [*****] in accordance with the following adjustment formula:

[*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 98/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   where:

[*****] is the [*****] for the year N+1, and [*****],

[*****]: is the [*****] as determined by economic conditions of year N (current year),

[*****]: is the [*****] in the year N,

[*****]: is the corresponding [*****] of the year N-1,

[*****]: is the [*****] in the year N,

[*****]: is the corresponding [*****] of the year N-1.

Escalation is subject to a [*****] for Stock, Clause 1.1 of the Exhibit 14, and Standard Exchange services, Clause 1.2 of the Exhibit 14.

Escalation is subject to a [*****] for LRU repair service, Clause 1.3 and Clause 2.2 of the Exhibit 14.

Escalation is subject to a [*****].     3.1.2 For Main Elements Services

The prices set out in this Agreement relative to the Main Elements will be [*****].

Escalation is subject to a [*****] for Main Elements repair service [*****] In any case the final result of the applicable annual adjustment rate [*****] Clause 1.3 of the exhibit 14.   3.2 Technical conditions for prices adjustment

The prices set out in this Exhibit 14 shall be modified [*****] at the occasion of the invoicing reconciliation pursuant to Clause 11 (Reconciliation) if the Standard Operations of the Aircraft, analyzed at the time of the adjustment (all calculations are made with figures corresponding to [*****]), change by more or less [*****] with respect to the estimated values of the same parameters, considered at the time of commencement of the Term.

As from the date this Agreement enters into force, the Parties agree to take into account the following basic operating parameters (the Standard Operations) as a reference for the above calculation:     (i) [*****]     - [*****]     - [*****]     - [*****]     (ii) [*****]     - [*****]     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 99/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     - [*****]     - [*****]

  4. Specific conditions

4.1 Company's Aircraft fleet change(s)

[*****].   4.2 Unused Aircraft

During the Term, should any Aircraft remain temporarily unused for less than [*****] by the Company for whatever reason, the Company shall not request or obtain from the Provider a change in prices or terms and conditions set out in this Agreement in Clause 12 (Invoicing and Payment terms).

  5. Phase-in:

As a condition precedent to the entry into force of this Agreement, as reflected in Clause 17 (Conditions Precedent), the Company shall pay to the Repairer an amount corresponding for each Main Element and/or any sub-assembly thereof, to the number of FH or CY accrued since the last overhaul or since new as applicable, at the date of entry into force of the Agreement, multiplied by the applicable rate defined in Clauses 1.3 and 3 of this Exhibit 14 and applicable at the date of the first event.

  6. Phase-out: Refundable maintenance provisions

6.1 Upon termination of this Agreement with respect to one or more Aircraft and/or Services in accordance with the terms of this Agreement (except as a result of a Company Default) (the Termination Date), the Repairer shall reimburse the Company Maintenance Provisions related to landing gears maintenance services and/or their sub-component for ATR 72-600 only based on [*****] of the amount set out in Clause 1.3.2 of the Exhibit 14 (Price Conditions)for maintenance services (the Refund Amount), taking into account the price applicable [*****] as per Clauses 3 of the Exhibit 14 (Price Conditions) and when applicable adjusted every [*****] as per Clause 10 and 11, for [*****] for Main Elements: between the re-installation on such Aircraft after the last shop repair or overhaul or exchange occurred under this Agreement, as evidenced in the relevant EASA, FAA, TC, or ANAC release form and ending on the Termination Date.

For sake of clarity, since the Company will pay such service based on,   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 100/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED

  - for ATR 42-500, ATR 72-500 and ATR 72-600, [*****] of the price by the hours and [*****]     - for ATR 72-600, [*****] of the price by the hours and [*****],     - for ATR 42-500 and ATR 72-500 [*****] of the price by the hours and [*****],

[*****]. In addition, it is agreed by the parties that [*****] out of [*****] of the maintenance provision paid for the maintenance of the landing gears [*****].

Should any Aircraft be an ATR and/or ATR Affiliate's property, then Refund Amount shall be reimbursed to the owner.

The Repairer will reimburse the Refund Rate provided that:     (i) the Company has returned to the Repairer all Spare(s), Main Element(s), Items of the Stock, Core Units and unserviceable LRUs theRepairer may have delivered or to be returned to the Repairer according to the terms of this Agreement, and     (ii) The Company has paid to the Repairer all amounts due under this Agreement , and     (iii) The Company is not in Default of any of its obligations under this Agreement.   6.2 It is also understood that [*****] to be taken into account for such a refund process are only those accrued for the original Main Element(s) of Aircraft when fitted on Company's Aircraft or alternatively spare(s) main elements of Company property. [*****] accrued on Spare Main Element(s) provided by the Repairer to the Company under this Agreement and/or any Main Element(s) different from those installed on Aircraft on the date they were originally delivered to the Company or not owned by the Company shall not be taken into account in the calculation of the Refund Rate phase-out set out in this Clause 6.   6.3 Such phase out shall occur simultaneously with the final reconciliation as per Clause 11.2 of this Agreement.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 101/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 15 - ADVANCED POOL SERVICE

1. Advanced Pool Stock Availability

With the scope of further facilitating the maintenance operations of the Company, Repairer agrees to make available the Advanced Pool Stock to the Company and Company agrees to store the Advanced Pool Stock in a restricted area at the Storage Location. The provision, holding, use and disposal of the Advanced Pool Stock and its review shall be subject to the terms and conditions of this Agreement.

  2. Provision and value of the Advanced Pool Stock

2.1 The Advanced Pool Stock is composed of items defined in Exhibit 16 (Advanced Pool Stock), which may be either brand new items or Used Serviceable Items depending on availability of each item of the Advanced Pool Stock into Repairer's inventory at the time of their respective delivery.   2.2 The Advanced Pool Stock is governed by this Agreement until it is (i) either returned to the Repairer at the Expiry Date, (ii) purchased by Company in accordance with Clause 6 hereunder, or (iii) upon redelivery of the Advanced Pool Stock to Repairer after the termination of this Agreement pursuant to Clause 16 of this Agreement.   2.3 The Advanced Pool Stock shall be provided to Company by Repairer for the duration of the Term provided Company has met each of the Conditions Precedent set out in Clause 17 of the Agreement to the satisfaction of the Repairer before the Start Date.   2.4 The Advanced Pool Stock total value, under economic conditions 2010, shall be:

[*****]

For the sake of clarity, the total Stock value of Exhibit 16 (Advanced Pool Stock) list shall be: [*****].

In the event the Repairer delivers Used Serviceable Items to the Company, the value of each such Used Serviceable Items shall be quoted at [*****] of the brand new value indicated in Exhibit 16 (Advanced Pool Stock) and the total value of the Advanced Pool Stock shall be adjusted accordingly.

  3. Delivery

3.1 The items of the Advanced Pool Stock will be delivered by Repairer to Company, with the relevant airworthiness documents (certificate of conformity, ANAC SEGVOO 003, EASA Form 1 or FAA Form 8130-3), [*****] ATR stores located at the address set forth in Clause 6.1 of this Agreement, or such other location as Repairer may from time to time notify to Company.   3.2 Delivery of the Advanced Pool Stock shall take place gradually. Repairer shall use its reasonable efforts to deliver [*****] of the items of the Advanced Pool Stock (in quantity) at the Start Date. Delivery of the Advanced Pool Stock shall be subject to the Stock delivery.     [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 102/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     3.3 Notwithstanding the fact that the Repairer is the owner of the Advanced Pool Stock, all risks whatsoever and howsoever relating to or arising in connection with the Advanced Pool Stock and any item of the Advanced Pool Stock, shall be transferred to, vested in and borne by the Company as from the delivery of each item of the Advanced Pool Stock by Repairer to Company.   3.4 Company shall be responsible for and proceed to custom clearance of any item of the Advanced Pool Stock. Within a maximum [*****] lead time from the date any item of the Advanced Pool Stock is delivered, Company shall provide Repairer with evidence that any fees, customs duties, and customs declarations has been paid and made, failing which Repairer may consider such failure as a Company Default pursuant Clause 16 of this Agreement.

  4. Management and Handling Procedures

4.1 Location



i. Company shall keep the Advanced Pool Stock in secured warehouse facilities at the Storage Location, the use of which is reserved for storing and protecting the Advanced Pool Stock owned by Repairer. These facilities shall be separated from any areas used to store any other equipment and the Storage Location shall be clearly marked with the inscription ATR PROPERTY. All the items of the Advanced Pool Stock will be stored with their corresponding documentation.

  ii. Company agrees to maintain the Advanced Pool Stock by applying the best standard methods for storage and maintenance as requiredby applicable EASA regulations at its own maintenance and storage costs, particularly for parts subject to limited shelf life or cure date.

  iii. Company shall promptly notify the Repairer any loss or damage to the Advanced Pool Stock whilst under its management.

  iv. Prior to the Delivery Date and upon each renewal of any policy, the Company shall supply the Repairer with certificates of insurancecompliant with the terms and conditions set out in Clause 8 of this Agreement.



v. If at any time during the term, the Storage Location is not owned by the Company and is leased from a third party, the Company shall advise the Repairer of the name and address of the owner or landlord of such facilities or if any change of the owner or landlord occurs. It shall be the responsibility of the Company to notify said owner or landlord of the Repairer's right of ownership in and to the Advanced Pool Stock and copy the Repairer of such notification.

  vi. The Company agrees to assume liability for and to indemnify and keep harmless Repairer against any loss, cost, expense (including the fees of professional advisers and out of pocket expense), financial liability, taxes, damage or monetary loss of any kind which Repairer may suffer or incur as a consequence of the loss or damage to any item of the Advanced Pool Stock.

  4.2 Use

The Company shall be entitled to, provided no Company Default has occurred and is continuing, withdraw and use any of the items of the Advanced Pool Stock pursuant standard   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 103/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   exchange service conditions defined in Exhibit 9 and in accordance with its operational needs, solely for the remedy of parts associated defects on the Aircraft covered under this Agreement.

  4.3 Inventory

The Repairer or its agent shall have the right to inspect the Advanced Pool Stock and to audit any records relating thereto at any reasonable time upon giving prior written notice to the Company. The Company shall provide full access to enable the Repairer to conduct periodic inventory inspection of the Advanced Pool Stock.

Should any part of the Advanced Pool Stock be missing, partially or totally damaged, or has not its appropriate airworthiness documentation at the time the Repairer or its agent carries out its inspection/audit, and if the Company cannot justify the part being under repair, the Company shall have a period of [*****] to remedy the situation to the satisfaction of the Repairer, failing which, the Repairer shall invoice the Company the price for any such lost or damaged item at the ATR spare parts catalogue price applicable at the date of such invoice.

  5. Purchase Option

[*****]

  6. Modifying the Composition of the Advanced Pool Stock

Upon either party's request, the parties agree to review the content of the Advanced Pool Stock at the first anniversary date of the Start Date. Shall the parties agree to modify the content of the Advanced Pool Stock, the following conditions shall apply:

  i. item returned by the Company that has never been used by the Company since the Start Date, is received by the Repairer in serviceablecondition, in its original packaging and with all appropriate airworthiness documents;

  ii. the item shall be returned in accordance with the provisions of Clause 6.2 of this Agreement; and

  iii. if an item is returned to the Repairer from the Advanced Pool Stock, the value of the Advanced Pool Stock shall be modified bysubtraction of the initial value of the concerned item; and

  iv. if an item is added to the Advanced Pool Stock, the value of the Advanced Pool Stock shall be increased pursuant to the ATR SparesCatalogue price for the added item at the economical condition of the moment the Advanced Pool Stock is modified.

The Company shall be responsible for and pay any costs incurred by the return to Repairer and/or replacement of such items of the Advanced Pool Stock, including but not limited to transportation costs, customs duties, formalities and commissions, re-certification fees if documents are missing or damages are found.

  7. Purchase or Return of the Advanced Pool Stock

7.1 Promptly on the Expiry Date, and subject to Clause 5 of this Exhibit 15, the Company shall   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 104/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   have the option to:

  i. [*****]

  ii. re-deliver the items of the Advanced Pool Stock to the Repairer in accordance with Clause 6.2 of this Agreement or to any other addressindicated from time to time by Repairer to the Company, in accordance with the following terms and conditions.   7.2 In the event that any items are delivered back to the Repairer without the appropriate airworthiness documentation, or whenever the parts are returned without the original documents supplied by the Repairer, or if the Repairer has to test, to replace or to repair such returned item(s) of the Advanced Pool Stock due to damage or deterioration as a result of incorrect storage, inappropriate packaging and/or transport, or for any other reason whatsoever, the Company is liable for any associated re-certification, repair, overhaul, or replacement costs for such items at the ATR catalogue prices applicable on the date of delivery of such item to the Company.   7.3 If the Company fails to deliver the Advanced Pool Stock or any part(s) of the Advanced Pool Stock within [*****] of the Expire Date, the Company shall pay late return fees equal to [*****] of the value of the non returned part(s), per Day since the Expire Date, until: a) the missing part(s) are duly received by the Repairer, or b) a maximum [*****] from the Expire Date. The Repairer will be entitled to withdraw such late return fees from the Security Deposit pursuant to Clause 13.   7.4 The Company acknowledges and agrees that in the event any item of the Advanced Pool Stock, or the entire Advanced Pool Stock, is not re- delivered to the Repairer within [*****] of the Expire Date, this item or the Advanced Pool Stock shall be deemed lost, and the Repairer will invoice this item of the Advanced Pool Stock to the Company at the ATR spare parts Catalogue price in force at the date of delivery of any such item of the Advanced Pool Stock. Should the Company fail to pay such invoice, Repairer will be entitled, at its sole discretion, to withdraw the corresponding amount(s) from the Security Deposit.

  8. Payment and Transfer of the Title to Property

8.1 Save as otherwise set out in this Agreement, the purchase price for any item of the Advanced Pool Stock shall be paid in accordance with the provisions of Clause 12.   8.2 Notwithstanding the provisions of Clause 6 of Exhibit 9, title to the Advanced Pool Stock or any item thereof shall remain with the Repairer at all times until such Advanced Pool Stock or part thereof has been purchased by the Company and provided that the amount of the corresponding invoice has been fully received by the Repairer in accordance with Clauses 10 and 12 of this Agreement. The Company specifically agrees that it shall not acquire any interest, equity or share of the Advanced Pool Stock, or pledge or create any lien of any sort whatsoever prior to the transfer of title to the Advanced Pool Stock to the Company in accordance with this Agreement. It is hereby acknowledged and agreed that the Company is appointed as the custodian of the Advanced Pool Stock, which appointment the Company hereby accepts until such time as the Repairer has received the Company's payment in full for the Advanced Pool Stock or any item if the Advanced Pool Stock in case such Advanced Pool Stock or item is either missing, damaged, without airworthiness documentation, purchased by the Company or not returned by the Company to the Repairer in accordance with the provisions of this Agreement.

  8.3 The Company may not, under any circumstances, perform or permit any action to be taken that   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 105/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   may be detrimental to the Repairer's title to and property in the Advanced Pool Stock, including without limitation:

  i. the Company must not transfer, sell, charge, pawn, mortgage, negotiate, dispose of, or intend to negotiate or dispose of the AdvancedPool Stock or any item of the Advanced Pool Stock ; and



ii. the Company shall take the necessary measures in order to prevent the Advanced Pool Stock or part of the Advanced Pool Stock from being seized or taken away, or to check the Advanced Pool Stock in the event of a seizure by distress or any other similar legal process. However, if the Advanced Pool Stock or part of the Advanced Pool Stock is seized or taken away, the Company must immediately inform the Repairer in writing and indemnify the Repairer for any losses, costs or expenses incurred by the Repairer as a result of the above-mentioned events, and shall mitigate any such Losses, costs or expenses by using its best efforts to re-possess the Advanced Pool Stock or to re-acquire the Advanced Pool Stock or any item of the Advanced Pool Stock.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 106/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED   EXHIBIT 16 - ADVANCED POOL STOCK

The following Exhibit is composed of two (2) pages, into which are listed [*****] part numbers.

First List for [*****] specific fleet contains [*****] part numbers   [*****]   DESCRIPTION   [*****] [*****]   CONDENSER   [*****] [*****]   COOLING UNIT   [*****] [*****]   VALVE-TURBINE INLET CONTROL   [*****] [*****]   AUDIO CONTROL PANEL   [*****] [*****]   CONTROL UNIT-HF   [*****] [*****]   REMOTE CONTROL AUDIO UNIT   [*****] [*****]   CONTROL UNIT-BUS POWER,DC   [*****] [*****]   CONTROL UNIT-GENERATOR,AC   [*****] [*****]   STARTER GENERATOR-DC   [*****] [*****]   PROBE-CCAS ALPHA   [*****] [*****]   PROBE-PITOT   [*****] [*****]   VALVE-HP AIR BLEED   [*****] [*****]   EXCITER - IGNITION I.C.   [*****] [*****]   SERVO VALVE   [*****] [*****]   FUEL PUMP   [*****] TOTAL

Second List for [*****] specific fleet contains [*****] part numbers   [*****]   DESCRIPTION   [*****] [*****]   REMOTE CONTROL AUDIO UNIT   [*****] [*****]   REMOTE CONTROL AUDIO UNIT   [*****] [*****]   CONTROL UNIT-BUS POWER,DC   [*****] [*****]   FCU-HYDRO MECHANICAL   [*****] [*****]   FCU-HYDRO MECHANICAL   [*****] [*****]   AUDIO CONTROL PANEL   [*****] [*****]   EXCITER - IGNITION I.C.   [*****] [*****]   EXCITER - IGNITION I.C.   [*****] [*****]   PROBE-CCAS ALPHA   [*****] [*****]   PROBE-CCAS ALPHA   [*****]   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 107/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   CONFIDENTIAL TREATMENT REQUESTED     [*****]   DESCRIPTION   [*****] [*****]   CONTROL UNIT-GENERATOR,DC   [*****] [*****]   SERVO VALVE   [*****] [*****]   CONTROL UNIT-VHF   [*****] [*****]   CONDITIONER,TORQUE SIGNAL   [*****] [*****]   ALTIMETER-STANDBY,MILLIBARS   [*****] [*****]   CONTROL UNIT-VHF   [*****] [*****]   ELECTRONIC SYSTEM UNIT   [*****] [*****]   INDICATOR-STANDBY HORIZON   [*****] [*****]   CONTROL,AUTOFEATHER   [*****] [*****]   CONTROL,AUTOFEATHER   [*****] [*****]   GOVERNOR-PROPELLER OVSP   [*****] [*****]   PUMP-PROPELLER FEATHERING   [*****] [*****]   PUMP-PROPELLER FEATHERING   [*****] [*****]   SWITCH-PROXIMITY   [*****] TOTAL [*****]     [*****]   [*****]   DESCRIPTION   [*****] [*****]   PROBE PITOT   [*****]

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.   [*****] Confidential material redacted and filed separately with the Securities and Exchange Commission.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 108/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   EXHIBIT 17 - INSURANCE CERTIFICATES

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 109/110

Source: AZUL SA, F-1/A, 3/3/2017





Execution version   EXHIBIT 18 - NOTA FISCAL REPORTING

Reporting 1:

Dedicated to the pool import + 1st standard exchange loop

Shall be submitted once (after all serviceable parts from the pool sent to Azul)

Part number   Serial number

Nota Fiscal CFOP 5949 number Flow Azul -> Helibras

Nota Fiscal CFOP 5949 number Flow Helibras -> Azul   Fiscal value Table with XXX lines (XXX = number of parts to be imported)         ...

Reporting 2:

Dedicated to subsequent standard exchanges

Shall be submitted on a monthly basis

Part number   Serial number

Nota Fiscal CFOP 5949 number Flow Azul -> Helibras

Nota Fiscal CFOP 5949 number Flow Helibras -> Azul   Fiscal value ...

ALL ITEMS, PARTS, COMPONENTS, SERVICES, WARRANTIES AND GUARANTEES PROVIDED HEREUNDER ARE PROVIDED SUBJECT TO CLAUSE 14 OF THE AGREEMENT.   AZUL-ATR   Global Maintenance Master Agreement DS/CS-3957/14/Issue 7   Page 110/110

Source: AZUL SA, F-1/A, 3/3/2017

Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?