Document:

Exhibit

Exhibit 10.5
EXECUTION VERSION

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of May 5, 2016 (the “Effective Date”) by and between Citizens Financial Group, Inc. (the “Company”) and Bruce Van Saun (“Executive”) (certain capitalized terms used herein being defined in Section 13).
WHEREAS, Executive and the Company (as successor in interest of RBS Citizens Financial Group, Inc.) are party to that certain Executive Employment Agreement, dated October 1, 2013 and to that certain letter from Elaine Arden to Executive dated November 6, 2013 (collectively, the “Prior Agreement”);
WHEREAS, the Company desires to continue to employ Executive, under modified terms and conditions, with effect from the Effective Date and to enter into this Agreement embodying such modified terms and conditions;
WHEREAS, Executive desires to continue his employment pursuant to such modified terms and conditions and to enter into this Agreement; and
WHEREAS, as of the Effective Date, Executive and the Company mutually desire to terminate and supersede in its entirety the Prior Agreement upon effect of this Agreement without triggering any entitlement under the Prior Agreement or any bonus, incentive or compensation schemes or plans.
NOW, THEREFORE, in consideration of the promises and mutual covenants herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
Section 1.  Employment At-Will
(a)    Executive’s employment with the Company shall remain strictly “at-will”.  Notwithstanding this and subject to the below, Executive’s employment under this Agreement shall be for an initial term of 

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five (5) years from the Effective Date (the “Initial Term”).  At the conclusion of the Initial Term, this Agreement shall automatically renew for an additional two (2) year term unless, at least twelve (12) months prior to the expiry of the Initial Term, either the Company or Executive provide notice to the other of its or his election not to renew.  In the event the Company elects not to renew the Initial Term, such nonrenewal shall constitute a termination of Executive’s employment by the Company without Cause.  Executive understands and acknowledges that no statement, whether written or verbal, by the Company or any of its officers, employees or representatives may in any way modify, alter or change the strictly “at-will” nature of Executive’s employment relationship with the Company, and both Executive and the Company retain the right to terminate Executive’s employment at any time, for any reason or no reason, subject to the provisions of Sections 1(b) through (h) of this Agreement.  It is acknowledged that for seniority purposes, Executive’s original hire date of September 8, 2009 with RBS remains in effect.
(b)    Termination for Cause by the Company.  Executive’s employment hereunder may be terminated at any time without prior notice by the Company for Cause, except that to the extent the act, omission or otherwise which forms the basis of the Cause termination may be cured to the Company’s satisfaction, the Company shall give Executive written notice specifying the basis for the Cause termination and what corrective steps Executive must take to cure, and Executive shall have a period of sixty (60) days to cure.  For the avoidance of doubt, if the Company believes in good faith that the act, omission or otherwise underlying the Cause termination is not curable, the Company need not give written notice and an opportunity to cure.  Additionally, in the event the Company does provide Executive with written notice and opportunity to cure, at the end of the sixty (60) day cure period, the determination as to whether a cure was accomplished shall rest in the Company’s sole discretion.  The Company must act in good faith in making such a decision.  Upon a termination for Cause, all outstanding unvested cash or equity awards will be immediately forfeited and Executive shall be entitled only to the Accrued Benefits.
(c)    Termination by Reason of Death or Disability.
(i)    Death

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(A)    Upon termination by reason of Executive’s death, Executive’s estate shall receive, in addition to the Accrued Benefits, a lump sum payment equal to: (i) Executive’s Base Salary, at the rate in effect at the time of Executive’s death, through the end of the month in which Executive’s death occurs; and (ii) a pro-rata portion of Executive’s target cash incentive for the year in which death occurs.  Such lump sum payment shall be made within thirty (30) days of the termination due to Executive’s death.
(B)    Treatment of Awards.  Upon termination by reason of Executive’s death, any outstanding unvested cash or equity-based awards will become immediately vested and settled, with any performance-based awards vesting based on the target level of performance.
(ii)    Disability
(A)    Upon termination by reason of Executive’s Disability, Executive shall be entitled to receive, in addition to the Accrued benefits, Executive’s Base Salary at the rate in effect at the time of Executive’s Disability, through the earliest of (x) date on which Executive is first eligible to receive payment of long-term disability benefits under the Company’s employee benefit plans as then in effect, (y) the end of the short-term deferral period as of the date of termination or (z) the date Executive is no longer Disabled.  Such continued Base Salary shall be paid in accordance with the Company’s normal payroll practices in effect from time to time.
(B)    Treatment of Awards.  Upon termination by reason of Executive’s Disability, any outstanding unvested cash or equity-based awards will remain outstanding and continue to vest on their original schedule, provided that the Executive complies with the provisions of Section 6(a) (regarding Non-Competition) during the entire remaining vesting period and Sections 6(b) and (c) (regarding Non-Solicitation of Employees, Customers and Prospective Clients) for twelve (12)  months less any time spent on Garden Leave and/or any Notice Period. Violation of any of those provisions shall result in the forfeiture of remaining unvested awards.

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Unless specified otherwise above or elsewhere in this Agreement, all other benefits due to Executive following Executive’s termination for death or Disability shall be determined in accordance with the Company’s plans, policies and practices then in effect.
(d)    Termination without Cause by the Company. The Company may terminate Executive’s employment for any reason other than Cause, death or Disability.  At the Company’s sole discretion, such termination may be made effective immediately, may be effective at a later date as stated in such notice with the requirement that Executive continue working through such stated date, or the Company may direct Executive not to report to work unless otherwise requested by the Company (the “Garden Leave”).
(i)    Severance.  Upon termination of Executive by the Company without Cause, the Company shall pay to Executive a lump sum in cash equal to two times Executive’s then Base Salary, paid, subject to execution and non-revocation of the Release (as defined below), within thirty (30) days of the termination of Executive’s employment, provided, however, if under the Release Executive is permitted more than thirty (30) days to sign and not revoke the Release, such amount shall still be paid within such thirty (30)-day period, but Executive will be required to repay the foregoing amount to the Company unless the Release is executed and becomes irrevocable within the specified period.  In addition, Executive shall be entitled to receive a pro-rata portion of Executive’s target cash incentive for the year in which termination occurs, not to exceed 2% of Pre-Tax Operating Income, as set forth in the Citizens Financial Group, Inc. Performance Formulate Incentive Plan (the “162(m) Plan”), or such other percentage of Pre-Tax Operating Income as may be set forth in any substitute plan which may be in effect during the year of termination.  The pro-rata cash incentive award shall be paid to Executive at the same time cash incentive awards are paid to active employees.  The foregoing payments are conditioned upon (x) there being an orderly handover by Executive of his responsibilities and (y) Executive executing and delivering to the Company a release of claims in substantially the form annexed hereto as Exhibit A (the “Release”).  Any additional payments will be at the sole discretion of the Board or so designated sub-committee thereof.  Such payments will be in substitution for any payment that may otherwise have been made to Executive pursuant to the Company’s then current severance practice or plan.

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(ii)    Treatment of Awards.  Upon termination of Executive by the Company without Cause, any outstanding unvested cash or equity-based awards will remain outstanding and continue to vest on their original schedule, provided that the Executive complies with the provisions of Sections 6(b) and (c) (regarding Non-Solicitation of Employees, Customers and Prospective Clients) for twelve (12) months less any time spent on Garden Leave and/or any Notice Period.  Violation of any of those provisions shall result in the forfeiture of remaining unvested awards.
(e)    Termination by Executive without Good Reason.  Executive may terminate his employment without Good Reason effective six (6) months (or such shorter period as is mutually agreed in writing) following Executive’s delivery of Notice of Termination to the Board.  Executive and the Company will mutually agree on how  a pro-rata portion of Executive’s variable compensation (excluding performance-based awards) for the year in which Executive’s termination occurs will be payable, should Executive be required to work during such Notice Period.  Any pro-rata payment of variable compensation that may be made to Executive under this Section 1(e) shall be subject to Executive executing and delivering to the Company the Release within the period specified by the Company.  Subject to Section 1(m) of this Agreement, if the lump sum payment described in this Section 1(e) is to be paid, such payment shall be made at the same time as such payment is made to active employees.
(f)    Termination by Executive for Good Reason.  Executive may resign for Good Reason by providing written notice to the Company stating the basis of such resignation.  Executive must give notice of the existence of the Good Reason condition(s) within sixty (60) days of the condition(s) first occurring.  If the Company fails to cure the action or inaction that forms the basis of such resignation within thirty (30) days of receipt of such notice, then Executive’s employment will be terminated effective as of the last day of that thirty (30) day cure period.   Upon such resignation for Good Reason, the Company shall pay to Executive a lump sum in cash equal to two times Executive’s then Base Salary, paid, subject to execution and non-revocation of the Release, within thirty (30) days of the termination of Executive’s employment, provided, however, if under the Release Executive is permitted more than thirty (30) days to sign and not revoke the Release, such amount shall still be paid within such thirty (30)-day period, but Executive will 

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be required to repay the foregoing amount to the Company unless the Release is executed and becomes irrevocable within the specified period.  In addition, Executive shall be entitled to receive a pro-rata portion of Executive’s target cash incentive for the year in which termination occurs, not to exceed 2% of Pre-Tax Operating Income, as set forth in the Citizens Financial Group, Inc. Performance Formulate Incentive Plan (the “162(m) Plan”), or such other percentage of Pre-Tax Operating Income as may be set forth in any substitute plan which may be in effect during the year of termination.  The pro-rata cash incentive award shall be paid to Executive at the same time cash incentive awards are paid to active employees.  The foregoing payments are conditioned upon (x) there being an orderly handover by Executive of his responsibilities and (y) Executive executing and delivering to the Company the Release. Any additional payments will be at the sole discretion of the Board or so designated sub-committee thereof.  Such payments will be in lieu of and not in addition to any payment that may otherwise have been made to Executive pursuant to the Company’s then current severance practice or plan.
(g)    Treatment of Awards upon Termination by Executive (With or Without Good Reason).   Because Executive has remained continuously employed with the Company for five (5) years (i.e. until September 8, 2014) and meets the Company’s current definition of Retirement, if Executive  gives at least six (6) months’ Notice of Termination upon a voluntary resignation without Good Reason or complies with the notice provisions required in Section 1(f) in the event of termination for Good Reason, and there is an orderly handover by Executive of his responsibilities, then provided that in the opinion of the Board Executive has not committed any acts or made any omissions capable of giving rise to a termination for Cause, any outstanding unvested cash or equity-based awards will remain outstanding and continue to vest on their original schedule, provided that the Executive complies with the provisions of Section 6(a) (regarding Non-Competition) during the entire remaining vesting period and Sections 6(b) and (c) (regarding Non-Solicitation of Employees, Customers and Prospective Clients) for twelve (12)  months less any time spent on Garden Leave and/or any Notice Period  in the event of a Termination by Executive without Good Reason and the provisions of Sections 6(b) and (c) (regarding Non-Solicitation of Employees, Customers and Prospective Clients) for twelve (12)  months less any time spent on Garden 

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Leave and/or any Notice Period in the event of a Termination by Executive with Good Reason.  Violation of any of those provisions shall result in the forfeiture of remaining unvested awards.
(h)    Change of Control Termination.
(i)    Severance.  Subject to the conditions set out in this Section 1(h), if within twenty four (24) months of a Change of Control, Executive is terminated without Cause or resigns for Good Reason (in either case a “Change of Control Related Termination”), then Executive shall be entitled to receive a lump sum payment at the time specified herein equal to (i) three times the sum of Executive’s then Base Salary and Executive’s target cash incentive for the year in which termination occurs; plus (ii) pro-rata portion of Executive’s target cash incentive for the year in which termination occurs.  The foregoing payments shall be made, subject to execution and non-revocation of the Release, within thirty (30) days of the termination of Executive’s employment, provided, however, if under the Release Executive is permitted more than thirty (30) days to sign and not revoke the Release, such amount shall still be paid within such thirty (30)-day period, but Executive will be required to repay the foregoing amount to the Company unless the Release is executed and becomes irrevocable within the specified period. Any payment made in accordance with this Section 1(h) shall be in lieu of and not in addition to any payments to which Executive may otherwise have been entitled in accordance with other sections of this Agreement and shall be in full and final settlement of all claims Executive may have arising out of or in connection with his employment or its termination.  No payment shall be made in accordance with this Section 1(h)(i) unless none of the circumstances referred to in Section 1(h)(iii) apply as at the date of payment.  In addition, in order to receive such payment, Executive must execute and deliver to the Company the Release.  For the purposes of this Section 1(h), the Board shall determine whether a Change of Control has occurred and the Company shall determine whether any of the circumstances referred to in Section 1(h)(iii) apply; however, in the event of a disagreement between Executive and the Board, the matter shall be presented to the Company’s auditor for a final determination.
(ii)    Treatment of Awards.  Upon a Change of Control, any outstanding performance-based awards will be deemed to have satisfied the target level of performance.  Upon a subsequent 

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Change of Control Related Termination, any outstanding cash or equity-based awards will become immediately vested and settled.
(iii)    Conditions.  No payments or acceleration of awards shall be payable in accordance with this Section 1(h) where:
(A)    circumstances exist that would entitle the Company or the acquirer to terminate Executive’s employment for Cause; or
(B)    any “clawback” provisions in the Company’s equity plans or otherwise have been triggered, resulting in clawback of compensation or the reduction of unvested compensation.
(i)    Notice of Termination and Notice Period.  Any purported termination of employment by the Company or by Executive shall be communicated by Notice of Termination to the other party hereto in accordance with the relevant subsection of Section 1 and Section 13 hereof.
(j)    During any period of Garden Leave or Notice Period under this Section 1, the following will apply:
(i)    Executive will remain an employee of the Company, will continue to be paid Executive’s then Base Salary, and will continue to be eligible for Employee Benefits;
(ii)    Executive will be expected to continue to undertake such duties and responsibilities as are assigned to Executive by the Board, including duties to assist the Company with Executive’s transition from the Company and maintaining the Company’s business, business relationships and goodwill; but notwithstanding the foregoing, the Company reserves the right to suspend any or all of Executive’s duties and powers and to relocate Executive’s office to Executive’s personal residence for all or part of the Garden Leave;

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(iii)    Executive will remain bound by all fiduciary duties and obligations owed to the Company and will remain required to comply with all Company policies and practices and the provisions of this Agreement;
(iv)    Executive may not, unless with the prior written consent of the Company or in the discharge of duties and responsibilities in accordance with subsection (ii) above, contact or attempt to contact any client, customer, agent, professional adviser, employee, supplier or broker of the Company;
(v)    Executive will not be permitted to work for any other organization or on Executive’s own behalf without the Company’s prior written consent, but may search for other employment opportunities, subject to Section 6 below; and
(vi)    All other terms and conditions of Executive’s employment (both express and implied) and of this Agreement will remain in full force and effect until the end of the Garden Leave or Notice Period, and the terms of Sections 6, 7, 8, 9, 10 and 11 shall survive termination of this Agreement.
(k)    Other Agreements.  Executive agrees that termination of employment hereunder for any reason will be deemed an immediate resignation by Executive as a member of any board of directors of or other position with the Company.  Executive also agrees to take such action as the Company deems reasonably necessary or desirable to evidence such resignation, and hereby irrevocably authorizes the Company to appoint a Person in Executive’s name and on Executive’s behalf to sign any documents and do any things necessary to effect such resignation should Executive fail to do so in a timely manner.
(l)    In the case of any of the foregoing terminations, Executive (or Executive’s estate as the case may be) shall be entitled to receive: (1) any earned but unpaid amounts as of the date of termination, including but not limited to (x) the Base Salary through the date of termination, paid in a lump sum within thirty (30) days following termination, (y) reimbursement for business expenses in the normal course in accordance with the Company’s policies, paid in a lump sum within thirty (30) days following termination, and (y) any bonus and other incentive awards actually awarded and due, but not yet paid, as of the date of termination, paid at the time such payments are made to active employees; (2) payment in 

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lieu of accrued but unpaid vacation days for the year of termination  through the date of termination, paid in a lump sum within thirty (30) days following termination; and (3) other payments and benefits, if any, in accordance with the terms of the Company’s plans and programs in which Executive participates, including the Company’s nonqualified deferred compensation plan (collectively, including the timing of payment or provision, the “Accrued Benefits”).
(m)    Section 409A.
(i)    The intent of the parties is that payments and benefits under this Agreement comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively, “Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith or exempt therefrom.  For purposes of Section 409A, Executive’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within thirty (30) days following the date of termination”), the actual date of payment within the specified period shall be within the sole discretion of the Company.
(ii)    A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  If Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered “deferred compensation” under Section 409A (whether under this Agreement, any other plan, program, payroll practice or any equity grant) that is due upon Executive’s separation from service, such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of Executive’s “separation from service” and (B) the date of 

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Executive’s death (the “Delay Period”) and this Agreement and each such plan, program, payroll practice or equity grant shall hereby be deemed amended accordingly.  Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 1(m) (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum on the first business day of the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.
(iii)    All expenses or other reimbursements paid pursuant to this Agreement or otherwise that are taxable income to Executive shall in no event be paid later than the end of the calendar year next following the calendar year in which Executive incur such expense or pays such related tax.  With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (x) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (y) the amount of expenses eligible for reimbursement, or of in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (y) shall not be violated without regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect and (z) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense occurred.
(n)    Section 280G.
(i)    If the aggregate of all amounts and benefits due to Executive under this Agreement or any other plan, program, agreement or arrangement of the Company or any of its Affiliates, which, if received by Executive in full, would constitute “parachute payments,” as such term is defined in and under Section 280G of the Code (collectively, “Change of Control Benefits”), reduced by all federal, state and local taxes applicable thereto, including the excise tax imposed pursuant to Section 4999 of the Code, is less than the amount Executive would receive, after all such applicable taxes, if Executive 

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received aggregate Change of Control Benefits equal to an amount which is $1.00 less than three (3) times Executive’s “base amount,” as defined in and determined under Section 280G of the Code, then such Change of Control Benefits shall be reduced or eliminated to the extent necessary so that the Change of Control Benefits received by the Executive will not constitute parachute payments. If a reduction in the Change of Control Benefits is necessary, reduction shall occur in the following order unless the Executive elects in writing a different order, subject to the Company’s consent (which shall not be unreasonably withheld or delayed): (i) severance payment based on multiple of Base Salary and/or annual bonus; (ii) other cash payments; (iii) any annual incentive compensation paid as severance; (iv) acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of stock subject to the option, provided such options are not permitted to be valued under Treasury Regulations Section 1.280G-1 Q/A – 24(c); (v) any equity awards accelerated or otherwise valued at full value, provided such equity awards are not permitted to be valued under Treasury Regulations Section 1.280G-1 Q/A – 24(c); (vi) acceleration of vesting of stock options with an exercise price that exceeds the then fair market value of stock subject to the option, provided such options are permitted to be valued under Treasury Regulations Section 1.280G-1 Q/A – 24(c); (vii) acceleration of vesting of all other stock options and equity awards; and (viii) within any category, reductions shall be from the last due payment to the first.
(ii)    It is possible that after the determinations and selections made pursuant to Section 1(n)(i) above, Executive will receive Change of Control Benefits that are, in the aggregate, either more or less than the amounts contemplated by Section 1(n)(i) above (hereafter referred to as an “Excess Payment” or “Underpayment,” respectively).  If there is an Excess Payment, Executive shall promptly repay the Company an amount consistent with this Section 1(n)(ii).  If there is an Underpayment, the Company shall pay Executive an amount consistent with this Section 1(n)(ii)
(iii)    The determinations with respect to this Section 1(n) shall be made by an independent auditor (the “Auditor”) compensated by the Company. The Auditor shall be the Company’s regular independent auditor, unless the regular independent auditor is unable or unwilling to makes such 

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determinations, in which event the Auditor shall be a nationally-recognized United States public accounting firm chosen by the Company and approved by Executive (which approval shall not be unreasonably withheld or delayed).
Section 2.  Position
(a)    Position.  During Executive’s employment, Executive shall serve as Chief Executive Officer and Chairman of the Company.  In this position, Executive shall report directly to the Board.
(b)    Best Efforts.  During Executive’s employment, Executive shall: (1) faithfully and efficiently perform Executive’s duties hereunder, comply with the Company’s policies, procedures, bylaws, rules, code of conduct and practices, as the same may be amended from time to time, and obey all reasonable and lawful directions given by or under the authority of the Board; (2) satisfy all relevant requirements, recommendations, rules and regulations as amended from time to time of any regulatory body whose consent is required to enable Executive to undertake (or continue to undertake) Executive’s duties hereunder and all other regulatory authorities relevant to the Company; (3) refrain from engaging in any other business, profession or occupation for compensation or otherwise which would conflict, directly or indirectly, with the rendition of services to the Company, without the prior written consent of the Board (except that Executive may engage in charitable and community activities and manage Executive’s personal investments, provided that such activities do not materially interfere with the performance of Executive’s duties hereunder or conflict with the conditions of Executive’s employment); (4) refrain from engaging in any conduct prejudicial to the interests and reputation of the Company but instead endeavor to promote and extend the business of the Company and protect and further its interests and reputation; and (5) other than in the proper performance of Executive’s duties hereunder, refrain from introducing to any other Person business of a kind in which the Company is for the time being engaged or capable of becoming engaged or with which the Company is able to deal in the course of its business.
(c)    Personal Performance.  Executive’s performance and discharge of Executive’s duties and responsibilities hereunder shall be the subject of regular review, the object of which is to assess 

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performance during the period under review and to set agreed performance standards for future review periods.
(d)    Directorships.  Executive may be required, at the sole discretion of the Company, to perform services for any subsidiary or Affiliate of the Company and may be required to undertake the role and duties of an officer or non-executive director of other companies that are subsidiaries or Affiliates of the Company.  No additional compensation will be paid in respect of these appointments and Executive shall, at the request of the Company, immediately resign from any such office without claim for compensation.
(e)    Location.  During the period of Executive’s employment, Executive shall be based in Stamford, Connecticut but may be relocated within a fifty (50) mile radius of the same location at the Company’s sole discretion.  Additionally, Executive may be required to travel elsewhere in the world in the performance of Executive’s duties.
(f)    Stock Ownership and Retention Requirements.  Executive will be subject to the Company’s stock ownership and retention guidelines applicable to the Chief Executive Officer of the Company as adopted by the Compensation and Human Resources Committee of the Board (the “CHRC”), and as may be amended from time to time in the discretion of the CHRC.
Section 3.  Compensation.
(a)    Base Salary.  The Company shall pay Executive a base salary (the “Base Salary”) at the initial annual rate of $1,487,000, in substantially equal installments as it is earned not less frequently than monthly in accordance with the Company’s usual payroll practices.  Executive shall be entitled to such increases in Executive’s Base Salary as may be determined from time to time at the sole discretion of the CHRC.
(b)    Total Compensation Opportunity.  Exclusive of the one-time equity grant discussed in Section 3(d) below, Executive’s annual target total compensation shall be $7,500,000.  Executive’s total 

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compensation opportunity may be subject to such increases as may be determined from time to time at the sole discretion of the CHRC.
(c)    Variable Compensation. Subject to regulatory requirements which may arise from time-to-time, Executive’s annual target variable compensation shall be $6,013,000.  The amount, form and timing of payment and grant will be determined by CHRC in its sole discretion on an annual basis.  The CHRC may consider a number of factors in making its variable compensation award decision, including personal, team, business, and Company targets and external economic considerations.  Variable compensation may be paid in cash, deferred cash or equity-based awards (including awards with performance conditions) or any other form, as determined by the CHRC in its sole discretion on an annual basis.
(d)    Equity Grant.  Executive shall be awarded a one-time equity-based award with a grant date value of $3,000,000.  The equity-based award shall be comprised 50% of restricted stock units that will be eligible to vest in May 2019 and 50% of performance share units that will be eligible to vest in May 2019, with the actual amount earned to be determined based subject to performance.  The terms and conditions of these equity awards will be memorialized in award agreements approved by the CHRC, which will include a condition that Executive must be employed by the Company in good standing on the equity award vesting date in order for vesting to occur.  For the avoidance of doubt, the termination provisions set forth in Section 1 shall not apply to this equity award.
Section 4.  Other Employee Benefits, Vacation and Perquisites.
(a)    Employee Benefits.  Executive may participate in and receive Employee Benefits available to the Company’s senior executives.  Copies of all pertinent plan, program or policy documents will be provided to Executive on request, to the extent the same are within the Company’s control.  All benefits and the plans, programs, policies, or practices relating to them may be changed at any time by the Company within its sole discretion.

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(b)    Paid Time Off.   In addition to any applicable statutory holidays, Executive shall be entitled to accrue twenty seven (27) days of paid time off (“PTO”) annually, which may be scheduled as time off away from work in accordance with the Company’s PTO policy in effect from time to time.
(c)    Car and Driver.   Executive shall be entitled to business use of a Company car and driver.
(d)    Reimbursement of Business Expenses.  Reasonable, customary and necessary travel, entertainment and other business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with the Company’s policies then in effect, subject to such reasonable substantiation and documentation as may be required by the Company from time to time.
(e)    Sickness.  Executive will be eligible for all payments in respect of short- and long-term disability generally made available from time to time to other executives of the Company.  Unless required under applicable federal or state law, Executive does not have any contractual or other right to payment in respect of any period of absence due to sickness or incapacity and any such payments will be made at the Company’s sole discretion.  Executive shall at any time (including during any period of incapacity), at the request and expense of the Company, submit to medical examinations by a medical practitioner nominated by the Company, to the extent permitted by applicable federal and state law.  Executive agrees, and hereby authorizes, that the results of any such medical examination be disclosed to the Company, subject to the provisions of the United States Health Insurance Portability and Accountability Act of 1996.
(f)    Financial Planning Services.  Executive shall be entitled to elect to receive financial planning services which may be offered by the Company to other senior executives.
Section 5.  Personal Securities Transactions Policy and Minimum Requirements.
Executive is subject to the Company’s Personal Securities Transactions Policy and related Minimum Requirements, which dictates the procedures relating to transactions in Company securities.

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Exhibit 10.5

Section 6.  Non-Competition, Non-Solicitation.
(a)    Non-Competition.  Executive acknowledges and recognizes the highly competitive nature of the businesses of the Company.  Accordingly, Executive agrees that during the Employment Term and Non-Competition Restricted Period, neither Executive nor any person or enterprise controlled by Executive will hold any position as employee, director, officer, consultant, partner, agent or principal in or with any of the following: JP Morgan Chase, Bank of America, Citigroup, Wells Fargo, US Bancorp, Regions Financial Corp., M&T Bank Corp., PNC, Fifth Third, Sun Trust, Comerica, KeyCorp, BB&T, Capital One, or TD Bank.  If Executive wishes to take up a position with any of the entities on the list, he should notify the Board of that wish and the Board will consider in good faith whether to release him from the restrictions in this Section 6(a) to the extent permitted to allow him to take up such position (and the Board will not unreasonably decline to provide such release).  Such release, if granted, will release Executive from the obligations under Sections 1(c)(ii)(B) and1(g) related to Non-Competition under this Section 6(a).  Notwithstanding the foregoing, nothing in this Section 6(a) shall prohibit Executive’s ownership of less than two percent (2%) of the outstanding shares of the stock or other equity of any company engaged in any business, which shares or other equity are regularly traded on a national securities exchange or in any over-the-counter market or the provision of services to a subsidiary, division or affiliate of a competitive business if such subsidiary, division or affiliate is not itself engaged in a competitive business and Executive does not provide services to, or have any responsibilities regarding, the competitive business.
(b)    Non-Solicitation of Employees. Executive agrees that during the Employment Term and Non-Solicitation Restricted Period, Executive shall not, directly or indirectly, whether for Executive’s own account or for any other person or entity hire, employ, solicit for employment or hire, or attempt to solicit for employment or hire any Covered Employee.  Executive further agrees not to otherwise interfere with the relationship between any Covered Employee and the Company.  Notwithstanding anything herein to the contrary, the Company agrees that Executive shall not be deemed in violation of this Section 6(b) if an entity with which Executive is associated hires or engages any employee of the Company or any of its 

17 

Exhibit 10.5

subsidiaries, if Executive was not, directly or indirectly, involved in hiring or identifying such person as a potential recruit or assisting in the recruitment of such employee.
(c)    Non-Solicitation of Customers and Prospective Clients.  Executive agrees that during the Employment Term and Non-Solicitation Restricted Period, Executive shall not, directly or indirectly, whether for Executive’s own account or for any other person or entity, through any corporation, partnership or other business entity of any kind, solicit, assist in soliciting for business or entice away or in any manner attempt to persuade any client or customer or prospective client or customer to discontinue or diminish his, her or its relationship or prospective relationship with the Company, or otherwise provide business to any person, corporation, partnership or other business entity of any kind other than the Company; provided, however, that general solicitation through advertisement shall not constitute solicitation for purposes of this provision.  The restrictions in this Section 6(c) shall apply only to: (1) clients, customers or prospective clients or customers introduced to Executive by the Company; or (2) any customer of the Company (whether previously known to Executive or introduced to Executive through the Company) with whom Executive had contact during Executive’s employment by the Company (including any Notice Period); or (3) any customer or client of the Company whose identity as a client or potential client became known to Executive as a result of Executive’s employment with the Company.
(d)    Representations.  Executive agrees that all of the foregoing restrictions are reasonable and necessary to protect the Company’s business and its Confidential Information and that Executive’s employment by the Company, along with the benefits and attributes of that employment, is good and valuable consideration to compensate Executive for agreeing to all restrictions contained in this Agreement.  Executive also acknowledges, represents and warrants that Executive’s knowledge, skills and abilities are sufficient to permit Executive to earn a satisfactory livelihood without violating these provisions.  Further, Executive agrees that Executive shall not, following the termination of Executive’s employment with the Company, represent or hold Executive out as being in any way connected with the Company.

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Exhibit 10.5

(e)    Blue Pencil.  It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 6 and in Section 7 to be reasonable, if a final judicial determination is made by an arbitrator or a court of competent jurisdiction that the time or territory or any other restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable.  Alternatively, if an arbitrator or a court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.
Section 7.  Confidentiality; Ownership of Materials; Duty to Return Company Property.
(a)    Confidential Information.  Other than in the proper performance of Executive’s duties hereunder, Executive will not, either during Executive’s employment or at any time afterwards, whether on Executive’s own behalf or in any capacity or on behalf of any other person, firm, company or organization, disclose or allow to be disclosed to any person or organization or use for Executive’s own benefit or for the benefit of any third party, any Confidential Information.  Executive will use Executive’s best endeavors to prevent the disclosure of any Confidential Information and will inform the Company immediately of any instances of disclosure of which Executive becomes aware.  For the avoidance of doubt, ‘disclosure’ includes (but is not limited to) disclosure on the internet or through similar means or media including any social media.  In relation to Price-Sensitive Information, Executive will also ensure that any disclosure, if required in the proper performance of Executive’s duties, is made in a manner that is compliant with applicable laws and regulations and Company procedures relating to the disclosure of such information.  Any breach by Executive of the provisions of this Section 7 will be regarded by the Company as a serious matter and may, if committed while Executive is employed by the Company, result in the immediate termination of Executive’s employment for Cause.  Executive agrees that the undertakings comprised in 

19 

Exhibit 10.5

this Section 7 are reasonable and necessary to protect the legitimate business interests of the Company both during and after the termination of Executive’s employment.
(b)    No Copies.  Executive is not permitted to make any copy, abstract, summary or précis of the whole or any part of any document belonging to the Company unless Executive has been authorized to do so by the Company, and shall not at any time use or permit to be used any such items otherwise than for the benefit of the Company in the performance of Executive’s services hereunder.
(c)    Exclusions.  The obligations in this Section 7 shall not apply: (1) to information or knowledge which is already in the public domain, other than by way of unauthorized use or disclosure (whether by Executive or a third party); (2) where Executive’s use or disclosure of the information has been properly authorized by the Company; (3) to any information which Executive discloses in accordance with applicable public interest disclosure legislation; or (4) to any disclosure required by law or by any court, arbitrator, mediator or administrative or legislative body (including any committee thereof) with jurisdiction to order Executive to disclose or make accessible any information; or (5) any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement.  Notwithstanding the foregoing or any other provision in this Agreement or otherwise, nothing herein shall prohibit Executive from reporting possible violations of federal or state law or regulation to any governmental agency or entity or self-regulatory organization including but not limited to the Department of Justice, the Securities and Exchange Commission, Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of federal or state law or regulation (it being understood that Executive does not need the Company’s prior authorization to make any such reports or disclosures and Executive not required to notify the Company that he has made such reports or disclosures).
(d)    Duty to Return Confidential Information and Other Company Property.  All reports, files, notes, memoranda, e-mails, accounts, documents or other material (including all notes and memoranda of any Confidential Information and any copies made or received by Executive in the course of Executive’s employment (whether during or after) are and shall remain the sole property of the Company 

20 

Exhibit 10.5

and, following termination of Executive’s employment or at any other time upon the Company’s request, to the extent within Executive’s possession or control, shall be surrendered by Executive to the duly authorized representative of the Company.  Executive agrees that upon termination of Executive’s employment with the Company for any reason, or at any other time upon the Company’s request, Executive will return to the Company immediately all memoranda, books, papers, plans, information, letters and other data, all copies thereof or therefrom, in any way relating to the business of the Company, all other property of the Company (including, but not limited to, company car (together with the keys and all documents relating to it), credit cards, equipment, correspondence, data, disks, tapes, records, specifications, software, models, notes, reports and other documents together with any extracts or summaries, removable drives or other computer equipment, keys and security passes) in Executive’s possession or under Executive’s control and Executive further agrees that Executive will not retain or use for Executive’s own account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Company.  Notwithstanding anything to the contrary in this Section 7(d), Executive shall be entitled to retain: (1) papers and other materials of a personal nature, including, but not limited to, photographs, correspondence, personal diaries, calendars and rolodexes, files containing personal materials and phone books, all exclusive of client contact and other business information; (2) copies of information showing Executive’s compensation or relating to reimbursement of expenses; (3) copies of information that Executive reasonably believes may be needed for tax purposes; and (4) copies of plans, programs and agreements relating to Executive’s employment, or termination thereof, with the Company.
(e)    Reasonableness.  Executive agrees that the undertakings set forth in this Section 7 and in Section 8 are reasonable and necessary to protect the legitimate business interests of the Company during, and after the termination of, Executive’s employment, and that the benefits Executive receives under this Agreement are sufficient compensation for these restrictions.
Section 8.  Intellectual Property.

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Exhibit 10.5

(a)    Executive agrees that all Intellectual Property that Executive develops or produces in connection with Executive’s employment duties, or which Executive derives from any material produced by Executive or any other employee of the Company in connection with their employment duties, will be owned by the Company absolutely and Executive hereby assigns all rights to such Intellectual Property to the Company in all countries.  Executive agrees, at the Company’s expense, to sign all documents and carry out all such acts as will be necessary to identify and preserve the legal protection of all Intellectual Property; however, the Company will have no obligation to compensate Executive for time spent in connection with any assistance provided unless otherwise required by law.  Notwithstanding the foregoing, Executive understands that no provision in this Agreement is intended to require assignment of any of Executive’s rights in an invention for which Executive can prove no equipment, supplies, facilities or Confidential Information or trade secret information of the Company was used, which invention was developed entirely on Executive’s own time, and which invention Executive can prove: (1) does not relate to the business of the Company or the actual or demonstrably anticipated research or development of the Company; and (2) does not result from any work performed by Executive for the Company.  To the extent compatible with applicable state law, these provisions do not apply to any invention which is required to be assigned by the Company to the United States Government.  Executive waives all moral rights in all Intellectual Property which is owned by the Company, or will be owned by the Company, pursuant to this Section 8.
(b)    Executive agrees to promptly submit to the Company written disclosures of all inventions, whether or not patentable, which are made, conceived or authored by Executive, alone or jointly with others, while Executive is employed by the Company.
Section 9.  Certain Agreements.
(a)    Data Protection.  Executive shall ensure Executive is familiar with and abides by the Company’s Data Management Policy, procedures and accountabilities.  Executive acknowledges that any breach of these procedures may result in the immediate termination of Executive’s employment.

22 

Exhibit 10.5

(b)    Personal Information.  Executive acknowledges and agrees that the Company is permitted to hold personal information about Executive as part of its personnel and other business records and, in accordance with applicable law, may use such information in the course of the Company’s business.
(c)    Credit Data.  The Company reserves the right, upon five (5) days’ prior written notice, to, and Executive agrees that the Company may, in accordance with applicable law, carry out searches about Executive through credit reference agencies or through the Company’s customer records at any time during Executive’s employment for purposes of identifying any serious debt or other significant financial difficulties of Executive for the purposes of detecting, eliminating or mitigating any particular risk of employee fraud or theft.  The Company will only retain the information about Executive which the Company obtains from these searches in accordance with applicable law and for so long as is needed for the purposes set out above (subject to any legal (including any regulatory) obligation which requires the Company to retain that information for a longer period).  The credit reference agency will record details of the search but these will not be available for use by lenders to assess the ability of Executive to obtain credit.  Executive has the right of access to Executive’s personal records held by credit reference agencies.  The Company will supply the names and addresses of such agencies upon request, to help Executive to exercise Executive’s right of access to such records.
(d)    Indebtedness.  For the reasons referred to above, the Company expects Executive to manage Executive’s personal finances responsibly.  The Company requires that Executive draw to the attention of the Board any serious debt or significant financial difficulties that Executive may have, including those which result in court action being taken against Executive.
Section 10.  Remedies.
The Company and Executive agree that it is impossible to measure solely in money the damages which will accrue to the Company by reason of Executive’s failure to observe any of Executive’s obligations under Sections 6, 7 or 8 of this Agreement.  Therefore, if the Company shall institute any 

23 

Exhibit 10.5

action or proceeding to enforce such provisions, Executive hereby waives the claim or defense that there is an adequate remedy at law and agrees in any such action or proceeding not to interpose the claim or defense that such remedy exists at law.  Without limiting any other remedies that may be available to the Company, Executive hereby specifically affirms the appropriateness of injunctive or other equitable relief in any such action and acknowledges that nothing contained within this Agreement shall preclude the Company from seeking or receiving any other relief including, without limitation, any form of injunctive or equitable relief.  Executive also agrees that, should Executive violate the provisions of Section 6 and its subsections such that the Company is forced to undertake any efforts to defend, confirm or declare the validity of the covenants contained within Section 6 of this Agreement, the time restrictions set forth therein shall be extended for a period of time equal to the pendency of any court proceedings, including appeals.
Section 11.  Dispute Resolution; Mediation and Arbitration.
Except as permitted in Section 10 or as provided in the last sentence of this Section 11, to the fullest extent permitted by law, the Company and Executive agree to waive their rights to seek remedies in court, including but not limited to rights to a trial by jury.  The Company and Executive agree that any dispute between or among them or their Subsidiaries, Affiliates or related entities arising out of, relating to or in connection with this Agreement or Executive’s employment with the Company, including but not limited to claims for discrimination or other alleged violations of any federal, state or local employment and labor law statutes, ordinances or regulations, will be resolved in accordance with a confidential two-step dispute resolution procedure involving: (1) Step One: non-binding mediation, and (2) Step Two: binding arbitration under the Federal Arbitration Act, 9 U.S.C. § 1, et. seq., or state law, whichever is applicable.  Any such mediation or arbitration hereunder shall be under the auspices of the American Arbitration Association (“AAA”) pursuant to its then current Commercial Arbitration Rules and Mediation Procedures (the “AAA Commercial Rules”).  Disputes encompassed by this Section 11 include claims for discrimination arising under local, state or federal statutes or ordinances and claims arising under any state’s labor laws.  Notwithstanding anything to the contrary in the AAA Commercial Rules, the mediation 

24 

Exhibit 10.5

process (Step One) may be ended by either party to the dispute upon notice to the other party that it desires to terminate the mediation and proceed to the Step Two arbitration; provided, however, that neither party may so terminate the mediation process prior to the occurrence of at least one (1) mediation session with the mediator.  No arbitration shall be initiated or take place with respect to a given dispute if the parties have successfully achieved a mutually agreed to resolution of the dispute as a result of the Step One mediation.  The mediation session(s) and, if necessary, the arbitration hearing, shall be held in New York, New York.  The arbitration (if the dispute is not resolved by mediation) will be conducted by a single AAA arbitrator, mutually selected by the parties, as provided for by the AAA Commercial Rules.  The Company will be responsible for the AAA charges, including the costs of the mediator and arbitrator.  The Company and Executive agree that the arbitrator shall apply the substantive law of the State of New York to all state law claims and federal law to any federal law claims, that discovery shall be conducted in accordance with the AAA Commercial Rules or as otherwise permitted by law as determined by the arbitrator.  In accordance with the AAA Commercial Rules (a copy of which is available through AAA’s website, www.adr.org), the arbitrator’s award shall consist of a written statement as to the disposition of each claim and the relief, if any, awarded on each claim.  The Company and Executive understand that the right to appeal or to seek modification of any ruling or award by the arbitrator is limited under state and federal law.  Any award rendered by the arbitrator will be final and binding, and judgment may be entered on it in any court of competent jurisdiction.  Nothing contained herein shall restrict either party from seeking temporary injunctive relief in a court of law to the extent set forth in Section 11 hereof.  In the unlikely event the AAA refuses to accept jurisdiction over a dispute, Executive and the Company agree to submit to Judicial-Arbitration-Mediation Services (“JAMS”) mediation and arbitration applying the JAMS equivalent of the AAA Commercial Rules.  If AAA and JAMS refuse to accept jurisdiction, the parties may litigate in a court of competent jurisdiction.
Section 12.  Miscellaneous.
(a)    Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard for the conflict of laws provisions thereof.

25 

Exhibit 10.5

(b)    Entire Agreement and Amendments; Survivorship; Strict Construction.  This Agreement contains the entire understanding and agreement of the parties with respect to the subject matter hereof, and as of the Effective Date, this Agreement shall supersede in its entirety the Prior Agreement, which shall be of no force or effect.  There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein.    This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto, which attaches a copy of this Agreement.  The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations.
(c)    No Waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
(d)    Severability.  In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.
(e)    Assignment.  This Agreement shall not be assignable by Executive.  This Agreement shall be freely assignable by the Company without restriction.
(f)    Successors; Binding Agreement.  This Agreement shall inure to the benefit of and be binding upon the parties’ personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, legatees and permitted assigns.
(g)    Notice.  For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or three (3) business days after mailing registered mail, return receipt requested, postage prepaid or by recognized courier.  All notices to the Company shall be directed to the attention of Neil Rosolinsky, Deputy General Counsel, Litigation & Employment, Citizens Bank, 30 Montgomery Street, 

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Exhibit 10.5

13th floor, Jersey City, NJ 07302 and all notices to Executive shall be sent to the last address for Executive in the Company’s records, or to such other address as either party may have furnished to the other in writing, except that notice of change of address shall be effective only upon receipt.
(h)    Withholding Taxes; Deductions.  The Company may withhold from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.  Executive agrees that the Company may, at any time during Executive’s employment, or in any event upon its termination, deduct from Executive’s remuneration, any monies due by Executive to the Company for any overpayment made and/or outstanding loans, advances, relocation expenses and/or salary paid in respect of excess PTO that was taken but not earned, unless otherwise prohibited by law, including, without limitation, Section 409A.
(i)    Counterparts; Effectiveness.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.  This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed by the other party hereto, including by fax or electronic pdf.
Section 13.  Defined Terms.
“Affiliate” has the meaning accorded such term under Rule 12b-2 of the Securities Exchange Act of 1934, as in effect on the Effective Date.
“Board” means the board of directors of Citizens Financial Group, Inc. (including any duly authorized committee of the Board).
“Cause” includes the following conduct by, or situation involving, Executive: (i) any indictment for, conviction of, plea of guilty or nolo contendere to by Executive for the commission of: (a) any felony, (b) any criminal offense within the scope of Section 19 of the Federal Deposit Insurance Act, 12 U.S. C. § 1829; or (c) a misdemeanor involving dishonesty ; (ii) if Executive willfully commits a material breach of his obligations under this Agreement or repeats or continues after written warning any material breach of 

27 

Exhibit 10.5

his obligations hereunder, or is, in the opinion of the Board, guilty of gross misconduct which brings him or the Company or any of its Affiliates into disrepute; (iii) if Executive is guilty of dishonesty in the conduct of his duties hereunder, gross incompetence, willful neglect of duty, or of mismanagement of his financial affairs through failure to observe the company’s rules and procedures for the operation of bank accounts and/or borrowing; (iv) if Executive commits any act of bankruptcy or takes advantage of any statute for the time being in force offering relief to insolvent debtors; or (v) if, as a result of any default on the part of Executive, he is prohibited by law from acting as an officer of the Company or any of its Affiliates.
“Change of Control” means the occurrence of any one or more of the following events:
(a)    any person, other than an employee benefit plan or trust maintained by the Company, becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act of 1934, as amended), directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s outstanding securities entitled to vote generally in the election of directors;
(b)    at any time during a period of twelve (12) consecutive months, individuals who at the beginning of such period constituted the Board and any new member of the Board whose election or nomination for election was approved by a vote of at least a majority of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was so approved, cease for any reason to constitute a majority of members of the Board; or
(c)    the consummation of (A) a merger or consolidation of the Company with any other corporation or entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or being converted into voting securities of the surviving entity or, if applicable, the ultimate parent thereof) at least fifty percent (50%) of the combined voting power and total fair market value of the securities of the Company or such surviving entity or parent outstanding immediately after such merger or consolidation, or (B) any sale, lease, exchange or other transfer to any person of assets 

28 

Exhibit 10.5

of the Company, in one transaction or a series of related transactions, having an aggregate fair market value of more than fifty percent (50%) of the fair market value of the Company and its subsidiaries (the “Company Value”) immediately prior to such transaction(s), but only to the extent that, in connection with such transaction(s) or within a reasonable period thereafter, the Company’s shareholders receive distributions of cash and/or assets having a fair market value that is greater than fifty percent (50%) of the Company Value immediately prior to such transaction(s).
Notwithstanding the foregoing, for any award that provides for accelerated distribution on a Change of Control of amounts that constitute “deferred compensation” (as defined in Section 409A), if the event that constitutes such Change of Control does not also constitute a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets (in either case, as defined in Section 409A), such amount shall not be distributed on such Change of Control but instead shall vest as of the date of such Change of Control and shall be paid on the scheduled payment date specified in the applicable award agreement, except to the extent that earlier distribution would not violate Section 409A.
“Confidential Information” means knowledge about the commercial affairs and business transactions of the Company including, but not limited to, information about customers, clients, employees or suppliers (whether former, actual or potential), Company contracts, pricing structures, financial and marketing details, terms of business, proposed transactions, business plans, premises, assets, internal communications, intellectual property, technical systems and data, designs, formulae, product lines, projects, operational procedures, research activities, negotiating positions, forward planning, technical and product developments, accounts, finances, computer software and general know-how of the Company.  Confidential Information also includes, without limitation: (1) Price-Sensitive Information; (2) any information contained in documents marked “confidential” or documents of a higher security classification and other information that, because of its nature or the circumstances in which Executive receives it, Executive should reasonably consider to be confidential; and (3) confidential information (howsoever obtained) about or provided by any third party received during the course of 

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Exhibit 10.5

Executive’s employment.  The Company reserves the right to modify the categories of Confidential Information from time to time.
“Covered Employee” means any person who was employed by the Company at any time within twelve (12) months prior to the time of the act of solicitation (and who, in the case of the Non-Solicitation Restricted Period following the termination of Executive’s employment, was also employed by the Company or any of its subsidiaries or Affiliates on the date the Non-Solicitation Restricted Period begins).
“Disability” means Executive’s physical or mental incapacitation such that Executive is unable for a period of six (6) months or for an aggregate of six (6) months in any twenty-four (24) consecutive month period to perform Executive’s duties hereunder.
“Employee Benefits” means any benefits under any and all executive welfare and health benefit plans (including but not limited to healthcare (medical, vision and dental), life insurance, and short-term and long-term disability plans) and other executive benefit plans (including but not limited to qualified pension plans, retirement savings and 401(k)), if any, that are offered to other executives of the Company, to the extent Executive is eligible thereunder and in accordance with all other terms and conditions of such plans, policies, programs and practices.
“Employment Term” means the period during which Executive was employed by RBS and the Company under the Prior Agreement together with the period during which Executive is employed by the Company under this Agreement.
“Good Reason” means a material breach of this Agreement by the Company, or a substantial diminution or other substantial adverse change, not consented to by Executive, in the nature or scope of Executive’s responsibilities, authorities, powers, functions or duties or in Executive’s Base Salary, save that removal of the role of Chairman of the Company from Executive’s remit shall not amount to Good Reason (although for the avoidance of doubt the Company has not determined this matter and any such decision will be taken with consideration of  any such factors as the Board believes relevant).

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Exhibit 10.5

“Intellectual Property” means patents, rights to inventions, trade marks, service marks, registered designs (including applications for and rights to apply for any of them), unregistered design rights, trade or business names, domain names, rights in get-up, rights in goodwill or to sue for passing off, unfair competition rights, copyright and related rights, rights in computer software, database rights, topography rights, rights in Confidential Information (including know-how and trade secrets) and any similar rights in any country.
“Non-Competition Restricted Period” means the six (6) month period following the date that Executive ceases employment with the Company by reason of a termination by the Company without Cause or a resignation by Executive for Good Reason (whether or not a Change of Control Related Termination), less any time spent on Garden Leave and/or any Notice Period worked; provided, however, the Non-Competition Restricted Period may be extended as provided in Section 1.
“Non-Solicitation Restricted Period” means the twelve (12) month period following the date that Executive ceases employment with the Company by reason of a termination by the Company without Cause or a resignation by Executive for Good Reason (whether or not a Change of Control Related Termination), less any time spent on Garden Leave and/or any Notice Period worked; provided, however, the Non-Solicitation Restricted Period may be extended as provided in Section 1.
“Notice Period” means the period of time specified for prior written Notice of Termination.
“Notice of Termination” means a written notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated, to the extent applicable.
“Person” means any individual, corporation, partnership, trust or any other entity or organization.
“Price-Sensitive Information” means information relating directly or indirectly to particular securities or issuers of such securities (including members of the Company and third parties) which 

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Exhibit 10.5

would, if generally available, be likely to have an effect on the price of such securities or related investments.
“RBS” means The Royal Bank of Scotland plc.
 “Retirement” means Executive’s age plus years of service (in each case, including completed months) equals or exceeds 65, with a minimum of at least five years of service with the Company, which Executive has achieved as of the Effective Date.

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Exhibit 10.5

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.
	
				
	BRUCE VAN SAUN

	/s/ Bruce Van Saun

	 

	 
	CITIZENS FINANCIAL GROUP, INC.

	 
	By:
	/s/ Stephen T. Gannon

	 
	 
	Name:  Stephen T. Gannon
	 

	 
	 
	Title:  General Counsel and Chief Legal Officer
	 

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Exhibit 10.5

 
Exhibit  A
Agreed form of Release
Dear Mr. Van Saun:
This letter confirms that on [Date] you received this Separation and General Release Agreement (the “Agreement”).  You have up to [21/45]1 days after your receipt of the Agreement to consider whether to sign and date the Agreement.
This Agreement sets forth our agreement with respect to the terms and conditions of your separation from Citizens Financial Group, Inc. (the “Company”) and your release of any claims you may have, or have had against the Company and its present, former and future parents, subsidiaries, affiliates, divisions, branches and other offices and their respective successors, assigns, officers, agents, representatives, attorneys, fiduciaries, administrators, directors, stockholders and employees (collectively the “Bank”), relating to your employment with, or separation of employment from, the Company.
1.    Termination Date.  Your termination of employment shall be effective [Date] (“Termination Date”).
2.    Separation Benefits. In consideration for timely signing this Agreement and for your complying with the terms herein, the Company agrees to [pay you a lump-sum payment of $[Amount] in accordance with Section [INSERT APPROPRIATE SECTION REFERENCE] of the Executive Employment Agreement between you and the Company dated [Date], 2016 (the “Employment Agreement”).  In addition, your cash and equity-based awards will be treated as specified in the Employment Agreement.  Collectively, these payments and benefits shall be referred to as your “Separation Benefits.”
Please be advised that your right to accrue a base salary, vacation pay, to receive short and long-term disability, to participate in the 401(k) plan, to participate in or remain eligible for any bonus or incentive award, or to participate in other benefits not specified above shall cease on your Termination Date.
1 Note: Consolidation period to be determined at time of termination.

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Exhibit 10.5

The Company will deduct from the above payments all amounts required by applicable federal, state, and local law, and you are responsible for any and all tax liabilities which may be imposed upon you as a result of your receipt and acceptance of the Separation Benefits.
3.    Benefits.  The following benefits are available to you irrespective of whether you execute this Agreement.
a.    Health Benefits and COBRA. You will continue your participation in the applicable medical, dental and vision coverage until midnight on the last day of the month in which your Termination Date falls.  Participation in the Health Care Reimbursement Account ends as of your Termination Date.   However, irrespective of whether you execute this Agreement, you may extend all of these benefits for up to an additional 18 months under COBRA, subject to the provisions of the American Recovery and Reinvestment Act of 2009.  You will pay the full cost of coverage, plus a 2% administrative fee.  Health Care Reimbursement Account participation is available on an after-tax basis only. (In some cases, COBRA coverage may be extended beyond 18 months. Please refer to the COBRA materials you will receive under separate cover for details).
Please be advised that if you extend coverage for at least one month, the first full calendar month after your exit date will continue at active employee rates and will not count towards the 18 months of COBRA.  Please note that you can extend only the medical, dental, vision and Health Care Reimbursement Account coverage options you have in place at your exit date.
You will receive additional information about continuing your medical, dental and vision coverage, and continued Health Care Reimbursement Account participation in connection with COBRA under separate cover. If you do not receive COBRA information, please call the HR Service Center at 1.866.472.8234.

b.    401(k) Participation.  Whether or not you sign this Agreement, the Company will provide you with a 401(k) matching contribution pursuant to the matching terms set forth in the 

2

Exhibit 10.5

Company’s 401(k) plan. Based on the rules of the Plan as indicated in the Plan Document you will be eligible for a true-up if you meet the requirements of a true-up.
c.    Outplacement.     Whether or not you sign this Agreement, the Company will provide you with professional outplacement benefits. This offer of outplacement benefits will remain open for a period of 180 days after your Termination Date.  
4.    Review Period.  You have up to [21/45] days after receipt of this Agreement to consider whether to sign and return this Agreement.  You understand that by entering into this Agreement and by accepting the Separation Benefits, you and the Company are agreeing to all of the terms and conditions set forth in this Agreement.  If you agree to and accept the terms and conditions herein sign, date and return an original of this Agreement to Citizens Financial Group, Inc., attn: [Name], [Address], no later than [21/45] days after your receipt of this Agreement.  The offer presented in the Agreement expires at close of business on [Date].
THE COMPANY ADVISES YOU TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT AND GENERAL RELEASE.  BY SIGNING THIS AGREEMENT AND GENERAL RELEASE YOU GIVE UP AND WAIVE IMPORTANT LEGAL RIGHTS.
5.    No consideration absent execution of this Agreement and General Release.  You understand and agree that you would not receive the Separation Benefits except for your execution of this Agreement and the fulfillment of the promises contained herein.
6.    General Release.  In consideration of the Company entering into this Agreement and providing you with the Separation Benefits, to which you would not otherwise be entitled, you agree that you and your heirs, executors, administrators and assigns hereby voluntarily, knowingly and willingly release the Bank from any and all claims that you now have or have had, including any and all claims which may have been brought by third-parties on your behalf, against the Bank arising out of your employment with the Company and/or the termination of that employment.  Without limiting the generality of the foregoing, this Agreement is intended to and shall release the Bank from any and all claims, 

3

Exhibit 10.5

whether known or unknown, which you ever had, now have or may have against the Bank arising out of your employment and/or your separation from that employment, including but not limited to: (i) any claim under Title VII of the Civil Rights Act of 1964 (“Title VII”), the Americans With Disabilities Act (“ADA”), the Americans with Disabilities Act Amendments Act of 2008 (“ADAAA”), the Employee Retirement Income Security Act of 1974 (“ERISA”), the Civil Rights Act of 1991, Title II of the Genetic Information Nondiscrimination Act of 2008 (“GINA”), the Pregnancy Discrimination Act, the retaliation provisions of the Fair Labor Standards Act (“FLSA”), the Occupational Safety and Health Act (“OSHA”), the Equal Pay Act of 1963 (“EPA”), the Lilly Ledbetter Fair Pay Act of 2009, the Family and Medical Leave Act of 1993 (“FMLA”), the National Labor Relations Act of 1935 (“NLRA”), Executive Order 11246, Section 503 of the Rehabilitation Act of 1973, the Sarbanes Oxley Act of 2002, the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, the Uniformed Services Employment and Reemployment Rights Act (“USERRA”), the Fair Credit Reporting Act (“FCRA”), the Federal Insurance Contributions Act (“FICA”), the Immigration Reform and Control Act, the Worker Adjustment and Retraining Notification Act (“WARN”), the Older Workers Benefit Protection Act (“OWBPA”), and all applicable state and local laws, including but not limited to the Connecticut Fair Employment Practices Act, the Connecticut Family and Medical Leave Act, Connecticut Labor Law, Connecticut Wage Payment Laws, the Connecticut Whistleblower Law, Connecticut Worker’s Compensation Law, the New York Labor Law, New York Worker’s Compensation Law, the New York State Human Rights Law, the New York City Human Rights Law, the Illinois Worker Adjustment and Retraining Notification Act, Illinois Labor Law, the Illinois Wage Payment and Collection Act, the Illinois Human Rights Act, the Cook County Human Rights Ordinance, the Chicago Human Rights Ordinance; (ii) any claim for equitable relief or recovery of punitive, compensatory, or other damages or monies, attorneys’ fees, any tort, and all claims for alleged discrimination or retaliation based upon age, race, color, sex, gender identity, sexual orientation, genetic information, marital status, religion, national origin, ancestry, handicap, disability, veteran status or other characteristic protected by law; (iii) any claim under the Company’s pension, welfare, stock, or incentive plans (except for applicable rights to deferred compensation or any other equity-based compensation plan under which you have unvested awards); (iv) any claim sounding in tort or contract (express or implied); (v) any claim for wages, commissions, 

4

Exhibit 10.5

bonuses, severance pay, holiday pay, vacation pay, life insurance, health or medical insurance, 401(k) matching, profit sharing contributions, any other payments and/or fringe benefits; and (vi) any claim for attorneys’ fees, costs, disbursements and/or the like.
In addition to the foregoing, in exchange for your receipt of the Separation Benefits, you hereby release and discharge the Bank from any and all claims you may have against the Bank arising under the Age Discrimination Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”).  You acknowledge that you understand that ADEA is a federal statute that prohibits discrimination on the basis of age in employment, benefits and benefit plans.
By virtue of the foregoing, you agree that you have waived any damages and other relief available to you (including, without limitation, monetary damages, equitable relief and reinstatement) with respect to any claim or cause of action released above.  Nothing herein, however, shall constitute a waiver of claims arising after you sign this Agreement, claims for enforcement of this Agreement or of claims for accrued, vested benefits under any employee benefit plan of the Bank in accordance with the terms of such plans and applicable law.

7.    Additional Agreements.   You also agree that:
a.    this waiver and release includes waiver and release of all claims, demands, contracts, agreements, obligations, debts, liens, covenants, suits, attorneys’ fees, damages, judgments, causes of action, orders and liabilities by you and your heirs, executors, administrators or assigns against the Bank, whether known or unknown, asserted or unasserted, suspected or unsuspected, which you may have arising out of your employment with the Company or the termination of that employment, or as a result of any act, debts, accounts, covenants, contracts, agreements or promises which may have occurred or been made by any entity, employee, officer director or other authorized representative of the Bank at any time on or prior to the date of your execution of this Agreement, including claims for injunctive or declaratory relief, reinstatement, compensation for lost wages and benefits, compensatory and punitive damages, and costs of litigation, including attorneys’ fees.

5

Exhibit 10.5

b.    you will not convey or otherwise disseminate any false or defamatory statements relating to or concerning the Bank, their officers or employees.
c.    neither you nor your attorneys, agents, or representatives will in any manner publish, publicize or otherwise make known to any person the existence of or the terms and conditions of this Agreement except as may be required by law, administrative regulation, court order, subpoena, or for the purpose of enforcing this Agreement.  This provision does not prohibit or restrict you (or your attorney) from responding to any inquiry, or providing testimony, about the Agreement or its underlying facts and circumstances by, or before, the Securities and Exchange Commission (SEC), Financial Industry Regulatory Authority (“FINRA”), any other self-regulatory organization, or any other federal or state regulatory authority.
d.    you will keep entirely confidential and will not, directly or indirectly, disclose any trade secrets, proprietary information, process or program developed by the Bank, and you will not disclose any such information concerning the Bank or its customers or counterparties, except such information as is already public information or becomes public through no action of your own.  For avoidance of doubt, you agree to keep strictly confidential any and all Company trading positions of which you have knowledge.  Nothing herein shall prevent you from complying with any valid subpoena, or order of any judicial or regulatory authority, seeking such information provided that you notify the Company within three (3) days of receiving any such legal process.  Notification should be sent via overnight courier to [Name] at [Address].
e.    any software programs, computer systems, configurations or processes developed by you or by the Bank’s employees under your direction (collectively, “Intellectual Property”) are the sole and exclusive property of the Bank, and you will not assert a claim of ownership or license with respect to such Intellectual Property.

6

Exhibit 10.5

f.    following your separation from the Company, that you will cooperate fully and in good faith with the Bank in connection with any defense, prosecution or investigation concerning any actual or potential litigation or administrative proceeding, investigation or review in which you may be 

involved as a party, non-party or witness.  Your cooperation shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial, cooperating in discovery, providing truthful affidavits, and otherwise acting as a witness on the Bank’s behalf at reasonably convenient times as may be required or deemed necessary by the Bank, all without the necessity of being subpoenaed.  The Company shall, at your request, reimburse you for the reasonable out-of-pocket expenses that you incur in the performance of your obligations under this paragraph.
g.    you acknowledge and agree that the Bank shall have no duty or obligation to consider any application by you for re-employment or reinstatement (whether as an employee, consultant, contractor or otherwise).  However, in the event that you are re-hired/reinstated, the Bank reserves its right to recoup all or part of your Separation Benefits.  Please be advised, in such circumstances, any portion of the Separation Benefits which you do retain shall continue to act as sufficient consideration to support this Agreement.
8.    Your Affirmations.  In executing this Agreement, you affirm that:
a.    you have had a reasonable amount of time to consider signing this Agreement, are able to read and understand this Agreement, and you understand its meaning and effect.
b.    you have not filed, caused to be filed, or presently are a party to any charge or claim against the Bank or any employee, officer, director, entity or other sub-part thereof, whether judicial, administrative or otherwise.
c.    with the exception of any previously communicated deferred compensation, you have been paid and/or have received all compensation, wages, bonuses, commissions, and/or benefits to which you may be entitled.

7

Exhibit 10.5

d.    none of the Bank’s decisions regarding your pay and benefits through the date of your execution of this Agreement was discriminatory based on age, disability, race, color, sex, religion, national origin or any other classification protected by applicable law.

e.    you have been granted any leave to which you were entitled under the Family and Medical Leave Act or related state or local leave or disability accommodation laws.
f.    you have no known workplace injuries or occupational diseases.
g.    you have not divulged any proprietary or confidential information of the Bank, including its trading positions, and will continue to maintain the confidentiality of such information consistent with any of the Bank’s policies and your agreement(s) with any employee, officer, director or entity of the Bank.
h.    you will continue to comply with Sections 6, 7, 8 and 10 of the Employment Agreement, which provisions shall remain in full force and effect notwithstanding your separation from employment with the Company.
i.    you have no knowledge of any fraudulent activity or any act(s) which would form the basis of a claim of fraudulent or illegal activity by the Company (including any allegations of corporate fraud or securities laws violations) and, further, you have not been retaliated against for reporting any such allegations of wrongdoing by the Bank or its employees, agents, officers or directors.
j.    you have not assigned or transferred to any person not a party to this Agreement any claim being released by this Agreement or any part thereof, and you shall defend, indemnify, and hold harmless the Bank from any claim (including the payment of attorneys’ fees and costs actually incurred whether or not litigation is commenced) based on or in connection with or arising out of any such assignment or transfer.

8

Exhibit 10.5

k.    you have returned to the Company in good working condition all property of the Bank, including equipment such as blackberries and laptops, documents and customer files, within your possession.
l.    you have repaid any and all outstanding balances in association with your corporate credit card as of the date of the execution of this Agreement, and have incurred no additional charges that will be due for payment after your execution of this Agreement.

9.    Voluntary Release and Waiver.  The release and waiver of claims set forth in the Agreement is an essential and material part of the Agreement. Your release and waiver of rights and claims is voluntary and knowing, without duress or coercion, and you elect to execute this Agreement on this date.
10.    Sufficiency of Consideration.  You acknowledge and agree that the Separation Benefits offered to you herein provide sufficient consideration to support the agreements, affirmations, releases and waivers that you are making by entering into the Agreement.  You further acknowledge and agree that the Separation Benefits are only being provided to you in exchange for the agreements, affirmations, releases and waivers you are making by entering into the Agreement and that the Separation Benefits constitute valuable consideration to which you are not otherwise entitled.
11.    Non-admission of wrongdoing.  The Parties agree that neither this Agreement nor the furnishing of Separation Benefits for this Agreement shall be deemed or construed at any time for any purpose as an admission by the Company or the Bank of wrongdoing or evidence of any liability or unlawful conduct.
12.    Severability.  If any portion of the Agreement is determined to be illegal or unenforceable in a legal forum, or by an arbitrator, with competent jurisdiction to so determine, that portion is deemed severable, such that the release and waiver shall remain valid and binding in full force and effect.

9

Exhibit 10.5

13.    Governing Law.  This Agreement shall be governed by and construed in accordance with New York law without giving effect to the conflict of laws provisions thereof.
14.    Arbitration.  The parties agree that this Agreement and any disputes relating thereto, including, but not limited to, disputes pertaining to claims of discrimination, shall be arbitrated before a single arbitrator chosen from the employment panel of JAMS Alternative Dispute Resolution (“JAMS”) and subject to the JAMS rules for resolving employment disputes unless another forum or set of rules mutually agreed to by the parties. The decision of the arbitrator(s) in connection with such arbitration shall be final, and judgment upon any award granted pursuant to such arbitration may be entered in any court having jurisdiction.

10

Exhibit 10.5

15.    Integration Clause.  This Agreement may not be changed orally, and it sets forth the complete agreement between you and the Company pertaining to your separation of employment and provision of the Separation Benefits from the Company.
16.    Review Period.  You received this Agreement on [Date] and have been given a period of [21/45] days from then to decide whether to sign it. You may sign before the end of the [21/45] day period (though you are under no obligation to do so) and you acknowledge that you are voluntarily and knowingly waiving your right, without duress or coercion, to consider this Agreement during the full Review Period.  For avoidance of doubt, the last day for you to sign this Agreement for it to be effective is [Date].
17.    Section 409A.  The provisions of Section 1(m) of the Employment Agreement shall be incorporated by reference herein as if fully set forth herein.
Please indicate your agreement with the foregoing by signing in the place indicated below.  The signed Agreement should be returned to [Name], at [Address].
Sincerely,
 
[Name] 
Human Resources
ACCEPTED AND AGREED on         of                     , [Year]
 
BRUCE VAN SAUN

11Exhibit

PURCHASE AGREEMENT COM0041-16 
between
EMBRAER S.A.
and
HORIZON AIR INDUSTRIES, INC.

	
				
	INDEX

	 
	ARTICLE
	 
	PAGE

	1.
	INTERPRETATION
	 
	4

	2.
	SUBJECT
	 
	6

	3.
	PRICE
	 
	7

	4.
	PAYMENT
	 
	7

	5.
	DELIVERY
	 
	8

	6.
	CERTIFICATION
	 
	8

	7.
	ACCEPTANCE AND TRANSFER OF OWNERSHIP
	 
	9

	8.
	STORAGE CHARGE
	 
	10

	9.
	DELAYS IN DELIVERY
	 
	11

	10.
	[***] DELIVERY INSPECTION
	 
	13

	11.
	CHANGES
	 
	14

	12.
	WARRANTY [***]
	 
	15

	13.
	PRODUCT SUPPORT PACKAGE
	 
	16

	14.
	ASSIGNMENT
	 
	16

	15.
	RESTRICTIONS AND PATENT INDEMNITY
	 
	16

	16.
	MARKETING PROMOTIONAL RIGHTS
	 
	18

	17.
	TAXES
	 
	18

	18.
	APPLICABLE LAW
	 
	18

	19.
	JURISDICTION
	 
	19

	20.
	TERMINATION
	 
	19

	21.
	OPTION AIRCRAFT
	 
	20

	22.
	INDEMNITY
	 
	21

	23.
	NOTICES
	 
	22

	24.
	CONFIDENTIALITY
	 
	23

	25.
	FOREIGN CONTENT
	 
	23

	26.
	COMPLIANCE WITH LAWS
	 
	23

	27.
	SEVERABILITY
	 
	24

	28.
	NON-WAIVER
	 
	24

	29.
	INTEGRATED AGREEMENT
	 
	24

	30.
	NEGOTIATED AGREEMENT
	 
	24

	31.
	COUNTERPARTS
	 
	24

	32.
	ENTIRE AGREEMENT
	 
	24

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Purchase Agreement COM0041-16 - Execution Version

ATTACHMENTS

		
	"A" -
	AIRCRAFT CONFIGURATION

		
	"B" -
	FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

Exhibit 1 to Attachment B (SPECIAL INSURANCE CLAUSES)
		
	"C" -
	WARRANTY CERTIFICATE - MATERIAL AND WORKMANSHIP

		
	"D" -
	PRICE ESCALATION FORMULA

		
	"E" -
	AIRCRAFT DELIVERY SCHEDULE

		
	"F" -
	[***]

		
	"G" -
	[***]

		
	"H" -
	[***] 

		
	"I" -
	[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Purchase Agreement COM0041-16 - Execution Version

PURCHASE AGREEMENT COM0041-16
THIS AGREEMENT IS ENTERED INTO THIS 11th DAY OF APRIL 2016, BY AND BETWEEN EMBRAER S.A. AND HORIZON AIR INDUSTRIES, INC. FOR THE PURCHASE AND SALE OF CERTAIN EMBRAER AIRCRAFT (AS DEFINED BELOW).
THE SALE COVERED BY THIS AGREEMENT SHALL BE GOVERNED SOLELY BY THE TERMS AND CONDITIONS HEREIN SET FORTH, AS WELL AS BY THE PROVISIONS SET FORTH IN THE ATTACHMENTS HERETO.

1.INTERPRETATION
1.1.    Definitions
For the purpose of this Agreement, the following definitions are hereby adopted by the Parties:
		
	1.1.1.
	 “Actual Delivery Date”: shall mean, with respect to each Aircraft, the date on which Buyer obtains title to that Aircraft in accordance with Article 7.

		
	1.1.2.
	“AD’s”: shall mean effective airworthiness directives issued by either the ANAC or the Airworthiness Authority, in connection with and with respect to the Aircraft.

		
	1.1.3.
	“Agreement” or “Purchase Agreement”: shall mean this purchase agreement and any amendments thereto.

		
	1.1.4.
	“Aircraft”: shall mean the EMBRAER 175 LR (certification designation: ERJ 170-200 LR) aircraft,  manufactured by Embraer according to Attachment “A”, for sale to Buyer pursuant to this Agreement, equipped with two engines identified therein (or, where there is more than one of such aircraft, each of such aircraft).

		
	1.1.5.
	“Aircraft Basic Price”: shall mean the Aircraft price, as defined in Article 3.1.

		
	1.1.6.
	“Aircraft Purchase Price”: shall mean the Aircraft price, effective on the relevant Aircraft Contractual Delivery Date, resulting from the application of the Escalation Formula to the Aircraft Basic Price as set forth in Article 3.3.

		
	1.1.7.
	“Airworthiness Authority”: shall mean the United States Federal Aviation Administration or FAA or such other entity in the United States from time to time charged with the administration of civil aviation.

		
	1.1.8.
	 “ANAC”: shall mean the Brazilian civil aviation authority – Agência Nacional de Aviação Civil. 

		
	1.1.9.
	“Business Day(s)”: shall mean a day on which banks are open for business in São José dos Campos and São Paulo in Brazil, Seattle and New York in the United States.

		
	1.1.10.
	“Buyer”: shall mean Horizon Air Industries, Inc., a company organized and existing under the laws of Washington State with its principal place of business at 19521 International Boulevard, Seattle, Washington, 98168, USA.

		
	1.1.11.
	“Contractual Delivery Date”: unless as otherwise provided for herein, the Contractual Delivery Date shall mean the last Working Day in the month 

Purchase Agreement COM0041-16 - Execution Version

for each Aircraft as provided for in Attachment E hereto and as referred to in Article 5.
		
	1.1.12.
	“Day(s)": shall mean calendar days.

		
	1.1.13.
	“Embraer”: shall mean Embraer S.A., a Brazilian corporation organized and existing under the laws of Brazil with its principal place of business at Av. Brigadeiro Faria Lima, 2170, São José dos Campos, SP, Brazil.

		
	1.1.14.
	“Escalation Formula”: shall mean the escalation formula contained in Attachment “D”.

		
	1.1.15.
	“FAF": shall mean delivery of an Aircraft in fly-away-factory condition (equivalent to Ex-Works condition – Incoterms 2010 - flying from the place designated in Article 5 and cleared for export by Embraer).

		
	1.1.16.
	“Initial Deposit”: shall mean the aggregate initial deposit referred to in Article 4.1.1.

		
	1.1.17.
	“LIBOR”: for purposes of calculating any rate under this Agreement for any period for which the same is to be established, shall mean the applicable rate per annum equal to the US$ Six-Month LIBOR displayed on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any successor or substitute page of such screen, providing rate quotations comparable to those currently provided on such page of such screen) at 11:00 a.m. London time, in the London interbank market on the first day of such period (or if such date is not a London business day, the immediately preceding London business day) and in an amount comparable to the amount for which such rate is to be established and, if any such rate is below zero, LIBOR will be deemed to be zero. For purposes of this definition, ”London business day” means any day excluding Saturday, Sunday and any day on which commercial banks in London, England are authorized or required by law to remain closed.

		
	1.1.18.
	“Major Changes”: shall mean the changes to the design of the Aircraft, as defined in Article 11.2.2.

		
	1.1.19.
	“Mandatory Service Bulletins”: shall mean the mandatory service bulletins applicable to the Aircraft, which are issued by Embraer to implement the AD’s referred to in Article 11.4.

		
	1.1.20.
	“Minor Changes”: shall mean the changes to the design of the Aircraft defined as per the terms and conditions of Article 11.2.1. 

		
	1.1.21.
	“Option Aircraft” shall be the additional EMBRAER 175 aircraft that Buyer shall have the option to purchase as per the terms of Article 21.

		
	1.1.22.
	“Parties”: shall mean Embraer and Buyer.

		
	1.1.23.
	 “Product Support Package”: shall mean the products and Services to be provided by Embraer as per Article 13.

		
	1.1.24.
	“Scheduled Inspection Date”: shall mean the date on which a certain Aircraft is available for inspection, acceptance and subsequent delivery to Buyer, as per the terms and conditions of Article 7.1.

		
	1.1.25.
	“Services”: shall mean the services, as defined in Article 2.3 of Attachment “B”.

Purchase Agreement COM0041-16 - Execution Version

		
	1.1.26.
	“Technical Description”: shall mean TD 175 – Rev 21 December 2015 as provided for in Attachment “A”.

		
	1.1.27.
	“Technical Publications”: shall mean the technical documentation pertaining and related to the Aircraft, as identified in Article 2.2 and Exhibit 1 of Attachment “B”.

		
	1.1.28.
	“USD” or “US$”: shall mean the legal currency of the United States of America.

		
	1.1.29.
	“Vendor”: shall mean third party suppliers of equipment, parts, tools, ground support and test equipment to Embraer to use on or in connection with the Aircraft.

		
	1.1.30.
	“Working Day(s)": shall mean a day, other than Saturday, Sunday or holiday, on which Embraer in São José dos Campos, SP, Brazil is open for business.

		
	1.2
	Construction

In this Agreement unless otherwise expressly provided:
1.2.1 words importing the plural shall include the singular and vice versa,
1.2.2 a reference to an Article, Attachment or Exhibit is a reference to an Article, Attachment or Exhibit to this Agreement, and
1.2.3 the headings in this Agreement are to be ignored in construing this Agreement.

2.    SUBJECT
Subject to the terms and conditions of this Agreement:
2.1 Embraer shall sell and deliver and Buyer shall purchase and take delivery of thirty (30) Aircraft;
2.2 Embraer shall provide to Buyer the Services and the Technical Publications as described in Attachment “B” to this Agreement; and
2.3 Buyer shall have the option to purchase up to thirty (30) Option Aircraft, in accordance with Article 21.

		
	3.
	PRICE

3.1 The Aircraft Basic Price of each Aircraft is [***], in [***] economic conditions.
3.2 The Services and Technical Publications are to be provided [***]. Additional technical publications as well as other services shall be billed to Buyer (unless such services are to be provided [***] in accordance with Attachment “B”) in accordance with Embraer’s rates prevailing at the time Buyer places a purchase order for such additional technical publications or other services.
3.3 The Aircraft Basic Price shall be escalated according to the Escalation Formula. Such price as escalated shall be the Aircraft Purchase Price and it will be provided by Embraer to Buyer [***] prior to each Aircraft Contractual Delivery Date.

Purchase Agreement COM0041-16 - Execution Version

4.    PAYMENT
4.1 To secure the Aircraft delivery positions set forth in Article 5 and to ensure delivery of Aircraft in accordance with the delivery schedule set forth in Article 5, Buyer shall pay Embraer for each Aircraft the amounts set forth in Article 3 in accordance with the terms and conditions contained in this Article 4. The Parties acknowledge that each of the Aircraft and the corresponding delivery positions have been reserved for purchase by Buyer and such Aircraft have been removed from the market. The amounts specified in Article 3 shall be paid by Buyer by wire transfer in immediately available USD funds, to a bank account to be timely informed by Embraer. 
The Aircraft Purchase Price for each Aircraft shall be paid by Buyer, as follows:
[***]
4.2 In the event Buyer fails to pay any amount payable as set forth in Articles 4.1.2 through 4.1.4 hereunder on the relevant due date and thereafter [***] after receipt by Buyer of notice from Embraer of the failure to pay the required amount (the “Cutoff Date”), Buyer shall pay to Embraer immediately upon demand made from time to time interest on such amount, or any part thereof, not paid from the Cutoff Date until the date on which the same is paid in full at the rate equal to [***]. For the payments referred to under Article 4.1.5, interest shall be calculated as per Article 7.8. Without prejudice to Embraer’s rights set forth in Article 4.3, interest accrued will be invoiced by Embraer [***], beginning [***] after the date on which payments should have been made, and payment thereof shall be made by Buyer in accordance with the instructions contained therein.
4.3 Without prejudice to the payment of interest on late payments set forth above, should Buyer fail to make any payment on or before the Cutoff Date referred to in Article 4.2 and if such failure shall not have been cured within [***] following the Cutoff Date, Embraer shall have the right to postpone the relevant Aircraft Contractual Delivery Date (it being understood that such postponement shall be [***]). Notwithstanding the foregoing, Embraer shall have the right to [***] if such failure shall not have been cured within [***] following the Cutoff Date.
4.4 Net payments: all payments to be made by Buyer under this Agreement shall be made without any set off or withholding whatsoever. If Buyer is obliged by law to make any deduction or withholding from any such payment, the amount due from Buyer in respect of such payment shall be increased to the extent necessary to ensure that, after the making of any such deduction or withholding, Embraer receives a net amount equal to the amount Embraer would have received had no such deduction or withholding been required to be made.
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Purchase Agreement COM0041-16 - Execution Version

4.5 Payment Date: unless otherwise agreed by the Parties in writing, payment of the amounts referred to in Articles 4.1.2, 4.1.3 and 4.1.4, if not due within [***] of the execution of this Agreement, shall be made by Buyer on or before [***] prior to the [***] on which each of such payments is due.
4.6 Non-refundable payments: except as expressly determined otherwise in this Agreement, all payments made by Buyer to Embraer hereunder shall be non-refundable.

5.    DELIVERY
Subject to payment in accordance with Article 4 and the provisions of Articles 7 and 9, Embraer shall offer the Aircraft to Buyer for inspection, acceptance and subsequent delivery in FAF condition, at Embraer premises in São José dos Campos, State of São Paulo, Brazil, [***].

6.    CERTIFICATION
The EMBRAER 175 aircraft is certified by the Airworthiness Authority pursuant to the US 14CFR PART 25 certification requirements.
6.1 The Aircraft shall be newly manufactured by Embraer in compliance with Airworthiness Authority type certification and the operational requirements of the Airworthiness Authority, except for the items that are under Buyer's regulatory responsibility pursuant to the requirements of the Airworthiness Authority and are not otherwise required to be provided by Embraer under this Agreement. Buyer shall be solely responsible for determining which operational requirements of the Airworthiness Authority are to be incorporated into the Aircraft configuration and for informing Embraer thereof. All such requirements, to the extent not included in Attachment A at the time of execution of this Agreement, shall be treated in accordance with the terms and conditions of Article 11.
6.2 The Aircraft shall be delivered to Buyer with an export certificate of airworthiness issued by the ANAC for export to the United States and complying with the type certificate. The condition of the Aircraft at delivery and the documentation delivered with the Aircraft, including the above mentioned export certificate of airworthiness shall be sufficient to enable Buyer to obtain a certificate of airworthiness from the Airworthiness Authority. Subject to the above, it shall be Buyer’s responsibility to obtain such certificate of airworthiness and to register the Aircraft, at Buyer’s sole expense. Embraer agrees to reasonably cooperate with Buyer’s requests for information and assistance in order to obtain such certificate of airworthiness and registration of the Aircraft.
	
		
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Purchase Agreement COM0041-16 - Execution Version

7.    ACCEPTANCE AND TRANSFER OF OWNERSHIP
7.1  Unless Buyer is notified by Embraer of an Excusable or Non-Excusable Delay (as each are defined herein), the Aircraft shall be delivered to Buyer in accordance with Article 5. Embraer shall initially give Buyer [***] advance notice by e-mail or facsimile of the [***] of the Contractual Delivery Date on which Embraer considers that each Aircraft will be ready for inspection, acceptance and subsequent delivery. Furthermore, Embraer shall give Buyer [***] advance notice by e-mail or facsimile of the Day during the month of the Contractual Delivery Date on which Embraer considers that each Aircraft will be ready for inspection, acceptance and subsequent delivery. The final notification shall be issued by Embraer to Buyer [***] prior to the actual date that the Aircraft will be made available for Buyer’s inspection, which date shall be defined as the “Scheduled Inspection Date”, on which date Buyer shall promptly start inspecting such Aircraft.
7.2 Buyer shall be allowed a reasonable period of time but in no event greater than [***] for the [***] Aircraft delivered to Buyer and [***] for the remaining Aircraft, to inspect and conduct an acceptance flight of each Aircraft prior to its delivery. Embraer will [***] for the Aircraft acceptance flight in accordance with [***]. Buyer is entitled to have its pilots operate the acceptance flight in addition to Embraer’s pilot in command.
7.3 If Buyer finds an Aircraft acceptable, Buyer shall promptly execute and deliver a certificate of acceptance of such Aircraft and pay any and all amounts then due and payable pursuant to this Agreement, including but not limited to all amounts referred to in Articles 4.1, 4.2, 7.8 and 8 as applicable. Simultaneously with receipt of the certificate of acceptance and the payments then due and payable, Embraer shall, on or before the Actual Delivery Date, issue an export certificate of airworthiness and on the Actual Delivery Date, a warranty bill of sale effecting transfer of title and risk of loss in and to the Aircraft to Buyer, free and clear of any liens and encumbrances, at which time Buyer shall promptly remove the Aircraft from the Embraer’s facilities.
7.4 Buyer may decline to accept an Aircraft which does not comply with the specification set forth in Attachment “A” or is not in an airworthy condition, is not in FAF condition at Embraer premises in Sao Jose Dos Campos, [***]. For the purposes of this Article 7, an Aircraft shall be deemed not to be compliant when one or more of the Aircraft characteristics identified in Article 11.2.1 (i) through (vi) are adversely affected by such non-compliance vis-à-vis the specification set forth in Attachment “A”.
7.5 If Buyer declines to accept an Aircraft, Buyer shall give Embraer written notice of all specific reasons for such refusal within [***] inspection period permitted above and Embraer shall [***] to take all necessary actions in order to resubmit the Aircraft to Buyer for re-inspection, which in any case shall [***] after receipt of such notice from Buyer. 
	
		
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Purchase Agreement COM0041-16 - Execution Version

7.6 Buyer shall be allowed [***] to re-inspect the Aircraft, commencing on the first Working Day after receipt of notice from Embraer that all necessary actions were taken. In the event Buyer declines to accept an Aircraft after this procedure is carried out [***], the Parties shall convene immediately following final refusal to accept the Aircraft in order to negotiate possible solutions. If within [***] immediately after the date in which Embraer receives notice of such final refusal to accept the Aircraft, Embraer and Buyer fail to reach an agreement in writing, then either Party may terminate this Agreement with respect to the affected Aircraft without liability to either Party, except that Embraer [***].
7.7 Should Buyer fail to perform the acceptance and transfer of title to the Aircraft or to give Embraer written notice of specific reasons for refusal, within the periods provided for and in accordance with this Article 7, Embraer shall be entitled, at its discretion, to either [***]. Embraer’s rights to [***] this Agreement shall only become effective if such default of Buyer has not been cured within [***] counted from the [***], subject to Articles 7.5 and 7.6 above.
7.8 Notwithstanding the provisions of Article 7.7 and in addition to Embraer’s rights pursuant to Article 20.3, should Buyer fail to perform the acceptance and transfer of title to the Aircraft within the time period specified in Articles 7.2, 7.3, 7.5 and 7.6, as applicable, and provided Embraer has tendered the Aircraft as contemplated by this Agreement, interest will accrue at the rate equal to [***] calculated over the unpaid balance of the relevant Aircraft Purchase Price, prorated from the date on which Buyer should have completed the inspection or re-inspection of the Aircraft, as the case may be, until the date in which transfer of title occurs or until the date Embraer terminates this Agreement pursuant to Article 7.7, whichever occurs first. Without prejudice to Embraer’s rights set forth in Article 7.7, interest accrued will be invoiced by Embraer on a [***], beginning [***] after the date on which the Aircraft acceptance or transfer of title should have been performed, and payment thereof shall be made by Buyer in accordance with the instructions contained therein.

8.    STORAGE CHARGE
8.1 A storage charge equal to [***] per Day, subject to [***] for an Aircraft, shall be charged by Embraer to Buyer commencing on:
8.1.1 Buyer’s failure to perform inspection or re-inspection (as applicable) of the Aircraft, per the date or time period specified in writing by Embraer, according to Article 7; or
8.1.2 Buyer’s acceptance of an Aircraft when Buyer defaults in the fulfillment of any payment due and in taking title to such Aircraft immediately thereafter; or
8.1.3 Buyer’s failure to remove an Aircraft from Embraer’s facilities after title transfer has occurred.
	
		
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Purchase Agreement COM0041-16 - Execution Version

8.2 If however, Buyer notifies Embraer in writing [***] in advance of its expected delay in the performance of its obligations set forth in Articles 8.1.1, 8.1.2 and 8.1.3 above, the storage charge shall commence on the [***] after the occurrence of the events set forth in Articles 8.1.1, 8.1.2 or 8.1.3 above, as applicable.
8.3 In the event that the Aircraft Contractual Delivery Date must be extended by Embraer due to Buyer’s failure to perform any action or provide any information contemplated by this Agreement, the storage charge shall commence on the [***] after the original Contractual Delivery Date relative to such Aircraft.
8.4 Subject to [***], Buyer shall pay the storage charge as set forth in Articles 8.1. or 8.3., as applicable, in USD, per each month of delay or prorated for any part thereof, within [***] after the presentation of each invoice by Embraer.

9.    DELAYS IN DELIVERY
9.1 Excusable Delays:
9.1.1 Embraer shall not be held liable or be found in default for any delays in the delivery of an Aircraft beyond the Contractual Delivery Date or in the performance of any act to be performed by Embraer under this Agreement, resulting from, but not restricted to, the following events or occurrences (hereinafter referred to as “Excusable Delays”): [***].
9.1.2 Within [***] Excusable Delays which may cause delays in the delivery of an Aircraft beyond the Contractual Delivery Date or in the performance of any act or obligation to be performed by Embraer under this Agreement, Embraer agrees [***]. 
9.1.3 [***].
9.1.4 If such Excusable Delay lasts longer than [***] or the cause of such Excusable Delay renders the performance of this Agreement impossible with respect of one or more specific undelivered Aircraft, then the Parties shall attempt to renegotiate the terms of this Agreement during the [***] following (i) the expiration of such [***], or (ii) the date it is determined that performance of the Agreement is impossible. In the event that the Parties fail to agree on such terms within [***], Buyer shall have the right to terminate this Agreement with respect to the affected Aircraft without liability to either Party, except as provided for in Article 20.2(i). If such Excusable Delay [***], then either Party shall have the right to terminate this Agreement with respect to the affected Aircraft, without liability to either Party, except as provided for in Article 20.2(i).
9.1.5 If the cause of such Excusable Delay is attributable to Buyer in accordance with [***], Buyer shall not be entitled to terminate this Agreement in accordance with Article 9.1.4 and upon a termination by Embraer the provisions of Article 20.3 shall apply.
	
		
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Purchase Agreement COM0041-16 - Execution Version

9.2 Non-Excusable Delays: 
9.2.1 If the delivery of an Aircraft is delayed, and such delay does not constitute an Excusable Delay (hereinafter referred to as "Non-Excusable Delays"), by more than [***] after the Contractual Delivery Date for such Aircraft, [***].
9.2.2 Upon the occurrence of any event which could constitutes a Non-Excusable Delay in the delivery of an Aircraft, Embraer agrees to send a written notice to Buyer, within a reasonable period of time which in any case shall not be greater than [***] after Embraer [***] determines that an event has occurred and that event may cause an Non-Excusable Delay, including a description of the event and an estimate of the effects expected upon the timing of delivery of the Aircraft. To the extent that a Non-Excusable Delay for an affected Aircraft lasts longer than [***], Buyer shall have the right to terminate this Agreement with respect to such affected Aircraft with such election to be made within [***]. Termination by Buyer under this Article 9.2.2 shall be without liability to either Party, except as provided for in Article 20.2 (ii).
9.2.3  It is agreed between the Parties that for any Aircraft that is subject to (i) a Non-Excusable Delay, (ii) a Delay Due to Loss or Structural Damage of the Aircraft as set forth in Article 9.3 below, or (ii) an Excusable Delay for which notice of such delay was provided by Embraer to Buyer less than [***] before the Contractual Delivery Date of such Aircraft, the Escalation Formula used to determine the Aircraft Purchase Price of such Affected Aircraft shall be [***] the Actual Delivery Date.  
9.2.4 It is further agreed between the Parties that if, with respect to a delayed Aircraft, Embraer does not receive [***], from Buyer, within [***] the Contractual Delivery Date of such Aircraft, Buyer shall be deemed to have [***].
9.3 Delay Due to Loss or Structural Damage of the Aircraft
If, before delivery thereof an Aircraft is lost, destroyed or, in the reasonable opinion of Embraer in consultation with Buyer, is damaged beyond economic repair (“Total Loss”), then Embraer will notify Buyer to this effect [***]. Embraer will specify in its notice, [***], the earliest date that an aircraft to replace the Aircraft may be delivered to Buyer and [***] Embraer, and (ii) the Parties execute an amendment to this Agreement recording the modification in the Contractual Delivery Date.
If this Agreement terminates in relation to an Aircraft in accordance with this Article 9.3, such termination shall discharge the Parties from all obligations and liabilities hereunder with respect to such Aircraft and related Services, except that Embraer shall, at its expense, return to Buyer (i) any moneys paid by Buyer towards the purchase of such Aircraft, no interest accrued and (ii) any Buyer Furnished Equipment (as defined in Attachment “A” hereto) delivered by Buyer to Embraer for such Aircraft.
	
		
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Purchase Agreement COM0041-16 - Execution Version

10.    [***] DELIVERY INSPECTION
10.1    At any time and from time to time after the date which is [***] the relevant Contractual Delivery Date while an Aircraft [***] the delivery inspection and acceptance of each Aircraft in accordance with Article 7, Buyer may, at Buyer’s sole discretion, send up to [***] authorized representatives (the “Authorized Representatives”) to the facilities of Embraer [***] Aircraft. Buyer shall communicate to Embraer the names of its Authorized Representatives, by means of written notice, at least [***] prior to each such date that Buyer intends to send Authorized Representatives [***]. 
10.2    In order to perform the delivery inspection and acceptance of each Aircraft in accordance with Article 7, Buyer shall send up to [***] Authorized Representatives to the facilities of Embraer. Buyer shall communicate to Embraer the names of its Authorized Representatives, by means of written notice, at least [***] prior to each relevant Aircraft Contractual Delivery Date specified in Article 5.
10.3  The Authorized Representatives sent to perform the delivery inspection and acceptance of each Aircraft in accordance with Article 10.2, may be authorized and duly empowered to sign the acceptance and transfer of title and risk documents and accept delivery of the Aircraft pursuant to Article 7. For the sake of clarity, Buyer’s representative for purpose of Article 10.3 need not be on site at Embraer’s facilities for purposes of delivery, at Buyer’s sole discretion.
10.4    For the purposes subject hereof, Embraer shall provide communication facilities (telephone, facsimile and internet connection) and access to a private office in the Embraer delivery center for Buyer’s Authorized Representatives, as well as the necessary tools, measuring devices, test equipment and technical assistance as may be necessary to perform acceptance tests. Embraer shall also make available to Authorized Representatives (i) free transportation between Embraer facilities and hotel in Sao Jose dos Campos during normal working hours on the relevant Working Days (with transportation before or after normal working hours to be as mutually agreed), and (ii) free lunch at the canteen at Embraer facilities on Working Days.
10.5  Buyer’s Authorized Representatives shall observe Embraer’s administrative rules and instructions while at Embraer’s facilities. Embraer agrees to provide notice to Buyer of any changes to such administrative rules and instructions.
10.6 Buyer’s Authorized Representatives shall be allowed exclusively in those areas of Embraer’s facility related to the subject matter hereof. Buyer agrees to hold harmless Embraer from and against all and any kind of liabilities in respect to such Authorized Representatives, for whom Buyer is solely and fully responsible under all circumstances and in any instance, except to the extent they arise from the gross negligence or the willful misconduct of Embraer, its officers, employees and agents.
	
		
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Purchase Agreement COM0041-16 - Execution Version

11. CHANGES
11.1 Each Aircraft will comply with the standards defined in Attachment “A” hereto and shall incorporate all modifications which are classified as AD’s mandatory by ANAC or the Airworthiness Authority as provided in Article 11.4, and those agreed upon by Buyer and Embraer in accordance with this Article.
11.2 The Parties hereby agree that changes can be made by Embraer in the design of the Aircraft, the definition of which and its respective classification shall be in compliance to the Aircraft type specification, as follows:
11.2.1 Minor Changes: defined as those modifications which shall not adversely affect the Aircraft in any of the following characteristics:
 [***]
11.2.2 Major Changes: defined as those modifications which affect at least one of the topics mentioned in Article 11.2.1.
11.3 Embraer shall have the right, but not the obligation, to incorporate Minor Changes in the Aircraft still in the production line at its own cost, without the prior consent of Buyer. [***].
11.4 Embraer shall convey those Major Changes that are classified as AD’s by means of service bulletins approved by the Airworthiness Authority and/or ANAC, as appropriate. Service bulletins that implement such AD’s shall be referred to as Mandatory Service Bulletins. Embraer shall incorporate Mandatory Service Bulletins as follows:
11.4.1 Compliance required before Contractual Delivery Date: Embraer shall incorporate Mandatory Service Bulletins in undelivered Aircraft at Embraer’s expense [***] if the compliance time for such Mandatory Service Bulletins is before Contractual Delivery Date of an Aircraft. Embraer shall not be liable for any delays resulting from incorporation of Mandatory Service Bulletins when the Aircraft has already passed the specific production stage affected by the incorporation of said change but Embraer shall [***] incorporate such changes prior the Actual Delivery Date and to minimize any delays in delivery.
11.4.2 Compliance required [***]: For a period of (i) [***], Embraer shall [***]. When flight safety is affected, such changes shall be immediately incorporated. If warranty coverage is not available or applicable pursuant to the terms of Attachment “C”, the provisions of Article 11.5 shall apply.
	
		
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[***]

11.5 Except for the Major Changes referred to in Article 11.4, any other Major Changes such as (i) any change developed by Embraer as product improvement, (ii) any change required by Buyer in relation to the Aircraft configuration, (iii) any change in the certification regulations presented in the Technical Description, which are required by the Airworthiness Authority as a consequence of alterations, amendments and/or innovations of these applicable regulations, or (iv) any change due to alterations, amendments and/or innovations of legal requirements by other authorities (including without limitation environmental authorities) that have the effect of rendering Aircraft parts obsolete or non-compliant, shall be considered as optional and Embraer shall submit to Buyer a Proposal of Major Change (“PMC”) describing the impacts of such change. Should Buyer not approve such PMC, the change shall not be incorporated in the Aircraft.
11.6 Any Major Change to the Aircraft, made in accordance with the foregoing paragraphs, which affect the provisions of Attachment “A” hereto, shall be incorporated in said Attachment by means of an amendment to this Agreement. 
11.7 Except as far as it relates to AD’s mandatory by ANAC or the Airworthiness Authority and Minor Changes, the Aircraft shall, on the Scheduled Inspection Date, comply with the terms and conditions of Attachment “A” as from time to time amended pursuant to Article 11.6. Determination of such compliance shall [***].
11.8   [***].
11.9   [***].

12.    WARRANTY [***]
12.1. Warranty: the materials and workmanship relative to the Aircraft subject of this Agreement will be warranted exclusively in accordance with the terms and conditions specified in Attachment “C”. 
12.2 [***]: Embraer hereby [***] to Buyer [***] exclusively in accordance with the terms and conditions specified in [***].

13.    PRODUCT SUPPORT PACKAGE
Embraer shall supply to Buyer the Product Support Package described in Article 2 of Attachment “B” hereto, which includes Embraer’s spare parts policy, the Technical Publications and the Services.
	
		
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Purchase Agreement COM0041-16 - Execution Version

14.    ASSIGNMENT
14.1 Assignment of rights and obligations: Buyer may not assign, novate or transfer any of its rights or obligations hereunder without the prior written consent of Embraer, provided however that Buyer (x) shall have the right to assign [***] under this Agreement with respect to any Aircraft with [***] prior notice to Embraer to an [***] and (y) may assign its [***] that shall acquire such Aircraft for the purpose of [***] with [***] prior notice to Embraer and Buyer shall [***] such Aircraft with [***].  
14.2 The Product Support Package, as identified in Article 13, shall not be assigned or transferred to any third party, [***], in connection with the transfer of title, possession or operation of any Aircraft.
14.3 Assignment of warranties [***]: if Buyer wishes to transfer or assign the warranty contained in Attachment “C” [***] to a third party in connection with the transfer of title, possession or operation of any Aircraft, Buyer shall obtain the prior written consent of Embraer, [***]. Notwithstanding the [***], Buyer may upon [***] prior written notice to Embraer assign to [***] that is [***] acquisition of an Aircraft the warranties contained in Attachment “C”, [***].
14.4  [***].
14.5 [***], this Agreement, as well as the warranty [***], shall not be assigned to [***], any person or entity which the Parties may be legally restricted to enter in to an agreement, to a debarred person or entity or in case such assignment would infringe US export control regulations or any other applicable law.

15.    RESTRICTIONS AND PATENT INDEMNITY 
15.1 Claims against Buyer. Subject to the limitations and conditions set forth herein, including, without limitation Article 15.2, Embraer shall indemnify Buyer with respect to all claims, lawsuits, and liabilities based upon or arising from any suit, action, proceeding, or allegation that:
(a) Any product or service purchased from or supplied by Embraer hereunder or any portion thereof (collectively, for the purposes of this Article 15, "Item") and/or the use or operation thereof constitutes an alleged or actual infringement of any granted or registered United States or foreign patent ("Patent Claim"), provided that from the time of design of such Item and until such Patent Claim is resolved, each of the country in which the relevant patent is held and the flag country of the Aircraft is a party to (1) the Paris Convention for the Protection of Industrial Property as amended and (2) Article 27 of the Chicago Convention on International Civil Aviation of December 7, 1944, or 
	
		
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Purchase Agreement COM0041-16 - Execution Version

(b) Aircraft software and accompanying documentation and manuals (collectively, for purposes of this Article 15, “Software”), or any part of such Aircraft Software furnished by Embraer, constitutes an alleged or actual infringement of any United States or foreign copyright rights or misappropriates any third party trade secret right under U.S. law or other foreign law ("Copyright Claim"), provided that from the time of design of such Software and until such Copyright Claim is resolved, each of the country in which the infringement claim is made and the flag country of the Aircraft is a member of the Berne Convention for the Protection of Literary and Artistic Works as amended and both countries recognize Software as a “work” under the Berne Convention. 
15.1.1 Embraer’s indemnification provided in this Article 15 shall not apply to Buyer furnished or installed equipment, Items or Software not installed, used or maintained in accordance with all instructions and procedures of Embraer (as may be modified by Embraer from time-to-time), any Buyer-furnished or requested designs or any Buyer modification of any Item or Software.
15.2 Limitations and Conditions. Buyer shall give prompt written notice to Embraer of the receipt of a notice of a suit or action against Buyer alleging a Patent Claim or Copyright Claim covered by this Article 15 or of a written notice alleging a Patent Claim or Copyright Claim covered by this Article 15, whichever occurs earlier. Failure to notify Embraer as provided herein shall relieve Embraer of liability that it may have to Buyer to the extent that the defense of any such Patent Claim or Copyright Claim is prejudiced thereby.
At all times, Embraer shall have the right, at its option and expense, to negotiate with any party alleging a Patent Claim or Copyright Claim, assume or control the defense to any allegation of a Patent Claim or Copyright Claim, including without limitation, the right to bring a declaratory judgment or similar action, intervene in any action involving a Patent Claim or Copyright Claim, and/or attempt to resolve a Patent Claim or Copyright Claim by replacing or modifying an Item or Software.
Buyer shall promptly furnish to Embraer all information, documents, records, and assistance within Buyer’s possession, custody or control as requested by Embraer that Embraer considers potentially relevant or material to any allegation covered by this Article 15. Buyer shall co-operate with Embraer and shall, upon Embraer’s reasonable request and at Embraer’s expense, arrange for the attendance of representatives of Buyer at depositions, hearings, trials, and the like, and assist in effecting settlements, securing and giving evidence, obtaining the attendance of witnesses and in the conduct of any suits or actions covered by this Article 15.
Buyer shall obtain Embraer’s written approval prior to paying, agreeing to pay, assuming any obligation or making any material concession relative to any Patent Claim or Copyright Claim.
Embraer shall assume and pay any and all judgments and all costs assessed against Buyer in a final non-appealable judgment of any suit or action, and Embraer will make all payments in settlement imposed upon or incurred by Buyer with Embraer’s [***].
EMBRAER SHALL HAVE NO OBLIGATION OR LIABILITY UNDER THIS ARTICLE 15 FOR ANY LOSS OF USE, REVENUE OR PROFIT, OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES. THE OBLIGATIONS AND REMEDIES OF BUYER SET FORTH IN THIS ARTICLE 15 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND 

Purchase Agreement COM0041-16 - Execution Version

BUYER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER INDEMNITIES, OBLIGATIONS AND LIABILITES OF EMBRAER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF BUYER AGAINST EMBRAER, EITHER EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHT BY ANY PRODUCT OR SERVICE PROVIDED UNDER THIS AGREEMENT.

16.    MARKETING PROMOTIONAL RIGHTS
Embraer shall have the right [***], to show for marketing purposes, free of any charge, the image of Buyer’s Aircraft, painted with Buyer’s colors and emblems, affixed in photographs, drawings, films, slides, audiovisual works, models or any other medium of expression (pictorial, graphic, digital, electronic and sculptural works), through all communications media including but not limited to billboards, magazines, newspaper, television, movie, theaters, as well as in posters, catalogues, models and all other kinds of promotional material. In the event that Buyer is no longer operating a fleet of E175 Aircraft, this Article 16 shall cease to be in effect and Embraer will stop using any of Buyer’s colors and emblems for any promotional or marketing purposes without the prior written consent of Buyer.

17.    TAXES
Embraer shall [***]. All other [***], shall be borne by Buyer. 

18.    APPLICABLE LAW
This Agreement shall in all respects be governed by the laws of the State of New York, including all matters of construction, validity and performance, without giving effect to principles of conflicts of laws other than sections 5-1401 and 5-1402 of the New York General Obligations law. 
	
		
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Purchase Agreement COM0041-16 - Execution Version

19.    JURISDICTION
Each Party hereto hereby irrevocably agrees, accepts and submits to, for itself and in respect of any of its property, generally and unconditionally, the exclusive jurisdiction of the courts of the State of New York in the City and County of New York and of the United States for the Southern District of New York, in connection with any legal action, suit or proceeding with respect to any matter relating to or arising out of or in connection with this Agreement or any other operative agreement and fully waives any objection to the venue of such courts. Furthermore to the fullest extent permitted by applicable law, each Party hereby waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding any claim that it is not personally subject to the jurisdiction of the above named courts, that the suit, action or proceeding is brought in an inconvenient forum, or that the venue of the suit, action or proceeding is improper.
EACH PARTY HERETO HEREBY EXPRESSLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A JURY TRIAL IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.

20.    TERMINATION
20.1 Should either Party fail to comply partially or completely with its obligations hereunder, the other Party shall be entitled to give notice of such failure and to require that such failure be remedied within the period specified in that notice, which period shall not be less than [***]. Should such failure not be remedied within the period so specified, then the Party who gave notice of such failure shall be entitled to terminate this Agreement. Should termination occur in accordance with the foregoing, [***]. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY IN ANY CIRCUMSTANCE HEREUNDER FOR ANY CONSEQUENTIAL DAMAGES, LOSS OF PROFITS, LOSS OF REVENUE, LOSS OF USE AND INCREASED COSTS, OR PUNITIVE DAMAGES OR INDIRECT OR INCIDENTAL DAMAGES WHICH MAY ARISE OUT OF, OR BE CONNECTED TO, ANY BREACH OR DEFAULT UNDER OF ANY TERM, CONDITION, COVENANT, WARRANTY, OR PROVISION OF THIS AGREEMENT, AND WHICH EITHER PARTY WOULD OTHERWISE BE ENTITLED TO UNDER ANY APPLICABLE LAW, INCLUDING BUT NOT LIMITED TO ANY CLAIMS SOUNDING IN CONTRACT, TORT, EQUITY OR STATUTE. 
20.2 This Agreement may be terminated in respect of the relevant Aircraft, 
a) by Buyer upon the occurrence of any Excusable Delay as provided for in Article 9.1.4;
	
		
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Purchase Agreement COM0041-16 - Execution Version

b) by Embraer upon the occurrence of any Excusable Delay as provided for in Article 9.1.4; 
c) by Buyer upon the occurrence of any Non-Excusable Delay as provided for in Article 9.2.2;
The above termination rights in regard to Excusable Delay and Non-Excusable Delay shall be exercisable by written notice from the relevant Party to the other to such effect [***] relevant time period as specified in Articles 9.1.4 and 9.2.2, as applicable. 
Upon receipt of such notice of termination by Buyer or Embraer, as the case may be, Embraer shall:
(i)    in case of Excusable Delay: [***].
(ii)    in case of Non-Excusable Delay: [***].
20.3 If Buyer terminates this Agreement before the Actual Delivery Date of an Aircraft [***]. It is hereby agreed by the Parties that upon the receipt by Embraer of the amounts set forth above in full, [***].
20.4 If either Party terminates this Agreement in respect to an Aircraft pursuant to Article 7.6 hereof, [***].
20.5 In the event this Agreement [***].

21.    OPTION AIRCRAFT 
Subject to the payment of the Option Aircraft initial deposit set forth in Article 21.1, Buyer shall have the option to purchase thirty-three (33) additional Option Aircraft, to be delivered in accordance with the Option Aircraft contractual delivery dates contained in item 2 of Attachment “E” to this Agreement (each an “Option Aircraft Contractual Delivery Date”). The Option Aircraft will be supplied in accordance with the following terms and conditions:
21.1 A [***] Option Aircraft initial deposit of [***] per Option Aircraft, is due and payable [***] of this Agreement (the “Option Aircraft Initial Deposit”).
21.2 The unit basic price of each Option Aircraft shall be equal to the unit Aircraft Basic Price, provided that such Option Aircraft be delivered within the delivery period above mentioned and in the same configuration, specification and installations specified in Attachment “A” hereto, as it is written on the date of signature of this Agreement, determining each Option Aircraft basic price (the “Option Aircraft Basic Price”).
21.3 The Option Aircraft Basic Price shall be escalated according to the escalation formula subject of Attachment “D” hereto, determining each Option Aircraft purchase price (the “Option Aircraft Purchase Price”).
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Purchase Agreement COM0041-16 - Execution Version

21.4 The option to purchase the Option Aircraft shall be exercised in [***] of Option Aircraft as follows: [***] no later than [***] prior to the first Business Day of the first Option Aircraft Contractual Delivery Date in each [***] (with Option Aircraft Contractual Delivery Dates [***]); and no later than [***] prior to the delivery of the first Option Aircraft [***] (with Option Aircraft Contractual Delivery Dates [***]). Exercise of the option to purchase the Option Aircraft shall be accomplished by means of a written notice from Buyer to Embraer, return receipt requested, specifying the Option Aircraft in [***] in respect of which Buyer is exercising its option. Buyer may acquire some or all the Option Aircraft [***] Option Aircraft shall [***]. Any Option Aircraft not exercised by Buyer as per the terms and conditions of this paragraph will be considered relinquished, no damages being due by either Party to the other, [***].
21.5 The payment of the Option Aircraft Purchase Price shall be made according to the following:
[***]
21.6 If the options are confirmed by Buyer as specified above, an amendment to this Agreement shall be executed by and between the Parties within [***] following the Option Aircraft exercise date, setting forth the terms and conditions applicable to, if any, exclusively to the Option Aircraft.
21.7 The product support package to be applied to the Option Aircraft is described in Article 2.4 of Attachment "B". 

22.    INDEMNITY
To the extent permitted by law, Buyer agrees to indemnify and hold harmless Embraer, its subsidiaries, affiliates, and their respective officers, directors, agents, employees, representatives and assignees (“Indemnified Parties”) from and against all liabilities, damages, losses, judgments, claims and suits, including costs and expenses incident thereto, which may be suffered by, accrued against, be charged to or recoverable from the Indemnified Parties by reason of loss or damage to property, including the Aircraft, or by reason of injury or death of any person resulting from or in any way connected with the performance of Services by the Indemnified Parties for or on behalf of Buyer related to Aircraft delivered by Embraer, performed while on the premises of Embraer or Buyer, while in flight or while performing any such activities, at any place, in conjunction with [***] ("Indemnified Services") but for those liabilities, damages, losses, judgments, claims and suits which are [***].    
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Purchase Agreement COM0041-16 - Execution Version

		
	23.
	NOTICES

All notices permitted or required hereunder shall be in writing in the English language and sent, by registered mail or facsimile, to the attention of the Vice President, Contracts – Commercial Aviation as to Embraer and of the Treasurer as to Buyer, to the addresses indicated below or to such other address as either Party may, by written notice, designate to the other.
23.1 EMBRAER:
EMBRAER S.A.
Av. Brigadeiro Faria Lima, 2170
12.227-901 São José dos Campos – SP - Brazil
Telephone: [***]
Facsimile:   [***]
23.2 BUYER:
HORIZON AIR INDUSTRIES, INC. 
19521 International Boulevard
Seattle, Washington - USA
Telephone: [***]
Facsimile:   [***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Purchase Agreement COM0041-16 - Execution Version

		
	24.
	CONFIDENTIALITY

Neither Party has the right to disclose the terms of this Agreement except as required by law. Each of Buyer and Embraer agrees not to disclose any portion of this Agreement or its Attachments, amendments or any other supplement, to any third party without the previous written consent of the other Party. Without limiting the foregoing, in the event either Party is legally required to disclose the terms of this Agreement, that Party shall notify the other Party (where permitted by law) reasonably in advance of such disclosure and exert its best efforts to request and obtain confidential treatment of the articles, terms and conditions of this Agreement relevantly designated by the other Party as confidential. In the event this Agreement is terminated, whether in whole or in part, this Article 24 shall survive such termination. Embraer agrees to cooperate reasonably with Buyer in preparing any redactions to this Agreement for purposes of public filing in accordance with applicable securities laws and regulations.

25.    FOREIGN CONTENT
The Aircraft contains commodities, technology and software that were exported from the United States and other countries in accordance with their respective export control regulations. Diversion contrary to U.S. law and/or any other applicable law is prohibited. 
Buyer agrees to comply with any export and re-export control laws of the United States and other countries applicable to the Aircraft, its parts, components, technology and software and, upon Embraer’s request, to execute and deliver to Embraer the relevant end-user certificates necessary for the export and transfer of the Aircraft to Buyer.

26.    COMPLIANCE WITH LAWS
Each Party represents to the other Party that in connection with the negotiation, execution and performance under this Agreement it: (i) has acted in good faith and with business integrity towards the other Party and any third parties, (ii) complies with anti-corruption and anti-money laundering laws applicable to such Party to the extent that they apply to such Party’s obligations and activities stated in this Agreement, (iii) such Party has a code of ethics (or equivalent document) and an anti-corruption policy (or equivalent document) (collectively, “Code”) consistent with internationally accepted ethical and anti-corruption standards, which guides the conduct of its officers and employees, and (iv) such Party maintains internal procedures reasonably designed and conceived to enforce and promote the compliance with the anti-corruption provisions of its Code. The foregoing representations are made on a continuing basis and shall hold true until termination or expiration of this Agreement. 
Each Party represents to the other Party that (i) such Party has not and will not offer, promise or give to any employee, officer, official, agent or representative of the other Party any amount of money, personal services, credit or other thing of value, save where not in violation of any of the following: (a) laws which apply or may apply to this Agreement or to such Party generally, or (b) reasonably accepted standards of conduct and practices;  and (ii) such Party has not and will not offer, promise or give to, or request or demand from, any employee, officer, official, agent or representative of the other 

Purchase Agreement COM0041-16 - Execution Version

Party any payment or thing of value which can potentially impact a business decision of the other Party in the context of this Agreement or the subject matter hereof.

27.    SEVERABILITY
If any provision or part of a provision of this Agreement or any of the Attachments shall be, or be found by any authority or court of competent jurisdiction to be, illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall not affect the other provisions or parts of such provisions of this Agreement, all of which shall remain in full force and effect.

28.    NON-WAIVER
Except as otherwise specifically provided to the contrary in this Agreement, any Party’s refrain from exercising any claim or remedy provided for herein shall not be deemed a waiver of such claim or remedy, and shall not relieve the other Party from the performance of such obligation at any subsequent time or from the performance of any of its other obligations hereunder.

29.    INTEGRATED AGREEMENT
All Attachments referred to in this Agreement and/or attached hereto are, by such reference or attachment, incorporated in this Agreement.

30.    NEGOTIATED AGREEMENT
Buyer and Embraer agree that this Agreement, including all of its Attachments, has been the subject of discussion and negotiation and is fully understood by the Parties, and that the rights, obligations and other mutual agreements of the Parties contained in this Agreement are the result of such complete discussion and negotiation between the Parties.

31.    COUNTERPARTS
This Agreement may be executed by the Parties hereto in any number of separate counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument and all of which when taken together shall constitute one and the same instrument. This Agreement may be signed by facsimile with originals to follow by an internationally recognized courier.

32.    ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the Parties hereto with respect to the subject matter hereof and supersedes all previous and connected negotiations, representations and agreements between the Parties. This Agreement may not be altered, amended or supplemented except by a written instrument executed by the Parties.

Purchase Agreement COM0041-16 - Execution Version

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

EMBRAER S.A.    HORIZON AIR INDUSTRIES, INC.

By: ___/s/ Luis Carlos Affonso__________    By: __/s/ Mark Eliasen______
Name:   Luis Carlos Affonso    Name:  Mark Eliasen
Title:      Chief Operating Officer    Title:     Treasurer
              Commercial Aviation

By: __/s/ Adriana Sarlo________________    
Name:  Adriana Sarlo    
Title:    Vice President, Contracts    
            Commercial Aviation
Place: Sao Jose dos Campos, Brazil     Place: Seattle, WA, U.S.A.

Witnesses:

___/s/ Fernando Bueno_______________    ___/s/ Jennifer C. Thompson____
Name: Fernando Bueno    Name: Jennifer C. Thompson
ID: [***]    ID: Assistant Corporate Secretary

Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "A"

AIRCRAFT CONFIGURATION

		
	1.
	STANDARD AIRCRAFT

The EMBRAER 175 Aircraft shall be manufactured according to (i) the standard configuration specified in the Technical Description TD 175 – Rev 21 (the “TD”), December 2015, which although not attached hereto, is incorporated herein by reference, and (ii) the characteristics described in the items below.
The Parties agree that this Attachment shall be amended to reflect the then available Technical Description [***].

		
	2.
	OPTIONAL EQUIPMENT

[***]

	
							
	[***]

	 

	[***]

	 
	[***]
	 
	[***]

	 
	 
	 
	 
	 

	Seats
	 
	 

	Class
	Count/Mode
	Details
	 
	 

	FC
	12
First
	2 seats @ [***]
1 seat @ {***.
9 seats @ 37" pitch
	 
	 

	YC
	64
Slim Plus
	2 seats @ [***]
2 seats @ [***]
12 seats @ 34" pitch
28 seats @ 31" pitch
	 
	 

	** Pitch In Class Divider
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 

	NOTES:

	 
	[***]
	 
	[***]

		
	3.
	EXTERIOR FINISHING 

The fuselage of the Aircraft shall be painted according to Buyer’s colour and paint scheme, which shall be supplied to Embraer by Buyer on or before [***] prior to the first Aircraft contractual delivery date. The wings and the horizontal stabilizer shall be supplied in the standard colours, i.e., grey BAC707.
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "A" to Purchase Agreement COMM0041-16 - Execution Version

	
	
	ATTACHMENT "A"

AIRCRAFT CONFIGURATION

Once defined, the choices of colour and paint scheme made by Buyer shall apply to all Aircraft. If Buyer requires a colour and paint scheme for any Aircraft that is different from the original one informed to Embraer, Buyer shall provide written notice to Embraer not less than [***] prior to the relevant Aircraft contractual delivery date and Embraer will submit the relevant quotation to the approval of Buyer within [***] from the date such request is received by Embraer, provided that Buyer shall have the right to [***] for the entire Aircraft order of thirty (30) Firm Aircraft [***], subject to the aforementioned conditions. Should Buyer not approve the quotation, the relevant Aircraft shall be painted in according to the original paint and colour scheme.

		
	4.
	INTERIOR DETAILING

Buyer shall inform Embraer up to the customer check list definition (“CCL”), to be held no later than [***] Aircraft contractual delivery date, of its choice of materials and colours of all and any item of interior furnishing including seat covers, carpet, floor lining and curtain, and trim and finishing, emergency equipment and galley inserts from the choices offered by and available at Embraer. In case Buyer opts to use different part numbers of equipment, inserts, materials and/or patterns, Embraer will submit to Buyer a Proposal of Major Change (“PMC”) describing the impacts of such option, if any. Should Buyer not approve such PMC, the interior shall be built according to the choices offered by and available at Embraer. Once defined, the choices of trim and finishing, emergency equipment and galley inserts made by Buyer shall apply to all Aircraft. If Buyer requires trim and finishing, emergency equipment or galley inserts for any Aircraft that is different from the original one informed to Embraer, Buyer shall present a written request to Embraer not less than [***] prior to the relevant Aircraft contractual delivery date and Embraer will submit the relevant quotation to the approval of Buyer within [***] from the date such request is received by Embraer. Should Buyer not approve the quotation, the interior of relevant Aircraft shall be built according to the original choice of Buyer.

		
	5.
	BUYER FURNISHED EQUIPMENT (BFE) AND BUYER INSTALLED EQUIPMENT (BIE)

The first Aircraft will have electrical galley inserts, such as ovens, coffee makers, hot jugs and water boilers as BFE for certification purpose. Buyer shall deliver such electrical inserts, in DDP conditions (Incoterms 2010), to C&D Zodiac – 14 Centerpointe Drive, La Palma, CA 90623, USA, or to another place to be timely informed by Embraer. 
The trolleys, standard units and the equipment classified as operational requirements shall be BIE items.
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "A" to Purchase Agreement COMM0041-16 - Execution Version

	
	
	ATTACHMENT "A"

AIRCRAFT CONFIGURATION

Medical kits, defibrillators and wheelchairs, as well as any other equipment classified as medical or pharmaceutical product, shall be acquired by Buyer and installed on the Aircraft by Buyer after delivery thereof.
For the second Aircraft and on, the BFE and BIE items and installations as well as the associated technical and commercial impacts shall be as agreed in the Purchase Agreement.

		
	6.
	EMBRAER RIGHT TO PERFORM FOR BUYER

If after written notice from Embraer, Buyer fails to, within [***] of such notice, to choose or define the exterior, interior finishing, emergency equipment and/or galley inserts of any Aircraft or fails to inform Embraer of its choice or definition within [***] period,  Embraer shall have the right to tender the Aircraft for delivery, as the case may be, with a white overall fuselage colour, fitted with an interior finishing selected by Embraer, and/or with provisions/installation for emergency equipment and galley inserts from the choices available at Embraer, at its reasonable discretion.
In any such cases, no compensation to Buyer or reduction shall be applied in the relevant Aircraft Basic Price. Buyer agrees hereby that any action taken by Embraer pursuant to this Article shall not constitute a waiver or release of any obligation of Buyer under the Purchase Agreement, nor a waiver of any event of default which may arise out of Buyer’s non performance of such obligation, nor an election or waiver by Embraer of any remedy or right available to Embraer under the Purchase Agreement. Further, Embraer shall be entitled to charge Buyer for reasonable expenses incurred by Embraer in connection with the performance of or compliance with such agreement, as the case may be, payable by Buyer within [***] from the presentation of the respective invoice by Embraer to Buyer.

		
	7.
	REGISTRATION MARKS, TRANSPONDER AND ELT CODES:

The Aircraft shall be delivered to Buyer with the registration marks painted on them. The registration marks, the transponder code and ELT protocol coding shall be supplied to Embraer by Buyer no later than [***] before each relevant Aircraft contractual delivery date. Embraer shall be entitled to tender the Aircraft for delivery to Buyer without registration marks, with an inoperative transponder and without setting the ELT protocol coding in case Buyer fails to supply such information to Embraer in due time.
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "A" to Purchase Agreement COMM0041-16 - Execution Version

	
	
	ATTACHMENT "A"

AIRCRAFT CONFIGURATION

		
	8.
	EXPORT CONTROL ITEMS 

The Aircraft contains IRU (Inertial Reference Unit) manufactured by Honeywell International, which is subject to export control under United States of America law. The Aircraft contains an IESI (Integrated Electronic Standby Instrument System) model manufactured by Thales which is not subject to export control, however in the event this IESI model is replaced by any IESI with the QRS-11 gyroscopic microchip, such component is subject to export control under United States of America law.

Transfer or re-export of such items (whether or not incorporated into the Aircraft), as well as their related technology and software may require prior authorization from the US Government.

IT IS HEREBY AGREED AND UNDERSTOOD BY THE PARTIES THAT IF THERE IS ANY CONFLICT BETWEEN THE TERMS OF THIS ATTACHMENT “A” AND THE TERMS OF THE TECHNICAL DESCRIPTION ABOVE REFERRED, THE TERMS OF THIS ATTACHMENT “A” SHALL PREVAIL.

Attachment "A" to Purchase Agreement COMM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

		
	1.
	FERRY FLIGHT ASSISTANCE

		
	1.1
	Embraer will make available to Buyer, [***], the services of a third party representative at the airport in which the Aircraft will make the last stop in Brazilian territory, to assist Buyer’s crew in the interface with Brazilian customs clearances. Such services do not include handling services such as refueling, ground equipment and communications and Buyer shall hire such services from a handling service company. Buyer shall also be responsible for the [***] and overflight permits required for the ferry flight.

If it is necessary that any ferry equipment be installed by Embraer in the Aircraft for the ferry flight between Brazil and final destination, Embraer will make available, upon Buyer’s written request, a standard and serviceable ferry equipment to Buyer (hereinafter the “Kit”) [***], except as set forth below. In this case, Buyer shall immediately upon the Aircraft arrival at its final destination, remove the Kit from the Aircraft and return it to a freight forwarder agent as determined by Embraer, in FCA (Free Carrier - Incoterms 2015) condition.
In case Embraer provides the Kit to Buyer and irrespective of whether (i) the Kit is utilized, whether totally or not, such decision to be taken in Embraer’s reasonable discretion, or (ii) the Kit is not used and is not returned to Embraer freight forwarder agent complete and in the same condition as it was delivered to Buyer within [***] after Aircraft arrival in final destination, Buyer shall pay Embraer the value of a new Kit upon presentation of an invoice by Embraer and then the original Kit shall become the property of Buyer. In addition, the availability of another Kit for the next occurring Aircraft ferry flight after such period shall not be an Embraer obligation.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

2.    PRODUCT SUPPORT PACKAGE 

		
	2.1
	MATERIAL SUPPORT

		
	2.1.1.
	SPARES POLICY

Embraer guarantees the supply of spare parts, ground support equipment and tooling, except engines and their accessories, hereinafter referred to as "Spare(s)", for the Aircraft for a period of [***] after production of the last aircraft of the same [***]. Such Spares shall be supplied according to the prevailing availability, sale conditions, delivery schedule and effective price on the date of acceptance by Embraer of a purchase order placed by Buyer for any of such items. The Spares may be supplied either by Embraer in Brazil or through its subsidiaries or distribution centers located abroad.
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

The sale and export of Spares to Buyer may be subject to export controls and other export documentation requirements of the United States and other countries. Buyer agrees that neither Embraer nor any of its subsidiaries, affiliates or Vendors shall be liable for failure to provide Spares and/or services, including without limitation the Services, under this Agreement or otherwise as a result of any ruling, decision, order, license, regulation, or policy of the competent authorities prohibiting the sale, export, re-export, transfer, or release of a Spare or its related technology. Buyer shall comply with any conditions and requirements imposed by the competent authorities and, upon Embraer’s request, shall execute and deliver to Embraer any relevant end-user certificates.

Export of (i) IESI (Integrated Electronic Standby Instrument System) manufactured by Thales Avionics with an embedded QRS-11 gyroscopic microchip used for emergency backup and flight safety information and (ii) IRU (Inertial Reference Unit) manufactured by Honeywell International are subject to export control under United States law. Transfer or re-export of such items, as well as their related technology and software, may require prior authorization from the U.S. Government.

		
	2.1.2.
	RSPL

Upon Buyer's request, Embraer shall present to Buyer a recommended Spare provisioning list (the "RSPL"). The objective of the RSPL is to provide Buyer with a detailed list of Spares that will be necessary to support the initial operation and maintenance of the Aircraft by Buyer. Such recommendation will be based on the experience of Embraer and on the operational parameters established by Buyer.
Embraer will, at its cost and expense, provide a qualified team to attend pre-provisioning conferences as necessary to discuss Buyer requirements and the RSPL as well as any available spare parts support programs offered by Embraer. Such meeting shall be held at a mutually agreed upon place and time, but in no event less than [***] prior to the Contractual Delivery Date of the first Aircraft.

Buyer may acquire the Spares contained in the RSPL directly from Embraer or directly from Vendors. Spares contained in the RSPL for which Buyer places a purchase order with Embraer (the "IP Spares") will be delivered by Embraer to Buyer within [***], at a fill rate of [***], in FCA (Free Carrier - Incoterms 2015) condition, at the port of clearance indicated by Embraer.  Embraer shall use [***] to achieve [***] fill rate not less [***] after Buyer places a purchase order with Embraer. 

In order to ensure the availability of IP Spares in accordance with the foregoing at the time of entry into service of the first Aircraft, Buyer shall  place a purchase order with Embraer for those IP Spares Buyer has decided to acquire from Embraer, as soon as practical and in any event not less than [***] prior to the Contractual Delivery Date of the first Aircraft. At the reasonable request of 

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

Embraer, Buyer shall demonstrate that it has acquired or ordered IP Spares from sources other than Embraer to complement the RSPL in a timely manner.

		
	2.1.3.
	OTHER SPARES SERVICES

AOG services: Embraer will maintain a call center for the AOG services, twenty four (24) hours a day, seven (7) days a week. All the contacts with the call center can be made through regular direct lines in Brazil (phone and fax), e-mail and also through the FlyEmbraer e-commerce system in case Buyer subscribes to this service. The information concerning regular direct lines and e-mail address shall be obtained through the Customer Account Manager designated to Buyer by Embraer or through Embraer’s Customer Service offices. 
Embraer will, subject to availability, deliver Spares requested as AOG orders in FCA (Free Carrier – Incoterms 2010) condition, at the Embraer’s facility nearest to the Buyer’s premises informed in Buyer’s shipping instructions.
Routine and/or critical Spares: Embraer will deliver routine and/or critical Spares (other than AOG Spares) in FCA condition, Embraer’s facility, from the location were such Spares are available. Routine and/or critical Spares shall be delivered according to their lead times, depending upon the purchase order priority. All Spares will be delivered with the respective authorized release certificate or any similar document issued by a duly authorized person.

		
	2.2
	AIRCRAFT TECHNICAL PUBLICATIONS:

		
	2.2.1.
	EMBRAER PUBLICATIONS [***]

Embraer shall provide [***] a license to access the operational and maintenance publications applicable thereto, through the web-based FlyEmbraer portal or any successor portal (“FlyEmbraer”). Such operational and maintenance publications will be issued under the applicable specification, in the English language (the “Technical Publications”).
Embraer shall provide [***]:
[***]

Such access to the Technical Publications [***] is conditioned upon Buyer’s full acceptance of the FlyEmbraer on-line terms and conditions (the “FlyEmbraer Agreement”), by a person legally qualified to do so, as appointed in writing (by an email message) by Buyer.
[***]
[***] extra hardcopy of mandatory operational publications will be supplied on board of each Aircraft solely for the purpose of supporting the delivery flight and this copy will not be revised by Embraer at anytime.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

		
	2.2.2.
	VENDOR PUBLICATIONS

The technical publications regarding parts, systems or equipment supplied by Vendors and installed by Embraer in the Aircraft during the manufacturing process, will be supplied to Buyer directly by such Vendors, in their original content and available format/media and/or on-line access, as the case may be, [***]. Vendors are also responsible to keep publications updated through a direct communication system with Buyer. Embraer shall use commercially reasonable efforts to cause Vendors to supply their respective technical publications in a prompt and timely manner.

		
	2.2.3.
	[***] 

		
	2.3
	SERVICES

[***], except as set forth below, Embraer shall provide the Services described in this Article 2.3, in accordance with the terms and conditions below:

		
	2.3.1
	Familiarization Programs:

		
	a.
	The familiarization programs specified below are offered [***], except for any travel, board and lodging expenses of Buyer’s trainees and except for any operational and incidental expenses related to training requirements of Buyer, whether imposed by the Airworthiness Authority or other authority of Buyer’s country having jurisdiction, and which differ from or are supplementary to the familiarization programs described herein. 

		
	b.
	The familiarization programs shall, at Embraer’s election, be conducted by Embraer, Flight Safety International or other Embraer designated training provider, in accordance with the scope, syllabi and duration of the training program developed by Embraer, Flight Safety International or other Embraer-designated training provider. Such familiarization programs shall be in accordance with all applicable regulations and requirements of and approved by the Airworthiness Authority. Buyer may choose to use the training programs “as is” or to develop its own training programs. In any case Buyer shall be solely responsible for preparing and submitting its training programs to the Airworthiness Authority for approval. 

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

		
	c.
	All familiarization programs shall be provided at the training centers of Embraer, Flight Safety International or other Embraer designated training provider at its respective training center in the United States or in such other location in the United States as Embraer, Flight Safety International or other Embraer designated training provider may reasonably indicate. Buyer shall be responsible for all costs and expenses related to the training services (including but not limited to instructor travel tickets, local transportation, lodging, per diem and non-productive days), in the event Buyer requires that any training services be carried outside such indicated training facilities.

		
	d.
	Notwithstanding the eventual use of the term “training” in this paragraph 2.3.1, the intent of this program is solely to familiarize Buyer’s pilots, mechanics, employees or representatives with the operation and maintenance of the Aircraft. It is not the intent of Embraer to provide basic training (“ab-initio”) to any representatives of Buyer. 

		
	e.
	Any trainee appointed by Buyer for participation in any of the familiarization programs shall be duly qualified per the governing body in the country of Buyer’s operation and fluent in the English language as all training will be conducted in, and all training material will be presented in, such language. Pilots and mechanics shall also have [***] in the [***], as applicable, of [***] or, [***], of [***]. Neither Embraer, Flight Safety International nor other Embraer designated training provider make any representation or give any guarantee regarding the successful completion of any training program by Buyers trainees, for which Buyer is solely responsible.

		
	f.
	The familiarization programs shall be carried out prior to the Contractual Delivery Date of the last Aircraft, in accordance with a schedule to be agreed upon by Buyer and Embraer not less than [***] prior to the intended beginning of such training schedule. Buyer shall give [***] advance notice to Embraer of the full name and professional identification data of each trainee. Substitutions of appointed trainees shall be permitted with the reasonable prior approval of Embraer or Flight Safety International or other Embraer designated training provider.

		
	g.
	Training entitlements regarding each Aircraft that remain unused up to [***] following the Actual Delivery Date of the last Aircraft to Buyer shall expire and Buyer shall be deemed to have fully waived its rights to such service, on refund or compensation being due by Embraer to Buyer in this case.

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

		
	h.
	The familiarization programs referred to above covers:

h.1 [***] pilot familiarization program for up to [***] pilots per Aircraft including (i) ground familiarization [***] and, (ii) [***] simulator sessions of [***] each, totalling [***] per trainee, half in the right-hand seat and half in the left-hand seat, which shall be performed in groups of [***] Buyer’s pilot per session. Simulator training includes the services of an instructor and will be carried out on [***]. Buyer shall be solely responsible for selecting experienced training pilots that are fluent in English and duly qualified in multi-engine aircraft operations, navigation and communication. 

h.2 [***] maintenance familiarization course for up to [***] qualified mechanics per Aircraft each entitled to one of the following modules to be chosen by Buyer:
[***]

This program shall consist of classroom familiarization with Aircraft systems and structures and shall be in accordance with ATA specification 104, level III.

h.3 [***] qualified flight attendant familiarization program for up to [***] of Buyer’s representatives per Aircraft. This program shall consist of classroom familiarization [***], including a general description of Aircraft safety procedures and flight attendant control panels.
h.4 [***] familiarization program on fault history database (FHDB) analysis for [***] groups up to [***] engineers and/or maintenance personnel each (total of [***] trainees for the entire transaction). This program is conducted on Buyer’s site and shall consist of [***] classroom to enable Buyer’s engineers and maintenance personnel to perform an optimized usage of central maintenance computer and FHDB functionalities and to troubleshoot failures based on best practices.

h.5 Total of [***] mechanics  entitled to the engine run-up & taxiing familiarization course with [***] classroom duration plus [***] simulator sessions. The mechanics shall have previously concluded the maintenance familiarization program described above.

h.6 Total of [***] flight dispatchers entitled to the flight dispatcher familiarization course with [***] classroom duration, including familiarization with aircraft systems, flight planning, weight and balance and dispatch publications.
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

h.7 Aircraft general familiarization for [***] groups up to [***] Buyer’s representatives each (total of [***] trainees for the entire transaction). This course shall be performed at Embraer’s facility in Brazil or any other location designated by Embraer and shall consist of [***] classroom duration, dedicated to operational personnel as well as management staff.

		
	i.
	The presence of Buyer’s authorized trainees shall be allowed exclusively in those areas of Embraer’s facilities related to the training hereof and Buyer agrees to hold harmless Embraer from and against all and any kind of liabilities in respect of such trainees to the extent permitted by law.

		
	j.
	In the event that Buyer does not use [***], as described in [***]:

[***]
2.3.2  On site support:

		
	a.
	Embraer shall provide the following on site support services:

		
	a.1
	[***] field support representative (“FSR”) to stay at Buyer’s main maintenance base for a period of [***] beginning on the Actual Delivery Date of the first Aircraft.

Such FSR shall be indicated or substituted by Embraer at its sole discretion. The FSR shall assist Buyer`s technicians and mechanics on the Aircraft maintenance during its initial operation 

		
	a.2
	[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

		
	b.
	[***], Buyer shall provide such FSR [***] (hereinafter defined as “Embraer Rep”) with communication services (international telephone line, facsimile, internet service and photocopy equipment) as well as suitable secure and private office facilities and related equipment including desk, table, chairs and file cabinet, located at Buyer’s main base of operation or other location as may be mutually agreed by the Parties. Buyer shall also (a) arrange all necessary work permits such as support for visa issuance, local pilot’s license validation and airport security clearances required for Embraer Rep, to permit the accomplishment of the Services mentioned in this item 2.3.2, in due time; and (b) obtain all necessary custom clearances both to enter and depart from Buyer’s country for Embraer’s Rep [***]. 

		
	c.
	During the stay of the Embraer Rep at Buyer’s facilities, Buyer shall permit access to the maintenance and operation facilities as well as to the technical data and technical files of Buyer’s Aircraft fleet.

		
	d.
	Embraer shall [***] of the Embraer Rep, including without limitation transportation, board and lodging, while the Embraer Rep is rendering such on site support at Buyer’s main facility. Buyer shall bear all expenses related to the transportation, board & lodging of the Embraer Rep in the event any Embraer Rep is required to render the Services provided for herein in any place other than Buyer’s main operation base (for the pilots) or main maintenance base (for the mechanics). [***], Buyer shall provide to the Embraer’s pilots transportation from/to Buyer operational base or airport where such pilots will render the Services, so that the pilots can report to Buyer’s operation facilities or leave the airport in a timely manner according to the schedule of the flights they are engaged in.

		
	e.
	The Embraer Rep shall not participate in test flights or flight demonstrations without the previous written authorization from Embraer.

		
	f.
	Buyer shall include Embraer as additional insured in its Hull and Comprehensive Airline Liability insurance policies in accordance with the clauses contained in Exhibit “1” to this Attachment. Buyer shall supply Embraer with a certificate evidencing such endorsements to the insurance policies prior to the date of which the Services are to begin (provided however that Buyer shall make its commercial reasonable efforts to supply Embraer with such certificate [***] prior to the date of which the Services are to begin (and at each renewal of Buyer Hull and Comprehensive Airline Liability insurance).  

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

		
	g.
	The Parties further understand and agree that in the event Buyer elects not to take all or any portion of the on site support provided for herein, no refund or other financial adjustment of the Aircraft Basic Price will be made since such on site support is offered at no charge to Buyer. Any other additional on site support shall depend on mutual agreement between the Parties and shall be charged by Embraer accordingly.

		
	h.
	The presence of Embraer Rep shall be allowed exclusively in those areas related to the subject matter hereof and Embraer agrees to hold harmless Buyer from and against all  and any kind of liabilities in respect of such Embraer Rep to the extent permitted and required by law. 

		
	i.
	Embraer may, at its own cost and without previous notice to Buyer, substitute at its sole discretion the Embraer Reps rendering the Services at any time during the period in which Services are being rendered.

		
	j.
	The rendering of the Services by Embraer’s Rep shall, at all times, be carried out in compliance with the applicable labor legislation.

		
	k.
	During the rendering of the Services, while on the premises of Buyer, Embraer Reps shall strictly follow the administrative routines and proceedings of Buyer, which shall have been expressly and clearly informed to Embraer Reps upon their arrival at said premises.

		
	l.
	Embraer shall have the right to interrupt the rendering of the Services (i) should any situation occur which, at the sole discretion of Embraer, could represent a risk to the safety or health of Embraer Reps or (ii) upon the occurrence of any of the following events: strike, insurrection, labor disruptions or disputes, riots, or military conflicts. Upon the occurrence of such an interruption, Embraer shall resume the rendering of the Services for the remainder period immediately after having been informed by Buyer, in writing, of the cessation thereof. No such interruption in the rendering of the Services shall give reason for the extension of the Services beyond the periods identified above.

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
	
	ATTACHMENT "B"

FERRY FLIGHT ASSISTANCE AND PRODUCT SUPPORT PACKAGE

2.3.3  Account Manager:

Embraer shall assign [***] Account Manager to support Buyer shortly after execution of the Purchase Agreement and to support the operations of all Aircraft in Buyer’s fleet in revenue service for passenger transportation. The Account Manager will be responsible for coordinating all product support related actions of Embraer aiming to assure a smooth Aircraft introduction into service and, thereafter, for concentrating and addressing all issues concerning the operation of the Aircraft by Buyer. A team composed of regional technical representatives, regional spare parts representatives and regional field engineers, as necessary and applicable, shall support the Account Manager.

2.3.4  Remote Technical and Engineering Support

Embraer shall provide remote technical and engineering support services, twenty-four (24) hours a Day and seven (7) Days a week, for airframe and systems. This service may be accessed by phone, fax and e-mail at the main facilities of Embraer and is designed to support daily operations of the Aircraft by Buyer by assisting Buyer with the identification and investigation of the causes of in-services issues and during AOG situations, as required. This service is offered at no charge to Buyer within such scope and is available for as long as Buyer continues to operate the Aircraft type in regular passenger revenue service.

Technical and engineering support is also available to assist Buyer in performing structural repairs on the Aircraft. Such assistance consists of the analysis of damage reports submitted by Buyer, preparation of instructions for repair in accordance with structural repair standard of Embraer. This support shall be provided [***]. 

		
	2.4
	PRODUCT SUPPORT PACKAGE FOR THE OPTION AIRCRAFT

The product support package for the Option Aircraft shall be [***] per Option Aircraft.
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment "B" to Purchase Agreement COM0041-16 - Execution Version

	
			
	EXHIBIT 1 - SPECIAL INSURANCE CLAUSES

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

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

[***]

b)     Comprehensive Airline Liability Policy [***].
[***]
		
	c) 
	Notwithstanding anything to the contrary as specified in the Policy or any endorsement thereof, the coverage stated in paragraphs a) and b) above, shall not be cancelled or modified by the Insurer, without [***] advance written notice to Embraer to such effect.

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Exhibit 1 to Attachment “B” to Proposal COM0586-15 - Execution Version

	
			
	ATTACHMENT "C"
WARRANTY - MATERIAL AND WORKMANSHIP

		
	1)
	Embraer, subject to the conditions and limitations hereby expressed, warrants the Aircraft subject of the Purchase Agreement, as follows:

		
	a.
	For a period of [***] from the date of delivery to Buyer, the Aircraft will be free from:

		
	•
	Defects in materials, workmanship and manufacturing processes in relation to parts manufactured by Embraer or by its subcontractors holding an Embraer part number; 

		
	•
	Defects inherent to the design of the Aircraft and its parts designed or manufactured by Embraer or by its subcontractors holding an Embraer part number.

		
	b.
	For a period of [***] from the date of delivery to Buyer, the Aircraft will be free from:

		
	•
	Defects in operation of parts manufactured by Vendors, excluding the Engines, Auxiliary Power Unit (APU) and their accessories (“Vendor Parts”), as well as failures of Vendor Parts due to incorrect installation or installation not complying with the instructions [***]. For the purpose of this warranty, Engine shall mean the complete power plant system which comprises the engine, the nacelle including thrust reverser, the engine mounting structure, all systems inside the nacelle and their integration with the Aircraft, and the Full Authority Digital Engine Control (FADEC) unit.

		
	•
	Defects due to non-conformity of Vendor Parts to the technical specification referred to in the Purchase Agreement.

Once the above mentioned periods have expired, Embraer will transfer to Buyer the original Warranty issued by the Vendors, if it still exists.
	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment “C” to Purchase Agreement COM0041-16 - Execution Version

	
			
	ATTACHMENT "C"
WARRANTY - MATERIAL AND WORKMANSHIP

		
	2)
	The obligations of Embraer as expressed in this Warranty are limited to replacing or repairing defective parts and related systems if damaged by such defects as determined by Embraer based,  upon its own reasonable judgment. The defective parts shall be returned to Embraer or its Representatives (“Representatives”, as used herein, is defined as subsidiaries or affiliates of Embraer in the United States or repair shops in the United States authorized by Embraer to repair parts under warranty) within a period of [***] after the discovery of the defect, adequately packed, provided that such components are actually defective and that the defect has occurred within the periods stipulated in this certificate. Should the defective part not be returned to Embraer within such [***] period, Embraer may have the right, at its sole discretion, to deny the warranty claim.

NOTE: Notification of any defect claimed under this item 2 must be given to Embraer within [***] after such defect is found. Such notification shall be sent by email to the warranty department of Embraer (email: [***]) and shall contain the following information: 
. Aircraft serial number and registration number;
. part number;
. serial number;
. date of failure (if unknown, date of discovery);
. short description of the failure and reason for removal.

For the warranty claims which Embraer deems valid, in compliance with the terms and conditions of this Attachment “C”, [***].

Parts supplied to Buyer as replacement for defective parts are warranted for the balance of the warranty period still available from the original warranty of the exchanged parts.

		
	3)
	Embraer will accept no warranty claims under any of the circumstances listed below:

		
	a.
	When the Aircraft has been used in an attempt to break records, or subjected to experimental flights, or in any other way not in conformity with the flight manual or the airworthiness certificate, or subjected to any manner of use in contravention of the applicable aerial navigation or other regulations and rules, issued or recommended by government authorities of whatever country in which the aircraft is operated, when accepted and recommended by I.C.A.O.; 

		
	b.
	When the Aircraft or any of its parts have been altered or modified by Buyer, without prior approval from Embraer or from the manufacturer of the parts through a service bulletin;

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment “C” to Purchase Agreement COM0041-16 - Execution Version

	
			
	ATTACHMENT "C"
WARRANTY - MATERIAL AND WORKMANSHIP

		
	c.
	Whenever the Aircraft or any of its parts have been involved in an accident, or when parts either defective or not complying to manufacturer's design or specification have been used;

		
	d.
	Whenever parts have had their identification marks, designation, seal or serial number altered or removed;

		
	e.
	In the event of negligence, misuse or maintenance services done on the Aircraft, or any of its parts not in accordance with the respective maintenance manual; 

		
	f.
	In cases of deterioration, wear, breakage, damage or any other defect resulting from the use of inadequate packing methods when returning items to Embraer or its representatives. 

		
	4)
	This Warranty does not apply to [***].

		
	5)
	The Warranty hereby expressed is established between Embraer and Buyer, and it cannot be transferred, assigned or novated to any third party, except as provided otherwise pursuant to Article 14 (Assignment) of the Purchase Agreement.

		
	6)
	TO THE EXTENT PERMITTED BY LAW, THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF EMBRAER AND REMEDIES OF BUYER SET FORTH IN THIS WARRANTY CERTIFICATE ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF EMBRAER AND ANY ASSIGNEE OF EMBRAER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES OF BUYER AGAINST EMBRAER OR ANY ASSIGNEE OF EMBRAER, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NON-CONFORMANCE OR DEFECT OR FAILURE OR ANY OTHER REASON IN ANY AIRCRAFT OR OTHER THING DELIVERED UNDER THE PURCHASE AGREEMENT OF WHICH THIS IS AN ATTACHMENT, INCLUDING DATA, DOCUMENT, INFORMATION OR SERVICE, INCLUDING BUT NOT LIMITED TO:

		
	a.
	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

		
	b.
	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; 

		
	c.
	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OR OTHER RELATED CAUSES OF EMBRAER OR ANY ASSIGNEE OF EMBRAER, WHETHER ACTIVE, PASSIVE OR IMPUTED; AND

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment “C” to Purchase Agreement COM0041-16 - Execution Version

	
			
	ATTACHMENT "C"
WARRANTY - MATERIAL AND WORKMANSHIP

		
	d.
	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO ANY AIRCRAFT, FOR LOSS OF USE, REVENUE OR PROFIT WITH RESPECT TO ANY AIRCRAFT OR FOR ANY DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES. 

		
	7)
	No representative or employee of Embraer is authorized to establish any other warranty than the one hereby expressed, nor to assume any additional obligation, relative to the matter, in the name of Embraer and therefore any such statements eventually made by, or in the name of Embraer, shall be void and without effect.

Attachment “C” to Purchase Agreement COM0041-16 - Execution Version

	
			
	ATTACHMENT "D"

ESCALATION FORMULA

[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment D to Purchase Agreement COM0041-16 - Execution Version

	
			
	ATTACHMENT "E"

AIRCRAFT DELIVERY SCHEDULE

		
	1.
	Firm Aircraft Delivery Schedule (ref. Purchase Agreement, Article 5)

	
				
	Firm Aircraft
	Delivery Date
	Firm Aircraft
	Delivery Date

	01
	[***] 2017
	16
	[***]

	02
	[***]
	17
	[***]

	03
	[***]
	18
	[***]

	04
	[***]
	19
	[***]

	05
	[***]
	20
	[***]

	06
	[***]
	21
	[***]

	07
	[***]
	22
	[***]

	08
	[***]
	23
	[***]

	09
	[***]
	24
	[***]

	10
	[***]
	25
	[***]

	11
	[***]
	26
	[***]

	12
	[***]
	27
	[***]

	13
	[***]
	28
	[***]

	14
	[***]
	29
	[***]

	15
	[***]
	30
	[***] 2019

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment “E” to Purchase Agreement COM0041-16 - Execution Version             

	
			
	ATTACHMENT "E"

AIRCRAFT DELIVERY SCHEDULE

		
	2.
	Option Aircraft Delivery Schedule (ref. Purchase Agreement,  Article 21)

	
						
	Option Aircraft
	Option Aircraft
	Option Aircraft 
Delivery Date
	Option Aircraft
	Option Aircraft
	Option Aircraft 
Delivery Date

	[***]
	1
	[***] 2019
	 
	19
	[***]

	 
	2
	[***]
	[***]
	20
	[***]

	 
	3
	[***]
	 
	21
	[***]

	[***]
	4
	[***]
	 
	22
	[***]

	 
	5
	[***]
	 
	23
	[***]

	 
	6
	[***]
	 
	24
	[***]

	 
	7
	[***]
	 
	25
	[***]

	 
	8
	[***]
	[***]
	26
	[***]

	[***]
	9
	[***]
	 
	27
	[***]

	 
	10
	[***]
	 
	28
	[***]

	 
	11
	[***]
	 
	29
	[***]

	 
	12
	[***]
	 
	30
	[***]

	 
	13
	[***]
	 
	31
	[***]

	[***]
	14
	[***]
	 
	32
	[***]

	 
	15
	[***]
	 
	33
	[***] 2021

	 
	16
	[***]
	 
	 
	 

	 
	17
	[***]
	 
	 
	 

	 
	18
	[***]
	 
	 
	 

[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment “E” to Purchase Agreement COM0041-16 - Execution Version             

	
			
	ATTACHMENT "F"

EMBRAER 175 - [***]

[***]

		
	Fleet Size:
	After the Aircraft fleet ramp up [***] to be delivered in accordance with the following delivery schedule:

	
					
	Aircraft Number
	Contractual Delivery Date
	 
	Aircraft Number
	Contractual Delivery Date

	01
	[***] 2017
	 
	16
	[***]

	02
	[***]
	 
	17
	[***]

	03
	[***]
	 
	18
	[***]

	04
	[***]
	 
	19
	[***]

	05
	[***]
	 
	20
	[***]

	06
	[***]
	 
	21
	[***]

	07
	[***]
	 
	22
	[***]

	08
	[***]
	 
	23
	[***]

	09
	[***]
	 
	24
	[***]

	10
	[***]
	 
	25
	[***]

	11
	[***]
	 
	26
	[***]

	12
	[***]
	 
	27
	[***]

	13
	[***]
	 
	28
	[***]

	14
	[***]
	 
	29
	[***]

	15
	[***]
	 
	30
	[***] 2019

[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment “F” to Purchase Agreement COM0041-16 - Execution Version           

	
			
	ATTACHMENT "G"

EMBRAER 175 - [***]

[***]

		
	Fleet Size:
	A [***], to be delivered in accordance with the following delivery schedule:

	
					
	Aircraft Number
	Contractual Delivery Date
	 
	Aircraft Number
	Contractual Delivery Date

	01
	[***] 2017
	 
	16
	[***]

	02
	[***]
	 
	17
	[***]

	03
	[***]
	 
	18
	[***]

	04
	[***]
	 
	19
	[***]

	05
	[***]
	 
	20
	[***]

	06
	[***]
	 
	21
	[***]

	07
	[***]
	 
	22
	[***]

	08
	[***]
	 
	23
	[***]

	09
	[***]
	 
	24
	[***]

	10
	[***]
	 
	25
	[***]

	11
	[***]
	 
	26
	[***]

	12
	[***]
	 
	27
	[***]

	13
	[***]
	 
	28
	[***]

	14
	[***]
	 
	29
	[***]

	15
	[***]
	 
	30
	[***] 2019

[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment “G” to Purchase Agreement COM0041-16 - Execution Version

	
			
	SCHEDULE 1 TO ATTACHMENT "G"

EMBRAER 175 - [***]

[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Schedule 1 to Attachment “G” to Proposal COM0586-15  -  Execution Version     

	
			
	ATTACHMENT "H"

[***]

[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment “H” to Purchase Agreement COM00041-16 - Execution Version

	
			
	ATTACHMENT "I"

[***]

[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Attachment “I” to Proposal COM0041-16   -     Execution Version 

	
			
	LETTER AGREEMENT COM0042-16

	
				
	INDEX

	 
	 
	 
	 

	 
	ARTICLE
	 
	PAGE

	1.
	[***]
	 
	2

	2.
	[***]
	 
	3

	3.
	SPARE PARTS [***]
	 
	5

	4.
	SPARE PARTS [***]
	 
	6

	5.
	[***]
	 
	6

	6.
	[***]
	 
	7

	7.
	[***]
	 
	7

	8.
	[***]
	 
	8

	9.
	[***] SUPPORT
	 
	8

	10.
	[***]
	 
	9

	11.
	EXPORT CONTROL
	 
	10

	12.
	COMPLIANCE WITH LAWS
	 
	10

	13.
	REINSTATEMENT OF THE PURCHASE AGREEMENT
	 
	10

	14.
	COUNTERPARTS
	 
	10

SCHEDULES:

SCHEDULE “A” -  [***]

SCHEDULE “B” - [***] SUPPORT

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Letter Agreement COM0042-16 - Execution Version

	
			
	LETTER AGREEMENT COM0042-16

This Letter Agreement COM0042-16 (this "Letter Agreement") dated April 11th, 2016 is an agreement by and between Embraer S.A. ("Embraer") with its principal place of business at São José dos Campos, SP, Brazil and Horizon Air Industries, Inc. ("Buyer") with its principal place of business at 19521 International Boulevard, Seattle, Washington, 98188, USA, collectively known as the “Parties”, and relates to Purchase Agreement COM0041-16 entered into by Embraer and Buyer on even date herewith (the "Purchase Agreement").

All capitalized terms not otherwise defined herein shall have the same meaning when used herein as provided in the Purchase Agreement and in case of any conflict between this Letter Agreement and the Purchase Agreement, the provisions of this Letter Agreement shall prevail.

WHEREAS:

		
	a)
	Pursuant and subject to the terms and conditions of the Purchase Agreement, Buyer shall buy and EMBRAER shall sell thirty (30) EMBRAER 175 LR aircraft (the “Firm Aircraft”) and Buyer shall have the right to purchase up to thirty (30) options EMBRAER 175 LR aircraft (the “Option Aircraft”) (collectively, the “Aircraft”).

		
	b)
	Embraer and Buyer wish to set forth the additional agreements with respect to certain matters related to the purchase of the Aircraft.

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

		
	1.
	[***]

		
	2.
	[***] 

		
	3.
	SPARE PARTS [***]

Embraer agrees that Buyer will [***].

		
	4.
	SPARE PARTS [***]

Embraer agrees that Buyer will [***].

		
	5.
	[***]

		
	6.
	[***]

		
	7.
	[***] 

Letter Agreement COM0042-16 - Execution Version

	
			
	LETTER AGREEMENT COM0042-16

		
	8.
	[***]

		
	9.
	[***] SUPPORT

Embraer shall provide the [***] Support to Buyer, as per Schedule “B” to this Letter Agreement.
		
	10.
	 [***]

		
	11.
	EXPORT CONTROL

Export of parts and services described in the Purchase Agreement or this Letter Agreement may be subject to export controls and other export documentation requirements of the United States and other countries. Buyer agrees that neither Embraer nor any of its subsidiaries or affiliates shall be liable for failure to provide parts and/or services as a result of any ruling, decision, order, license, regulation, or policy of the competent authorities prohibiting the export, re-export, transfer, or release of a part listed in this Letter Agreement or its related technology. Buyer shall comply with any conditions and requirements imposed by the competent authorities and, upon Embraer’s request, shall execute and deliver to Embraer any relevant end-user certificates.

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Letter Agreement COM0042-16 - Execution Version

	
			
	LETTER AGREEMENT COM0042-16

		
	12.
	COMPLIANCE WITH LAWS

Each Party represents to the other Party that it has complied, and will continue to comply, with relevant anti-corruption and anti-money laundering laws to the extent that they apply to such Party’s obligations and activities stipulated herein. Each Party further represents that, in all matters relating hereto, it has acted, and will continue to act in strict compliance with internationally accepted ethical and business integrity standards. Each Party represents to the other Party that (i) such Party has a code of ethics (or functionally equivalent document) and/or an anti-corruption policy (or functionally equivalent document) (“Code”) which guides the conduct of its officers and employees, (ii) such Code contains anti-corruption provisions consistent with internationally accepted ethical and business integrity standards, and (iii) such Party maintains internal procedures reasonably designed and conceived to enforce and promote the compliance with the anti-corruption provisions of the Code, which includes, inter alia, training, monitoring, auditing and disciplining provisions.

		
	13.
	REINSTATEMENT OF THE PURCHASE AGREEMENT

All other terms and conditions of the Purchase Agreement which have not been expressly amended or modified by this Letter Agreement shall remain valid, in full force and effect as and to the extent provided therein without any change as the result of this Letter Agreement.

		
	14.
	COUNTERPARTS

This Letter Agreement may be signed by the Parties hereto in any number of separate counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument and all of which when taken together shall constitute one and the same instrument. This Letter Agreement may be signed by facsimile with originals to follow by an internationally recognized courier.

Letter Agreement COM0042-16 - Execution Version

	
			
	LETTER AGREEMENT COM0042-16

IN WITNESS WHEREOF, Embraer and Buyer, by their duly authorized officers, have entered into and executed this Letter Agreement to be effective as of the date first written above.

EMBRAER S.A.    HORIZON AIR INDUSTRIES, INC.

By: ___/s/ Luis Carlos Affonso__________    By: __/s/ Mark Eliasen______
Name:   Luis Carlos Affonso    Name:  Mark Eliasen
Title:      Chief Operating Officer    Title:     Treasurer
              Commercial Aviation

By: __/s/ Adriana Sarlo________________    
Name:  Adriana Sarlo    
Title:    Vice President, Contracts    
            Commercial Aviation
Place: Sao Jose dos Campos, Brazil     Place: Seattle, WA, U.S.A.

Witnesses:

___/s/ Fernando Bueno_______________    ___/s/ Jennifer C. Thompson____
Name: Fernando Bueno    Name: Jennifer C. Thompson
    

Letter Agreement COM0042-16 - Execution Version

	
			
	SCHEDULE "A"

[***]

[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Schedule “A” to Letter Agreement COM0042-16 - Execution Version

	
			
	SCHEDULE "B"

EMBRAER 175 - [***] SUPPORT

[***]

	
		
	*
	Indicates that certain information contained herein has been omitted and filed separately with the Securities and Exchange Commission. Confidential Treatment has been requested with respect to the omitted portions.

Schedule “B” to Letter Agreement COM0042-16 - Execution Version

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