Document:

Amendment No. 17 to the Purchase Agreement DCT-014/2004 datedNovember 14, 2006

    
      	
              EXHIBIT
                10.39(q)

            
	
              CONFIDENTIAL
                TREATMENT

            
	
              REQUESTED
                PURSUANT TO RULE 24b-2

            
	
               

            
	
              Certain
                portions of this exhibit have been omitted pursuant to a request
                for
                confidential treatment under Rule 24b-2 of the Securities Exchange
                Act of
                1934. The omitted materials have been filed separately with the Securities
                and Exchange Commission.

            

    

    

    CONFIDENTIAL

    

    

    AMENDMENT
      No. 17 TO PURCHASE AGREEMENT DCT-014/2004

    

    

    This
      Amendment No. 17 to Purchase Agreement DCT-014/2004, dated as of November 14,
      2006 (“Amendment No. 17”) relates to the Purchase Agreement DCT-014/2004 (the
“Purchase Agreement”) between Embraer - Empresa Brasileira de Aeronáutica S.A.
      (“Embraer”) and Republic Airline Inc. (“Buyer”) dated March 19, 2004 as amended
      from time to time (collectively referred to herein as “Agreement”). This
      Amendment No. 17 is between Embraer and Buyer, collectively referred to herein
      as the “Parties”.

    

    This
      Amendment No. 17 sets forth additional agreements between Embraer and Buyer
      relative to Buyer’s purchase of additional eight (8) EMBRAER 175 model aircraft
      and to the addition of four (4) Option Aircraft.

    

    Except
      as
      otherwise provided for herein all terms of the Purchase Agreement shall remain
      in full force and effect. All capitalized terms used in this Amendment No.
      17,
      which are not defined herein, shall have the meaning given in the Purchase
      Agreement. In the event of any conflict between this Amendment No. 17 and the
      Purchase Agreement the terms, conditions and provisions of this Amendment No.
      17
      shall control. 

    

    WHEREAS,
      

    

    In
      connection with the Parties’ agreement above mentioned, the Parties have now
      agreed to amend the Purchase Agreement as provided for below:

    

    NOW,
      THEREFORE, for good and valuable consideration which is hereby acknowledged
      Embraer and Buyer hereby agree as follows:

    

    1.
      Subject:
      Article
      2 of the Purchase Agreement is hereby deleted and replaced as
      follows:

     

    “Subject
      to the terms and conditions of this Agreement:
 

    
      	
              2.1
                

            	
              Embraer
                shall sell and deliver and Buyer shall purchase and take delivery
                of
                forty-eight (48) EMBRAER 170 Aircraft and thirty-eight (38) EMBRAER
                175
                Aircraft (as identified in Article 5.1 of this
                Agreement);

            

      	 	 

      	2.3	Embraer shall provide to Buyer the Services and
              the
              Technical Publications; and

    

    

    
      	
              2.4

            	
              Buyer
                shall have the option to purchase up to seventy-nine (79) Option
                EMBRAER
                170 Aircraft, in accordance with Article
                23.”

            

    

    

    2.
      Payment:

    

    
      	
              2.1

            	
              A
                new sentence is hereby added to the end of the the first paragraph
                of
                Article 4.1 as follows:

            

      	 	 

      	 	“Buyer has already paid to Embraer prior to the execution
              of Amendment No. 17 to this Agreement a *** deposit (the “*** Deposit”)
              per Firm Aircraft on order prior thereto, and *** and ***.”
              

    

     

    
      	
              2.1
                

            	
              The
                penultimate sentence of the last paragraph of Article 4.1 is hereby
                deleted and replaced as follows:

            

      	 	 

      	 	“Any progress payment for *** would otherwise be
              due ***
              shall be due ***.”

    

    ____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.
      Firm Aircraft:
      The
      table containing the delivery schedule in Article 5.1 of the Purchase Agreement
      is hereby deleted in its entirely and replaced with the following:

    

    
      	
              Firm
                A/C

            	
              Delivery
                Month

            	
              ***

            	
              ***

            	
              Firm
                A/C

            	
              Delivery
                Month

            	
              ***

            	
              ***

            
	
              49

            	
              Jan
                07

            	
              ***

            	
              ***

            	
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              86

            	
              Jul
                08

            	
              ***

            	
              ***

            

    

    

    Note:
      The
      first 48 EMBRAER 170 Aircraft (Aircraft #1 to # 48) were already
      delivered.

     

     ____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    4.
      Option Aircraft: 

    

    
      	
              4.1
                

            	
              The
                opening paragraph of Article 23 and delivery schedule table of the
                Purchase Agreement are hereby deleted and replaced by the
                following:

            

      	 	 

      	 	“Buyer shall have the option to purchase up to
              seventy-nine (79) additional Option Aircraft, to be delivered on
              the last day of the applicable month set forth below or such earlier
              date
              in such month specified pursuant to Article 7.1:
              

    
      	
              Option
                A/C

            	
              Delivery
                Month

            	
              ***

            	
              ***

            	
              Option
                A/C

            	
              Delivery
                Month

            
	
              1

            	
              Jul
                08

            	
              ***

            	
              ***

            	
              ***

            	
              ***

            
	
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              79

            	
              Aug
                12

            
	
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      	4.2 	Article 23.5.1 is hereby deleted and
              replaced
              by the following:

    

     

    
      	 	 	
              “23.5.1

            	
              Notwithstanding
                the terms of Article 23.5 above, if Buyer exercises its option for
                the
                first Option Group, such option shall be exercised by Buyer on or
                before
                April 30, 2007.”

            

    

    
 

    
      	5. New Attachment
              “A-2”:	Attachment “A-2” to the Purchase Agreement is
              hereby deleted and replaced with Attachment “A-2” to this Amendment No.
              17.
	 	 
	6. Attachment “B”: 	Embraer shall provide to Buyer ***,
              ***
              necessary
              to reflect all relevant information regarding the inclusion of the
              EMBRAER
              175 ***
              Aircraft. If requested by Buyer, ***,
              which will ***,
              and this ***.
	 	 
	7. Attachment “E”:	Attachment “E” to the Purchase Agreement is
              hereby deleted and replaced with Attachment “E” to this Amendment No.
              17.
	 	 
	8. Attachment “F”:	Attachment “F” to the Purchase Agreement is
              hereby deleted and replaced with Attachment “F” to this Amendment No.
              17.
	 	 
	9. Attachment
              “H-1”:	Attachment “H-1” to the Purchase Agreement is
              hereby deleted and replaced with Attachment “H-1” to this Amendment No.
              17.

    

     

    

    All
      other
      provisions of the Agreement which have not been specifically amended or modified
      by this Amendment No. 17 shall remain valid in full force and effect without
      any
      change.

    

    (Signature
      page follows)
____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, EMBRAER and BUYER, by their duly
      authorized officers, have entered into and executed this Amendment No. 17 to
      Purchase Agreement to be effective as of the date first written
      above.

    
 

    
      	EMBRAER
              - Empresa Brasileira de Aeronáutica S.A.	 	 	Republic
              Airline Inc.
	 	 	 	 
	/s/ Frederico
              Fleury Curado	 	 	/s/ Bryan
              Bedford
	
              

            	 	 	
              

            
	
              Name:
                Frederico Fleury Curado
Title: Executive Vice President Airline
                Market

            	 	 	Name:
              Bryan
              Bedford
Title: President
	 	 	 	 
	 	 	 	Date:
              November 14, 2006
	 	 	 	Place:
              Indianapolis

      
        	 	 	 	 
	/s/ Jose
                Luis
                D. Molina	 	 	 
	
                

              	 	 	
              
	Name:
                Jose Luis D.
                Molina
Title: Director of Contracts - Airline Market
	 	 	 
	Date:
                November 14, 2006	 	 	
              
	Place:
                Sao Jose Dos Campos, SP, Brazil	 	 	 

      

       

       

       

      
        	Witnesses:	 	 	 
	 	 	 	 
	Witness:
                Carlos Martins Dutra	 	 	Witness:
                Lars-Erik Arnell
	Name:
                Carlos Martins Dutra	 	 	Name:
                Lars-Erik Arnell
	
              	 	 

      

       

    

    Acknowledged
      and agreed by Republic Airways Holdings Inc. with respect to all terms of this
      Amendment No.17, Amendment No.10 to the Letter Agreement and all previous
      amendments, in its capacity as “Guarantor” pursuant to the Guaranty by it to
      Embraer dated March 19, 2004.

    

    Republic
      Airways Holdings Inc. 

     

    
      	 	 	 	 
	/s/ Bryan
              Bedford	 	 	 
	
              

            	 	 	
            
	Name:
              /Bryan
              Bedford
Title: President
	 	 	 

    

    
      	 	 	 	 
	/s/ Lars-Erik
              Arnell	 	 	 
	
              

            	 	 	
            
	Name:
              Lars-Erik
              Arnell
Title: Vice President of Corporate Development	 	 	 
	 	 	 	 
	Date:
              November 14, 2006	 	 	 
	Place:
              Indianapolis	 	 	 

    

     

    
    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      
        	
                 

                
                  ATTACHMENT “A-2”
                    - EMBRAER 175 AIRCRAFT CONFIGURATION 

                  Delta
                    Configuration

                   

                

              

      

    

     

    1.
      EMBRAER 175 CONFIGURATION 

    EMBRAER
      175 Standard Aircraft

     

    The
      EMBRAER 175 Aircraft shall be manufactured according to (i) the standard
      configuration specified in the Preliminary Technical Description PTD-175 Rev.
      4
      dated May 2003, which although not attached hereto, is incorporated herein
      by
      reference, and (ii) the characteristics described in the items
      below. 

     

    2.
      EMBRAER 175 Optional Equipment

     

    The
      EMBRAER 175 Aircraft will also be fitted with the following options selected
      by
      Buyer:

     

    2.1
      Aircraft Model and Engines

     

    
      	a)  	
              EMBRAER
                175 LR

            

    

    
      	b)  	
              GE
                CF34-8E5 Engines

            

    

     

    2.2
      Options By Ata Chapter

    

    
      	
              ***

               

            	
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    ____________
 ***Confidential

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    

      
        	
                 

                
                  ATTACHMENT “A-2”
                    - EMBRAER 175 AIRCRAFT CONFIGURATION 

                  Delta
                    Configuration

                   

                

              

      

    
    

    

     

    ***

    

     

    
 

    
      	 

    

    

    3.
      FINISHING

     

    The
      Aircraft will be delivered to Buyers as follows:

    

    
      	
                3.1

            	EXTERIOR
              FINISHING:

    

     

    The
      fuselage of the Aircraft shall be painted according to Buyer’s color and paint
      scheme which shall be supplied to Embraer by Buyer on or before six (6) months
      prior to the relevant Aircraft ContractualDeliveryDate. 

    The
      wings
      and the horizontal stabilizer of all Aircraft shall be supplied in the standard
      colors, i.e., gray BAC707.

    

    
      	3.2  	
              INTERIOR
                FINISHING:

            

    

    

    Buyer
      shall inform Embraer on or before *** months prior to the relevant Aircraft
      Contractual Delivery Date of its choice of materials and colors of all and
      any
      item of interior finishing such as seat covers, carpet, floor lining on galley
      areas, side walls and overhead lining, galley lining and curtain. The
      above-mentioned schedule for definition of interior finishing shall only be
      applicable if Buyer selects its materials from the choices offered by and
      available at Embraer. In case Buyer opts to use different materials and or
      patterns, such schedule shall be mutually agreed between the Parties at the
      time
      of signature of the Purchase Agreement.

    

    
      	3.3  	
              BUYER
                FURNISHED AND BUYER INSTALLED EQUIPMENT (BFE and
                BIE):

            

    

    

    Buyer
      may
      choose to have carpets, tapestries, seat covers and curtain fabrics supplied
      to
      Embraer for installation in the Aircraft as BFE. Materials shall conform to
      the
      required standards and comply with all applicable regulations and airworthiness
      requirements. Delays in the delivery of BFE equipment or quality restrictions
      that prevent the installation thereof in the time frame required by the Aircraft
      manufacturing process shall entitle Embraer to either delay the delivery of
      the
      Aircraft or present the Aircraft to Buyer without such BFE, in which case Buyer
      *** of the Aircraft. All BFE equipment shall be delivered to Embraer in DDP
      -
      Embraer facilities in São José dos Campos, SP, Brazil (Incoterms 2000)
      conditions.

    

    The
      Aircraft galleys have provisions for the following BIE items that, unless timely
      agreed by the Parties, are not supplied or installed by Embraer: Trolleys,
      ovens, coffee makers, hot jugs and standard units.

     

    4.
      REGISTRATION MARKS AND TRANSPONDER CODE

     

    The
      Aircraft shall be delivered to Buyer with the registration marks painted on
      them. The registration marks and the transponder code shall be supplied to
      Embraer by Buyer no later than ninety (90) Days before each relevant Aircraft
      Contractual Delivery Date.

     

    IT
      IS
      HEREBY AGREED AND UNDERSTOOD BY THE PARTIES THAT IF THERE IS ANY CONFLICT
      BETWEEN THE TERMS OF THIS ATTACHMENT “A-2” AND THE TERMS OF THE TECHNICAL
      DESCRIPTION ABOVE REFERRED, THE TERMS OF THIS ATTACHMENT “A-2” SHALL
      PREVAIL.

     

    ____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      
        	
                 

                ATTACHMENT “E”
                  - DIRECT MAINTENANCE COST GUARANTEE

                 

              

      

    

     

    I. Embraer,
      subject to the terms, conditions and limitations contained in this Attachment,
      shall guarantee the incurred direct maintenance cost (the “Maintenance Cost
      Guarantee”) for the fleet of Aircraft subject of the Purchase Agreement as
      follows:

     

    
      	a.  	
              The
                Maintenance Guarantee for the Aircraft shall be for the period that
                begins
                at ***.

            

    

     

    
      	b.  	
              For
                the first *** period commencing with the first Aircraft Actual Delivery
                Date, the Achieved cumulative Maintenance Cost - AMC for replacement,
                repair, overhauls and inspections of Buyer's Aircraft, shall not
                exceed a
                Maintenance Cost Guarantee (MCG1)
                rate of: 

            

    

     

    
      	
               

              ***

            	
              ***

            	
              ***

            
	
              ***

            	
              ***

            	
              ***

            

    

     

    
      	c.  	
              For
                the first *** period commencing with the first Aircraft Actual Delivery
                Date, the Achieved cumulative Maintenance Cost - AMC for replacement,
                repair, overhauls and inspections of Buyer's Aircraft, shall not
                exceed a
                Maintenance Cost Guarantee (MCG1)rate
                of: 

            

    

     

    
      	
              ***

            	
              ***

            	
              ***

            
	
              ***

            	
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              ***

            

    

     

    
      	d.  	
              The
                *** shall be ***.

            

    

     

    
      	e.  	
              Measurement
                will be computed annually on the anniversary date of ***. The results
                will
                be reconciled year by year until
                ***.

            

    

     

    
      	f.  	
              In
                the event at the end of each annual measurement period, the AMC is
                higher
                than the MCG, Embraer shall *** as provided for
                below:

            

    

     

    ***

     

    
      	g.  	
              Buyer
                shall use *** efforts to calculate and submit to Embraer the AMC
                quarterly, in electronic format, *** after the end of each quarter
                during
                the Guarantee Term. In the event that Buyer fails to submit such
                data to
                Embraer as described in the preceding sentence, Embraer shall send
                a
                written notice to Buyer requesting such data, and the guarantee contained
                in this Attachment shall terminate in the event Buyer fails to submit
                the
                AMC to Embraer within *** of such written notice.
                

            

    

     

    The
      Parties shall use *** efforts to reach an agreement over the data annually
      within *** after the submission of AMC in regard to any fourth quarter. In
      the
      event that the AMC contains *** that is out of the reasonable control of ***,
      the Parties shall also discuss the reasons for such *** and whether it should
      be
      included in the calculation of the AMC. Any credit amount will be credited
      to
      Buyer *** after the agreement regarding the annual period. Such credit may
      be
      used by Buyer only toward ***.

     

    
      	h.  	
              This
                Maintenance Guarantee is based upon the following assumptions, and
                any
                change to the assumptions shall result in an appropriate recalculation
                of
                the MCG rate specified in items “b” and “c” above, at Embraer
                criteria.

            

    

     

    Fleet
      Size: A
      minimum
      fleet size of *** Aircraft (*** EMBRAER 170 and *** EMBRAER 175 delivered in
      accordance with Article 5 of the Purchase Agreement ***).

     

     

     

    
      	§  	
              Economic
                condition:
                ***. 

            

    

     

    
      	§  	
              Utilization:
                The guarantee covers a minimum of *** flight hours per cycle, ***
                APU hour
                per flight hour plus or minus *** APU hour per flight hour and ***
                APU
                cycle per flight cycle plus or minus *** APU cycle per flight cycle.
                Buyer's
                fleet-wide average
                annual Aircraft utilization shall be *** flight hours, plus or minus
                ***.

            

    

     

    
      	§  	
              Labor
                rate:
                *** per man-hour ***.

            

    

     

     

     

    ____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               

              ATTACHMENT “E”
                - DIRECT MAINTENANCE COST GUARANTEE

               

            

    

     

    
      	§  	
              Maintenance
                Review Board Report: MRB
                170.

            

    

     

     

     

    
      	§  	
              Economic
                condition:
                ***. 

            

    

     

    
      	§  	
              Utilization:
                The guarantee covers a minimum of *** flight hours per cycle, ***
                APU hour
                per flight hour plus or minus *** APU hour per flight hour and ***
                APU
                cycle per flight cycle plus or minus *** APU cycle per flight cycle.
                Buyer's
                fleet-wide average
                annual Aircraft utilization shall be *** flight hours, plus or minus
                ***.

            

    

     

    
      	§  	
              Labor
                rate:
                *** per man-hour ***.

            

    

     

    
      	§  	
              Maintenance
                Review Board Report: MRB
                170.

            

    

     

    
      	i.  	
              The
                following are the elements covered under this Maintenance
                Guarantee: 

            

    

     

    
      	1. 	Material
              cost for non-repairable parts purchased from or through Embraer and
              / or
              Embraer approved vendors.

      	 	 

      	    2. 	
              Overhaul/repair
                costs incurred at Embraer approved repair
                facilities.

            

    

     

    
      	3. 	
              Expendable
                which can be accounted for on an unit basis, i.e. filters, gaskets,
                excluding wire, rivets, nuts, bolts, washers, pins, brackets, tie
                wraps.

            

    

     

    
      	4. 	
              Parts
                and materials consumed through scheduled maintenance according to
                the
                Maintenance Review Board Report
                (MRB).

            

    

     

    
      	j.  	
              The
                following elements are not covered under this guarantee:
                

            

    

     

    
      	1. 	
              Costs
                associated with taxes, levies, imposts, customs
                fees.

            

    

     

    
      	2. 	
              Shipping,
                receiving, ferry, packing, storage, warehousing and insurance
                expenses.

            

    

     

    
      	3. 	
              General
                administrative and overhead
                expenses.

            

    

     

    
      	4. 	
              Restoration
                expenses incurred due to damage to or failure of Aircraft, components
                or
                parts caused by accident, incident, FOD or Acts of God, negligence,
                abuse,
                misuse and/or maintenance errors.

            

      	 	 

      	5. 	
              When
                the Aircraft or any of its parts has/have been altered or modified
                by
                Buyer, without prior approval from Embraer or from the manufacturer
                of the
                parts through a service bulletin, provided such approvals have not
                been
                unreasonably withheld. 

            

      	 	 

      	6. 	Consumables
              including but not limited to fluids, water, oils, sealants, washing
              compounds, cleansers, solvents, and
              lubricants.

      	 	 

      	7. 	
              Labor
                costs (excluding the *** related to *** and the *** service bulletins
                implementation, provided that *** have been *** in writing *** in
                order
                ***).

            

      	 	 

      	8. 	
              Normal
                line operations activities (i.e. Aircraft servicing) including but
                not
                limited to walkaround (i.e. visual inspection), fueling, parking,
                washing,
                lavatory servicing and gallery servicing.

            

      	 	 

      	9. 	
              Service
                bulletins and or airworthiness
                directives.

            

      	 	 

      	10. 	
              Parts
                or components returned from vendors with “no-fault” found, i.e.,
                re-certification charges without any repair and associated labor.
                Any part
                removed and replaced from an Aircraft which does not solve the Aircraft
                problem (poor troubleshooting) and associated
                labor.

            

      	 	 

      	11. 	
              Leasing
                or loan fees related to the aircraft or any of its parts which are
                being
                used in place of an unserviceable unit.

            

      	 	 

      	12. 	
              Any
                part supplied on a “no-charge basis” or for which a warranty credit or
                replacement part has been supplied.

            

      	 	 

      	13. 	
              Aircraft
                downtime costs.

            

      	 	 

      	14. 	
              Any
                parts that are changed during scheduled or unscheduled maintenance,
                due to
                failure, which are still under the warranty period and, are not submitted
                to Embraer or the suppliers for warranty
                credit.

            

      	 	 

      	15.
               	Cabin
              equipment and furnishing materials, such as but not limited to carpets,
              seat covers, galley equipment and passenger
              commodities.

____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    
      	
               

              ATTACHMENT “E”
                - DIRECT MAINTENANCE COST GUARANTEE

               

            

    

     

     

     

    
      	16.  	
              Spare
                parts prices that exceed the prices obtainable from Embraer, provided,
                in
                the event that *** in a reasonable time frame, *** may *** and ***
                will
                reasonably agree on ***.

            

    

     

    
      	17.  	
              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.

            

    

     

    
      	18.  	
              Maintenance
                problems caused by Buyer’s negligence or misuse of parts or Buyer’s
                failure to take all maintenance actions on the Aircraft as recommended
                in
                all applicable maintenance manuals.

            

    

     

    
      	19.  	
              Maintenance
                problems involving Aircraft or parts that has / have been involved
                in an
                accident, or when parts either defective or not complying to
                manufacturer’s design or specification have been
                used.

            

    

     

    
      	20.  	
              Maintenance
                problems involving parts that have had their identification marks,
                designation, seal or serial number altered or
                removed.

            

    

     

    
      	21.  	
              Extraordinary
                costs incurred as a result of any labor disruption or dispute involving
                a
                significant work action that affects in whole or part the Aircraft’s
                normal operation or maintenance.

            

    

     

    
      	22.  	
              Engines,
                related parts and related LRU
                costs.

            

    

     

    
      	23.  	
              Nacelle
                and Thrust Reverser.

            

    

     

    
      	24.  	
              BFE
                (Buyer Furnished Equipment) and / or BIE (Buyer Installed Equipment)
                costs.

            

    

     

    
      	25.  	
              Maintenance
                reserves.

            

    

     

    
      	26.  	
              GSE
                (Ground Support Equipment) costs.

            

    

     

    
      	27.  	
              For
                the purpose of calculating the Achieved Maintenance Cost Guarantee,
                the
                materials and labor costs related to the New US Airways Aircraft,
                Owned
                Aircraft and GECC Aircraft shall be accounted for at the time these
                aircraft start their revenue service by Buyer under this Purchase
                Agreement. All previous materials cost and labor costs shall be
                disregarded. The total number of previous flight hours and cycles
                of such
                additional aircraft (New US Airways Aircraft, Owned Aircraft and
                GECC
                Aircraft) New US Airways Aircraft, Owned Aircraft and GECC Aircraft
                shall
                be considered.

            

    

     

    
      	II.  	
              The
                foregoing maintenance guarantee is provided subject to Buyer’s adherence
                to the following general
                conditions:

            

    

     

    
      	a.  	
              Airplane
                Operation: Aircraft shall be operated in airline service in accordance
                with the applicable Air Authority regulations and as recommended
                by
                Embraer through the official and updated Operations and Airplane
                Flight
                Manual.

            

    

     

    
      	b.  	
              Inspection
                Program: The Aircraft shall be maintained in accordance with the
                current
                Maintenance Review Board Report - (MRB), and the checks shall in
                no event
                occur at a time *** of the maintenance interval recommended by the
                current
                Maintenance Review Board Report - (MRB). Buyer’s Maintenance Program must
                have provisions for escalating the checks interval as soon as the
                applicable Air Authority allows. Buyer’s program should also include the
                use of task cards to assist the maintenance personnel in performing
                inspection task.

            

    

     

    
      	c.  	
              Aircraft
                Manuals: Buyer shall keep a complete set of Embraer recommended manuals
                up-to-date and available to airline personnel for assisting them
                with the
                maintenance and operation of the Aircraft. A set of recommended manuals
                or
                a electronic link to the data should be available at all maintenance
                bases
                (line or heavy) and shall be maintained with the latest revisions
                at all
                times.

            

    

     

    
      	d.  	
              Warranty:
                Buyer shall have at minimum, one person which will be dedicated to
                the
                Aircraft warranty program. This person(s) will be trained by Embraer
                warranty department on the correct procedures for filing Buyer warranty
                claims in accordance with mutually agreed format. This person(s)
                shall
                also be responsible for the filing of warranty claims directly to
                suppliers for credit, repair or
                replacement.

            

    

     

    ____________
 ***Confidential

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

     

    
      	
               

              ATTACHMENT “E”
                - DIRECT MAINTENANCE COST GUARANTEE

               

            

    

     

    

     

     

    
      	e.  	
              Parts
                Repair: All shop repairs shall be performed in Embraer’s or Embraer’s
                suppliers’ authorized repair shops.

            

    

     

    
      	f.  	
              Staff
                levels: Buyer shall have available reasonable staff to properly maintain
                the Aircraft during scheduled and unscheduled maintenance. This shall
                include, but not be limited to, mechanics, electricians, avionics
                specialists, inspectors, cleaners, ground personnel and flight crews
                licensed or certified by the applicable Air Authority as required
                by the
                applicable Air Authority
                regulations.

            

    

     

    
      	g.  	
              Training:
                Buyer is required to put in place a training program approved by
                the local
                airworthiness authority, which, at a minimum, shall include the following
                items:

            

    

     

    
      	1.  	
              initial
                and recurrent training for pilots in the
                Aircraft;

            

    

     

    
      	2.  	
              initial
                and recurrent training for flight attendants in the Aircraft;
                and

            

    

     

    
      	3.  	
              initial
                and recurrent training for the maintenance staff (airframe, powerplant,
                electric avionics specialists) in the
                Aircraft.

            

    

     

    A
      reasonable number of maintenance specialist will require supplier’s
      training.

     

    Buyer
      is
      required to train to the above standards a reasonable number of new hired
      employee who will work in or on the Aircraft.

     

    
      	h.  	
              Spare
                Parts Limitation: Spare parts price shall not exceed the prices obtainable
                from Embraer. In the event that Embraer cannot supply a part to Buyer
                in a
                reasonable time frame, Embraer may authorize the purchase of such
                part by
                Buyer from a third party at a price in excess of Embraer’s price, Embraer
                and Buyer will mutually agree on the portion of such price to be
                included
                in this guarantee provided Buyer maintained the minimum stock level
                recommended by Embraer.

            

    

     

    
      	i.  	
              Buyer
                will be required to provide Embraer an every three month service
                bulletin
                status report, containing service bulletin number, Aircraft serial
                number,
                Aircraft total time and total
                cycles.

            

    

     

    
      	j.  	
              Ground
                Support Equipment: Embraer shall provide Buyer a list of tooling
                and
                ground support equipment required to maintain the Aircraft, this
                list
                shall be subject to Buyer’s reasonable approval. Buyer will be required to
                maintain these levels of required tooling and ground support equipment
                in
                good working order at all times.

            

    

     

    
      	k.  	
              Reliability
                Reporting: Buyer is to provide monthly to Embraer an Aircraft reliability
                report. This report shall include Aircraft total time and cycles,
                component removals, shop finding reports and tear down reports (for
                each
                failure completed) by authorized agencies and SDR’s (Service Difficult
                Report) with date, Aircraft registration, problem description, maintenance
                action, and part number and serial number of the components removed
                and
                installed. Buyer shall use the ATA 100 chapter breakdown format for
                all
                reports.

            

    

     

    
      	l.  	
              Accounting
                System:

            

    

     

    
      	1.  	
              Buyer
                shall have an accounting system, subject to Embraer’s reasonable approval,
                which demonstrates the ability to discriminate between chargeable
                and
                non-chargeable costs and expenses. Buyer’s accounting system shall be
                presented to Embraer, upon Embraer’s written request, *** before
                ***.

            

    

     

    
      	2.  	
              Upon
                Embraer’s written request, Buyer shall also provide on a *** basis an
                activity and expenditure report satisfactory to Embraer, in electronic
                format and in accordance with Embraer’s Service News Letter for data
                exchange. 

            

    

     

    
      	3.  	
              Upon
                Embraer’s written request, Embraer and Buyer may convene frequently
                meetings to address issues concerning the AMC and to identify methods
                to
                decrease Buyer’s maintenance costs. At a minimum, Embraer and Buyer shall
                have two meetings per year to confirm and compute all costs claimed
                by
                Buyer. Buyer shall permit Embraer access to all Buyer data which
                can be
                used to verify any reports produced pursuant to this Attachment.
                

            

    

     

    
      	m.  	
              Duplicated
                Guarantee: If Buyer negotiates directly with any of Embraer’s
                suppliers/vendors a particular maintenance cost guarantee or equivalent
                program (including fleet hour agreements),

            

    

     

    ____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
               

              ATTACHMENT “E”
                - DIRECT MAINTENANCE COST GUARANTEE

               

            

    

     

    

     

     

    or
      an
      alternative support program with Embraer, the Parties shall negotiate in good
      faith and agree on the
      portion of cost related to this equipment/system that shall be excluded from
      the
      MCG rate, specified in Article I.b and I.c, and shall result in an appropriate
      recalculation of the MCG.

     

     

    
      	III.  	
              Buyer
                shall not unreasonably reject Embraer’s recommendations, changes or
                solutions to elements of maintenance that would result in cost savings,
                as
                reasonably determined by the
                Parties.

            

    

     

    
      	IV.  	
              EXCEPT
                AS OTHERWISE PROVIDED IN THIS AGREEMENT THE GUARANTEES, OBLIGATIONS
                AND
                LIABILITIES OF EMBRAER, AND REMEDIES OF BUYER SET FORTH IN THIS AIRCRAFT
                MAINTENANCE COST GUARANTEE ARE EXCLUSIVE AND IN SUBSTITUTION FOR,
                AND
                BUYER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER RIGHTS, CLAIMS,
                DAMAGES AND REMEDIES OF BUYER AGAINST EMBRAER OR ANY ASSIGNEE OF
                EMBRAER,
                EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO
                ANY
                GUARANTEED LEVEL OF AIRCRAFT MAINTENANCE
                COSTS.

            

    

     

    
      	V.  	
              The
                guarantee hereby expressed is established between Embraer and Buyer
                and it
                cannot be transferred or assigned to others, unless stated in this
                Agreement or by previous written consent of
                Embraer.

            

    

     

     

     

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      

        
          	
                   

                  ATTACHMENT “F”
                    - SCHEDULE RELIABILITY GUARANTEE

                   

                

        

      

    

     

    I. Definitions.
      

     

    a. Available
      for Dispatch: An Aircraft which is on the ground and cleared for dispatch by
      signature of Buyer's responsible maintenance personnel at least *** before
      the
      scheduled departure time of the initial flight in any given day shall be deemed
      to be "available for dispatch".

     

    b. Maintenance
      Interruption. 

     

    1. A
      maintenance interruption occurs when the malfunction of an item, or necessary
      checking and/or corrective actions, cause a revenue flight not to take place
      or
      a flight delay exceeding ***.

     

    2. For
      the
      purposes of this guarantee, only the initial Maintenance Interruption shall
      be
      accounted as interruption. Maintenance Interruption of any or all flights on
      subsequent days arising from the initial Maintenance Interruption shall not
      constitute an additional Maintenance Interruption.

     

    3. Before
      a
      flight may be considered as a Maintenance Interruption for the purpose of this
      Schedule Reliability Guarantee the Aircraft must be inspected for mechanical
      failure or malfunction.

     

    4. A
      repetitive problem, which caused an actual maintenance interruption and was
      not
      previously corrected, shall not be counted as a Maintenance
      Interruption.

     

    5. To
      be
      accounted as a Maintenance Interruption, any malfunction reported, either verbal
      or written, must result in maintenance corrective action. “No-trouble-found” or
“could not duplicate” or “reset” events shall not be accounted as Maintenance
      Interruption.

     

    6. A
      maintenance interruption that occurs due to failures of systems or parts from
      suppliers or vendors that have a separate maintenance interruption guarantee
      agreement with Buyer, and which is not assigned to Embraer, shall not be
      considered as a Maintenance Interruption.

     

    c. Achieved
      Dispatch Reliability Percentage (“ADRP”).

     

    ADRP
      is
      the actual dispatch reliability percentage obtained by Buyer's fleet of Aircraft
      in regular revenue service, which are the subject of this
      Agreement.

     

    ADRP
      shall be computed monthly commencing *** by Buyer, as follows:

     

    ***

     

    II. Embraer,
      subject to the conditions and limitations expressed herein, will guarantee
      the
      Aircraft’s schedule reliability percentage as follows: 

     

    a. The
      average ADRP for the *** period after *** delivered under the Purchase
      Agreement, shall be ***; for the *** period the ADPR shall be ***; for the
      ***
      period the ADPR shall be ***; for the *** period the ADPR shall be ***, for
      the
      *** period (the “Final Period”) the ADPR shall be ***.

     

    b. In
      the
      event that the ADRP in any of the *** periods referred to above is lower than
      GDR for the relevant period, Embraer shall diligently, after notification by
      Buyer:

     

    1. Make
      recommendations concerning Buyer's programs, publications and maintenance and
      operational policies to improve ADRP.

    2. Take
      all
      measures, as deemed necessary and appropriate by Embraer when vendor action
      does
      not provide the required improvement in the ADRP.

    3. ***
      Embraer shall issue a proposal to Buyer showing the price of the relevant
      Service Bulletin and the effectiveness of such modification for
      Buyer.

     

    ____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               

              ATTACHMENT
                "F" - SCHEDULE RELIABILITY GUARANTEE

               

            

    

     

     

    c. In
      the
      event the average ADRP at the end of any of the *** periods described in
      paragraph “II.a.” is lower than the GDR for such period, Embraer shall credit
      Buyer for Maintenance Interruptions calculated according to the following
      formula:

     

    ***

     

    In
      the
      event the average ADRP at the end of any of the *** periods described in
      paragraph “II.a.” above is *** for such period, the *** calculated according to
      the formula above shall be ***. 

     

    Measurements
      will be calculated and submitted by Buyer *** after the end of each *** referred
      to in Article II a. herein. The Parties shall do their efforts to reach an
      agreement over the data *** of the submission thereof. Any achieved credit
      amount will be credited to Buyer or to Embraer *** after each agreement date
      for
      each of the ***. Buyer may use such credit only toward ***. Embraer may use
      such
      credit only for ***.

     

    The
      sum
      of all credits under this Dispatch Reliability Guarantee shall not exceed ***
      for Buyer’s

    entire
      Aircraft fleet for the *** periods.

     

    d. This
      dispatch reliability guarantee is based upon the following assumptions provided
      by Buyer, and any change to the assumptions shall be cause for reevaluation
      or
      adjustments of this guarantee upon the reasonable agreement of the
      Parties.

     

    Fleet
      Size:
      Minimum
      of ***.

     

    Utilization:
      The
      guarantee covers a minimum of *** flight hours per cycle, *** APU hour per
      flight hour plus or minus *** APU hour per flight hour and *** APU cycle per
      flight cycle plus or minus *** APU cycle per flight cycle. Buyer's
      fleet-wide average
      annual Aircraft utilization shall be *** flight hours, plus or minus
      ***.

     

    For
      all
      purposes of this guarantee, the regularly scheduled revenue Aircraft departures
      and the Maintenance Interruptions related to the SAC Aircraft, Owned Aircraft
      and GECC Aircraft shall be accounted for at the time these aircraft start their
      revenue service by Buyer under this Purchase Agreement. All previous regularly
      scheduled revenue Aircraft departures and Maintenance Interruptions shall be
      disregarded.

     

    e. The
      following elements are not covered under this guarantee: 

     

    - Interruptions
      of scheduled flights due to reasons other than Aircraft mechanical failures,
      including without limitation:

    - Air
      Traffic Control

    - Weather,
      acts of God, FOD, wars, riots, third party criminal acts

    - Accidents

    - Incidents

    - Negligence

    - Conditions
      that exist prior to dispatch which lead to a flight interruption and could
      have
      been prevented by maintenance prior to dispatch (including but not limited
      to
      worn, flat and cut tires, servicing (ATA Chapter 12), dead batteries, and worn
      brakes)

    - Hard
      landing.

    - Late
      out
      of maintenance 

    - Force
      majeure

    - Crew
      refusal

    - Optional
      equipment other than that identified on Attachment “A” to this
      Agreement

    - Operational
      delays or cancellations not related to maintenance

    - Passenger
      and/or baggage loading

    - Non-availability
      of spares or equipment 

    - Non-availability
      of personnel 

     

    ____________

    ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               

              ATTACHMENT
                "F" - SCHEDULE RELIABILITY GUARANTEE

               

            

    

     

     

    - Operation
      interruptions or Maintenance Interruptions, which occurred due to items, related
      in the Minimum Equipment List (“MEL”) issued and/or approved by the local
      regulatory authority was followed

     

    - If
      the
      Aviation Authority grounds Buyer's fleet, or one of Buyer’s
      Aircraft

     

    - Maintenance
      problems caused by Buyer’s negligence or misuse of parts or Buyer’s failure to
      take all maintenance actions on the Aircraft as recommended in all applicable
      maintenance manuals

     

    - Maintenance
      problems involving Aircraft or parts that has/have been involved in an accident,
      or when parts either defective or not complying to manufacturer’s design or
      specification have been used. 

     

    - Maintenance
      problems involving parts that have had their identification marks, designation,
      seal or serial number altered or removed

     

    - Maintenance
      problem resulting from inadequate packing for shipment and storage

     

    - A
      flight
interruption
      shall
      not be considered as a Maintenance Interruption if, at the time of the
      interruption, Buyer has a spare aircraft in its fleet, even though for a
      different model, that could commercially reasonable be used to avoid such
      interruption and is not otherwise deployed in service

     

    - Regulatory
      changes compliance

     

    - Cancellations
      or delays caused by components repaired in non-approved local airworthiness
      authority shop

     

    - Flight
      cancellation or delay occurred due to one same problem on the same Aircraft
      within fourteen (14) consecutive days period. 

     

    III. The
      foregoing dispatch reliability guarantee is provided subject to Buyer's
      adherence in all material respects to the following general
      conditions:

     

    a. Airplane
      Operation: Aircraft shall be operated in airline service in accordance with
      the
      Aviation Authority regulations and as recommended by Embraer through the
      official and most updated Operations and Airplane Flight Manual. Buyer shall
      have available one spare Aircraft for each twenty Aircraft at all
      times.

     

    b. Inspection
      Program: The Aircraft shall be maintained in accordance with the most current
      MRB document. Buyer’s program must have provisions for escalating the checks
      intervals as soon as the Aviation Authority allows. Buyer’s program should also
      include the use of task cards to assist the maintenance personnel in performing
      inspection tasks. 

     

    c. Aircraft
      Manuals: Buyer shall keep a complete set of Embraer recommended manuals
      up-to-date and available to airline personnel for assisting them with the
      maintenance and operation of the Aircraft. A set of recommended manuals should
      be available at all maintenance bases (line or heavy) and shall be maintained
      with the latest revisions at all times. 

     

    d. MEL:
      Buyer shall keep its MEL up to date, with the most current issue. 

     

    e. Stocking
      Levels: Buyer shall be responsible to stock and maintain the recommended spare
      parts list (RSPL) in inventory, throughout the guarantee period. There shall
      be
      a minimum inventory level at each line maintenance base along with the major
      parts being stored at the heavy maintenance facility. In the event during the
      ADR meetings, the Aircraft does not achieve the guaranteed values, and if the
      cause of this non-performance is the lack of spare parts initially recommended
      by Embraer for the RSPL and not purchased by Buyer, this guarantee will not
      be
      applicable. Embraer is to receive annually an inventory list from the Buyer
      that
      shows current stocking levels and the locations of all Aircraft spare parts
      and
      will make any recommendations on additional inventory if needed. 

     

    f. Parts
      Repair: All shop repairs shall be performed in Embraer’s or Embraer’s suppliers'
      authorized repair shops. 

     

    

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      	
               

              ATTACHMENT
                "F" SCHEDULE RELIABILITY
                GUARANTEE

               

            

    

    
 

    g. Staff
      Levels: Buyer shall have available reasonable staff to properly maintain the
      Aircraft during scheduled and unscheduled maintenance. This shall include,
      but
      not be limited to, mechanics, electricians, avionics specialists, inspectors,
      cleaners, ground personnel and flight crews licensed or certified by the
      Aviation Authority as required by Aviation Authority regulations. 

     

    h. Training:
      Buyer is required to put in place a training program approved by the Aviation
      Authority, which, at a minimum, shall include the following items: 

     

    1. Initial
      and recurrent training for pilots in the Aircraft;

    2. Initial
      and recurrent training for flight attendants in the Aircraft; and

    3. Initial
      and recurrent training for the maintenance staff (airframe, power plant,
      electric avionics specialists) in the Aircraft. 

     

    Any
      maintenance specialist (engine, APU, avionics) will require suppliers' training.
      

    

    Buyer
      is
      required to train to the above standards any new hired employee who will work
      in
      or on the Aircraft.
      

     

    i. Aircraft
      Cleaning: Buyer shall keep the Aircraft reasonably clean, inside and out, by
      commercial airline standards at all times. This includes without limitation,
      the
      engines, wheel wells, nacelles, landing gear and flight control areas.

     

    j. Service
      Bulletins: When Embraer recommends that Buyer implement a service bulletin
      which
      improves performance or dispatch reliability, enhances flight operations or
      decreases maintenance costs, ***, and Buyer concludes by a cost benefit analysis
      that the SB is commercially reasonable, Embraer Customer Support Department
      shall contact Buyer's Vice President of Maintenance, in writing, with
      recommendations that the service bulletin be complied with. Buyer will schedule
      the Aircraft for incorporation of such service bulletin ***, but, subject to
      Embraer agreement which shall not be unreasonably withheld, Buyer may schedule
      it for incorporation during a maintenance check, so as to minimize interruption
      to scheduled service.

     

    k. Ground
      Support Equipment: Embraer shall provide Buyer two lists of tooling and ground
      support equipment required to maintain the Aircraft, which lists shall be
      subject to Buyer's reasonable approval. One list will cover line maintenance
      bases while the other will apply to heavy maintenance facilities. Buyer will
      be
      required to maintain these levels of required tooling and ground support
      equipment in good working order at all times. 

     

    l. Reliability
      Reporting: Buyer shall monthly provide to Embraer, in electronic format, a
      reliability and maintenance cost report in accordance with the latest revision
      of the Embraer’s Service News Letter for data exchange.

     

    m. Rejection:
      Buyer shall not unreasonably reject Embraer's recommendations / changes /
      solutions which in Embraer's opinion, would result in an improvement in Buyer's
      dispatch reliability. Any such rejection shall be cause for re-evaluation and/or
      adjustment of this guarantee. Anything in this Agreement to the contrary
      notwithstanding, Buyer shall not be required to comply with or implement, and
      the benefits and rights provided Buyer hereunder will not be adversely affected
      by, Buyer’s not complying with or implementing any Embraer recommendation /
      changes / solutions (including without limitation, recommended service
      bulletins) or any provision of applicable product literature for which
      compliance is not mandated by the local airworthiness authority rules and
      regulations if Buyer has determined in good faith that such recommendation
      /
      change / solution or provision of such product literature is not reasonably
      expected to result in a net economic benefit to Buyer in light of all applicable
      facts and circumstances, including, without limitation, the number of man-hours
      reasonably estimated by Embraer to be required to accomplish such recommendation
      / change / solution, the labor cost to be incurred, the potential reduction
      in
      maintenance costs to be realized, the time value of money and the period which
      would be required for such savings resulting from the improvement in dispatch
      reliability to offset the labor and other costs associated with such man-hours
      (provided that Buyer may not consider any benefits to Buyer under any product
      guarantees to the extent resulting from Buyer’s decision to comply or not to
      comply with or implement a recommendation, change, or solution).

    ____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	
               

              ATTACHMENT
                "F" SCHEDULE RELIABILITY GUARANTEE

               

            

    

    

     

    n. Certification
      or Regulatory Changes: The achieved maintenance interruption shall not take
      into
      account those interruptions, which were originated by conformity to mandatory
      regulatory change.

     

    
      	 	
              o.

            	
              Achieved
                Dispatch Reliability Review Meeting: An Achieved Dispatch Reliability
                Review Meeting shall be scheduled, if necessary, and at the end of
                each
                six (6) month period of Buyer's Aircraft operation. Representatives
                of
                Buyer and Embraer shall participate in the meetings and will:
                

            

    

     

    1. Review
      current Achieved Dispatch Reliability; 

    2. Eliminate
      irrelevant or non-Aircraft-intrinsic interruption claims from computed
      cancellation rates; and

    3. Review
      Buyer's compliance with Service Bulletins as required by Article III.j herein,
      review disputed claims, and consider methods for improvement of Achieved
      Dispatch Reliability. 

     

    Buyer
      shall permit Embraer access to all Buyer data which can be used in understanding
      and analyzing the dispatch reliability failure.

     

    p. Duplicated
      Guarantee: If Buyer negotiates directly with any of Embraer’s suppliers/vendors
      a particular dispatch or completion reliability guarantee, or an alternative
      support program with Embraer, this
      amount shall be excluded from the guarantee rate, specified in Article III.a,
      and shall result in an appropriate recalculation of this guarantee in accordance
      with Embraer criteria.

     

    IV. Suspension

     

     

    
      	a.  	
              This
                guarantee shall be automatically suspended and shall not apply during
                the
                period of any labor disruption or dispute involving a significant
                work
                action, which affects in whole or in part the Aircraft normal operation
                and maintenance.

            

    

     

    
      	b.  	
              This
                guarantee shall be automatically suspended and shall not apply during
                the
                computation period of which worldwide EMBRAER 170 fleet (excluding
                Buyer’s
                Aircraft) average dispatch reliability percentage is at least 1%
                higher
                than Buyer’s Aircraft dispatch reliability
                percentage.

            

    

     

     

    V. Buyer
      will not include in the calculation of the ADRP Maintenance Interruptions
      occurring 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 subject to any manner of use in
      contravention of the applicable aerial navigation or other regulations or rules,
      issued or recommended by government authorities of whatever country in which
      the
      Aircraft is operated, when accepted and recommended by ICAO; and

     

    b. When
      the
      Aircraft or any of its parts has/have been altered or modified by Buyer, without
      prior approval from Embraer or from the manufacturer of the parts through a
      service bulletin, provided such approval has not been unreasonably
      withheld.

     

     

    VI. THE
      GUARANTEES, OBLIGATIONS AND LIABILITIES OF EMBRAER, AND REMEDIES OF BUYER SET
      FORTH IN THIS SCHEDULE RELIABILITY GUARANTEE ARE EXCLUSIVE AND IN SUBSTITUTION
      FOR, AND BUYER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER RIGHTS, CLAIMS,
      DAMAGES AND REMEDIES OF BUYER AGAINST EMBRAER OR ANY ASSIGNEE OF EMBRAER,
      EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY ACHIEVED
      DISPATCH RELIABILITY.

     

    VII. The
      terms
      and conditions of this dispatch reliability guarantee do not alter, modify
      or
      impair, in any way, the terms and conditions of Attachment “C“ (Aircraft
      Warranty Certificate) to the Purchase Agreement.

     

    VIII. The
      guarantee hereby expressed is established between Embraer and Buyer and it
      cannot be transferred or assigned to others, unless by previous written consent
      of Embraer.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
 

    

      
        	
                 

                ATTACHMENT “H-1”
                  - PERFORMANCE GUARANTEE EMBRAER 175

                 

              

      

    

     

     

    
      	
              1.

            	
              GUARANTEES

            

    

    
      	 	 
	
               

            	Embraer, subject to the conditions and
              limitations hereby expressed, and considering the Aircraft EMBRAER
              175 LR
              version with a maximum takeoff weight of 85,517 lb (38,790 kg), equipped
              with Embraer furnished General Electric CF34-8E5 engines, guarantees
              that
              each Aircraft on the relevant Actual Delivery Date shall comply with
              the
              following performance:
	 	 
	
               1.1

            	
              CRUISE
                SPECIFIC AIR RANGE

            
	 	 
	 	
              The
                cruise specific air range(SAR) in a standard day (ISA), at the aircraft
                gross weights, pressure altitudes and Mach numbers noted below shall
                not
                be less than the guarantee value:

            

    

     

    ***.

     

    
      	
              2.

            	
              AIRCRAFT
                CONFIGURATION

            

    

     

    
      	
              2.1

            	
              The
                guarantees stated above are based on the
                Aircraft configuration as defined in the Technical Description PTD-175
                Rev. 5 dated April 2005, plus specific Buyer configuration options
                as
                defined at Attachment “A” to the Purchase Agreement, (hereinafter referred
                to as the “Detail Specification”). If necessary, appropriate adjustment to
                this Aircraft Performance Guarantees shall be made for changes in
                such
                Detail Specification (including but not limited to Buyer requests
                for
                changes, Proposal of Major Changes or any other changes mutually
                agreed
                upon between the Buyer and Embraer) approved in writing by the Buyer
                and
                Embraer. Such adjustments shall be accounted for by Embraer in its
                evidence of compliance with the guarantees.

            
	 	 
	
               

            	
              In
                the event a change is made to any law,
                governmental regulation or requirement, or in the interpretation
                of any
                such law, governmental regulation or requirement that affects the
                certification basis for the Aircraft, and as a result thereof, a
                change is
                made to the configuration and/or the performance of the Aircraft
                in order
                to obtain certification, the guarantees set forth in this Aircraft
                Performance Guarantee shall be appropriately modified to reflect
                any such
                change.

            
	 	 
	
              2.2

            	The performance guarantees of Article
              1 of
              this Attachment shall be adjusted by Embraer for the following in its
              evidence of compliance with such
              guarantees:

    

     

    a. Changes
      to the Detail Specification including Major Changes or any other changes
      mutually agreed upon between the Buyer and Embraer. 

     

    b. The
      difference between the weight allowances of optional items listed in the Detail
      Specification and the actual weights.

     

    
      	
              3.

            	
              GUARANTEE
                CONDITIONS

            

      	 	 

      	      3.1	All guaranteed performance data are
              based on
              the ICAO International Standard Atmosphere (ISA) unless otherwise
              specified. Altitudes are pressure altitudes.

      	 	 

      	      3.2	The FAA Regulations referred to in this Attachment
              are,
              unless otherwise specified, the Certification Basis regulations specified
              in the Aircraft Type Certificate Data Sheet. 

      	 	 

      	      3.3	
              The cruise specific air range
                and the
                climb, cruise and descent portions of the mission guarantees include
                allowances for normal electrical power extraction and normal operation
                of
                the air conditioning system. Normal power extraction shall be defined
                as
                not less than a 41 kW total electrical and hydraulic loads. Normal
                operation of the air conditioning system

            

    

     

     

    ____________

    ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

     

    
      	
               

              ATTACHMENT
                “H-1” - PERFORMANCE GUARANTEE EMBRAER 175

               

            

    

     

    

     

    
      	
               

            	 
	
               

            	 
	
               

            	
              shall
                be defined as operation in the automatic
                mode, with the temperature control set to maintain a nominal cabin
                temperature of 70 °F,
                and all air conditioning systems operating normally. This operation
                nominally allows a maximum cabin pressure differential of *** lb
                per
                square inch, with a nominal Aircraft cabin ventilation rate of ***
                cu.ft
                per min at *** ft including passenger cabin recirculation (nominal
                recirculation is ***%). The APU is turned off unless otherwise specified.
                

            
	 	 
	
              3.5

            	
              The
                cruise specific air range, speed and the
                climb, cruise, and descent portions of the mission guarantees are
                based on
                an Aircraft center of gravity location of ***% of the mean aerodynamic
                chord. 

            
	 	 
	
              3.6

            	Performance, where applicable, is based
              on a
              fuel Lower Heating Value (LHV) of 18,580 BTU per pound and a fuel density
              of 6.7 lb per U.S. gallon.

     

    
      	
              4.
                

            	
              PARTIES’
                OBLIGATIONS ACCORDING TO THIS
                GUARANTEE

            

    

     

    
      	
               4.1

            	
              During
                the Aircraft acceptance to be performed
                by Buyer in accordance with Article 7 of the Purchase Agreement,
                Buyer
                shall check the Aircraft performance specified in Article 1 of this
                Attachment H, by using the Aircraft Flight Manual (AFM) or by comparing
                the flight test data, at the atmospheric conditions prevailing during
                the
                flight, with the information presented in the Supplementary Performance
                Manual (SPM), as applicable. All performance guarantee under this
                Attachment are in accordance with both manuals above mentioned, taking
                into consideration the established tolerances.

            
	 	 
	
               4.2

            	
              Embraer’s
                obligations in respect to the
                guarantees stated in Article 1 of this Attachment are limited to
                Buyer’s
                right to ***, should it be reasonably verified that such Aircraft,
                during
                the acceptance procedure specified in Article 7 of the Purchase Agreement,
                cannot comply with the performances guaranteed hereunder, after Embraer
                has had a reasonable opportunity to cure such deficiencies in accordance
                with Article 7 of the Purchase Agreement. ***

            
	 	 
	
               4.3

            	
              In
                case, during the above mentioned acceptance
                procedure, it is proven that the Aircraft performance does not comply
                with
                the performances specified in Article 1 of this Attachment, but Buyer
                considers it satisfactory by accepting delivery of such Aircraft,
                then
                Embraer shall not be liable to any claim or demand whatsoever from
                Buyer
                with respect to such performance guarantees.

            
	 	 
	
               4.4

            	Upon acceptance of the Aircraft by Buyer,
              all
              obligations of Embraer regarding the Aircraft performance guarantees
              shall
              cease.

    

     

    
      	
              5.

            	
              GUARANTEE
                COMPLIANCE

            

    

     

    
      	
               5.1

            	
              Compliance
                with the guarantees of Article 1 of this Attachment shall be based
                on the
                conditions specified in that article, the Aircraft configuration
                contained
                in Attachment “A” to the Purchase Agreement and the guarantee conditions
                of Article 3 above.

            
	 	 
	
               5.2

            	
              Compliance
                with the cruise specific air range, and the climb, cruise and descent
                portions of the mission guarantees shall be established by calculations
                based on the comparison mentioned in paragraph 4.1 above.
                

            
	 	 
	
               5.3

            	
              The
                data derived from tests shall be adjusted as required by conventional
                methods of correction, interpolation or extrapolation in accordance
                with
                established engineering practices to show compliance with the performance
                guarantee. 

            
	 	 
	
               5.4

            	
              Compliance
                with the Equipped Empty Weight guarantee shall be based on information
                in
                the appropriate approved weight and balance manual, and associated
                document or report.

            

    

     

     

     

    ____________
 ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    
      	
               

              ATTACHMENT
                "H-1" PERFORMANCE GUARANTEE EMBRAER 175

               

            

    

     

     

    
      	
              6.

            	
              EXCLUSIVE
                GUARANTEES

            

    

     

    
      	
               6.1

            	The only performance guarantees applicable
              to
              the Aircraft are those set forth in this document. The performance
              guarantees set forth herein are established between Buyer and Embraer
              and
              may not be transferred or assigned to others, unless by previous written
              consent of Embraer.
	 	 
	
               6.2

            	THE GUARANTEES, OBLIGATIONS AND LIABILITIES
              OF EMBRAER, AND REMEDIES OF BUYER SET FORTH IN THIS PERFORMANCE GUARANTEE
              ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND BUYER HEREBY WAIVES, RELEASES
              AND RENOUNCES, ALL OTHER RIGHTS, CLAIMS, DAMAGES AND REMEDIES OF BUYER
              AGAINST EMBRAER OR ANY ASSIGNED OF EMBRAER, EXPRESS OR IMPLIED, ARISING
              BY
              LAW OR OTHERWISE, WITH RESPECT TO ANY ACHIEVED
              PERFORMANCE.

    

     

    The
      terms
      and conditions of this performance guarantee do not alter, modify or impair,
      in
      any way, the terms and conditions of Attachment “C” (Aircraft Warranty
      Certificate) to the Purchase Agreement.Amendment No. 9 to Letter Agreement DCT-015/2004 dated September 19, 2006

    
      	
              EXHIBIT
                10.40(i)

            
	
              CONFIDENTIAL
                TREATMENT

            
	
              REQUESTED
                PURSUANT TO RULE 24b-2

            
	
               

            
	
              Certain
                portions of this exhibit have been omitted pursuant to a request
                for
                confidential treatment under Rule 24b-2 of the Securities Exchange
                Act of
                1934. The omitted materials have been filed separately with the Securities
                and Exchange Commission.

            

    

    

    

    AMENDMENT
      No. 9 TO LETTER AGREEMENT DCT-015/2004

     

    

    This
      Amendment No. 9 to Letter Agreement DCT-015/2004, dated as of September 19,
      2006
      (“Amendment No. 9”) relates to the Letter Agreement DCT-015/2004 (the “Letter
      Agreement”) between Embraer - Empresa Brasileira de Aeronáutica S.A. (“Embraer”)
      and Republic Airline Inc. (“Buyer”) dated March 19, 2004 and which concerns the
      Purchase Agreement DCT-014/2004 (the “Purchase Agreement”), as amended from time
      to time (collectively referred to herein as “Agreement”). This Amendment No. 9
      is between Embraer and Buyer, collectively referred to herein as the
“Parties”.

    

    This
      Amendment No. 9 sets forth additional agreements between Embraer and Buyer
      related to the *** Firm EMBRAER 170 and Firm EMBRAER 175 Aircraft.

     

    Except
      as
      otherwise provided for herein all terms of the Letter Agreement shall remain
      in
      full force and effect. All capitalized terms used in this Amendment No. 9 that
      are not defined herein shall have the meaning given in the Letter Agreement.
      In
      the event of any conflict between this Amendment No. 9 and the Letter Agreement
      the terms, conditions and provisions of this Amendment No. 9 shall control.
      

     

    NOW,
      THEREFORE, for good and valuable consideration which is hereby acknowledged
      Embraer and Buyer hereby agree as follows:

    

    1.
      Schedule “5” - Mutual Support-Second Amended and
      Restated

    

    The
      ***
      paragraph of the “***” section of Schedule 5 to the Letter Agreement is hereby
      amended by ***.

     

     2.
      Miscellaneous

     

    All
      other
      provisions of the Letter Agreement which have not been specifically amended
      or
      modified by this Amendment No. 9 shall remain valid in full force and effect
      without any change.

    

    (Signature
      page follows)

    ____________

    ***Confidential

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, EMBRAER and BUYER, by their duly authorized officers, have
      entered into and executed this Amendment No. 9 to Letter Agreement to be
      effective as of the date first written above.

    

     

    
      	EMBRAER
              - Empresa Brasileira de Aeronáutica S.A.	 	 	Republic
              Airline Inc.
	 	 	 	 
	/s/ Satoshi
              Yokota	 	 	/s/ Bryan
              Bedford
	
              

            	 	 	
              

            
	
              Name:
                Satoshi Yokota
Title: Executive Vice President Engineering and
                Development

            	 	 	Name:
              Bryan
              Bedford
Title: President
	 	 	 	 
	 	 	 	Date:
              September 20, 2006
	 	 	 	Place:
              Indianapolis

    

    
      	 	 	 	 
	/s/ Jose
              Luis
              D. Molina	 	 	 
	
              

            	 	 	
            
	Name:
              Jose Luis D.
              Molina
Title: Director of Contracts - Airline Market
	 	 	 
	Date:
              September 20, 2006	 	 	
            
	Place:
              Sao Jose Dos Campos, SP, Brazil	 	 	 

    

    
 

     

    
      	Witnesses:	 	 	 
	 	 	 	 
	Witness:
              Carlos Martins Dutra	 	 	Witness:
              Lars-Erik Arnell
	Name:
              Carlos Martins Dutra	 	 	Name:
              Lars-Erik Arnell

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