Document:

exv10w17

 

EXHIBIT 10.17

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

     The non-employee members of the Board of Directors of The Allied Defense
Group, Inc. are entitled to be compensated for their service via a combination
of cash and shares of stock of The Allied Defense Group, Inc. (“Stock”). This
Deferred Compensation Plan For Non-Employee Directors is intended to allow the
members of the Board of Directors of The Allied Defense Group, Inc. to defer
receipt of the cash and/or Stock compensation, all as set forth herein.

1. Eligibility

     Each member of the Board of Directors (a “Director”) of The Allied Defense
Group, Inc. (“Company”) who is not an employee of the Company, or of any of its
subsidiaries, is eligible to participate in this Deferred Compensation Plan for
Non-Employee Directors (“Plan”).

2. Participation

     (a) Prior to the beginning of any July 1 — June 30 period (“Fiscal Year”),
each eligible Director may elect to participate in the Plan by directing that
(i) all of the cash compensation which would otherwise be payable for services
as a Director during such Fiscal Year (“Cash Compensation”) shall be credited
to a deferred compensation account (“Cash Account”), and/or (ii) all of the
Stock compensation which would otherwise be payable for services as a Director
during such Fiscal Year (“Stock Compensation”) shall be credited to a separate
deferred compensation account (“Stock Account”), all pursuant to the terms of
the Plan.

     (b) An election to participate in the Plan shall be in the form of an
enrollment form (“Enrollment Form”) executed by the Director and filed with the
Secretary of the Company. Upon the adoption of this Plan, each eligible
Director has completed an Enrollment Form and filed it with the Secretary of
the Company. Each such election shall be effective for the upcoming Fiscal
Year and shall continue in effect from Fiscal Year to Fiscal Year until the
Director terminates or modifies the election by providing a substitute
Enrollment Form prior to the commencement of any Fiscal Year.

3. Cash Accounts

     (a) A Cash Account for each participating Director shall be maintained on
a book-keeping basis by the Secretary of the Company.

 

 

     (b) Deferrals of Cash Compensation credited to a Cash Account shall bear
interest from the first day of the month in which the related Cash Compensation
would otherwise be paid. The interest credited will be compounded and credited
at the end of each Fiscal Year. Interest during each Fiscal Year will accrue
at the same rate as is earned by the Company on its funds in its bank account.

     (c) The accumulated amount in the Cash Account shall be paid to the
Director (or beneficiary) upon the earliest to occur of the following
(“Retirement”):

	 	(i)	 	the termination of the Director’s service on the Board for any
reason (including death);
	 
	 	(ii)	 	the sale, merger or consolidation of, change of control of, or
similar extraordinary transaction involving, the Company.

     (d) At the time of election to participate in the Plan, a Director shall
also make elections with respect to the method of distribution of Cash
Compensation deferred under the Plan, plus accumulated interest. Such
elections shall be contained in the Enrollment Form.

4. Stock Accounts

     (a) Stock Accounts for each participating Director shall be maintained on
a book-keeping basis by the Secretary of the Company.

     (b) For each share of Stock issuable as Stock Compensation for which a
Director has elected deferral pursuant to the Enrollment Form, the Director’s
Stock Account shall be credited with a stock unit (the “Unit”).

     (c) The number of Units credited to the Stock Account shall be
appropriately and equitably adjusted to reflect any change in the outstanding
stock of the Company in the event of any recapitalization, reorganization,
merger, consolidation, spin-off, combination, repurchase, exchange of shares or
other securities of the Company, stock split, reverse stock split, stock
dividend, extraordinary dividend, liquidation, dissolution, or other similar
corporate transaction or event affecting the Company, all as determined by the
Board of Directors of the Company.

     (d) Payment of the deferred compensation represented by a Stock Account
shall be made to the Director (or beneficiary) upon a Director’s Retirement
solely in the form of one share of Stock for each Unit. All Stock shall be
issued from the Company’s 2001 Incentive Equity Plan, as amended, or a
subsequent plan approved by the Company’s stockholders.

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     (e) At the time of election to participate in the Plan, a Director shall
also make elections with respect to the method of distribution of Stock
Compensation deferred under the Plan. Such elections shall be contained in the
Enrollment Form.

     (f) Directors who elect to make a deferral of Stock in accordance with
this Plan will have no rights as stockholders of the Company with respect to
Units credited to their Stock Accounts.

     (g) On each payment date for any cash dividends paid on the Stock, the
Company shall pay to each Director as an additional cash fee an amount equal to
the cash dividends that would be payable by the Company on a number of shares
of Stock equal to the number of Units in the Director’s Stock Account as of
such payment date. Such amounts shall be paid directly to each Director in
cash and shall not be eligible for deferral under this Plan.

5. Miscellaneous

     (a) The right of a Director to any payment hereunder shall not be subject
to assignment by the Director.

     (b) Benefits provided by this Plan shall be unfunded. All amounts payable
under this Plan to the participating Directors shall be paid from the general
funds of the Company, and nothing contained in this Plan shall require the
Company to set aside or hold in trust any amounts or assets for the purpose of
paying benefits to any Director. This Plan shall create only a contractual
obligation on the part of the Company, and participating Directors shall have
the rights of a general unsecured creditor with respect to the benefit
obligations hereunder. Funds of the Company available to pay benefits pursuant
to the Plan shall be subject to the claims of general creditors of the Company,
and may be used for any purpose by the Company. The obligation of the Company
to make payments pursuant to this Plan constitutes an unsecured but legally
enforceable promise of the Company to make such payments.

     (c) A participating Director’s interest in his Cash Account and Stock
Account shall at all times be 100% vested and nonforfeitable.

     (d) The Company shall have the right to amend or terminate this Plan in
whole or in part from time to time by resolution of the Board; provided,
however, that no action shall cancel or reduce the amount of a Director’s
previously accrued benefits.

     (e) Deferral elections and beneficiary designations made pursuant to this
Plan must be made in writing on forms substantially similar to the forms set
forth in Exhibit 1 to this Plan, and shall be subject to such other procedural
rules as the Board of Directors may establish.

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     (f) This Plan shall be construed, administered and governed in all
respects in accordance with the laws of the State of Delaware.

     IN WITNESS WHEREOF, the Company has caused this Plan to be executed by a
duly authorized officer.

	 	 	 	 	 
	 	THE ALLIED DEFENSE GROUP, INC.

 	 
	Dated:  June 3, 2004 	By:  	 	 
	 	 	
	 
	 	 	John G. Meyer, Jr., 	 
	 	 	President and Chief Executive Officer 	 
	 

Allied/Deferred Compensation Plan 2004.5 (Exhibit 10.17)

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EXHIBIT 1 TO DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

DEFERRAL ELECTION FORM

AND DESIGNATION OF BENEFICIARY FORM

I. DEFERRAL(S)

	 	 	 
	TO:

	 	The Allied Defense Group, Inc.
	

	 	Attn: Corporate Secretary

     Pursuant to the terms and conditions of the Deferred Compensation Plan For
Non-Employee Directors (the “Plan”), I hereby make the following election to
defer Cash Compensation and/or Stock Compensation pursuant to the Plan.

     All capitalized terms not expressly defined in this Deferral Election Form
have the meanings set forth in the Plan.

     1._____Deferral of Cash Compensation: I hereby irrevocably elect to defer
receipt of each monthly payment of Cash Compensation.

     2._____Deferral of Stock Compensation: I hereby irrevocably elect to defer
receipt of the shares of Stock payable with respect to the upcoming July 1 -
June 30 Fiscal Year.

     3.          Payment of Cash Account: I hereby irrevocably elect to have my Cash
Account paid to me as follows:

	 	(a)	 	In a lump sum within sixty (60) days of my Retirement; or
	 
	 	(b)	 	In ______ (not to exceed 5) equal annual installments (without
further interest) commencing within sixty (60) days of my
Retirement.

     4.          Payment of Stock Account: I hereby irrevocably elect to have my Stock
Account paid to me in the form of Stock as follows:

	 	(a)	 	In a lump sum Stock award within ten (10) days of my Retirement; or
	 
	 	(b)	 	In ______ (not to exceed 5) equal annual Stock installments
commencing within ten (10) days of my Retirement.

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II. DESIGNATION OF
BENEFICIARY

	 	 	 
	Name of Director:

	 	Marital Status: Single
	Social Security No.:

	 	Married

     I hereby revoke any previous designation(s) of beneficiary made by me with
respect to amounts payable by The Allied Defense Group, Inc. (the “Company”)
under the Deferred Compensation Plan For Non-Employee Directors in the event of
my death; and I hereby designate the following person(s) or entity to receive,
upon my death, any such amounts:

Primary Beneficiary or Beneficiaries:

	 	 	 	 	 	 	 
	Name:                   

	 	Share:     %
	 	Relationship:                   
	 	Birth Date:                   
	Address: 
               
                
                   
         

	 	SS#: 
                         
 
	 	 
	 
	 	 	 	 	 	 
	Name:                   

	 	Share:     %
	 	Relationship:                   
	 	Birth Date:                   
	Address: 
               
                
                   
         

	 	SS#:                             
	 	 

Contingent Beneficiary or Beneficiaries (if your Primary Beneficiary(ies) all
predecease you):

	 	 	 	 	 	 	 
	Name:                   

	 	Share:     %
	 	Relationship:                   
	 	Birth Date:                   
	Address: 
               
                
                   
         

	 	SS#:                             
	 	 
	 
	 	 	 	 	 	 
	Name:                   

	 	Share:     %
	 	Relationship:                   
	 	Birth Date:                   
	Address: 
               
                
                   
         

	 	SS#:                             
	 	 

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This election to defer is made as of the date of my signature below.

I certify that the foregoing elections are not being made in reliance upon any
financial or tax advice given by the Company. I understand that I should
consult my own tax advisor as to the tax consequences of my elections.

	 	 	 	 	 
	Date:
	 	 	 	 
	

	 	

	 	

	

	 	 	 	(Signature of Non-Employee Director)
	 
	 	 	 	 
	

	 	 	 	Name:
	

	 	 	 	

Received by the Company:

The Allied Defense Group, Inc.

	 	 	 
	Date:
	 	 
	

	 	

	 	 	 
	Acknowledged:
	 	 
	

	 	

	

	 	Name and Title
	

	 	Office of Corporate Secretary

ADG/Deferred Compensation Plan 2004.5 (Exhibit 10.17)

7exv10w42

 

Pursuant to 17 CFR 240.24b-2,
confidential information has been omitted and has been
filed separately with the Securities and Exchange Commission pursuant
to a Confidential Treatment Application filed with the Commission.

Exhibit 10.42

AIRBUS A319/A320/A321 PURCHASE AGREEMENT

Dated as of April 1, 2004

between

AVSA, S.A.R.L.,

Seller

and

ATLANTIC COAST AIRLINES

Buyer

 

 

CONTENTS

	 	 	 	 	 
	CLAUSES
	 	TITLE

	0
	 	DEFINITIONS	1
	1
	 	SALE AND PURCHASE	10
	2
	 	SPECIFICATION	10
	3
	 	PRICE	12
	4
	 	PRICE REVISION	18
	5
	 	PAYMENT TERMS	18
	6
	 	INSPECTION	22
	7
	 	CERTIFICATION	23
	8
	 	BUYER’S TECHNICAL ACCEPTANCE	24
	9
	 	DELIVERY	26
	10
	 	EXCUSABLE DELAY AND TOTAL LOSS	27
	11
	 	INEXCUSABLE DELAY	30
	12
	 	WARRANTIES AND SERVICE LIFE POLICY	31
	13
	 	INTELLECTUAL PROPERTY INDEMNITY	52
	14
	 	TECHNICAL DATA AND SOFTWARE SERVICES	56
	15
	 	SELLER REPRESENTATIVES	62
	16
	 	TRAINING AND TRAINING AIDS	64
	17
	 	SUPPLIER PRODUCT SUPPORT	82
	18
	 	BUYER FURNISHED EQUIPMENT	83

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CONTENTS

	 	 	 	 	 
	CLAUSES
	 	TITLE

	19
	 	INDEMNITIES AND INSURANCE	87
	20
	 	ASSIGNMENTS AND TRANSFERS	89
	21
	 	TERMINATION	91
	22
	 	MISCELLANEOUS PROVISIONS	95
	23
	 	CERTAIN REPRESENTATIONS OF THE PARTIES	101

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CONTENTS

	 	 	 	 	 
	EXHIBITS
	 	
	EXHIBITS A-1
	 	STANDARD SPECIFICATION PORTION OF CD-ROM ENTITLED “SINGLE AISLE STANDARD SPECIFICATIONS AND CONFIGURATION GUIDES (JANUARY 2003)”	•
	 
	EXHIBIT A-2
	 	SCNs	109
	 
	EXHIBIT B-1
	 	SCN FORM	113
	 
	EXHIBIT B-2
	 	MSCN FORM	•
	 
	EXHIBIT C
	 	SELLER SERVICE LIFE POLICY	117
	 
	EXHIBIT D
	 	CERTIFICATE OF ACCEPTANCE	119
	 
	EXHIBIT E
	 	BILL OF SALE	120
	 
	EXHIBIT F
	 	TECHNICAL DATA	123
	 
	APPENDIX 1 TO
EXHIBIT F	 	LICENSE FOR USE OF SOFTWARE	138
	 
	APPENDIX 2 TO
EXHIBIT F	 	LICENSE FOR USE OF AIRBUS ON-LINE SERVICES	145
	 
	ATTACHMENT 1 TO
APPENDIX 2 TO

EXHIBIT F	 	AIRBUS ON-LINE SERVICES	156
	 
	ATTACHMENT 2 TO
APPENDIX 2 TO
EXHIBIT F	 	REQUEST FOR CONNECTION TO AIRBUS ON-LINE SERVICES	162
	 
	EXHIBIT G
	 	SELLER PRICE REVISION FORMULA	163
	 
	EXHIBIT H
	 	PROPULSION SYSTEMS PRICE REVISION FORMULA	166

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PURCHASE AGREEMENT

This agreement is made this 1st day of April 2004

between

	 	 	 	AVSA, S.A.R.L, a société à responsabilité limitée organized and
existing under the laws of the Republic of France, having its
registered office located at
	 
	 	 	 	2, rond-point Maurice Bellonte

31700 BLAGNAC

FRANCE
	 
	 	 	 	(hereinafter referred to as the “Seller”)

and

	 	 	 	ATLANTIC COAST AIRLINES, a corporation organized and existing under
the laws of the State of California, United States of America,
having its principal corporate offices located at
	 
	 	 	 	45200 Business Court

Dulles, Virginia 20166
	 
	 	 	 	(hereinafter referred to as the “Buyer”)

	 	 	WHEREAS the Buyer wishes to purchase and the Seller is willing to sell
new Airbus A319-100, A320-200 and A321-200 model aircraft, on the terms
and conditions herein provided; and
	 
	 	 	WHEREAS the Seller is a sales subsidiary of Airbus S.N.C. and will
purchase such aircraft from Airbus S.N.C. for resale to the Buyer,
	 
	 	 	NOW THEREFORE IT IS AGREED AS FOLLOWS:

	0 – 	 	DEFINITIONS
	 
	 	 	For all purposes of this agreement, except as otherwise expressly
provided or unless the context otherwise requires, the following terms
will have the following meanings:
	 
	 	 	A319 Aircraft — any or all of the (i) A319 Firm Aircraft; (ii)
Option Aircraft that have been converted into firmly ordered A319
aircraft; or (iii) A319 aircraft that have been converted from A320
Aircraft pursuant to this Agreement.
	 
	 	 	A319 Airframe — any A319 Aircraft, excluding the A319 Propulsion
Systems.

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	 	 	A319 Firm Aircraft — any or all of the ten (10) firm A319-100
aircraft for which the delivery schedule is set forth in Clause 9.1.1
hereof to be sold by the Seller and purchased by the Buyer pursuant to
this Agreement, together with all components, equipment, parts and
accessories installed in or on such aircraft and the A319 Propulsion
Systems installed thereon upon delivery.
	 
	 	 	A319 Propulsion Systems — the two (2) International Aero Engines
IAE V2524-A5 powerplants installed on an A319 Aircraft at Delivery, each
composed of the powerplant (as such term is defined in Chapters 70-80 of
ATA Specification 100), but limited to the equipment, components, parts
and accessories included in the powerplant, as so defined), which are the
powerplants for the A319 Aircraft defined and agreed in writing between
the Buyer and International Aero Engines and that have been sold to the
Manufacturer by International Aero Engines.
	 
	 	 	A319 Specification — the A319 Standard Specification as amended by
the SCNs itemized in Exhibit A-2 hereto, including but not limited to an
increase in the maximum takeoff weight (MTOW) from 64 to 75.5 metric
tons, as such document may be further amended or modified in accordance
with this Agreement (including, without limitation, by SCNs and MSCNs not
listed in Exhibit A-2 as of the date hereof).
	 
	 	 	A319 Standard Specification — the A319 standard specification
document number J.000.01000, Issue 4.1, dated April 30, 2001, published
by the Manufacturer, a copy of which is annexed in Exhibit A-1 hereto.
	 
	 	 	A320 Aircraft — any or all of the (i) A320 Firm Aircraft; (ii)
Option Aircraft that have been converted into firmly ordered A320
aircraft; or A320 aircraft that have been converted from A319 Aircraft
pursuant to this Agreement.
	 
	 	 	A320 Airframe — any A320 Aircraft, excluding the A320 Propulsion
Systems.
	 
	 	 	A320 Family Aircraft — Airbus A319-100, A320-200 or A321-200 model
aircraft.
	 
	 	 	A320 Firm Aircraft — any or all of the five (5) firm A320-200
aircraft for which the delivery schedule is set forth in Clause 9.1.1
hereof to be sold by the Seller and purchased by the Buyer pursuant to
this Agreement, together with all components, equipment, parts and
accessories installed in or on such aircraft and the A320 Propulsion
Systems installed thereon upon delivery.
	 
	 	 	A320 Propulsion Systems — the two (2) International Aero Engines
IAE V2527-A5 powerplants installed on an A320 Aircraft at Delivery, each
composed of the powerplant (as such term is defined in Chapters 70-80 of
ATA Specification 100), but limited to the equipment, components, parts
and accessories included in the powerplant, as so defined), which are the
powerplants for the A320 Aircraft defined and agreed in writing between
the Buyer and International Aero Engines and that have been sold to the
Manufacturer by International Aero Engines.

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	 	 	A320 Specification — the A320 Standard Specification as amended by
the SCNs set forth in Appendix 1 to Exhibit A-2 hereto, including but not
limited to an increase in the maximum takeoff weight (MTOW) from 73.5 to
77 metric tons, as such document as may be further amended or modified in
accordance with this Agreement (including, without limitation, by SCNs
and MSCNs not listed in Exhibit A-2 as of the date hereof).
	 
	 	 	A320 Standard Specification — the A320 standard specification
document number D.000.02000, Issue 5.1 dated April 30, 2001, published by
the Manufacturer, a copy of which annexed in Exhibit A-1 hereto.
	 
	 	 	A321 Aircraft — any or all of the (i) [***]; (ii) A321 aircraft
[***] pursuant to the Agreement or (iii) A321 aircraft [***] pursuant to
the Agreement.
	 
	 	 	A321 Airframe — any A321 Aircraft, excluding the A321 Propulsion
Systems.
	 
	 	 	A321 Propulsion Systems — the two (2) International Aero Engines
V2533-A5 powerplants installed on an A321 Aircraft at Delivery, each
composed of the powerplant (as such term is defined in Chapters 70-80 of
ATA Specification 100), but limited to the equipment, components, parts
and accessories included in the powerplant, as so defined), which are the
powerplants for the A321 Aircraft defined and as may be agreed in writing
between the Buyer and International Aero Engines and that may be sold to
the Manufacturer by International Aero Engines.
	 
	 	 	A321 Specification — the A321 Standard Specification as amended by
the SCNs set forth in Exhibit A-2 hereto, as may be further amended or
modified in accordance with this Agreement (including, without
limitation, by SCNs and MSCNs not listed in Exhibit A-2 as of the date
hereof).
	 
	 	 	A321 Standard Specification — the A321-200 standard specification
document number E.000.02000, Issue 2.1, dated April 30, 2001, published
by the Manufacturer, which includes a maximum takeoff weight (MTOW) of 93
metric tons and two (2) auxiliary center tanks (ACTs), a copy of which is
annexed in Exhibit A-1 hereto.
	 
	 	 	Additional Rolling Option Aircraft — any or all of the up to [***]
A320 Family Aircraft that may be placed on option order and which may be
sold by the Seller and purchased by the Buyer pursuant to this Agreement,
together with all components, equipment, parts and accessories installed
in or on such aircraft and the Propulsion Systems installed thereon upon
delivery.
	 
	 	 	Affected Aircraft — as defined in Clause 21.3 of this Agreement.
	 
	 	 	Affiliate — with respect to any person or entity, any other person
or entity directly or indirectly controlling, controlled by or under
common control with such person or entity, not including any of the
Associated Contractors. For purposes of the
preceding sentence, “control” of an entity shall mean having direct or
indirect power to direct, or cause the

3

 

	 	 	direction of, the management or
policies of such person or entity, whether through the ownership of
voting securities, by contract or otherwise.
	 
	 	 	Agreement — this Airbus A319/A320/A321 purchase agreement,
including all exhibits and appendices attached hereto and any Letter
Agreements between the Seller and the Buyer relating by their terms
hereto, as the same may be amended or modified and in effect from time to
time.
	 
	 	 	Aircraft — any or all of the A319 Aircraft, A320 Aircraft or A321
Aircraft to be sold by the Seller and purchased by the Buyer pursuant to
this Agreement.
	 
	 	 	Aircraft Warranty Period — as referred to in Clause 12.1.3 of this
Agreement.
	 
	 	 	Airframe — any Aircraft, excluding the Propulsion Systems
therefore.
	 
	 	 	ANACS — Airbus North America Customer Services, Inc., a
corporation organized and existing under the laws of Delaware, having its
registered office located at 198 Van Buren Street, Suite 300, Herndon, VA
20170, or any successor thereto.
	 
	 	 	AOLS — as referred to in Clause 14.11.3.2 of this Agreement.
	 
	 	 	AOLS License — as referred to in Clause 14.11.3.2 of this
Agreement.
	 
	 	 	Applicable Date — as defined in Clause 21.3 of this Agreement.
	 
	 	 	Associated Contractors — collectively, the principal
subcontractors of the Manufacturer, which are the following, including
any successors thereto:

	 	(1)	 	Airbus France, S.A.S., whose principal office is at

316, route de Bayonne

31060 Toulouse

France
	 
	 	(2)	 	Airbus UK Ltd, whose principal office is at

Warwick House

PO Box 87

Farnborough Aerospace Centre

Farnborough

Hants GU14 6YU

England
	 
	 	(3)	 	Airbus España S.L., whose principal office is at

404 Avenida de Aragon

28022 Madrid

Spain

4

 

	 	(4)	 	Airbus Deutschland GmbH , whose principal office is at

Kreetslag 10

Postfach 95 01 09

21111 Hamburg

Germany

	 	 	ATA Specification 100 — the specification issued by the Air
Transport Association of America relating to manufacturers’ technical
data.
	 
	 	 	ATA Specification 101 — the specification issued by the Air
Transport Association of America relating to ground equipment technical
data.
	 
	 	 	ATA Specification 102 — the specification issued by the Air
Transport Association of America relating to software programs.
	 
	 	 	ATA Specification 200 — the specification issued by the Air
Transport Association of America relating to integrated data processing.
	 
	 	 	ATA Specification 300 — the specification issued by the Air
Transport Association of America relating to the packaging of spare parts
shipments.
	 
	 	 	ATA Specification 2000 — the specification issued by the Air
Transport Association of America relating to an industry-wide
communication system linking suppliers and users for the purposes of
spares provisioning, purchasing, order administration, invoicing and
information or data exchange.
	 
	 	 	ATA Specification 2100 — the specification issued by the Air
Transport Association of America relating to the standards for the
presentation of technical information prepared as digital media (magnetic
tape or CD ROM).
	 
	 	 	Aviation Authority — when used with respect to any jurisdiction,
the government entity that, under the laws of such jurisdiction, has
control over civil aviation or the registration, airworthiness or
operation of civil aircraft in such jurisdiction.
	 
	 	 	Balance of the Final Contract Price — means the amount payable by
the Buyer to the Seller on the Delivery Date for an Aircraft after
deducting from the Final Contract Price for such Aircraft the amount of
all Predelivery Payments received by the Seller from the Buyer in respect
of such Aircraft on or before the Delivery Date for such Aircraft.
	 
	 	 	Base Price — for any Aircraft, Airframe, SCNs or Propulsion
Systems, as more completely defined in Clause 3.1 of this Agreement.
	 
	 	 	Buyer Furnished Equipment (BFE) — for any Aircraft, all the items
of equipment that will be furnished by the Buyer and installed or
intended to be installed in the Aircraft by the Seller, as defined in the
Specification.

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	 	 	Certificate of Acceptance — as referred to in Clause 8.3 of this
Agreement.
	 
	 	 	Change in Law — as defined in Clause 7.3.1 of this Agreement.
	 
	 	 	Claims — as defined in Clause 13.1.1 of this Agreement.
	 
	 	 	Customer Originated Changes (COC) — Buyer-originated data that are
introduced into Seller’s Technical Data and Documentation, as more
completely set forth in Clause 14.10 of this Agreement.
	 
	 	 	Customization Milestone Chart — as referred to in Clause 2.2 of
this Agreement.
	 
	 	 	Delivery — the transfer of title to the Aircraft from the Seller
to the Buyer, in accordance with Clause 9.
	 
	 	 	Delivery Date — the date on which Delivery will occur, or occurs,
as the context may require.
	 
	 	 	Delivery Location — the facilities of the Manufacturer at the
location of final assembly of the Aircraft, which is currently at Airbus
France S.A.S. works in Toulouse, France, for the A320 model aircraft, and
at Airbus Deutschland GmbH works in Hamburg, Germany, for the A319 and
A321 model aircraft.
	 
	 	 	Development Changes — as defined in Clause 2.1.2.4 of this
Agreement.
	 
	 	 	DGAC — the Direction Générale de l’Aviation Civile of France, or
any successor thereto.
	 
	 	 	EASA — European Aviation Safety Agency or any successor agency
thereto.
	 
	 	 	Excusable Delay — delay in delivery or failure to deliver an
Aircraft due to causes specified in Clause 10.1 of this Agreement.
	 
	 	 	Export Certificate of Airworthiness  — an export certificate of
airworthiness issued by the Aviation Authority of the Delivery Location.
	 
	 	 	FAA — the U.S. Federal Aviation Administration, or any successor
thereto.
	 
	 	 	Failure — as defined in Clause 12.2.1(ii) of this Agreement.
	 
	 	 	Final Contract Price — as defined in Clause 3.2 of this Agreement.
	 
	 	 	Firm Aircraft — the A319 Firm Aircraft and the A320 Firm Aircraft.
	 
	 	 	Free Carrier (FCA) — defined in Incoterms 2000: ICC Official
Rules for the Interpretation of Trade Terms, published by the
International Chamber of Commerce in 1999.

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	 	 	Indemnitee — as referred to in Clause 19.3 of this Agreement.
	 
	 	 	Indemnitor — as referred to in Clause 19.3 of this Agreement.
	 
	 	 	Inexcusable Delay — as referred to in Clause 11.1 of this
Agreement.
	 
	 	 	In-house Warranty — as referred to in Clause 12.1.8 of this
Agreement.
	 
	 	 	In-house Warranty Labor Rate — as defined in Clause 12.1.8(v)(b)
of this Agreement.
	 
	 	 	Initial Option Aircraft — any or all of the [***] A320 Family
Aircraft on option order, which may be sold by the Seller and purchased
by the Buyer pursuant to this Agreement, together with all components,
equipment, parts and accessories installed in or on such aircraft and the
Propulsion Systems installed thereon upon delivery.
	 
	 	 	Initial Payment — each of the initial payment amounts described in
Clause 5.3 of this Agreement.
	 
	 	 	Item — as defined in Clause 12.2.1(i) of this Agreement.
	 
	 	 	Interface Problem — as defined in Clause 12.4.1 of this Agreement.
	 
	 	 	LBA — Luftfahrt-Bundesamt of Germany or any successor thereto.
	 
	 	 	LIBOR — the London Interbank Offered Rate for each stated interest
period, determined on the basis of the offered rates for deposits in US
dollars, for six-months deposits in US dollars, as it appears on the
Reuters Screen LIBO Page as of 11:00 a.m., London time, on the day that
is two (2) days (other than a Saturday, Sunday or a day that is a legal
holiday or a day on which banking institutions are authorized to close in
the City of New York, New York, London, England, or Paris, France) before
the first day of an interest period. If at least two (2) such offered
rates appear on the Reuters Screen LIBO Page, the rate for that interest
period will be the arithmetic mean of all such offered rates rounded to
the nearest one-hundred thousandth of a basis point. If only one (1)
offered rate appears, the rate for that interest period will be “LIBOR”
as quoted by National Westminster Bank, plc. “Reuters Screen LIBO Page”
means the display designated as page “LIBO” on the Reuters Monitor Money
Rates Service (or any successor to such page or service).
	 
	 	 	Losses — as referred to in Clause 19.1 of this Agreement.
	 
	 	 	Manufacturer — Airbus, a Société en Nom Collectif, of the Republic
of France.
	 
	 	 	Manufacturer Specification Change Notice (MSCN) — as defined in
Clause 2.1.2.3 of the Agreement.
	 
	 	 	Newco — as referred to in Clause 20.4 of this Agreement.

7

 

	 	 	Option Aircraft — any or all of the Initial Option Aircraft,
Rolling Option Aircraft and Additional Rolling Option Aircraft.
	 
	 	 	Overdue Rate — as defined in Clause 5.6.
	 
	 	 	Paris Convention — as referred to in Clause 13.1.1(iv) of this
Agreement.
	 
	 	 	Party — either of the Buyer or the Seller, as context may require.
	 
	 	 	Predelivery Payment — any of the payments made in accordance with
Clause 5.2 of this Agreement.
	 
	 	 	Predelivery Payment Reference Price — as defined in Clause 5.2.2
of this Agreement.
	 
	 	 	Propulsion Systems — any or all of the A319 Propulsion Systems,
A320 Propulsion Systems or A321 Propulsion Systems.
	 
	 	 	Propulsion Systems Price Revision Formula — the Propulsion
Systems price revision formula set forth in Exhibit H hereto.
	 
	 	 	Ready for Delivery — when (i) the Technical Acceptance Process has
been successfully completed for an Aircraft and (ii) the Export
Certificate of Airworthiness has been issued for such Aircraft.
	 
	 	 	Reference Price — as set forth in Clause 3.1.2 of the Agreement.
	 
	 	 	Resident Customer Support Representative — as defined in Clause
15.2.1 of this Agreement.
	 
	 	 	Rolling Option Aircraft — any or all of the up to [***] A320
Family Aircraft that may be placed on option order pursuant to this
Agreement and which may be sold by the Seller and purchased by the Buyer
pursuant to this Agreement, together with all components, equipment,
parts and accessories installed in or on such aircraft and the Propulsion
Systems installed thereon upon delivery.
	 
	 	 	Scheduled Delivery Month — as defined in Clause 9.1.1 of the
Agreement.
	 
	 	 	Seller Price Revision Formula — the airframe price revision
formula set forth in Exhibit G hereto.
	 
	 	 	Service Life Policy — as set forth in Clause 12.2 of this
Agreement.
	 
	 	 	Software License — as referred to in Clause 14.11.1 of this
Agreement.

8

 

	 	 	Specification — any or all of the A319 Standard Specification,
A320 Standard Specification, or A321 Standard Specification, as the
context may require.
	 
	 	 	Specification Change Notice (SCN) — as described in Clause 2.1.2.2
of this Agreement.
	 
	 	 	Supplier — any supplier of Supplier Parts.
	 
	 	 	Supplier Part — any component, equipment, accessory or part
installed in an Aircraft at the time of Delivery thereof, not including
the Propulsion Systems or Buyer Furnished Equipment, for which there
exists a Supplier Product Support Agreement.
	 
	 	 	Supplier Product Support Agreement — an agreement between the
Manufacturer and a Supplier containing enforceable and transferable
warranties (and in the case of landing gear suppliers, service life
policies for selected structural landing gear elements).
	 
	 	 	Technical Data  — as defined in Clause 14.1 of this Agreement and
as described in Exhibit F hereto.
	 
	 	 	Technical Acceptance Process — as defined in Clause 8.1.1 of this
Agreement.
	 
	 	 	Total Loss — as referred to in Clause 10.4 of this Agreement.
	 
	 	 	Training Conference — as defined in Clause 16.4.1 of this
Agreement.
	 
	 	 	Training Course Catalog — as referred to in Clause 16.4.1 of this
Agreement.
	 
	 	 	Type Certificate — as defined in Clause 7.1 of this Agreement.
	 
	 	 	Warranted Part — as defined in Clause 12.1.1 of this Agreement.
	 
	 	 	Warranty Claim — as defined in Clause 12.1.7(v) of this Agreement.
	 
	 	 	Working Day — with respect to any action to be taken hereunder, a
day other than a Saturday, Sunday or other day designated as a legal
holiday in the jurisdiction in which such action is required to be taken.
	 
	 	 	The terms “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement, and not a particular Clause thereof. The
definition of a singular in this Clause will apply to plurals of the same
words.
	 
	 	 	Technical and trade terms not otherwise defined herein will have the
meanings assigned to them as generally accepted in the aircraft
manufacturing industry.

9

 

	1 –	 	SALE AND PURCHASE
	 
	 	 	The Seller will cause to be manufactured and will sell and deliver,
and the Buyer will purchase from the Seller and take delivery of,
the Aircraft at the Delivery Location, subject to the terms and
conditions in this Agreement.
	 
	2 –	 	SPECIFICATION
	 
	2.1	 	Specification Documents
	 
	2.1.1	 	Specification
	 
	 	 	The A319 Aircraft will be manufactured in accordance with the A319
Specification. The A320 Aircraft will be manufactured in
accordance with the A320 Specification. The A321 Aircraft will be
manufactured in accordance with the A321 Specification.
	 
	2.1.2	 	Specification Amendment 
	 
	2.1.2.1	 	Specification Amendment Process
	 
	 	 	The Parties understand and agree that the Specifications may be
amended following signature of this Agreement. Any such amendment
will take the written form of a “Specification Change Notice”
(SCN) or Manufacturer’s Specification Change Notice (MSCN). The
contents of each of these documents are described below in Clauses
2.1.2.2 and 2.1.2.3. Implementation of an SCN or MSCN may affect a
range of operational and maintenance matters; however, neither of
these documents discusses these matters.
	 
	 	 	Before an SCN or MSCN is binding, the Seller will inform the Buyer
in writing (which may be in the form of e-mails or minutes of
meetings) as to the impact, if any, the SCN or MSCN, as
applicable, may have on the Buyer’s [***], design, [***], weight,
maintenance requirements, operational requirements, [***] or
performance of the Aircraft affected thereby, inter-changeability,
replaceability or intermixability (compatible with Aircraft that
have either been delivered (as configured at Delivery) or are to
be delivered) requirements of the Specification with respect to
any Aircraft, parts or components thereof of the affected
Aircraft. These disclosures shall include references to Technical
Data for maintenance such as the AMM, AWM, IPC and MPD, and/or to
Technical Data for operations such as the AFM, FCOM and MMEL, as
applicable. The maintenance and operational impact of such
modification, if incorporated in the Aircraft, will be
incorporated in the relevant portions of the Technical Data in
accordance with the Seller’s obligations in Clause 14.2.4

10

 

	 	 	To initiate an SCN, the Buyer will submit to the Seller a request
for change, if required. In addition, for certain amendments to
the Specification requiring an SCN, prior to finalization of such
SCN, a study must be conducted for the Seller to determine whether
such amendment is feasible and for the Buyer to decide whether to
have an SCN implemented. Such a feasibility study will be the
subject of a separate SCN to be signed by the Parties. Following
the Buyer’s receipt of the results of such study and the
information the Seller has provided pursuant to the preceding
paragraph, the Buyer may elect to sign the SCN amending the
Specification.
	 
	2.1.2.2	 	Specification Change Notice
	 
	 	 	The Specifications may be amended in writing by the Buyer and the
Seller by a Specification Change Notice (SCN) in substantially the
form set out in Exhibit B-1 hereto. An SCN will set out the SCN’s
effectivity and will also set forth, in detail, the particular
change to be made to the applicable Specification and the effect,
if any, of such change on design, [***], performance, weight,
Delivery Date of the Aircraft affected thereby, interchangeability
or replaceability requirements of the Specification, and text of
the applicable Specification with respect to any affected Aircraft
parts or components thereof listed in the Specification. An SCN
may result in an adjustment of the Base Price of the Aircraft,
which adjustment if any, will be specified in the SCN.
	 
	2.1.2.3	 	Manufacturer Specification Change Notice
	 
	 	 	The Specifications may also be amended in writing by the Seller by
a “Manufacturer’s Specification Change Notice” (MSCN) in
substantially the form set out in Exhibit B-2 hereto. An MSCN will
set out the MSCN’s effectivity and will also set forth, in detail,
the particular change to be made to the applicable Specification
and the effect, if any, of such change on design, [***],
performance, weight, Delivery Date of the Aircraft affected
thereby, interchangeability or replaceability requirements of the
Specification, and text of the applicable Specification with
respect to any affected Aircraft parts or components thereof listed
in the Specification. An MSCN may result in an adjustment of the
Base Price of the Aircraft, which adjustment, if any, will be
specified in the MSCN. MSCNs will be subject to the Buyer’s
acceptance, except in the case of changes resulting from
Airworthiness Directives, government-mandated regulations or
equipment obsolescence. [***].
	 
	2.1.2.4	 	Development Changes
	 
	 	 	Also, changes may be made by the Seller without the Buyer’s consent
by a Manufacturer’s Information Document (MID) when changes to the
applicable Aircraft are deemed by the Seller to be necessary to
improve the Aircraft affected thereby, prevent delay or ensure
compliance with this Agreement (“Development Changes”), and such
Development Changes do not adversely affect price, Delivery

11

 

	 	 	Date, [***], design, [***], weight, [***] or performance,
interchangeability, replaceability or intermixability (compatible
with Aircraft that have either been delivered or are to be
delivered) requirements of the Specification with respect to the
Aircraft affected thereby. A Development Change may affect the
Buyer’s maintenance or operational requirements, however, when
taking into consideration the expected benefit of such Development
Change to the Buyer, such change [***].
	 
	2.2	 	Customization Milestones Chart 
	 
	 	 	The Seller will provide the Buyer with a customization milestones
chart, defining the lead times before Delivery needed for agreeing
on items requested by the Buyer from the Standard Specifications and
Configuration Guides CD-ROM made available by the Seller (the
“Customization Milestone Chart”). The Seller will provide the
Customization Milestone Chart sufficiently in advance of the lead
times required in the Customization Milestone Chart to allow the
Buyer to make any required determinations.
	 
	2.3	 	Propulsion Systems
	 
	2.3.1	 	A319 Airframe
	 
	 	 	The A319 Airframe will be equipped with the A319 Propulsion Systems.
	 
	2.3.2	 	A320 Airframe
	 
	 	 	The A320 Aircraft will be equipped with the A320 Propulsion Systems.
	 
	2.3.3	 	A321 Airframe
	 
	 	 	The A321 Aircraft will be equipped with the A321 Propulsion Systems.
	 
	3 –	 	PRICE
	 
	3.1	 	Base Price of the Aircraft
	 
	 	 	The Base Price of each Aircraft is the sum of:

	 	(i)	 	the Base Price of the applicable Airframe, and
	 
	 	(ii)	 	the Base Price of the applicable Propulsion Systems for the Aircraft.

	3.1.1	 	Base Price of the Airframe
	 
	3.1.1.1	 	A319 Airframe

12

 

	 	 	The Base Price of the A319 Airframe is the sum of the Base Prices set forth below in (i), (ii) and (iii):

	 	(i)	 	the Base Price of the A319 Airframe, as defined
in the A319 Standard Specification, excluding Buyer Furnished
Equipment, and SCNs, at delivery conditions prevailing in
January 2003, which is:
	 
	 	 	 	US $ [***]
	 
	 	 	 	(US dollars — [***]),
	 
	 	(ii)	 	the Base Price of any and all SCNs for the A319
Aircraft mutually agreed upon prior to the signature of this
Agreement and set forth in Exhibit A-2 hereto (but excluding
the SCN described below in Clause 3.1.1.1(iii)), at delivery
conditions prevailing in January 2003, which is:
	 
	 	 	 	US $ [***]
	 
	 	 	 	(US dollars — [***]), and
	 
	 	(iii)	 	the Base Price of the SCN for the increase
in maximum takeoff weight from 64 metric tons to 75.5 metric
tons, which is:
	 
	 	 	 	US $ [***]
	 
	 	 	 	(US dollars — [***]).

	3.1.1.2	 	A320 Airframe
	 
	 	 	The Base Price of the A320 Airframe is the sum of the Base Prices
set forth below in (i), (ii) and (iii):

	 	(i)	 	the Base Price of the A320 Airframe, as defined
in the A320 Standard Specification, excluding Buyer Furnished
Equipment and SCNs, at delivery conditions prevailing in
January 2003, which is:
	 
	 	 	 	US $ [***]
	 
	 	 	 	(US dollars — [***]), and
	 
	 	(ii)	 	the Base Price of any and all SCNs for the A320
Aircraft mutually agreed upon prior to the signature of this
Agreement and set forth in Exhibit A-2 hereto (but excluding
the SCN described below in Clause 3.1.1.2.(iii)), at delivery
conditions prevailing in January 2003, which is:
	 
	 	 	 	US $ [***]

13

 

	 	 	 	(US dollars — [***]), and
	 
	 	(iii)	 	the Base Price of the SCN for the increase
in maximum takeoff weight from 73.5 metric tons to 77 metric
tons, which is:
	 
	 	 	 	US $ [***]
	 
	 	 	 	(US dollars — [***]).

	3.1.1.3	 	A321 Airframe
	 
	 	 	The Base Price of the A321 Airframe is the sum of the Base Prices
set forth below in (i) and (ii):

	 	(i)	 	the Base Price of the A321 Airframe, as defined
in the A321 Standard Specification, excluding Buyer Furnished
Equipment, the increase in maximum takeoff weight to 93 metric
tons, and the two (2) auxiliary center tanks, at delivery
conditions prevailing in January 2003, which is:
	 
	 	 	 	US $ [***]
	 
	 	 	 	(US dollars — [***]), and
	 
	 	(ii)	 	the Base Price of any and all SCNs mutually
agreed upon prior to the signature of this Agreement and set
forth in Exhibit A-2 hereto, at delivery conditions prevailing
in January 2003, which is:
	 
	 	 	 	US $ [***]
	 
	 	 	 	(US dollars — [***]).

	3.1.2	 	Base Price of the Propulsion Systems
	 
	3.1.2.1	 	Base Price of the A319 Propulsion Systems
	 
	 	 	The Base Price of the A319 Propulsion Systems, at delivery conditions
prevailing in January 2003, is:
	 
	 	 	US $ [***]
	 
	 	 	(US dollars — [***]).
	 
	 	 	Said Base Price has been calculated from the Reference Price for
the A319 Propulsion Systems indicated by International Aero Engines
of US $ [***] (US

14

 

	 	 	dollars — [***]) in accordance with delivery conditions prevailing
in January 2001.

	 
	3.1.2.2	 	Base Price of the A320 Propulsion Systems 
	 
	 	 	The Base Price of the A320 Propulsion Systems, at delivery
conditions prevailing in January 2003, is:
	 
	 	 	US $ [***]
	 
	 	 	(US dollars — [***]).
	 
	 	 	Said Base Price has been calculated from the Reference Price for
the A320 Propulsion Systems indicated by International Aero Engines
of US $ [***] (US dollars — [***]) in accordance with delivery
conditions prevailing in January 2001.
	 
	3.1.2.3	 	Base Price of the A321 Propulsion Systems
	 
	 	 	The Base Price of the A321 Propulsion Systems, at delivery
conditions prevailing in January 2003, is:
	 
	 	 	US $ [***]
	 
	 	 	(US dollars — [***]).
	 
	 	 	Said Base Price has been calculated from the Reference Price for
the A321 Propulsion Systems indicated by International Aero Engines
of US $ [***] (US dollars — [***]) in accordance with delivery
conditions prevailing in January 2001.
	 
	3.2.	 	Final Contract Price
	 
	3.2.1	 	The Final Contract Price of an A319 Aircraft will be the sum of:

	 	(i)	 	the Base Price of the A319 Airframe, as adjusted
to the Delivery Date of such A319 Aircraft in accordance with
the Seller Price Revision Formula;
	 
	 	(ii)	 	the price of any SCNs for the A319 Aircraft
entered into after the date of
signature of this Agreement, as adjusted (as applicable) to
the Delivery Date of the applicable A319 Aircraft in
accordance with the Seller Price Revision Formula;
	 
	 	(iii)	 	the Reference Price of the A319 Propulsion
Systems constituting a part of such A319 Aircraft, as adjusted
to the Delivery Date of such A319 Aircraft in accordance with
the Propulsion Systems Price Revision Formula; and

15

 

	 	(iv)	 	any other amount pursuant to any other provisions
of this Agreement and/or any other written agreement between
the Buyer and the Seller relating to the A319 Aircraft that,
in both cases, expressly states an amount to be included in
the Final Contract Price of an A319 Aircraft.

	3.2.2	 	The Final Contract Price of an A320 Aircraft will be the sum of:

	 	(i)	 	the Base Price of the A320 Airframe, as adjusted
to the Delivery Date of such A320 Aircraft in accordance with
the Seller Price Revision Formula;
	 
	 	(ii)	 	the price of any SCNs for the A320 Aircraft
entered into after the date of
signature of this Agreement, as adjusted (as applicable) to
the Delivery Date of the applicable A320 Aircraft in
accordance with the Seller Price Revision Formula;
	 
	 	(iii)	 	the Reference Price of the A320 Propulsion
Systems constituting a part
of such A320 Aircraft, as adjusted to the Delivery Date of
such A320 Aircraft in accordance with the Propulsion Systems
Price Revision Formula; and
	 
	 	(iv)	 	any other amount pursuant to any other provisions
of this Agreement and/or any other written agreement between the Buyer and the
Seller relating to the A320 Aircraft that, in both cases, expressly states an
amount to be included in the Final Contract Price of an A320 Aircraft.

	3.2.3	 	The Final Contract Price of an A321 Aircraft will be the sum of:

	 	(i)	 	the Base Price of the A321 Airframe, as adjusted
to the Delivery Date of such A321 Aircraft in accordance with
the Seller Price Revision Formula;
	 
	 	(ii)	 	the price of any SCNs for the A321 Aircraft
entered into after the date of signature of this Agreement, as
adjusted (as applicable) to the Delivery Date of the
applicable A321 Aircraft in accordance with the Seller Price
Revision Formula;
	 
	 	(iii)	 	the Reference Price of the A321 Propulsion
Systems constituting a part of such A321 Aircraft, as adjusted
to the Delivery Date of such A321 Aircraft in accordance with
the Propulsion Systems Price Revision Formula; and
	 
	 	(iv)	 	any other amount pursuant to any other provisions
of this Agreement and/or any other written agreement between
the Buyer and the Seller relating to the A321 Aircraft that,
in both cases, expressly states an amount to be included in
the Final Contract Price of an A321 Aircraft.

16

 

	3.3	 	Taxes, Duties and Imposts
	 
	3.3.1	 	Except for taxes based on or measured by net income of the Buyer or any
taxes of a similar nature or charges levied against the Buyer or its
Affiliates for the privilege of doing business in any jurisdiction, the
Seller will pay any and all taxes, duties, imposts or similar charges of
any nature whatsoever that are (i) imposed upon the Buyer, (ii) imposed
upon the Seller with an obligation on the Buyer to withhold or collect the
amount thereof from the Seller or (iii) imposed upon the Buyer with an
obligation on the Seller to withhold or collect such amount from the
Buyer, and that are levied, assessed, charged or collected for or in
connection with the fabrication, manufacture, modification, assembly,
sale, delivery, use of or payment under this Agreement for any Aircraft,
component, accessory, equipment or part delivered or furnished hereunder
(excluding Buyer Furnished Equipment), provided such taxes, duties,
imposts or similar charges have been levied, assessed, charged, or
collected under laws promulgated and enforceable in the country of the
Delivery Location [***] on or before Delivery ([***]) of such Aircraft.
	 
	3.3.2	 	Except for taxes based on or measured by net income of the Seller or any
taxes of a similar nature or charges levied against the Seller or its
Affiliates for the privilege of doing business in any jurisdiction, the
Buyer will pay any and all taxes, duties, imposts or similar charges of
any nature whatsoever that are (i) imposed upon the Seller, (ii) imposed
upon the Buyer with an obligation on the Seller to collect the amount
thereof for the Buyer or (iii) imposed upon the Seller with an obligation
for the Buyer to withhold such amount from the Seller, and that are
levied, assessed, charged or collected for or in connection with the
fabrication, manufacture, modification, assembly, sale, delivery or use of
or payment under this Agreement for any Aircraft, component, accessory,
equipment or part delivered or furnished hereunder, provided such taxes,
duties, imposts or similar charges have been levied, assessed, charged or
collected under laws promulgated and enforceable [***].
	 
	3.3.3	 	If either Party receives a notice of claim or assessment of a tax for
which the other Party may be liable under Clause 3.3.1 or 3.3.2, the Party
receiving the notice shall promptly forward such notice to the other
Party. Upon receipt of such notice, the other Party shall promptly notify
the receiving Party whether it, in its sole discretion, elects to contest
such claim or assessment. If the other Party elects to pursue such
contest, it shall control such contest and shall pay all costs and
expenses of pursuing such contest. If the other Party elects not to
pursue a contest of such claim, the receiving Party may, at its own
expense, elect to contest such claim, provided, however, that the other
Party’s liability under Clause 3.3.1 or 3.3.2 shall not exceed the amount
for which it would have otherwise been liable in the absence of such a
contest.

17

 

	3.3.4	 	The Seller will arrange for the exportation of the Aircraft from the
country of the Delivery Location and will pay any customs duties, taxes
and fees required to be paid with respect to such exportation of the
Aircraft.
	 
	3.3.5	 	The Buyer will arrange for the importation of the Aircraft into any
country or jurisdiction of its choosing and will pay any customs duties,
taxes and fees required to be paid with respect to such importation of the
Aircraft. The Seller will reasonably assist the Buyer in arranging such
importation upon the Buyer’s request.
	 
	3.3.6	 	[***]. Nothing in this Clause 3.3.6 will relieve either of the Parties
of any of their respective obligations under Clause 3.3.4 or 3.3.5, as
applicable, or compel either Party to act in contravention of any
regulations existing when the Aircraft is removed from the Delivery
Location.
	 
	4 -	 	PRICE REVISION
	 
	4.1	 	Seller Price Revision Formula
	 
	 	 	The Base Prices of the Airframe and of SCNs are subject to revision
up to and including the Delivery Date, in accordance with the
Seller Price Revision Formula.
	 
	4.2	 	Propulsion Systems Price Revision 
	 
	 	 	The Propulsion Systems Reference Price is subject to revision in
accordance with the Propulsion Systems Price Revision Formula up to
and including the Delivery Date.
	 
	4.3	 	Modification of Propulsion Systems Reference Price and Propulsion
Systems Price Revision Formula
	 
	 	 	The Propulsion Systems Reference Prices, the prices of the related
equipment and the Propulsion Systems Price Revision Formula are
based on information received from the Propulsions Systems
manufacturer and are subject to amendment by the Propulsion Systems
manufacturer at any time prior to Delivery. If the Propulsion
Systems manufacturer makes any such amendment, the amendment will
be automatically incorporated into this Agreement and the
Propulsion Systems Reference Price, the prices of the related
equipment and the Propulsion Systems Price Revision Formula will be
adjusted accordingly. Each Party agrees to notify the other Party
as soon as it receives notice of any such amendment from the
Propulsion Systems manufacturer.
	 
	5 -	 	PAYMENT TERMS

18

 

	5.1	 	The Buyer will pay the Predelivery Payments, the Balance of the Final
Contract Price and any other amount due hereunder in immediately available
funds in United States dollars to Credit Lyonnais, New York Branch, for
transfer by Credit Lyonnais to the Seller’s account with Credit Lyonnais
at 1, Esplanade Compans Caffarelli, 31000 Toulouse, France, or to such
other account within the United States as may be designated by the Seller.
	 
	 	 	The Seller will pay any amount due the Buyer hereunder in
immediately available funds in United States dollars to such
account within the United States as the Buyer may designate in
writing to the Seller.
	 
	5.2	 	Predelivery Payments
	 
	5.2.1	 	Predelivery Payments will be paid by the Buyer to the Seller for each
Aircraft. Predelivery Payments are nonrefundable (although amounts equal
to Predelivery Payments may be paid to the Buyer under Clauses 10.4 and
11.3 of this Agreement). The Buyer will pay Predelivery Payments to the
Seller totalling [***] of the Predelivery Payment Reference Price defined
below in Clause 5.2.2.
	 
	5.2.2	 	The Predelivery Payment Reference Price is defined as:

	 	 	 
	A =

	 	Pb (1 + 0.04N)
	 
	where
	 	 
	 
	A =

	 	the Predelivery Payment Reference Price for an
Aircraft to be delivered in calendar year T.
	 
	Pb =

	 	the Base Price of the Aircraft as defined in Clause 3 above.
	 
	N =

	 	(T – 2003).
	 
	T =

	 	the year of delivery of the relevant Aircraft.

19

 

	5.2.3	 	Predelivery Payments will be paid according to the following schedule.

	 	 	 	 	 
	 	 	 	 	Percentage of
	 	 	 	 	Predelivery
	 	 	 	 	Payment
	Payment Date
	 	 	 	Reference Price

	[***]

	 	On signature of this Agreement

No later than the first Working Day of the
following months:
	 	[***] ([***])
	[***]

	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	

	 	TOTAL PAYMENT PRIOR TO DELIVERY
	 	[***]

	 	 	All Predelivery Payments for which the payment due date falls before
signature of this Agreement will be paid at signature of this Agreement.
	 
	5.2.4	 	The Seller will be entitled to hold and use any Predelivery Payment as
absolute owner thereof subject to (i) the obligation to deduct Predelivery
Payments from the Final Contract Price when calculating the Balance of the
Final Contract Price, (ii) Clause [***] of the Agreement, (iii) Clause
[***] of the Agreement, or (iv) [***] Predelivery Payments as may be set
forth elsewhere in this Agreement. The Seller will be under no obligation
to segregate any Predelivery Payment from the Seller’s funds generally.
	 
	5.3	 	Initial Payment
	 
	 	 	The Seller acknowledges that it has received from the Buyer the
sum of US $[***] (U.S. dollars — [***]), which represents an
initial payment of US $[***] (US dollars — [***]) for each Firm
Aircraft. The Initial Payment paid with respect to each particular
Aircraft will be credited without interest against the first
Predelivery Payment for such Aircraft.
	 
	5.4	 	Payment of Balance of the Final Contract Price
	 
	 	 	Concurrently with each Delivery, the Buyer will pay to the Seller
the Balance of the Final Contract Price for the applicable
Aircraft. The Seller’s receipt of the full amount of all
Predelivery Payments and of the Balance of the Final Contract
Price, including any amounts due under Clause 5.6, will be a
condition precedent to the Seller’s obligation to deliver such
Aircraft to the Buyer.
	 
	5.5	 	Payment Set Off

20

 

	 	 	Notwithstanding any other rights the Seller may have at contract or at
law, the Buyer and the Seller hereby agree that should any amount
(whether under this Agreement or under any other agreement between the
Buyer and the Seller and whether at the stated maturity of such
amount, by acceleration or otherwise) become due and payable by the
Buyer or its Affiliates, and not be paid in full in immediately
available funds on the date due, then the Seller will have the right
to debit and apply, in whole or in part, the unused amount of any
credit made available by the Seller to the Buyer against such unpaid
amount. The Seller will promptly notify the Buyer in writing after
such debiting and application.
	 
	5.6	 	Overdue Payments
	 
	 	 	If any payment due under this Agreement to the Seller, [***] is not
received by the Seller on the date or dates agreed on between the
Buyer and the Seller, the Seller will have the right to claim from the
Buyer, and the Buyer will promptly pay to the Seller on receipt of
such claim interest, at [***] (as established by [***] or any
successor thereto) [***] per year (the “Overdue
Rate”) on the amount
of such overdue payment, to be calculated from and including the due
date of such payment to (but excluding) the date such payment is
received by the Seller. The Seller’s right to receive such interest
will be in addition to any other rights of the Seller hereunder or at
law. [***].
	 
	5.7	 	Proprietary Interest
	 
	 	 	Notwithstanding any provision of law to the contrary, the Buyer
will not, by virtue of anything contained in this Agreement
(including, without limitation, any Predelivery Payments hereunder,
or any designation or identification by the Seller of a particular
Aircraft as an Aircraft to which any of the provisions of this
Agreement refers) acquire any proprietary, insurable or other
interest whatsoever in any Aircraft before Delivery of and payment
for such Aircraft, as provided in this Agreement. This Clause 5.7
will not apply to BFE, which BFE will, at all times, except as
otherwise agreed elsewhere in the Agreement, remain the property of
the Buyer.
	 
	5.8	 	Payment in Full
	 
	 	 	The Buyer’s obligation to make payments to the Seller hereunder
will not be affected by and will be determined without regard to
any setoff, counterclaim, recoupment, defense or other right that
the Buyer may have against the Seller or any other person and all
such payments will be made without deduction or withholding of any
kind. The Buyer will ensure that the sums received by the Seller
under this Agreement will be equal to the full amounts expressed to
be due the Seller hereunder, without deduction or withholding on
account of and free from any and all taxes, levies, imposts, duties
or charges of whatever nature, except that if the Buyer is
compelled by law to make any such deduction or withholding the
Buyer will pay such additional amounts to the Seller as may be

21

 

	 	 	necessary so that the net amount received by the Seller after such
deduction or withholding will equal the amounts that would have
been received in the absence of such deduction or withholding.
	 
	6 -	 	INSPECTION
	 
	6.1	 	Inspection Procedures
	 
	6.1.1	 	All work to be carried out on the Aircraft and all materials and parts
thereof will be open to inspection during business hours by duly
authorized representatives of the Buyer or its designee at the respective
works of the Manufacturer, Associated Contractors and, if possible, at the
works of their respective subcontractors. These representatives will have
access to such relevant technical data as are reasonably necessary for
this purpose (except that, if access to any part of the respective works
where construction is in progress or materials or parts are stored is
restricted for security reasons, the Manufacturer or Associated
Contractors will be allowed a reasonable time to make the items available
for inspection elsewhere). The actual detailed inspection of the
Aircraft, materials and parts thereof will take place only in the presence
of the respective inspection department personnel of the Manufacturer or
Associated Contractors or their subcontractors. The Parties will cooperate
to ensure the reasonable availability of the respective inspection
department personnel of the Manufacturer or Associated Contractors or
their subcontractors and [***] on procedures for such inspections.
	 
	6.1.2	 	All inspections, examinations and discussions with the Manufacturer’s,
Seller’s, Associated Contractors’ or their respective subcontractors’
engineering or other personnel by the Buyer and its representatives will
be performed in such a manner as not to delay or hinder either the work to
be carried out on the Aircraft or the proper performance of this
Agreement. In no event will the Buyer or its representatives be permitted
to inspect any aircraft other than the Aircraft [***]. The Seller will not
permit anyone other than the Buyer, its representatives, and concerned
governmental agencies to inspect the Aircraft without the Buyer’s prior
consent, such consent not to be unreasonably withheld.
	 
	6.1.3	 	If, as a result of any inspection or examination of an Aircraft
conducted by the Buyer pursuant to this Clause 6, [***]).
	 
	6.2	 	Representatives
	 
	 	 	For the purposes of Clause 6.1 above, starting at a mutually agreed
date until Delivery of the last Aircraft, the Seller will furnish free
of charge secretarial assistance and suitable space, office equipment
and facilities in or conveniently located with respect to the Delivery
Location for the use of not more than four (4) representatives of the
Buyer during the aforementioned period. The Seller will also provide
to the Buyer’s representative during the aforementioned period, free

22

 

	 	 	of charge, reasonable use of electronic mail, internet access, facsimile and telephone service.
	 
	7	 	CERTIFICATION
	 
	 	 	Except as set forth in this Clause 7, the Seller will not be required to
obtain any certificate or approval with respect to the Aircraft.
	 
	7.1	 	Type Certification
	 
	 	 	The Aircraft have been type certificated under EASA procedures for
joint certification in the transport category. The Seller will
obtain or cause to be obtained an FAA type certificate (the “Type
Certificate”) to allow the issuance of the Export Certificate of
Airworthiness.
	 
	7.2	 	Export Certificate of Airworthiness 
	 
	 	 	Subject to the provisions of Clause 7.3, each Aircraft will be
delivered to the Buyer with an Export Certificate of Airworthiness
issued by the DGAC or the LBA, as applicable, and in a condition
enabling the Buyer (or an eligible person under then applicable law)
to obtain at the time of Delivery a Standard Airworthiness Certificate
issued pursuant to Part 21 of the US Federal Aviation Regulations.
	 
	 	 	If the FAA requires a modification to comply with additional aircraft
import requirements and/or supply of additional data before the
issuance of the Export Certificate of Airworthiness, the parties
hereto will sign an SCN for such modification, which the Seller will
incorporate as specified in such SCN, and/or the Seller will provide
such data at costs to be borne by the Buyer.
	 
	7.3	 	Specification Changes Before Delivery
	 
	7.3.1	 	If, any time before the date on which the Aircraft is Ready for Delivery,
any law,
rule or regulation is enacted, promulgated, becomes effective
and/or an interpretation of any law, rule or regulation is issued
by the EAS that requires any change to the Specification for the
purposes of obtaining the Export Certificate of Airworthiness (a
“Change in Law”), the Seller will make the required modification
and the parties hereto will sign an SCN.
	 
	7.3.2	 	The Seller will as far as practicable, but at its sole discretion and
without prejudice to Clause 7.3.3 (ii), take into account the information
available to it concerning any proposed law, rule or regulation or
interpretation that could become a Change in Law, in order to minimize the
costs of changes to the Specification as a result of such proposed law,
regulation or interpretation becoming effective before the applicable
Aircraft is Ready for Delivery.

23

 

	7.3.3	 	The cost of implementing the required modifications referred to in
Clause 7.3.1 above will be:

	 	(i)	 	for the account of the Seller if a Change in Law
became effective before the date of this Agreement, and
	 
	 	(ii)	 	shared equally by the Seller and the Buyer if
Change in Law becomes effective after the date of this
Agreement but before the Aircraft is Ready for Delivery.

	7.3.4	 	Notwithstanding the provisions of Clauses 7.3.3 (i) and (ii), if a
Change in Law relates to an item of BFE or to the Propulsion Systems (and,
in particular, to engine accessories, quick engine change units or thrust
reversers) the costs will be borne in accordance with such arrangements as
may be made separately between the Buyer and the manufacturer of the BFE
or the Propulsion Systems, as applicable, and the Seller will have no
obligation with respect thereto.
	 
	7.4	 	Specification Changes After Delivery
	 
	 	 	Nothing in Clause 7.3 will require the Seller to make any
changes or modifications to, or to make any payments or take any
other action with respect to, any Aircraft that is Ready for
Delivery before the compliance date of any law or regulation
referred to in Clause 7.3. Any such changes or modifications made
to an Aircraft after it is Ready for Delivery will be at the
Buyer’s expense.
	 
	7.5	 	Certificate of Sanitary Construction
	 
	 	 	The Seller will assist the Buyer in obtaining at time of delivery of
the first A319 Aircraft and first A320 Aircraft a Certificate of
Sanitary Construction issued by the US Public Health Service Food and
Drug Administration.
	 
	8 -	 	BUYER’S TECHNICAL ACCEPTANCE
	 
	8.1	 	Technical Acceptance Process
	 
	8.1.1	 	Prior to Delivery, the Aircraft will undergo a technical acceptance
process developed by the Seller (the “Technical Acceptance Process”).
Completion of the Technical Acceptance Process will demonstrate the
satisfactory functioning of the Aircraft and will be deemed to demonstrate
compliance with the applicable Specification. Should it be established
that the Aircraft fails to complete the Technical Acceptance Process
satisfactorily, the Seller will without hindrance from the Buyer be
entitled to carry out any necessary changes and, as soon as practicable
thereafter, resubmit the Aircraft in order to complete the Technical
Acceptance Process.
	 
	8.1.2	 	The Technical Acceptance Process will

24

 

	 	(i)	 	start on a date notified by the Seller to the
Buyer at least ten (10) days in advance,
	 
	 	(ii)	 	take place at the Delivery Location,
	 
	 	(iii)	 	be carried out by the personnel of the Seller,
	 
	 	(iv)	 	include a technical acceptance flight, which will
not exceed three (3) hours, and
	 
	 	(v)	 	conclude in five (5) working days

	8.2	 	Buyer’s Attendance
	 
	8.2.1	 	The Buyer is entitled to attend and observe the Technical Acceptance Process.
	 
	8.2.2	 	If the Buyer attends the Technical Acceptance Process, the Buyer

	 	(i)	 	will comply with the reasonable requirements of
the Seller, with the intention of completing the Technical
Acceptance Process within five (5) working days, and
	 
	 	(ii)	 	may have a maximum of four (4) of its
representatives (no more than three (3) of whom will have
access to the cockpit at any one time) accompany the Seller’s
representatives on the technical acceptance flight, during
which the Buyer’s representatives will comply with the
instructions of the Seller’s representatives.

	8.2.3	 	If the Buyer does not attend or fails to cooperate in the Technical
Acceptance Process, the Seller will [***] Clause 8.1. [***].
	 
	8.3	 	Certificate of Acceptance
	 
	 	 	Upon successful completion of the Technical Acceptance Process, the
Buyer will, on or before the Delivery Date, sign and deliver to the
Seller a certificate of acceptance in respect of the Aircraft in
the form of Exhibit D (the “Certificate of Acceptance”) hereto.
	 
	8.4	 	Finality of Acceptance
	 
	 	 	The Buyer’s signature of the Certificate of Acceptance for the
Aircraft will constitute waiver by the Buyer of any right it may
have under the Uniform Commercial Code as adopted by the State of
New York or otherwise to revoke acceptance of the Aircraft for any
reason, whether known or unknown to the Buyer at the time of
acceptance. Nothing in this Clause 8.4 shall be deemed to

25

 

	 	 	operate as a waiver of any other right or remedy that the Buyer may
enjoy under this Agreement.
	 
	8.5	 	Aircraft Utilization
	 
	 	 	The Seller will, without payment or other liability, be entitled to
use the Aircraft before Delivery to obtain the certificates
required under Clause 7. Such use will not prejudice the Buyer’s
obligation to accept Delivery hereunder.
	 
	9 -	 	DELIVERY
	 
	9.1	 	Delivery Schedule
	 
	9.1.1	 	Subject to Clauses 2, 7, 8, 10 and 18, the Seller will have the Firm
Aircraft Ready for Delivery at the Delivery Location within the
following months (each a “Scheduled Delivery Month”):
	 
	 	 	The Scheduled Delivery Months for the A319 Firm Aircraft are as
follow:

	 	 	 
	A319 Firm Aircraft	 	Month/Year of Delivery
	 
	1

	 	[***]
	2

	 	[***]
	3

	 	[***]
	4

	 	[***]
	5

	 	[***]
	6

	 	[***]
	7

	 	[***]
	8

	 	[***]
	9

	 	[***]
	10

	 	[***]

	 	 	The Scheduled Delivery Months for the A320 Firm Aircraft are as follow:

	 	 	 
	A320 Firm Aircraft	 	Month/Year of Delivery
	 
	1

	 	[***]
	2

	 	[***]
	3

	 	[***]
	4

	 	[***]
	5

	 	[***]

	9.1.2	 	The Seller will give the Buyer [***]. Thereafter, the Seller will
give the Buyer [***] written notice of the anticipated date on which the
Aircraft will be Ready for Delivery. Thereafter, on becoming aware of
any change to when the Aircraft will be Ready for Delivery, the Seller
will promptly notify the Buyer of such

26

 

	 	 	change and confirm a new date, which date will allow the Buyer
reasonable advance notice to attend the Technical Acceptance
Process.
	 
	9.1.3	 	[Intentionally left blank.]
	 
	9.1.4	 	The Seller will transfer title to the Aircraft to the Buyer free and
clear of all liens, claims, charges or encumbrances of any kind
whatsoever, except any liens, charges or encumbrances applicable to BFE
(other than those arising by or through the Seller, its Affiliates or
the Associated Contractors provided that the Balance of the Final
Contract Price has been paid by the Buyer pursuant to Clause 5.4 and
that the Certificate of Acceptance has been signed and delivered to the
Seller pursuant to Clause 8.3. The Seller hereby warrants that there
will not be any liens, claims, charges or encumbrances on the BFE
arising through the Seller, its Affiliates and the Associated
Contractors and its affiliates. The Seller will provide the Buyer with
a bill of sale in the form of Exhibit E hereto and/or such other
documentation confirming transfer of title and receipt of the Final
Contract Price as may reasonably be requested by the Buyer. Property
interest in and risk of loss of or damage to the Aircraft will also be
transferred to the Buyer on Delivery.
	 
	9.1.5	 	If the Buyer fails to (i) deliver the signed Certificate of Acceptance
to the Seller on or before the Delivery Date, or (ii) pay the Balance of
the Final Contract Price for the Aircraft to the Seller on the Delivery
Date, then the Buyer will be deemed to have rejected Delivery without
warrant when the Aircraft was duly tendered to the Buyer hereunder. If
the Buyer rejects the Aircraft, the Seller will retain title to the
Aircraft and the Buyer will indemnify and hold the Seller harmless
against any and all costs (including but not limited to any parking,
storage, and insurance costs) and consequences resulting from the
Buyer’s rejection, it being understood that the Seller will be under no
duty to store, park, or otherwise protect the Aircraft. These rights of
the Seller will be in addition to the Seller’s other rights and remedies
in this Agreement.
	 
	9.2	 	Flyaway
	 
	 	 	All expenses of, or connected with, flying the Aircraft from the
Delivery Location after Delivery will be borne by the Buyer. The
Buyer will make direct arrangements with the supplying companies
for the fuel and oil required for all post-Delivery flights.
	 
	9.2.3	 	The Buyer will remove each Aircraft from the Delivery Location [***].
During any such period following Delivery, [***].
	 
	10 -	 	EXCUSABLE DELAY AND TOTAL LOSS
	 
	10.1	 	Scope of Excusable Delay

27

 

	 	 	Neither the Seller, the Manufacturer, the Associated Contractors,
nor any Affiliate of any of the foregoing, will be responsible for
or be deemed to be in default on account of delays in delivery or
failure to deliver or otherwise in the performance of this
Agreement or any part hereof due to causes reasonably beyond the
Seller’s, the Manufacturer’s or any Associated Contractor’s control
(“Excusable Delay”), including, but not limited to (provided that
in each case such event is due to causes reasonably beyond the
Seller’s, the Manufacturer’s or any Associated Contractor’s
control): (i) acts of God or the public enemy, natural disasters,
fires, floods, storms beyond ordinary strength, explosions or
earthquakes; epidemics or quarantine restrictions; serious
accidents; total or constructive total loss; any law, decision,
regulation, directive or other act of any government or of the
Council of the European Community or the Commission of the European
Community or of any national, Federal, State, municipal or other
governmental department, commission, board, bureau, agency, court
or instrumentality, domestic or foreign; governmental priorities,
regulations or orders affecting allocation of materials, facilities
or a completed Aircraft; war, civil war or warlike operations,
terrorism, insurrection or riots; failure of transportation;
strikes or labor troubles causing cessation, slow down or
interruption of work; delay in obtaining any airworthiness or type
certification after due and timely diligence; inability after due
and timely diligence to procure materials, accessories, equipment
or parts; or failure of a subcontractor or Supplier to furnish
materials, components, accessories, equipment or parts; (ii) any
delay caused by the Buyer; and (iii) delay in delivery or otherwise
in the performance of this Agreement by the Seller due to any delay
in or failure of the delivery of, or any other event or
circumstance relating to, the Propulsion Systems or Buyer Furnished
Equipment. Notwithstanding the foregoing, Excusable Delay will not
include any delay occasioned by the Seller’s, the Manufacturer’s or
the Associated Contractor’s fault or negligence.
	 
	10.2	 	Consequences of Excusable Delay
	 
	10.2.1	 	If an Excusable Delay occurs the Seller will:

	 	(i)	 	as soon as practicable notify the Buyer of such
Excusable Delay after becoming aware of the same, [***];
	 
	 	(ii)	 	not be deemed to be in default in the performance
of its obligations hereunder as a result of such
Excusable Delay;
	 
	 	(iii)	 	not be responsible for any damages arising from
or in connection with such Excusable Delay suffered or
incurred by the Buyer;
	 
	 	(iv)	 	promptly after the removal of the cause of the
delay, resume performance of any of its obligations ([***])
under this Agreement that may have been suspended during the
period of the Excusable Delay and so inform Buyer of the same;
	 
	 	(v)	 	use its commercially reasonable efforts to remove
or alleviate the cause of such Excusable Delay as quickly as
possible; and

28

 

	 	(vi)	 	keep the Buyer informed on a regular basis through the above process.

	10.3	 	[***]
	 
	10.3.1	 	If any [***] as a result of [***] for a period of more than [***] after
the last day of the Scheduled Delivery Month, ([***]), [***] as the case
may be. However, [***].
	 
	10.3.2	 	If any [***] as a result of [***] for a period of more than [***] after
the last day of the Scheduled Delivery Month, [***] period or, within
[***] for a period of more than [***] after the last day of the Scheduled
Delivery Month, as the case may be. However, [***].
	 
	10.3.3	 	[***], then the Seller will be entitled to reschedule delivery. The
[***] to terminate this Agreement under the terms of Clause 10.3.1. or
10.3.2 as the case may be), [***]. The Seller will notify the Buyer of
the new Scheduled Delivery Month after the [***] ([***]), and this new
Scheduled Delivery Month will be deemed to be an amendment to the
applicable Scheduled Delivery Month in Clause 9.1.1 of the Agreement.
	 
	10.4	 	Total Loss, Destruction or Damage
	 
	 	 	If prior to Delivery of an Aircraft, such Aircraft is lost,
destroyed or in the reasonable opinion of the Seller is damaged
beyond economic repair [***] (“Total Loss”), the Seller will give
written notice to the Buyer to this effect within [***] of such
Total Loss and [***] of the event of Total Loss. The Seller will
include in said notice (or as soon after the issue of the notice as
such information becomes available to the Seller) the earliest date
consistent with the Seller’s other commitments and production
capabilities ([***]) that an aircraft to replace the Aircraft may
be delivered to the Buyer, and the Scheduled Delivery Month will be
extended as specified in the Seller’s notice to accommodate the
delivery of the replacement aircraft; provided, however, that, if
the Scheduled Delivery Month is extended to a month exceeding
twelve (12) months after the last day of the original Scheduled
Delivery Month, then this Agreement will terminate with respect to
said Aircraft unless

	 	(i)	 	the Buyer notifies the Seller within one (1)
month of the date of receipt of the Seller’s notice that it
desires the Seller to provide a replacement aircraft during
the month quoted in the Seller’s notice; and
	 
	 	(ii)	 	the Parties execute an amendment to this
Agreement recording the variation in the Scheduled Delivery
Month.

	 	 	Nothing herein will require the Seller to manufacture and deliver a
replacement aircraft if such manufacture would require the
reactivation of its production line for the model or series of
aircraft that includes the Aircraft.

29

 

	 	 	Any termination pursuant to this Clause 10.4 as to a particular
Aircraft will discharge the obligations and liabilities of the
Parties with respect to such Aircraft, except that upon receipt of
any available insurance proceeds and in no event later than thirty
(30) days following such termination, Seller will pay to the Buyer
an amount equal to all Predelivery Payments (without interest) made
by the Buyer in respect of such Aircraft, provided that such Total
Loss is not the result of any act or omission of the Buyer. [***].
	 
	10.5	 	REMEDIES
	 
	 	 	THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF THE
BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, DUE TO TOTAL
LOSS OR EXCUSABLE DELAY, AND THE BUYER HEREBY WAIVES ALL RIGHTS TO
WHICH WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF, INCLUDING,
WITHOUT LIMITATION, ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL
DAMAGES OR SPECIFIC PERFORMANCE. [***].
	 
	11 -	 	INEXCUSABLE DELAY
	 
	11.1	 	Definition of “Inexcusable Delay”
	 
	 	 	Should an Aircraft not be Ready for Delivery within thirty (30)
days after the last day of the Scheduled Delivery Month (as such
month may be changed pursuant to Clauses 2, 7 or 10) and such delay
is not as a result of an Excusable Delay, Total Loss or [***], then
such delay will be termed an “Inexcusable Delay.”
	 
	11.2	 	Consequences of Inexcusable Delay
	 
	 	 	If an Inexcusable Delay occurs the Seller will

	 	(i)	 	notify the Buyer of such Inexcusable Delay as
soon as practicable after becoming aware of the same, [***];
	 
	 	(ii)	 	use its commercially reasonable efforts to
remove or alleviate the cause of such Inexcusable Delay as
quickly as possible; and
	 
	 	(iii)	 	promptly after the removal of the cause of the
Inexcusable Delay ([***]) resume performance of any of its
obligations under this Agreement that may have been suspended
during the period of the Inexcusable Delay ([***]) and
notify the Buyer of the revised Scheduled Delivery Month.

	11.3	 	Liquidated Damages
	 
	 	 	In the event of an Inexcusable Delay, Seller will pay the Buyer
liquidated damages of US $ [***] (US dollars — [***]) for each day
of delay in the Delivery, starting thirty-one (31) days following
the scheduled delivery date within the Scheduled Delivery Month as
provided in Clause 9.1.2 (or if no such date has been set, the last
day of the Scheduled Delivery Month). The amount of liquidated

30

 

	 	 	damages will in no event exceed the total of US $ [***] (US dollars
 — [***]) in respect of any one Aircraft.
	 
	11.4	 	Renegotiation
	 
	 	 	If, as a result of an Inexcusable Delay, (a) Delivery does not
occur within [***] after the last day of the Scheduled Delivery
Month or (b) [***] such Inexcusable Delay [***] period, the Buyer
will then have the right exercisable by written notice to the
Seller to require from the Seller a renegotiation of the Scheduled
Delivery Month for the affected Aircraft, provided that such notice
is given, (i) in the case of (a) above, within [***] following the
expiration of the [***] period or, (ii) in the case of (b) above,
[***] period. Unless otherwise agreed between the Parties during
such renegotiation, the said renegotiation will not prejudice the
Buyer’s right to receive liquidated damages in accordance with
Clause 11.3.
	 
	11.5	 	Termination
	 
	 	 	If, as a result of an Inexcusable Delay, Delivery does not occur
within [***] months after the last day of the Scheduled Delivery
Month and the parties have not renegotiated the Delivery Date
pursuant to Clause 11.4, [***] to terminate this Agreement in
respect of the affected Aircraft. In the event of termination,
neither party will have any claim against the other, except that
the Seller will pay to the Buyer any amounts due pursuant to Clause
11.1 and will repay the Buyer an amount equal to the Predelivery
Payments received from the Buyer hereunder in respect to the
terminated Aircraft.
	 
	11.6	 	REMEDIES
	 
	 	 	[***], THIS CLAUSE 11 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF
THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, OTHER THAN
SUCH DELAYS AS ARE COVERED BY CLAUSE 10, AND THE BUYER HEREBY
WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE ENTITLED IN
RESPECT THEREOF, INCLUDING WITHOUT LIMITATION ANY RIGHTS TO
INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC PERFORMANCE.
	 
	12 -	 	WARRANTIES AND SERVICE LIFE POLICY
	 
	 	 	The Seller represents and warrants that the Manufacturer has
provided to the Seller the following Warranty, Service Life Policy,
Supplier Warranties and Interface Commitment with respect to the
Aircraft, which are reproduced below between the words QUOTE and
UNQUOTE and which are subject to the terms, conditions, limitations
and restrictions (including, but not limited to, the Exclusivity of
Warranties and General Limitations of Liability and Duplicate
Remedies provisions) as hereinafter set out, and that the same are
in full force and effect and have not been amended. The Seller
hereby assigns to the Buyer, and

31

 

  	 	 	the Buyer hereby accepts, all of the Seller’s rights and obligations
        as the “Buyer” under the said Warranty, Service Life Policy,
        Supplier Warranties and Interface Commitment, and the Seller subrogates
        the Buyer to all such rights and obligations in respect of the Aircraft.
        The Seller hereby warrants to the Buyer that (i) it has all requisite
        authority to make the foregoing assignment to and to effect the foregoing
        subrogation in favor of the Buyer, (ii) such assignment and subrogation
        are effective to confer on the Buyer all of the foregoing rights and obligations
        of the Seller, and the Seller is bound by said assignment and subrogation
        (iii) the Seller will not enter into any amendment of the provisions
        so assigned without the prior written consent of the Buyer.
	 	 	 
	 	 	The provisions below between the words QUOTE and UNQUOTE reflect the
        Warranty, Service Life Policy, Supplier Warranties, and Interface Commitment
        that the Manufacturer has provided to the Seller with respect to the Aircraft.
        In the provisions below between the words QUOTE and UNQUOTE, capitalized
        terms have the meanings assigned thereto in this Agreement, except that
        the term “Buyer” therein refers to the Seller, and the term
        “Seller” therein refers to the Manufacturer. Once the assignment
        contemplated hereby is made, the term “Buyer” will in the context
        of such assignment refer to the Buyer herein (i.e., Atlantic Coast Airlines)
        and in the context of such assignment the term “Seller” will
        refer to the Manufacturer.

QUOTE

	12.1	 	WARRANTY
	 
	12.1.1	 	Nature of Warranty
	 
	 	 	Subject to the limitations and conditions as hereinafter provided,
except as provided in Clause 12.1.2, the Seller warrants to the
Buyer that each Aircraft and each Warranted Part (as such term is
defined below) will at Delivery be free from defects

	 	(i)	 	in material,
	 
	 	(ii)	 	in workmanship, including, without limitation,
processes of manufacture
including, without limitation, [***],
	 
	 	(iii)	 	in design (including, without limitation,
selection of materials) having regard to the state of the art
at the date of such design, and
	 
	 	(iv)	 	arising from failure to conform to the applicable
Specification, except as to those portions of such
Specification that are expressly stated in such Specification
to be estimates or approximations or design aims.

32

 

	 	 	The term “Warranted Part” will mean any Seller proprietary
component, equipment, accessory or part including, but not limited
to, [***], it being understood that any such item installed on an
Aircraft will bear a part number of the Seller that (a) is
installed on an Aircraft at Delivery, (b) is manufactured to the
detail design of the Seller or a subcontractor of the Seller and
(c) bears a part number of the Seller at Delivery.
	 
	12.1.2	 	Exceptions
	 
	 	 	The warranties set forth in Clause 12.1.1 will not apply to Buyer
Furnished Equipment, to the Propulsion Systems, or to any
component, accessory, equipment or part purchased by the Buyer that
is not a Warranted Part, provided, however, that:

	 	(i)	 	any defect in the Seller’s workmanship in respect
of the installation of such items in the Aircraft, including,
but not limited to any failure by the Seller to conform to the
installation instructions of the manufacturers of such items
that invalidates any applicable warranty from such
manufacturers, will constitute a defect in workmanship for the
purpose of this Clause 12.1 and be covered by the warranty set
forth in Clause 12.1.1(ii), and
	 
	 	(ii)	 	any defect inherent in the Seller’s design of
the installation, considering the state of the art at the
date of such design, that impairs the use of such items will
constitute a defect in design for the purposes of this Clause
12.1 and be covered by the warranty set forth in Clause
12.1.1(iii), and
	 
	 	(iii)	 	to the extent that [***] with respect to the
installation or design of the installation referenced in
Clause 12.1.2(i) or 12.1.2(ii), [***].

	12.1.3	 	Aircraft Warranty Periods
	 
	 	 	The warranties described in Clauses 12.1.1 and 12.1.2 hereinabove
will be limited to those defects that become apparent within [***]
after Delivery of the affected Aircraft, [***] (the “Aircraft
Warranty Period”).
	 
	12.1.4	 	Limitations of Warranty
	 
	12.1.4.1	 	The Buyer’s remedy and the Seller’s obligation and liability under
Clauses 12.1.1 and 12.1.2 hereinabove are limited to, as mutually agreed
between the Parties, and at the Seller’s expense, the repair, replacement
or correction of, or the supply of modification kits rectifying the defect
to, any defective Warranted Part. Upon the [***] the Seller may furnish a
credit to the Buyer for the future purchase of goods and services (not
including Aircraft) equal to the price at which the Buyer is then entitled
to acquire a replacement for the defective Warranted Part.

33

 

	12.1.4.2	 	If the Seller corrects a defect covered by Clause 12.1.1(iii) that
becomes apparent within the Aircraft Warranty Period set forth in Clause
12.1.3, on the Buyer’s written request the Seller will correct any such
defect in any Aircraft that has not already been delivered to the Buyer.
However, rather than accept a delay in Delivery of any such Aircraft, the
Buyer and the Seller may agree to deliver such Aircraft with subsequent
correction of the defect by the Buyer at the Seller’s expense, or the
Buyer may elect to accept Delivery and thereafter file a Warranty Claim as
though the defect had become apparent immediately after Delivery of such
Aircraft.
	 
	12.1.5	 	Cost of Inspection
	 
	12.1.5.1	 	In addition to the remedies set forth in Clauses 12.1.4.1 and
12.1.4.2, the Seller will reimburse the Buyer for the direct labor costs
spent by the Buyer in performing inspections of the Aircraft that are
conducted

	 	(i)	 	to determine whether a defect exists in any
Warranted Part within the
Aircraft Warranty Period or
	 
	 	(ii)	 	pending the Seller’s provision of a corrective technical
solution.

	12.1.5.2	 	The above commitment is subject to the following conditions:

	 	(i)	 	the inspections are performed outside the scope
of a scheduled maintenance check as recommended by the Buyer’s
approved Maintenance Program.
	 
	 	(ii)	 	the labor rate for such labor being the labor
rate defined in Clause 12.1.8(v)(b); and
	 
	 	(iii)	 	the hours used to determine such reimbursement
will not exceed [***] estimate of the hours required for such
inspections.

	12.1.6	 	Warranty Claim Requirements
	 
	 	 	The Buyer’s remedy and the Seller’s obligation and liability under
this Clause 12.1, with respect to each claimed defect, are subject
to the following conditions precedent:

	 	(i)	 	the defect becomes apparent within the Aircraft
Warranty Period,
	 
	 	(ii)	 	the Buyer submits to the Seller evidence
reasonably satisfactory to the Seller that the claimed defect
is due to a matter covered under the provisions of this Clause
12.1, and that such defect did not result from any failure by
the Buyer [***] to operate and maintain the affected Aircraft
or part thereof in accordance with the standards set forth in
Clause 12.1.11,

34

 

	 	(iii)	 	the Buyer returns as soon as practicable the
Warranted Part claimed to be defective to the repair
facilities designated by the Seller [***], unless the Buyer
elects to repair a defective Warranted Part in accordance with
the provisions of Clause 12.1.8,
	 
	 	(iv)	 	the Seller receives a Warranty Claim complying
with the provisions of Clause 12.1.7(v) below.

	12.1.7	 	Warranty Administration
	 
	 	 	The warranties set forth in Clause 12.1 will be administered as
hereinafter provided:

	 	(i)	 	Claim Determination
	 
	 	 	 	Warranty Claim determination by the Seller will be reasonably
based on claim details, reports from the Seller’s regional
representative, historical data logs, inspections, tests,
findings during repair, defect analysis and other relevant
documents and information.
	 
	 	(ii)	 	Transportation Costs of a Warranted Part
	 
	 	 	 	The cost of transporting a Warranted Part claimed to be
defective to the facilities designated by the Seller will be
borne by the Buyer, provided, however, that, [***].
	 
	 	(iii)	 	Return of an Aircraft
	 
	 	 	 	If [***] an Aircraft must be returned to the Seller’s
facility or to a repair facility reasonably designated by the
Seller for accomplishment of a warranted repair or
correction, pursuant to a Warranty Claim, the [***].
	 
	 	 	 	If the Seller reasonably desires to accomplish a warranted
repair or correction at the Buyer’s facilities or wherever
the Aircraft is located and the Buyer nevertheless desires to
return the Aircraft to the Seller for such repair or
correction, the Seller will designate the facility where the
repair will be accomplished, and the [***].
	 
	 	(iv)	 	 On-Aircraft Work by the Seller
	 
	 	 	 	If the work to accomplish a repair or correction pursuant to
a Warranty Claim must be accomplished by a Seller working
party, the Seller will be responsible for all costs of labor
and material [***].
	 
	 	 	 	If such repair or correction is not required to be
accomplished by a Seller working party, but the Buyer
nevertheless desires a Seller working party to

35

 

	 	 	 	accomplish the same, the Seller will be responsible for all
costs of labor and material, [***].
	 
	 	 	 	On-Aircraft work by the Seller will only be undertaken if, in
the Seller’s opinion, the work requires the Seller’s
technical expertise. In such case, the Seller and the Buyer
will agree on a schedule and place for the work to be
performed.
	 
	 	(v)	 	Warranty Claim Substantiation
	 
	 	 	 	For each claim under this Clause 12.1 the Buyer will give
written notice to the Seller that contains at least the data
listed below with respect to an Aircraft or Warranted Part,
as applicable (“Warranty Claim”). The Buyer will make such
Warranty Claim within [***] of discovering the defect giving
rise to such Warranty Claim.

	 	(a)	 	Description of the defect and any
action taken.
	 
	 	(b)	 	Date of incident and/or removal.
	 
	 	(c)	 	Description of the Warranted Part
claimed to be defective.
	 
	 	(d)	 	Part number.
	 
	 	(e)	 	Serial number (if applicable).
	 
	 	(f)	 	Position on Aircraft, according to
Catalog Sequence Number (CSN) of the Illustrated Parts
Catalog, Component Maintenance Manual or Structural
Repair Manual (as such documents are defined in Clause
14 and Exhibit F hereto) as applicable.
	 
	 	(g)	 	Total flying hours or calendar times, as applicable,
at the date of
appearance of a defect.
	 
	 	(h)	 	Time since last shop visit at the date of appearance
of defect.
	 
	 	(i)	 	Manufacturer’s serial number (MSN) of
the Aircraft and/or its registration number.
	 
	 	(j)	 	Aircraft total flying hours and/or number of landings at
the date of
appearance of defect.
	 
	 	(k)	 	Claim number.
	 
	 	(l)	 	Date of claim.

36

 

	 	(m)	 	Date of delivery of an Aircraft
or Warranted Part to the Buyer.
	 
	 	 	 	Warranty Claims are to be addressed as follows:
	 
	 	 	 	AIRBUS

CUSTOMER SERVICES DIRECTORATE

WARRANTY ADMINISTRATION

ROND-POINT MAURICE BELLONTE

B.P. 33

F-31707 BLAGNAC CEDEX

FRANCE

	 	(vi)	 	Replacements
	 
	 	 	 	Replacements made pursuant to this Clause 12.1 will be made
within the lead time defined in the Seller’s Spare Parts Price Catalog.
Replaced components, equipment, accessories or parts will
become the Seller’s property. The [***].
	 
	 	 	 	Title to and risk of loss of any Aircraft, component,
accessory, equipment or part returned by the Buyer to the
Seller will at all times remain with the Buyer, except that
(i) when the Seller has possession of a returned Aircraft,
component, accessory, equipment or part to which the Buyer
has title, the Seller will have such responsibility therefore
as is chargeable by law to a bailee for hire, and in
addition, the responsibility to insure against any damage to
or loss of each component, accessory, equipment or part that
is in the Seller’s possession, but the Seller will not be
liable for loss of use, and (ii) title to and risk of loss of
a returned component, accessory, equipment or part will pass
to the Seller on shipment by the Seller to the Buyer of any
item furnished by the Seller to the Buyer as a replacement
therefore. Upon the Buyer’s receipt of any replacement
component, accessory, equipment or part provided by the
Seller pursuant to this Clause 12.1, title to and risk of
loss of such component, accessory, equipment or part will
pass to the Buyer.
	 
	 	(vii)	 	Acceptance or Rejection
	 
	 	 	 	The Seller will provide acceptance or rejection (with
reasonable written substantiation in case of rejection) of
all Warranty Claims [***]. The Buyer will (a) [***] and (b)
[***].
	 
	 	 	 	[***].
	 
	 	(viii)	 	Inspection

37

 

	 	 	 	The Seller will [***] have the right to reasonably inspect
the affected Aircraft and documents and other records
relating thereto in the event of any claim under this Clause
12.1.

	12.1.8	 	In-house Warranty

	 	(i)	 	Authorization 
	 
	 	 	 	The Buyer [***], is hereby authorized to repair Warranted
Parts, subject to the terms of this Clause 12.1.8 (“In-house
Warranty”). When the estimated cost of an In-house Warranty
repair exceeds $5,000 (five thousand US dollars), the Buyer
will notify [***] the Resident Customer Support
Representative of its decision to perform any in-house
repairs before such repairs are commenced, [***]. The
Buyer’s notice will include sufficient detail regarding the
defect, estimated labor hours and material to allow the
Seller to ascertain the reasonableness of the estimate. The
Seller will promptly respond and will not unreasonably
withhold authorization.
	 
	 	(ii)	 	Conditions of Authorization
	 
	 	 	 	The Buyer will be entitled to the benefits under this Clause
12.1.8 for repair of Warranted Parts:
	 
	 	(a)	 	if adequate facilities and qualified personnel
are available to the
Buyer,
	 
	 	(b)	 	provided that repairs are to be performed in
accordance with the
Seller’s written instructions set forth in applicable
Technical Data, or such other written instructions of the
Seller pertaining to repair of such Warranted Part, and
	 
	 	(c)	 	in the absence of the Seller’s written
instructions, to the extent reasonably necessary to correct
the defect in accordance with the standards set forth in
Clause 12.1.11.
	 
	 	(iii)	 	Seller’s Rights
	 
	 	 	 	The Seller will have the right to require the return of any
Warranted Part (subject to the provisions of Clause
12.1.8(vii)), or any part removed therefrom, which is claimed
to be defective, if, in the Seller’s judgment, the nature of
the claimed defect requires technical investigation. Such
return will be subject to the provisions of Clause 12.1.7(ii).

38

 

	 	 	 	The Seller will have the right to have a representative
present during the disassembly, inspection and testing of any
Warranted Part claimed to be defective, subject to [***].
	 
	 	(iv)	 	In-house Warranty Claim Substantiation
	 
	 	 	 	Claims for In-house Warranty credit will be filed within the
time period set forth in and will contain the same information
required in Warranty Claims under Clause 12.1.7(v) and in
addition will include:

	 	(a)	 	a report of technical findings with respect to the
defect,
	 
	 	(b)	 	for parts required to remedy the defect:

	 	–	 	part numbers,
	 	–	 	serial numbers (if applicable),
	 	–	 	description of the parts,
	 	–	 	quantity of parts,
	 	–	 	unit price of parts,
	 	–	 	related Seller’s or third party’s invoices (if applicable),
	 	–	 	total price of parts

	 	(c)	 	detailed number of labor hours,
	 
	 	(d)	 	In-house Warranty Labor Rate (defined
below in Clause 12.1.8(v)(b)), and
	 
	 	(e)	 	total claim value.

	 	(v)	 	Credit
	 
	 	 	 	The Buyer’s sole remedy, and the Seller’s sole obligation and
liability, in respect of In-house Warranty claims, will be a
credit from the Seller for goods and services, as provided
for in Clause 12.1.1. This credit will be equal to the sum
of the direct labor cost expended in performing a repair and
to the direct cost of materials required in performing the
repair. Such costs will be determined as set forth below.

	 	(a)	 	To determine direct labor costs, only
the manhours spent on disassembly, inspection, repair,
reassembly, and final inspection and test (including,
but not limited to, flight tests if flight tests prove
necessary to confirm the satisfactory completion of a
repair under the In-house Warranty) of the Warranted
Part alone will be counted. The hours required for
maintenance work concurrently being carried out on the
Aircraft or Warranted Part as well as for removal and
installation of the Warranted Part, will not be
included.

39

 

	 	(b)	 	The hours counted as set forth above
will be multiplied by the labor rate below, which is
deemed to represent the Buyer’s composite average hourly
labor rate (excluding all fringe benefits, premium time
allowances, social security charges, business taxes and
similar items) paid to the Buyer’s employees or to a
third party that the Buyer has authorized to perform the
repair, whose jobs, in both cases, are directly related
to the performance of the repair. This labor rate is US
$ [***] (US dollars — [***]) at economic conditions
prevailing in January 2003 (the “In-house Warranty Labor
Rate”).
	 
	 	 	 	The In-house Warranty Labor Rate is subject to adjustment
annually by multiplying by the ratio ECIn/ECIb. For the
purposes of this Clause 12.1.8(v) only, ECIn is equal to
the Labor Index defined in the Seller Price Revision
Formula hereto for January of the year in which the hours
are spent and ECIb is equal to such Labor Index for
January 2003.
	 
	 	(c)	 	Direct material costs are determined
by the prices (including but not limited to [***]) at
which the Buyer acquired such replacement material,
excluding any parts and materials used for overhaul
furnished free of charge by the Seller.

	 	(vi)	 	Limitation on Credit
	 
	 	 	 	The Buyer, with respect to any In-House Warranty credit, will
in no event be credited for repair costs (labor and material)
for any Warranted Part exceeding sixty-five percent (65%) of
the Seller’s current catalog price for a replacement of such
defective Warranted Part or exceeding those costs that would
have resulted if repairs had been carried out at the Seller’s
facilities. The Seller will substantiate these costs in
writing on reasonable request by the Buyer.
	 
	 	(vii)	 	Scrapped Material
	 
	 	 	 	The Buyer may, with the agreement of the Seller’s Resident
Customer Support Representative, scrap any such defective
parts that are beyond economic repair and not required for
technical evaluation.
	 
	 	 	 	If the Buyer does not obtain the agreement of the Seller’s
Resident Customer Support Representative to scrap a Warranted
Part defective beyond economic repair, then the Buyer will
retain such Warranted Part and any defective part removed
from a Warranted Part during repair for a period of either
one hundred and twenty (120) days after the date of
completion of repair or sixty (60) days after submission of a
claim for In-house Warranty credit relating thereto,
whichever is longer. Such parts

40

 

	 	 	 	will be returned to the Seller within thirty (30) days of
receipt of the Seller’s request to that effect.
	 
	 	 	 	Scrapped Warranted Parts will be evidenced by a record of
scrapped material certified by an authorized representative
of the Buyer, which will be kept in the Buyer’s file for at
least the duration of the Aircraft Warranty Periods.
	 
	 	(viii)	 	DISCLAIMER OF SELLER LIABILITY FOR BUYER’S REPAIR
	 
	 	 	 	[***] THIS CLAUSE 12.1.8 [***] THE SELLER WILL NOT BE LIABLE
FOR ANY RIGHT, CLAIM OR REMEDY, AND THE BUYER WILL INDEMNIFY
THE SELLER AGAINST THE CLAIMS OF ANY THIRD PARTIES FOR
LOSSES DUE TO ANY DEFECT, NONCONFORMANCE OF ANY KIND,
ARISING OUT OF OR IN CONNECTION WITH ANY REPAIR OF WARRANTED
PARTS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE 12.1.8 OR
ANY OTHER ACTIONS UNDERTAKEN BY THE BUYER UNDER THIS CLAUSE
12.1.8, WHETHER SUCH CLAIM IS ASSERTED IN CONTRACT OR IN
TORT, OR IS PREMISED ON ALLEGED, ACTUAL, IMPUTED, ORDINARY
OR INTENTIONAL ACTS OR OMISSIONS OF THE BUYER OR THE SELLER,
PROVIDED THAT THE FOREGOING INDEMNITY WILL NOT APPLY TO THE
EXTENT THAT ANY SUCH CLAIM IS CAUSED BY THE GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF THE SELLER.

	12.1.9	 	Warranty Transferability
	 
	 	 	The warranties provided for in this Clause 12.1 for any Warranted
Part will accrue to the benefit of any airline in revenue service
other than the Buyer, if the Warranted Part enters into the
possession of any such airline as a result of a pooling agreement
between such airline and the Buyer, in accordance with the terms
and subject to the limitations and exclusions of the foregoing
warranties and to applicable laws or regulations.
	 
	12.1.10	 	Warranty for Corrected, Replacement or Repaired Warranted Parts 
	 
	 	 	Whenever any Warranted Part that contains a defect for which the
Seller is liable under Clause 12.1 has been corrected, repaired or
replaced pursuant to the terms of this Clause 12, the period of the
Seller’s warranty with respect to such corrected, repaired or
replacement Warranted Part, whichever may be the case, will be the
remaining portion of the original warranty in respect of such
corrected, repaired or replacement Warranted Part. If a defect is
attributable to a defective repair or replacement by the Buyer, a
Warranty Claim with respect to such defect will be rejected,
notwithstanding any subsequent correction or repair.

41

 

	12.1.11	 	Good Airline Operation
	 
	 	 	The Buyer’s rights under this Clause 12.1 are subject to the
Aircraft and each component, equipment, accessory and part thereof
being maintained, overhauled, repaired and operated in accordance
with all technical documentation and any other instructions issued
by the Seller, the Suppliers or the manufacturer of the Propulsion
Systems (provided that [***]) and all applicable rules, regulations
and directives of the relevant Aviation Authorities. [***].
	 
	 	 	The Seller’s obligations under this Clause 12.1 will not extend to
normal wear and tear or to the extent that the defect giving rise
to the Warranty Claim arises from:

	 	(i)	 	any Aircraft or component, equipment, accessory
or part thereof that has been repaired, altered or modified
after Delivery in a manner other than that specified in the
applicable Technical Data; or
	 
	 	(ii)	 	any Aircraft or component, equipment, accessory
or part thereof that has been knowingly operated in a damaged
state (other than that allowed with continued operation under
deferred defect or MEL conditions), to complete a flight in
progress, or to ferry the Aircraft directly to a repair
facility.

	 	 	The Seller’s obligations under this Clause 12.1 also will not
extend to any component, equipment, accessory or part from which
the trademark, trade name, part or serial number or other
identification marks have been intentionally removed [***].
	 
	12.2	 	SELLER SERVICE LIFE POLICY
	 
	12.2.1	 	Scope and Definitions
	 
	 	 	In addition to the warranties set forth in Clause 12.1 above, the
Seller further agrees that should a Failure occur in any Item (as
these terms are defined below), then, subject to the general
conditions and limitations set forth in Clause 12.2.4 below, the
provisions of this Clause 12.2 will apply.
	 
	 	 	For the purposes of this Clause 12.2, the following definitions
will apply:

	 	(i)	 	“Item” means any of the Seller components,
equipment, accessories or parts listed in Exhibit C hereto
that are installed on an Aircraft at any time during the
period of effectiveness of the Service Life Policy as defined
below in Clause 12.2.2.
	 
	 	(ii)	 	“Failure” means any breakage of, or defect in, an
Item that materially impairs the utility or safety of the
Item, provided that (a) any such breakage of, or defect in, any Item did not result from any
breakage or 

42

 

	 	 	 	defect in any other Aircraft part or component or
from any other extrinsic force and (b) has occurred or can
reasonably be expected to occur on a repetitive basis.

	12.2.2	 	Periods and Seller’s Undertaking
	 
	 	 	Subject to the general conditions and limitations set forth in
Clause 12.2.4 below, the Seller agrees that if a Failure occurs in
an Item within one hundred forty-four (144) months after the
Delivery of such Aircraft, the Seller will, at its discretion, as
promptly as practicable and for a price that reflects the Seller’s
financial participation as hereinafter provided, either:

	 	(i)	 	design and furnish to the Buyer a [***]
correction for such Item ([***]) and provide any parts
required for such correction (including Seller designed
standard parts but excluding industry standard parts, unless a
part of an Item), or
	 
	 	(ii)	 	replace such Item.

	12.2.3	 	Seller’s Participation in the Cost
	 
	 	 	Any part or Item that the Seller is required to furnish to the
Buyer under this Service Life Policy will be furnished to the Buyer
at the Seller’s current sales price therefore, less the Seller’s
financial participation, which will be determined in accordance
with the following formula:

	 	 	 	 
	 	 	C (N  — T)	 
	P =
	 	N	 
	 	 	 	 
	where	 	 	 
	 	 	 	 
	P:
	 	financial participation of the Seller,
	 	 	 
	C:
	 	the Seller’s then current sales price for the
required Item or required Seller designed parts,
	 	 	 
	and,	 	 
	 	 	 
	T:
	 	total time in months at time of Failure since
Delivery of the Aircraft in which the Item subject to a
Failure was originally installed,
	 	 	 
	and,	 	 
	 	 	 
	N:
	 	[***].

43

 

	12.2.4	 	General Conditions and Limitations
	 
	12.2.4.1	 	Notwithstanding any provision of this Clause 12.2, during the Aircraft
Warranty Period, all Items will be covered by the provisions of Clause
12.1 of this Agreement and not by the provision of Clause 12.2.
	 
	12.2.4.2	 	The Buyer’s remedies and the Seller’s obligations and liabilities
under this Service Life Policy are subject to compliance by the Buyer with
the following conditions:

	 	(i)	 	The Buyer will maintain log books and other
historical records with
respect to each Item required to be maintained by the
applicable Aviation Authority and such other information as
the Parties may agree.
	 
	 	(ii)	 	The Buyer will keep the Resident Customer Support
Representative informed of any significant incidents relating
to an Aircraft, howsoever occurring or recorded.
	 
	 	(iii)	 	The conditions of Clause 12.1.11 will have been complied
with.
	 
	 	(iv)	 	The Buyer will implement specific structural
inspection programs for monitoring purposes as may be
established from time to time by the Parties. Such programs
will be compatible with the Buyer’s operational requirements
and will be carried out at the Buyer’s expense. Reports
relating thereto will be regularly furnished to the Seller.
	 
	 	(v)	 	The Buyer will report any breakage or defect in
writing to the Seller within sixty (60) days after any
breakage or defect in an Item becomes apparent, whether or not
the breakage or defect can reasonably be expected to occur in
any other Aircraft (to the extent the Buyer has such
information available), and the Buyer will provide the Seller
with sufficient detail about the breakage or defect to enable
the Seller to determine whether said breakage or defect is
subject to this Service Life Policy.

	12.2.4.3	 	Except as otherwise provided in this Clause 12.2, any claim under this
Service Life Policy will be administered as provided in, and will be
subject to the terms and conditions of, Clause 12.1.6.
	 
	12.2.4.4	 	If the Seller has issued a modification applicable to an Aircraft, the
purpose of which is to avoid a Failure, the Seller may elect to supply the
necessary modification kit free of charge or under a pro rata cost-sharing
formula [***]. If such a kit is so offered to the Buyer, then, in respect
of such Failure and any Failures that could ensue therefrom, the validity
of the Seller’s commitment under this Clause 12.2 will be subject to the
Buyer’s incorporating such modification in the relevant Aircraft, within a
reasonable time (consistent with the Buyer’s

44

 

	 	 	Aviation Authority requirements), as promulgated by the Seller and
in accordance with the Seller’s instructions.
	 
	12.2.4.5	 	THIS SERVICE LIFE POLICY IS NEITHER A WARRANTY, PERFORMANCE GUARANTEE,
NOR AN AGREEMENT TO MODIFY ANY AIRCRAFT OR AIRFRAME COMPONENTS TO CONFORM
TO NEW DEVELOPMENTS OCCURRING IN THE STATE OF AIRFRAME DESIGN AND
MANUFACTURING ART. THE SELLER’S OBLIGATION UNDER THIS CLAUSE 12.2 IS TO
MAKE ONLY THOSE CORRECTIONS TO THE ITEMS OR FURNISH REPLACEMENTS THEREFORE
AS PROVIDED IN THIS CLAUSE 12.2. THE BUYER’S SOLE REMEDY AND RELIEF FOR
THE NONPERFORMANCE OF ANY OBLIGATION OR LIABILITY OF THE SELLER ARISING
UNDER OR BY VIRTUE OF THIS SERVICE LIFE POLICY WILL BE IN MONETARY
DAMAGES, LIMITED TO THE AMOUNT THE BUYER REASONABLY EXPENDS IN PROCURING A
CORRECTION OR REPLACEMENT FOR ANY ITEM THAT IS THE SUBJECT OF A FAILURE
COVERED BY THIS SERVICE LIFE POLICY AND TO WHICH SUCH NONPERFORMANCE IS
RELATED, LESS THE AMOUNT THAT THE BUYER OTHERWISE WOULD HAVE BEEN REQUIRED
TO PAY UNDER THIS CLAUSE 12.2 IN RESPECT OF SUCH CORRECTED OR REPLACEMENT
ITEM. WITHOUT LIMITING THE EXCLUSIVITY OF WARRANTIES AND GENERAL
LIMITATIONS OF LIABILITY PROVISIONS SET FORTH IN CLAUSE 12.5, THE BUYER
HEREBY WAIVES, RELEASES AND RENOUNCES ALL CLAIMS TO ANY FURTHER DIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS OF PROFITS AND ALL
OTHER RIGHTS, CLAIMS AND REMEDIES, ARISING UNDER OR BY VIRTUE OF THIS
SERVICE LIFE POLICY, [***].
	 
	12.2.5	 	Transferability
	 
	 	 	Except as otherwise permitted under this Agreement, the Buyer’s
rights under this Clause 12.2 will not be assigned, sold,
transferred or otherwise alienated by operation of law or
otherwise, without the Seller’s prior written consent.
	 
	 	 	Any unauthorized assignment, sale, transfer or other alienation of
the Buyer’s rights under this Service Life Policy will, as to the
particular Aircraft involved, immediately thereafter void this
Service Life Policy in its entirety.
	 
	12.3	 	SUPPLIER WARRANTIES AND SERVICE LIFE POLICIES
	 
	12.3.1	 	[Intentionally left blank.]
	 
	12.3.2	 	Supplier’s Default

45

 

	12.3.2.1	 	If any Supplier under any warranty obtained by the Seller pursuant to
Clause 17.1 hereof defaults in the performance of any material obligation
under such warranty with respect to a Supplier Part, and the Buyer has
used [***] efforts to enforce its rights under such warranty, and the
Buyer, upon the Seller’s request, submits reasonable evidence, within a
reasonable time, that such default has occurred, then Clause 12.1 of this
Agreement will apply to the extent it would have applied had such Supplier
Part been a Warranted Part, except that, for obligations covered under
Clause 12.1, the Supplier’s warranty period indicated in the Supplier
Product Support Agreements manual will apply. However, to the extent
[***].
	 
	12.3.2.2	 	If any Supplier under any Supplier service life policy obtained by the
Seller pursuant to Clause 17.1 hereof defaults in the performance of any
material obligation with respect thereto, and the Buyer has used [***]
efforts to enforce its rights under such service life policy, and the
Buyer, upon the Seller’s request, submits evidence within a reasonable
time that such default has occurred, then Clause 12.2 of this Agreement
will apply to the extent the same would have applied had such component,
equipment, accessory or part been a part listed in Exhibit C hereto,
except that for obligations covered under Clause 12.2, the Supplier’s
service life policy period indicated in the Supplier Product Support
Agreements will apply, to the extent that the Seller can reasonably
perform or caused to be performed said Supplier’s obligations.
	 
	12.3.2.3	 	At the Seller’s request, the Buyer will assign to the Seller, and the
Seller will be subrogated to, all of the Buyer’s rights against the
relevant Supplier with respect to, and arising by reason of any defaults
of the Supplier that Seller has cured and the Buyer will provide
reasonable assistance to enable the Seller to enforce the rights so
assigned. Nothing stated herein will preclude the Buyer from proceeding
against the Supplier in any dispute with the Supplier with respect to any
provisions of the Supplier Warranty and/or Service Life Policy that have
not been assigned to the Seller.
	 
	12.4	 	INTERFACE COMMITMENT
	 
	12.4.1	 	Interface Problem
	 
	 	 	The Buyer may experience technical problems in the operation of an
Aircraft or its systems due to a malfunction, the cause of which,
after due and reasonable investigation, is not readily identifiable
by the Buyer, but which the Buyer reasonably believes to be
attributable to the design characteristics of one or more
components of the Aircraft (an “Interface Problem”). The Seller
will, if requested by the Buyer, promptly conduct or have conducted
an investigation and analysis of such problem to determine, if
possible, the cause or causes of the problem and recommend such
corrective action as may be feasible. If, after such due and
reasonable investigation, the [***] Interface Problem was due to or
caused by [***] under Clause 12.1.11, [***]. The Buyer will
furnish to the Seller all data and information in the Buyer’s
possession relevant to the Interface

46

 

	 	 	Problem and will reasonably cooperate with the Seller in the
conduct of the Seller’s investigations and such tests as may be
required. At the conclusion of such investigation the Seller will
promptly advise the Buyer in writing of the Seller’s opinion as to
the cause or causes of the Interface Problem and the Seller’s
recommendations as to corrective action.
	 
	12.4.2	 	Seller’s Responsibility
	 
	 	 	If the Interface Problem is primarily attributable to the design of
a Warranted Part, the Seller will, if requested by the Buyer,
correct the design of such Warranted Part, pursuant to the terms
and conditions of Clause 12.1.
	 
	12.4.3	 	Supplier’s Responsibility
	 
	 	 	If the Interface Problem is primarily attributable to the design of
any Supplier Part, the Seller will at the Buyer’s request,
reasonably assist the Buyer in processing any warranty claim the
Buyer may have against the manufacturer of such Supplier Part.
	 
	12.4.4	 	Joint Responsibility
	 
	 	 	If the Interface Problem is attributable partially to the design of
a Warranted Part and partially to the design of any Supplier Part,
the Seller will, if requested by the Buyer, seek a solution to the
Interface Problem through cooperative efforts of the Seller and any
Supplier involved. Furthermore, if the Interface Problem is
attributable to the incompatibility of any two parts (be they
Warranted Parts or Supplier Parts), [***]. The Seller will
promptly advise the Buyer of any corrective action proposed by the
Seller and any such Supplier. Such proposal will be consistent
with any then existing obligations of the Seller hereunder and of
any such Supplier to the Buyer. Such corrective action, unless
reasonably rejected by the Buyer, will constitute full satisfaction
of any claim the Buyer may have against either the Seller or any
such Supplier with respect to such Interface Problem.
	 
	12.4.5	 	General
	 
	12.4.5.1	 	All requests under this Clause 12.4 will be directed both to the
Seller and the affected Suppliers.
	 
	12.4.5.2	 	Except as specifically set forth in this Clause 12.4, this Clause 12.4
will not be deemed to impose on the Seller any obligations not expressly
set forth elsewhere in this Agreement.
	 
	12.4.5.3	 	All reports, recommendations, data and other documents furnished by
the Seller to the Buyer pursuant to this Clause 12.4 will be deemed to be
delivered under

47

 

	 	 	this Agreement and will be subject to the terms, covenants and
conditions set forth in this Clause 12 and in Clause 22.7.
	 
	12.5	 	EXCLUSIVITY OF WARRANTIES 
	 
	 	 	[***] THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE
EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE
OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO
THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM
ANY DEFECT OR NONCONFORMITY OF ANY KIND IN ANY AIRCRAFT, COMPONENT,
EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY
THE SELLER UNDER THIS AGREEMENT.
	 
	 	 	THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN
THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER
FROM ANY DEFECT OR NONCONFORMITY OF ANY KIND IN ANY AIRCRAFT,
COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE
SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES
AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND
LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES
OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY
CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY
NONCONFORMITY OR DEFECT OF ANY KIND IN ANY AIRCRAFT, COMPONENT,
EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY
THE SELLER UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	 	(1)	 	ANY IMPLIED WARRANTY OF MERCHANTABILITY
AND/OR FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;
	 
	 	(2)	 	ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM
COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
	 
	 	(3)	 	ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF
CONTRACT;
	 
	 	(4)	 	ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER
ANY THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT
LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, [***],
IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR
FAILURE TO WARN;

48

 

	 	(5)	 	ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE
UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL
STATUTE;
	 
	 	(6)	 	ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY
REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL,
NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;
	 
	 	(7)	 	ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE
COMPENSATED FOR:

	 	(a)	 	LOSS OF USE OR REPLACEMENT OF ANY
AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART
PROVIDED UNDER THIS AGREEMENT;
	 
	 	(b)	 	LOSS OF, OR DAMAGE OF ANY KIND TO,
ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART
PROVIDED UNDER THIS AGREEMENT;
	 
	 	(c)	 	LOSS OF PROFITS AND/OR REVENUES;
	 
	 	(d)	 	ANY OTHER INCIDENTAL OR CONSEQUENTIAL
DAMAGE.

	 	 	THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS AGREEMENT
WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN
INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN THE EVENT THAT
ANY PROVISION OF THIS CLAUSE 12 SHOULD FOR ANY REASON BE HELD
UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS CLAUSE
12 WILL REMAIN IN FULL FORCE AND EFFECT.
	 
	 	 	FOR THE PURPOSE OF THIS CLAUSE 12.5, “SELLER” WILL BE UNDERSTOOD TO
INCLUDE THE SELLER, ITS AFFILIATES, SUPPLIERS AND ASSOCIATED
CONTRACTORS.
	 
	12.6	 	DUPLICATE REMEDIES
	 
	 	 	The remedies provided to the Buyer under this Clause 12 as to any
defect in respect of the Aircraft or any part thereof are mutually
exclusive and not cumulative. The Buyer will be entitled to the
remedy that provides the maximum benefit to it, as the Buyer may
elect, pursuant to the terms and conditions of this Clause 12 for
any such particular defect for which remedies are provided under
this Clause 12; provided, however, that the Buyer will not be
entitled to elect a remedy under one part of this Clause 12 that
constitutes a duplication of any

49

 

	 	 	remedy elected by it under any other part hereof for the same
single defect. If the Seller fails in its performance of its
duties and obligations arising under these warranties, the measure
of the Buyer’s rights and remedies, expressed in monetary terms
shall be limited to the amount the Buyer expends procuring a
correction or replacement for any covered part subject to a defect
or due to nonperformance covered by this Clause 12. [***] as
otherwise set forth in this Clause 12.

UNQUOTE

	 	 	In consideration of the assignment and subrogation by the Seller
under this Clause 12 in favor of the Buyer in respect of the
Seller’s rights against and obligations to the Manufacturer under
the provisions quoted above, the Buyer hereby accepts such
assignment and subrogation and agrees to be bound by all of the
terms, conditions and limitations therein contained, specifically
including, without limitation, the Exclusivity of Warranties and
General Limitations of Liability provisions and Duplicate Remedies
provisions.
	 
	 	 	[***] THIS CLAUSE 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH THE
EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE
OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO
THE BUYER, WHETHER UNDER THIS AGREEMENT OR OTHERWISE, ARISING FROM
ANY DEFECT OR NONCONFORMITY OF ANY KIND IN ANY AIRCRAFT, COMPONENT,
EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY
THE SELLER UNDER THIS AGREEMENT.
	 
	 	 	THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN
THIS CLAUSE 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER
FROM ANY DEFECT OR NONCONFORMITY OF ANY KIND IN ANY AIRCRAFT,
COMPONENT, EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE
SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES
AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS, GUARANTEES AND
LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS, CLAIMS AND REMEDIES
OF THE BUYER AGAINST THE SELLER, WHETHER EXPRESS OR IMPLIED BY
CONTRACT, TORT, OR STATUTORY LAW OR OTHERWISE, WITH RESPECT TO ANY
NONCONFORMITY OR DEFECT OF ANY KIND IN ANY AIRCRAFT, COMPONENT,
EQUIPMENT, ACCESSORY, PART, SOFTWARE, DATA OR SERVICE DELIVERED BY
THE SELLER UNDER THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	 	(1)	 	ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR
FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

50

 

	 	(2)	 	ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM
COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
	 
	 	(3)	 	ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF
CONTRACT;
	 
	 	(4)	 	ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY
THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT
LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, [***],
IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR
FAILURE TO WARN;
	 
	 	(5)	 	ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE
UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE;
	 
	 	(6)	 	ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY
REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL,
NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;
	 
	 	(7)	 	ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE
COMPENSATED FOR:

	 	(a)	 	LOSS OF USE OR REPLACEMENT OF ANY
AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY PART, SOFTWARE
OR DATA PROVIDED UNDER THIS AGREEMENT;
	 
	 	(b)	 	LOSS OF, OR DAMAGE OF ANY KIND TO,
ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY, PART,
SOFTWARE OR DATA PROVIDED UNDER THIS AGREEMENT;
	 
	 	(c)	 	LOSS OF PROFITS AND/OR REVENUES;
	 
	 	(d)	 	ANY OTHER INCIDENTAL OR CONSEQUENTIAL
DAMAGE.

	 	 	 	THE WARRANTIES AND SERVICE LIFE POLICY PROVIDED BY THIS
AGREEMENT WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A
WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER. IN
THE EVENT THAT ANY PROVISION OF THIS CLAUSE 12 SHOULD FOR ANY
REASON BE HELD UNLAWFUL, OR OTHERWISE UNENFORCEABLE, THE

51

 

	 	 	 	REMAINDER OF THIS CLAUSE 12 WILL REMAIN IN FULL FORCE AND
EFFECT.
	 
	 	 	 	The remedies provided to the Buyer under this Clause 12 as to
any defect in respect of the Aircraft or any part thereof are
mutually exclusive and not cumulative. The Buyer will be
entitled to the remedy that provides the maximum benefit to
it, as the Buyer may elect, pursuant to the terms and
conditions of this Clause 12 for any such particular defect
for which remedies are provided under this Clause 12;
provided, however, that the Buyer will not be entitled to
elect a remedy under one part of this Clause 12 that
constitutes a duplication of any remedy elected by it under
any other part hereof for the same single defect. If the
Seller fails in its performance of its duties and obligations
arising under these warranties, the measure of the Buyer’s
rights and remedies, expressed in monetary terms shall be
limited to the amount the Buyer expends procuring a
correction or replacement for any covered part subject to a
defect or nonperformance covered by this Clause 12. [***] as
otherwise set forth in this Clause 12.

	12.7	 	NEGOTIATED AGREEMENT
	 
	 	 	The Buyer specifically recognizes that:

	 	(i)	 	this Agreement, and in particular this Clause 12,
has been the subject of discussion and negotiation and is
fully understood by the Buyer; and
	 
	 	(ii)	 	the price of the Aircraft and the other mutual
agreements of the Buyer set forth in this Agreement were
arrived at in consideration of, inter alia, the provisions of
this Clause 12, specifically including the Exclusivity of
Warranties set forth in Clause 12.5.

	13 -	 	INTELLECTUAL PROPERTY INDEMNITY
	 
	 	 	The Seller represents and warrants to the Buyer that the
Manufacturer has provided to the Seller the following indemnity
against patent copyright, [***] with respect to the Aircraft which
are reproduced below the words “Quote” and “Unquote” and which are
subject to the terms, conditions, limitations and restrictions
(including, but not limited to, the Exclusivity of Warranties and
Duplicate Remedies provisions) as hereinafter set out. Seller also
represents and warrants that it has the right to assign this
indemnity to the Buyer and that this indemnity is perpetual,
irrevocable and in full force and effect, and that its terms have
not been amended. [***].
	 
	 	 	The benefit of the indemnity so assigned extends to the Buyer and
its Affiliates and their respective officers, directors, agents,
members (if the Buyer or any of its Affiliates is a limited
liability corporation or similar entity), and employees. The

52

 

	 	 	Seller hereby assigns to the Buyer, and the Buyer hereby accepts,
all of the Seller’s rights as the “Buyer” as well as the Seller’s
obligations set forth in Clause 13.2 as the “Buyer” under the
following Manufacturer indemnity against patent and copyright
infringements, and the Seller subrogates the Buyer to all such
rights and obligations in respect of the Aircraft. The Seller
hereby covenants and warrants to the Buyer that (i) it has all
requisite authority to make the foregoing assignment and to effect
the foregoing subrogation in favor of the Buyer, (ii) such
assignment and subrogation are effective to confer on the Buyer all
of the following Seller’s rights, and the Seller’s obligations set
forth in Clause 13.2, and (iii) the Seller will not enter into any
amendment of the provisions so assigned without the prior written
consent of the Buyer.
	 	 	It is understood that, in the provisions below between the words
QUOTE and UNQUOTE, capitalized terms have the meanings assigned
thereto in this Agreement, except that (i) the term “Seller,” which
means the Manufacturer as between the Manufacturer and the Seller,
also means the Manufacturer in this Agreement, and (ii) the term
“Buyer,” which means the Seller as between the Manufacturer and the
Seller, means the Buyer in this Agreement.

QUOTE

	13.1	 	Indemnity
	 
	13.1.1	 	Subject to the provisions of Clause 13.2.3, the Seller will indemnify,
defend and hold harmless the Buyer and its Affiliates and their respective
officers, directors, members (if the Buyer or any of its Affiliates is a
limited liability corporation or similar entity) and employees from and
against any damages, costs and expenses including legal costs [***]
(excluding damages, costs, expenses, loss of profits and other liabilities
in respect of or resulting from loss of use of the Aircraft) resulting
from any action for infringement or claim of infringement by
(collectively, “Claims”) resulting from or rising out of or in connection
with any infringement or claim that the Airframe, or any component, part,
[***] installed therein at Delivery violates or constitutes an
infringement or misappropriation of

	 	(i)	 	any British, French, German, Spanish or U.S. patent; and
	 
	 	(ii)	 	any patent issued under the laws of any other country in which
the Buyer may lawfully operate the Aircraft, provided that from the
time of design of such Airframe or any part or software installed
therein at Delivery and until infringement claims are resolved, the
country of the patent and the flag country of the applicable
Aircraft are both parties to:
	 
	 	(iii)	 	the Chicago Convention on International Civil
Aviation of December 7, 1944, and are each fully entitled to
all benefits of Article 27 thereof, or,

53

 

	 	(iv)	 	the International Convention for the Protection
of Industrial Property of March 20, 1883 (the “Paris
Convention”); and
	 
	 	(v)	 	in respect of computer software installed on the
Aircraft, any copyright, provided that the Seller’s obligation
to indemnify will be limited to infringements in countries
which, at the time of infringement, are members of The Berne
Union and recognize computer software as a “work” under the
Berne Convention.

	13.1.2	 	Clause 13.1.1 will not apply to

	 	(i)	 	Buyer Furnished Equipment;
	 
	 	(ii)	 	the Propulsion Systems;
	 
	 	(iii)	 	Supplier Parts; or
	 
	 	(iv)	 	software not developed by the Seller.

	13.1.3	 	If the Buyer, due to circumstances contemplated in Clause 13.1.1 is
prevented [***] from using the Aircraft (whether by a valid judgment of a
court of competent jurisdiction or by a settlement arrived at among the
claimant, the Seller and the Buyer, or otherwise), the Seller will at its
expense either

	 	(i)	 	as promptly as possible procure for the Buyer the
right to use the affected Airframe, part or software free of
charge, or
	 
	 	(ii)	 	replace the infringing part or software as soon
as possible with a non-infringing substitute reasonably
satisfactory to the Buyer.

	13.2	 	Administration of Patent and Copyright Indemnity Claims
	 
	13.2.1	 	If the Buyer receives a written claim or a suit is threatened or begun
against the Buyer for which the Buyer will seek indemnity from the Seller
pursuant to Clause 13.1, the Buyer will

	 	(i)	 	forthwith notify the Seller, giving particulars
thereof;
	 
	 	(ii)	 	furnish to the Seller all relevant data, papers
and records within the Buyer’s control or possession relating
to such patent or claim;
	 
	 	(iii)	 	refrain from admitting any liability or
otherwise acting in a manner prejudicial to the defense or
denial of the suit or claim,
	 
	 	(iv)	 	except as required by applicable law (including
but not limited to applicable regulations) refrain from
making any payment, or assuming

54

 

	 	 	 	any expenses, damages, costs or royalties, it being agreed
that nothing in this Clause 13.2.1(iv) will prevent the Buyer
from paying the sums that may be required to obtain the
release of the Aircraft, provided that payment is accompanied
by a denial of liability and is made without prejudice;
	 	(v)	 	fully cooperate with, and render all assistance
to, the Seller at the Seller’s expense, as may be pertinent to
the defense or denial of the suit or claim ;
	 
	 	(vi)	 	reasonably cooperate with the Seller to mitigate
damages and/or to reduce the amount of royalties that may be
payable, and act to minimize costs and expenses.

	13.2.2	 	The Seller will be entitled either in its own name or on behalf of the
Buyer to conduct negotiations with the party or parties alleging
infringement and may [***].
	 
	13.2.3	 	The Seller’s liability hereunder will be [***] to the extent that [***]
by the Buyer’s failure to comply with the terms of this Clause. The
Seller’s liability hereunder is in lieu of any other liability to the
Buyer, whether express or implied, which the Seller might incur at law as
a result of any infringement or claim of infringement of any patent or
copyright.
	 
	13.2.4	 	The provisions of this Clause 13 will survive any termination of this
Agreement.

UNQUOTE

	 	 	In consideration of the assignment and subrogation by the Seller
under this Clause 13 in favor of the Buyer in respect of the
Seller’s rights against and obligations to the Manufacturer under
the provisions quoted above, the Buyer hereby accepts such
assignment and subrogation and agrees to be bound by all of the
terms, conditions and limitations therein contained (specifically
including, without limitation, the waiver, release and renunciation
provision).
	 
	 	 	THE INDEMNITY PROVIDED IN THIS CLAUSE 13 AND THE OBLIGATIONS AND
LIABILITIES OF THE SELLER UNDER THIS CLAUSE 13 ARE EXCLUSIVE AND IN
SUBSTITUTION FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND
RENOUNCES ALL OTHER INDEMNITIES, WARRANTIES, OBLIGATIONS,
GUARANTEES AND LIABILITIES ON THE PART OF THE SELLER AND RIGHTS,
CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR
IMPLIED, ARISING BY LAW OR OTHERWISE (INCLUDING WITHOUT LIMITATION
ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY ARISING FROM OR
WITH RESPECT TO LOSS OF USE OR REVENUE OR CONSEQUENTIAL DAMAGES),
WITH RESPECT TO ANY ACTUAL OR ALLEGED PATENT INFRINGEMENT OR THE
LIKE BY ANY

55

 

	 	 	AIRFRAME, PART OR SOFTWARE INSTALLED THEREIN AT DELIVERY, OR THE
USE OR SALE THEREOF, PROVIDED THAT, IN THE EVENT THAT ANY OF THE
AFORESAID PROVISIONS SHOULD FOR ANY REASON BE HELD UNLAWFUL OR
OTHERWISE INEFFECTIVE, THE REMAINDER OF THIS CLAUSE WILL REMAIN IN
FULL FORCE AND EFFECT. THIS INDEMNITY AGAINST PATENT AND COPYRIGHT
INFRINGEMENTS WILL NOT BE EXTENDED, ALTERED OR VARIED EXCEPT BY A
WRITTEN INSTRUMENT SIGNED BY THE SELLER AND THE BUYER.
	 
	14 -	 	TECHNICAL DATA AND SOFTWARE SERVICES
	 
	14.1	 	Scope 
	 
	 	 	This Clause covers the terms and conditions for the supply of
technical data and software services (hereinafter, “Technical Data”).
	 
	14.2	 	General
	 
	14.2.1	 	Range, form, type, format, ATA/non-ATA compliance, revision and quantity
of the Technical Data are covered in Exhibit F hereto. Within a
reasonable period of time following commencement of revenue service with
A320 Family Aircraft, the Parties will review and adjust as reasonably
necessary the quantities of Technical Data set forth in Exhibit F hereto.
	 
	14.2.2	 	The Technical Data will be supplied in the English language using
aeronautical terminology in common use.
	 
	14.2.3	 	The Buyer will not receive credit or compensation for any partially used
Technical Data or unused Technical Data provided pursuant to this Clause
14.
	 
	14.2.4	 	The configuration of the Aircraft will be introduced into the Technical
Data on or before Delivery of the Aircraft, unless changes are made to the
configuration in a lead-time before production of Technical Data that does
not allow incorporation by such time in which case such configuration will
be incorporated in the Technical Data no later than [***] after delivery
of each Aircraft (and [***]).
	 
	14.2.5	 	If feasible, upon receipt of the Buyer’s purchase order, the Seller will
comply with the Buyer’s request to change the form or quantity of any of
the Technical Data specified in Exhibit F.
	 
	14.3	 	Aircraft Identification for Technical Data 
	 
	 	 	For the Technical Data that is customized to the Aircraft and/or
operations listed below, the Buyer agrees to the allocation of Fleet
Serial Numbers (FSNs) in the form of a block of numbers selected in
the range from 001 to 999.

56

 

	 	 	The sequence will be interrupted only if two (2) different Propulsion
Systems or different Aircraft models are selected.
	 
	 	 	The Buyer will indicate to the Seller the FSNs corresponding to the
Aircraft as listed in Clause 9 of this Agreement within forty-five
(45) days after execution of this Agreement. The allocation of FSNs
to such Aircraft will not constitute any proprietary, insurable or
other interest of the Buyer in any Aircraft before delivery of and
payment for Aircraft as provided in this Agreement.
	 
	 	 	For purposes of this Clause 14.3, the customized Technical Data are:

	 	–	 	Aircraft Maintenance Manual and associated products
	 
	 	–	 	Illustrated Parts Catalog
	 
	 	–	 	Trouble Shooting Manual
	 
	 	–	 	Aircraft Wiring Manual
	 
	 	–	 	Aircraft Schematics Manual
	 
	 	–	 	Aircraft Wiring Lists

	14.4	 	Supplier Equipment and Buyer Furnished Equipment 
	 
	 	 	Data relating to Supplier equipment that is installed on the
Aircraft by the Seller will be included free of charge in the basic
issue of the customized Technical Data.
	 
	 	 	The Buyer will supply to the Seller, [***], the technical data
related to Buyer Furnished Equipment, in English, before the
scheduled delivery of the customized Technical Data. The Seller
will inform Buyer as to any deficiencies in such information as
soon as Seller discovers the same. The Seller will incorporate the
BFE technical data into the Technical Data at [***]. If such BFE
technical data are supplied to the Seller at least [***] before the
scheduled Delivery of an Aircraft, the Seller will include such
data in the customized Technical Data before such Delivery; if such
BFE technical data are supplied fewer than [***] before such
Delivery, the Seller will make reasonable efforts to include such
BFE technical data in such Technical Data at the first revision of
the Technical Data following Delivery, with the actual inclusion
data of such BFE technical data in the Technical Data depending on
the volume and delivery date to the Seller of such data.
	 
	14.5	 	Delivery
	 
	14.5.1	 	The Technical Data and corresponding revisions to be supplied by the
Seller will be sent to one address only as advised by the Buyer.
	 
	14.5.2	 	Technical Data and revisions will be packed and shipped by the quickest
transportation methods reasonably available. Shipment will be Free
Carrier (FCA) Toulouse, France, and/or Free Carrier (FCA) Hamburg,
Germany.

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	 	 	[The Buyer will provide no less than [***] notice to the Seller if
a change is requested to the delivery schedule for the Technical
Data.]
	 
	14.6	 	Revision Service
	 
	 	 	Unless otherwise specifically stated, revision service for all
Technical Data will be offered [***] accordance with quantities
listed in Exhibit F hereto, for [***]. Thereafter, revision service
will be provided in accordance with the terms and conditions found in
the then current Airbus North America Customer Services Catalog. As
long as the Buyer is taking delivery of Aircraft MSCNs will be
incorporated into Technical Data at no charge.
	 
	14.7	 	Service Bulletin (SB) Incorporation
	 
	 	 	During the period of revision service and upon the Buyer’s request
for incorporation, which will be made within two (2) years after
issuance of a Service Bulletin, Seller’s Service Bulletin
information will be incorporated into the Technical Data for the
Aircraft after formal notification by the Buyer of its intention to
accomplish a Service Bulletin. The split effectivity for the
corresponding Service Bulletin will remain in the Technical Data
until notification from the Buyer that embodiment has been
completed on all the Aircraft. For the operational Technical Data,
only the pre- or post- Service Bulletin status will be shown. The
Seller will incorporate each incorporated Service Bulletin into the
Technical Data no later than the second revision after the
accomplishment of the Service Bulletin on the applicable Aircraft.
This obligation will remain in effect for so long as the Buyer has
revision service.
	 
	14.8	 	Future Developments
	 
	 	 	The Buyer agrees to consider for implementation any new
technological development applicable to, and deemed by the Seller
to be beneficial and economical for, the production and
transmission of data and documents.
	 
	14.9	 	Technical Data Familiarization
	 
	 	 	Upon request by the Buyer, the Seller will provide [***] of
Technical Data familiarization training, at the Seller’s or Buyer’s
facility. If such familiarization is conducted at the Buyer’s
facilities, the Buyer will reimburse the Seller in accordance with
Clause 16.6.2.1.
	 
	14.10	 	Customer Originated Changes
	 
	14.10.1	 	At the Buyer’s request, the Seller will incorporate Customer Originated
Changes (COC) into the following customized Technical Data:

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	 	–	 	Aircraft Maintenance Manual and associated products
	 
	 	–	 	Illustrated Parts Catalog
	 
	 	–	 	Trouble Shooting Manual
	 
	 	–	 	Aircraft Wiring Manual
	 
	 	–	 	Aircraft Schematics Manual
	 
	 	–	 	Aircraft Wiring Lists
	 
	 	–	 	Flight Crew Operating Manual
	 
	 	–	 	Quick Reference Handbook

	14.10.2	 	COC data will be developed by the Buyer according to the “Customer
Guide for Customer Originated Changes (COC)” issued by the Seller. The
Buyer will ensure that any such COC data are in compliance with the
requirements of its local Aviation Authorities.
	 
	 	 	COC data will be incorporated by the Seller in the customized
Technical Data listed in Clause 14.10.1 unless the Buyer specifies
in writing into which customized Technical Data the Buyer desires
that the COC data be incorporated. Following incorporation of the
COC data as requested by the Buyer, the relevant customized
Technical Data will show only the aircraft configuration that
reflects the COC data and not the configuration before
incorporation of the COC data. The Seller will use all reasonable
efforts to introduce the COC into the relevant Technical Data as
soon as possible following the receipt of complete and accurate
data for processing, but no later than two (2) revisions after
submission of the COC. The COC data will be labeled as such. The
method of labeling varies from Technical Data document to Technical
Data document, which is explained in each Technical Data document.
	 
	14.10.3	 	The Buyer hereby acknowledges and accepts that the incorporation of any
COC into the Technical Data will be at the Buyer’s sole risk, and the
Seller will have no liability whatsoever with respect to: (a) the contents
of any COC (including, but not limited to, any omissions or inaccuracies
therein) (b) any effect that the incorporation of such COC may have on the
Technical Data or (c) any costs of any nature that any COC may have on all
subsequent Service Bulletins and modifications.
	 
	 	 	The Seller will not be required to check the accuracy or validity
of any COC data submitted for incorporation into the Technical Data
	 
	14.10.4	 	[***] except in the case of [***] as a result of incorporation of any
COC into the Technical Data issued by the Seller.
	 
	14.10.5	 	[***], no liability on the part of the Seller will arise by any
communication, whether written or oral, between the Seller and the Buyer
with respect to COC data or the incorporation of such data into the
Technical Data.

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	14.10.6	 	The Seller’s costs with respect to the incorporation of any COC will be
invoiced to the Buyer under conditions specified in ANACS’ Customer
Services Catalog in effect at the time of the Buyer’s request for
incorporation.
	 
	14.11	 	Software Services
	 
	14.11.1	 	Performance Engineer’s Programs
	 
	 	 	In addition to the standard operation manuals, the Seller will
provide to the Buyer Performance Engineer’s Programs (PEPs) under
the terms and conditions of the License for use of Software
attached as Appendix 1 to Exhibit F hereto (the “Software
License”). Use of PEP will be limited to one (1) copy installed
on one (1) computer. PEP is intended for use on the ground only
and will not be installed on an Aircraft. The Seller will provide
the Buyer with a three-day installation and review visit regarding
the PEPs.
	 
	 	 	The Software License for use of PEP will be granted free of
charge for a period coextensive with the period of time within
which the Buyer is entitled to free Technical Data revision service
under the terms of Clause 14.6. At the expiration of that period,
the Buyer will be entitled to continue to use the PEP Software free
of charge, but the Buyer will be charged for all revisions, in
accordance with the terms and conditions of the then current Airbus
North America Customer Services Catalog.
	 
	14.11.2	 	AirN@vmailto:
	 
	 	 	The following Technical Data are provided on DVD (digital video
disk) under the terms and conditions of the Software License:
	 
	 	 	–   Trouble Shooting Manual
	 
	 	 	–   Aircraft Maintenance Manual
	 
	 	 	–   Illustrated Parts Catalog
	 
	 	 	From time to time, the Seller may make additional Technical Data
available on DVD and may impose other reasonable license
conditions with respect thereto not inconsistent with this
Agreement. mailto:
	 
	 	 	The Software License for use of AirN@v will be granted
free of charge for a period coextensive with the period of time
within which the Buyer is entitled to free Technical Data revision
service under the terms of Clause 14.6. At the expiration of that
period, the Buyer will be entitled to continue to use the software
free of charge, but the Buyer will be charged for all revisions, in
accordance with the terms and conditions of the then current Airbus
North America Customer Services Catalog.
	 
	14.11.3	 	Airbus On-Line Services

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	14.11.3.1	 	AOLS is a database allowing the Buyer to access a wide range of
services through a web portal. AOLS, including a description of those
Technical Data that are available through the use of AOLS, are described
in Attachment 1 to Appendix 2 to Exhibit F. The Buyer will be entitled to
use the AOLS software free of charge for so long as the Buyer operates at
least one Aircraft.
	 
	14.11.3.2	 	The Seller will provide to the Buyer Airbus On-Line Services (“AOLS”)
under the terms and conditions of the License Agreement for use of AOLS
attached as Appendix 2 to Exhibit F here to (the “AOLS License”) and to
the Software License attached as Appendix 1 to Exhibit F.
	 
	14.11.3.3	 	Those Technical Data that are available through AOLS and individual
documents contained therein will be subject to change, revision and/or
replacement from time to time. Revisions will be available free of charge
for a period coextensive with the period of time within which the Buyer is
entitled to free Technical Data revision service under the terms of Clause
14.6. At the expiration of that period, the Buyer will be entitled to
continue to use the software free of charge, but the Buyer will be charged
for all revisions, in accordance with the terms and conditions of the then
current Airbus North America Customer Services Catalog.
	 
	14.12	 	Warranty 
	 
	 	 	The provisions of Clause 12 and in particular of Clause 12.6
(EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY),
will apply to the provision of Technical Data under this Clause 14.
	 
	14.13	 	Proprietary Rights
	 
	 	 	All proprietary rights, including but not limited to patent,
design and copyrights, relating to Technical Data will remain with
the Seller (except COCs, BFE data and any other Technical Data
supplied by or through the Buyer). All Technical Data are supplied
to the Buyer for the sole use of the Buyer, who undertakes not to
divulge the contents thereof to any third party save as permitted
therein or otherwise pursuant to any governmental or legal
requirement imposed on the Buyer.
	 
	 	 	These proprietary rights will also apply to any translation into a
language or languages or media that may have been performed or
caused to be performed by the Buyer.
	 
	14.14	 	Confidentiality.
	 
	 	 	Notwithstanding the provisions of Clause 22.7, this Clause 14.14
provides the confidentiality terms with respect to Technical Data.
The Technical Data and their content are designated as
confidential. All such Technical Data are supplied to the Buyer
for the sole use of the Buyer who undertakes not to disclose the
contents thereof to any third party without the prior written
consent of the Seller as

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	 	 	permitted therein or otherwise pursuant to any government or legal
requirement imposed upon the Buyer. [***].
	 
	 	 	If the Buyer authorizes the Seller to disclose Technical Data to
third parties, as required for maintenance and/or operation of the
Aircraft in the Buyer’s fleet, the Buyer will undertake that such
third party agree to be bound by the same conditions as the Buyer
with respect to the confidentiality of the Technical Data in the
form set forth in the Data Release Agreement.
	 
	15 -	 	SELLER REPRESENTATIVES
	 
	15.1	 	The Seller will provide or cause to be provided at no charge to the Buyer
the services described in this Clause 15, at the Buyer’s main base or at
other locations the Buyer may designate.
	 
	15.2	 	Resident Customer Support Representatives
	 
	15.2.1	 	The Seller will provide representatives to act in an advisory capacity
at the Buyer’s main base or at other locations (“Resident Customer Support
Representative”) to be mutually agreed.

	 	(i)	 	At a mutually agreed date, the Seller will
provide a dedicated Resident Customer Support Representative
who will remain on-site as long as the Buyer has at least one
(1) Aircraft in its fleet that is dedicated to the Buyer’s
operation.
	 
	 	(ii)	 	In addition, the Seller will provide a total of
[***] man-months’ of Resident Customer Support
Representatives. The actual number of Customer Support
Representatives assigned to the Buyer at any one time will be
mutually agreed.

	15.2.2	 	The Seller will provide to the Buyer a regular written account of the
consumed man-months and any remaining balance of such months provided
above under Clause 15.2.1(ii). This account will be made [***] until the
man-months are consumed.
	 
	15.2.3	 	Should the Buyer request additional services that exceed the amounts set
forth in Clause 15.2.1(ii), the Seller may provide additional service
subject to the terms and conditions agreed by the Buyer and the Seller at
the time of such request.
	 
	15.2.4	 	The Parties will consult to determine if and when similar services will
be provided by the Propulsion System manufacturer and Suppliers.
	 
	15.3	 	Customer Support Director

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	 	 	The Seller will assign the services of one (1) Customer Support
Director based in Herndon, Virginia, to liaise between the
Manufacturer and the Buyer on product support matters after signature
of this Agreement for as long as the Buyer has at least one (1)
Aircraft in its fleet.
	 
	15.4	 	Buyer’s Service
	 
	15.4.1	 	From the date of arrival of the first Resident Customer Support
Representative and for until the duration of the assignment, the Buyer
will furnish free-of-charge suitable space, office equipment and
facilities in or conveniently located with respect to the Buyer’s
maintenance facilities for the use by the Resident Customer Support
Representatives during the aforementioned period. The Buyer will also
provide to the Seller’s Resident Customer Support Representatives during
the aforementioned period, free of charge, reasonable use of electronic
mail, internet access, facsimile and telephone service.
	 
	15.4.2	 	In accordance with the Buyer’s regulations, the Buyer will provide at no
charge to the Seller transportation for each Resident Customer Support
Representative(s) in coach class between the locations established
pursuant to Clause 15.2.1 and the place of assignment, when said Resident
Customer Support Representative(s) is assigned away from such locations at
the Buyer’s request.
	 
	15.4.3	 	The Parties will give each other all necessary reasonable assistance
with general administrative functions specific to their respective
countries and procurement of the documents necessary to live and work
there.
	 
	15.5	 	Temporary Assignment and Withdrawal of Resident Customer Support
Representatives
	 
	 	 	The Seller will have the right upon written notice to and
communication with the Buyer to transfer or recall any Resident
Customer Support Representative(s) on a temporary or permanent
basis if, in the Seller’s reasonable opinion, conditions are
dangerous to the Resident Customer Support Representative’s safety
or health or prevent the fulfillment of such Resident Customer
Support Representative’s contractual tasks. The Buyer will receive
credit for the man-days during which any Resident Customer Support
Representative is absent from the Buyer’s facility pursuant to this
Clause 15.5.
	 
	15.6	 	Representatives’ Status
	 
	 	 	In providing the above technical service, the Seller’s employees,
including, but not limited to, Resident Customer Support
Representative(s) and the Customer Support Director, are deemed to
be acting in an advisory capacity only and at no time will they be
deemed to be acting, either directly or indirectly, as the Buyer’s
employees or agents and will for all purposes be independent
contractors as to the Buyer. Nevertheless, the Seller’s employees,
including, but not limited to, the

63

 

	 	 	Resident Customer Support Representative(s) and the Customer
Support Director, shall comply with the Buyer’s reasonable internal
procedures, rules, and regulations.
	 
	15.7	 	The Seller has established a global technical services network available
for the nonexclusive use of operators of aircraft manufactured by the
Manufacturer. The Buyer will have free access to this global network at
any time in the course of its operation of the Aircraft. In particular,
the Buyer will have access to the regional customer support
representatives closest to the Buyer’s main base to cover for the
temporary absence of the Customer Support Representative(s). A list of
the contacts for the global technical services network, including but not
limited to, the regional customer support representatives, will be
provided to the Buyer.
	 
	16 -	 	TRAINING AND TRAINING AIDS
	 
	16.1.	 	General
	 
	 	 	This Clause covers the terms and conditions for the supply of
training and training aids for the Buyer’s personnel to support the
Aircraft operation.
	 
	16.2.	 	Scope
	 
	16.2.1	 	The range and quantity of training and training aids to be provided free
of charge under this Agreement are covered in Appendix A to this Clause
16. The Seller will arrange availability of such training and training
aids in relation to the delivery schedule for the Aircraft set forth in
Clause 9.1.1, in accordance with the plan developed and agreed at the
Training Conference (as defined below), as such plan and delivery schedule
may be changed from time to time by mutual agreement of the Parties.
	 
	16.2.2	 	The contractual training courses, defined in Appendix A to this Clause
16, will be provided for up to one (1) year after delivery of the last
Aircraft.
	 
	16.2.3	 	In the event that the Buyer should use none or only part of the training
or training aids to be provided pursuant to this Clause, no compensation
or credit of any sort will be provided.
	 
	16.3.	 	Training Organization / Location
	 
	16.3.1	 	The Seller will use commercially reasonable efforts to provide the
training at the Airbus/CAE Cooperation Network Training Center in Miami,
Florida.
	 
	16.3.2	 	If the unavailability of facilities or scheduling imperatives make it
not feasible for the Seller to provide training as set forth in Clause
16.3.1, then the Seller will provide training at other Airbus/CAE
Cooperation Network Training Centers [***], to the extent reasonably
possible. Otherwise, the Seller will provide

64

 

	 	 	training at another available FAA-approved training center that
will be acceptable to the Parties.

	16.3.3	 	Upon the Buyer’s request the Seller may also provide certain training at
one of the Buyer’s bases, if and when practicable for the Seller, under
terms and conditions to be mutually agreed upon. In this event, all
additional charges listed in Clause 16.6.2 will be borne by the Buyer.
	 
	16.4	 	Training Courses
	 
	16.4.1	 	Training courses, as well as the minimum and maximum numbers of trainees
per course provided for the Buyer’s personnel, are defined in the Seller’s
applicable training course catalog (the “Training Course Catalog”) and
will be scheduled as mutually agreed upon during a training conference
(the “Training Conference”) that will be held no later than sixty (60)
days after signature of this Agreement.
	 
	16.4.2	 	The following terms will apply when training is performed by the Seller:

	 	(i)	 	Training courses will be the Seller’s standard
courses as described in the Seller’s applicable and then
current Training Course Catalog. The Seller will be
responsible for all training course syllabi, training aids and
training equipment necessary for the organization of the
training courses. The Seller will [***].
	 
	 	(ii)	 	It is possible that the training curricula and the
training equipment will not be fully customized. However, they
will be modified to include the most significant aspects of the
Specification as known at the latest six (6) months prior to
the date of the first training course planned for the Buyer and
will be configured in order to obtain the relevant Aviation
Authority’s approval and to support the Seller’s teaching
programs. As part of the training allowances provided
hereunder, the Seller will provide the Buyer differences
training for A320 Family Aircraft for flight crew, maintenance,
dispatch, and/or flight attendant personnel.
	 
	 	(iii)	 	Training data and documentation necessary for
training detailed in Appendix A to this Clause 16 will be
free-of-charge and will not be revised once provided to
trainees. Training data and documentation will be marked “FOR
TRAINING ONLY” and as such will be supplied for the sole and
express purpose of training.
	 
	 	(iv)	 	Upon the request of the Buyer and at no charge to the
Buyer, the Seller will collect and pack for consolidated
shipment to the Buyer’s facility, all training data and
documentation of the Buyer’s trainees attending training at the
Airbus Training Center in Miami, Florida, Blagnac, France or
Beijing, China as applicable. This training data and
documentation will be delivered Free Carrier (FCA) Miami
International Airport. It is

65

 

	 	 	 	understood that title to and risk of loss of the training
data and documentation will pass to the Buyer upon delivery.

	16.4.3	 	The Buyer will give the Seller a minimum of [***] calendar days’ prior
written notice if any cancellation or rescheduling is required. [***].
	 
	16.4.4	 	[***] under this Clause 16 [***]. If a scheduled training session
within a confirmed course is cancelled [***] the Parties will [***].
	 
	16.4.5	 	In fulfillment of its obligation to provide training courses, when the
Seller performs the training courses, the Seller will deliver to the
trainees a certificate of completion at the end of any such training
course. The Seller’s certificate does not represent authority or
qualification by any official Aviation Authorities but may be presented to
such officials in order to obtain relevant formal qualification.
	 
	 	 	If training is provided by a training provider selected by the
Seller, the Seller will cause such training provider to deliver a
certificate of completion at the end of any such training course.
Such certificate will not represent authority or qualification by
any official Aviation Authorities but may be presented to such
officials in order to obtain relevant formal qualification.
	 
	 	 	Notwithstanding the foregoing, the training courses shall be
approved by the FAA and shall meet certification requirements as
established by the FAA for aircraft type ratings or maintenance
certificates as necessary to allow the Buyer to meet regulatory
obligations to operate and maintain the Aircraft.
	 
	16.5	 	Prerequisites
	 
	16.5.1	 	Training will be conducted in English and all training aids are written
in English using common aeronautical terminology. Trainees must have the
prerequisite experience as defined in Appendix B to this Clause 16, unless
otherwise agreed by the Parties.
	 
	 	 	The Buyer will be responsible for the selection of the trainees and
for any liability with respect to the entry knowledge level of the
trainees.
	 
	16.5.2	 	The Buyer will provide the Seller with an attendance list of the
trainees for each course with the validated qualification of each trainee.
The Seller reserves the right to verify the trainees’ proficiency and
previous professional experience. The Seller will in no case warrant or
otherwise be held liable for any trainee’s performance as a result of any
training services provided, [***].
	 
	16.5.3	 	Upon the Buyer’s request, the Seller may be consulted to direct the
above mentioned trainee(s) through a relevant entry level training
program, which will be at the Buyer’s charge, and, if necessary, to
coordinate with competent outside

66

 

	 	 	organizations for this purpose. Such consultation will be held as
soon as it is apparent that the trainees do not meet minimum
standards.

	 	 	If the Seller and the Buyer agree that a trainee lacks the required
competency, such trainee will be withdrawn from the training
program. The Seller, after finding the qualification information
provided for a trainee is in error, may, following consultation
with the Buyer, withdraw such trainee from the program.
	 
	 	 	Upon such withdrawals, [***]. To the extent [***], the Seller may
deduct the allowance from the total allowance for the applicable
training.
	 
	16.6.	 	Logistics
	 
	16.6.1	 	Trainees
	 
	16.6.1.1	 	When training is done at the Airbus Training Center in Miami, Florida,
the Seller will provide a free-of-charge rental car for all of the Buyer’s
trainees for the period of the training course on the basis of one (1)
rental car per four (4) maintenance, operations and cabin attendant
trainees or other trainees of the Buyer and one (1) rental car per each
flight crew.
	 
	 	 	The Seller will provide rental cars with unlimited mileage, and the
Buyer will pay for gas, and fines, if any. However, the Buyer will
indemnify and hold the Seller harmless from and against all
liabilities, claims, damages, costs and expenses for any injury to
or death of any of the Buyer’s trainees occasioned during the
course of such transportation.
	 
	16.6.1.2	 	When training is done at the Airbus Training Center in Blagnac,
France, or Beijing, China, the Seller will provide free local
transportation by bus for the Buyer’s trainees to and from designated pick
up points and the training center
	 
	16.6.1.3	 	Living expenses for the Buyer’s trainees are to be borne by the Buyer.
	 
	16.6.2	 	Training at External Location
	 
	16.6.2.1	 	Seller’s Instructors
	 
	 	 	If, at the Buyer’s request, training is provided by the Seller’s
instructors at any location other than the Seller’s training
centers, [***].
	 
	16.6.2.2	 	Living Expenses for the Seller’s Instructors
	 
	 	 	Such expenses, covering the entire period from day of secondment
to day of return to the Seller’s base, will cover reasonable
lodging, laundry, telephone, food and local transportation to and
from the place of lodging and the training course location.
[***].

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	16.6.2.3	 	Air Travel
	 
	 	 	[***].
	 
	16.6.2.4	 	Training Material
	 
	 	 	The Buyer will reimburse the Seller for the reasonable cost of
shipping the training material needed to conduct such courses.
	 
	16.6.2.5	 	Training Equipment Availability
	 
	 	 	Training equipment necessary for course performance at any course
location other than the Seller’s training centers or the
facilities of the training provider selected by the Seller will
be provided by the Buyer in accordance with the terms specified
herein, as the Parties may modify the same in writing.
	 
	16.7	 	Flight Operations Training
	 
	16.7.1	 	Flight Crew Training Course
	 
	 	 	The Seller will perform a flight crew training course program for
the Buyer’s flight crews. A flight crew will consist of one
captain (1) and one (1) first officer, as defined in Appendix A
to this Clause 16. The training manual used will be the Seller’s
Flight Crew Operating Manual, [***].
	 
	16.7.2.	 	Flight Crew Line Initial Operating Experience
	 
	16.7.2.1	 	In order to assist the Buyer with initial operating experience after
delivery of the first Aircraft, the Seller will provide to the Buyer pilot
instructor(s) as defined in Appendix A to this Clause 16. The maximum
number of Seller’s pilot instructors present at the Buyer’s site at one
time will be mutually agreed between the Parties during the Training
Conference.
	 
	16.7.2.2	 	Additional pilot instructors can be provided at the Buyer’s expense
upon conditions to be mutually agreed.
	 
	16.7.2.3	 	Prior to any flight training to be performed by the Seller on the
Buyer’s Aircraft, the Buyer will provide to the Seller a copy of the
certificate of insurance as requested in Clause 19.
	 
	16.7.3	 	Cabin Attendants’ Familiarization Course
	 
	 	 	The Seller will provide cabin attendants’ course(s) to the Buyer’s
cabin attendants, as defined in Appendix A to this Clause 16.

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	 	 	The cabin attendants’ course, when incorporating visits to the
Aircraft, will be provided at mutually agreed upon times.
	 
	16.8	 	Maintenance Training
	 
	16.8.1	 	The Seller will provide maintenance training for the Buyer’s ground
personnel as defined in Appendix A to this Clause 16.
	 
	 	 	The available courses are listed in the Seller’s applicable
Training Course Catalog.
	 
	 	 	The practical training provided in the frame of maintenance
training is performed exclusively on the training devices in use in
the Seller’s Training Center or Affiliated Training Centers. If
additional practical training is required, such additional
practical training can be organized with the assistance of the
Seller, in accordance with Clause 16.8.2 hereunder.
	 
	16.8.2	 	Practical Training
	 
	 	 	If the Buyer requires practical training to be organized at another
airline’s facilities, then the Seller will assist the Buyer in
organizing this training without guaranteeing the availability of
any other airline’s facilities.
	 
	 	 	Such practical training will be deducted from the trainee-day
allowance defined in Paragraph 2.1 of Appendix A to this Clause 16
in the manner defined in Paragraph 3 of such Appendix.
	 
	16.8.3	 	Line Maintenance Initial Operating Experience Training
	 
	 	 	In order to assist the Buyer during the entry into service of the
Aircraft, the Seller will provide to the Buyer maintenance
instructor(s) at the Buyer’s base as defined in Appendix A to this
Clause 16.
	 
	16.8.3.1	 	This line maintenance initial operating experience training will cover
training in handling and servicing of Aircraft, flight crew and
maintenance coordination, use of paper and/or electronic documentation
and/or any other activities which may be deemed necessary after delivery
of the first [***]).
	 
	16.9	 	Supplier and Engine Manufacturer Training
	 
	 	 	The Seller will ensure that major Suppliers and the Propulsion
System manufacturer provide maintenance training and overhaul
training on their products at appropriate times.
	 
	 	 	A copy of the Supplier Training Catalogue, listing the suppliers
that provide training, will be supplied to the Buyer on request.

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	16.10	 	Training Aids for the Buyer’s Training Organization
	 
	16.10.1	 	The Seller will provide to the Buyer the Airbus Computer Based
Training, and training aids, as used in the Seller’s Training Centers,
free of charge as defined in Appendix A to this Clause 16. Subject to
Paragraph 6.2 of Appendix C to this Clause 16, the Buyer shall be
permitted to incorporate the contents of the training aids, which have
been provided by the Seller into the Buyer’s in-house training program at
no charge to the Buyer.
	 
	 	 	The Airbus CBT System and training aids supplied to the Buyer will
be similar to those used at the Airbus Training Centers for
training such as that to be provided for the Buyer. The Seller has
no obligation to cause the Manufacturer to revise the Airbus CBT
System. The Airbus CBT System in use at the Seller’s Training
Center may be revised on a regular basis including to reflect any
significant change related to a technical evolution of the
Aircraft, and such revisions, if any, will be provided to the Buyer
free of charge up to [***].
	 
	16.10.2	 	Delivery
	 
	16.10.2.1	 	The Seller will deliver to the Buyer the Airbus CBT System, training
aids as defined in Appendix A to this Clause 16, at a date to be mutually
agreed during the Training Conference.
	 
	16.10.2.2	 	Those items supplied to the Buyer pursuant to Clause 16.10.1 above
will be delivered FCA Toulouse, France, and/or FCA Hamburg, Germany. Title
to and risk of loss of said items will pass to the Buyer upon delivery.
	 
	16.10.3	 	Installation
	 
	16.10.3.1	 	The Buyer will provide any and all the necessary hardware on which
the Airbus CBT System will be installed and Seller will not be responsible
for any incompatibility of such hardware with the Airbus CBT System.
	 
	16.10.3.2	 	The Airbus CBT System will be installed, with Seller’s assistance, by
the Buyer’s personnel who have completed the Airbus CBT training, and the
Seller will be held harmless from any damage to person and/or to property
caused by or in any way connected with the handling and/or installation of
the Airbus CBT System by the Buyer’s personnel.
	 
	16.10.3.3	 	The Buyer will reimburse the expenses in accordance with Clause 16.6,
for the Seller’s personnel required at the Buyer’s facility to conduct
Airbus CBT Training and/or provide installation assistance.
	 
	16.10.4	 	License

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	 	 	The Seller will grant the Buyer a license to use the Airbus CBT
System, as defined in Appendix C to this Clause 16.
	 
	 	 	Supply of additional sets of courseware supports (DVD and/or
CD-ROM) as well as any extension to the license for such
courseware, will be subject to terms and conditions to be mutually
agreed. The Seller will not unreasonably withhold its consent to
any request from the Buyer for additional sets of courseware
supports (and any additional licenses necessary for the Buyer’s use
of the same) if the Buyer needs such additional supports to develop
the Buyer’s training program for the training of the Buyer’s
personnel or the Buyer’s subcontractor(s).
	 
	16.10.5	 	The Seller will not be responsible and hereby disclaims any and all
liabilities resulting from or in connection with the use by the Buyer of
the training aids at the Buyer’s facilities.
	 
	16.11	 	Proprietary Rights
	 
	 	 	The Seller’s training data and documentation, Airbus CBT System and
training aids are proprietary to the Manufacturer and its suppliers.
The Buyer agrees not to disclose the content of the courseware or
any information or documentation provided by the Seller in relation
to training, in whole or in part, to any third party, without the
prior written consent of the Seller, it being understood that [***].

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APPENDIX A TO CLAUSE 16

TRAINING ALLOWANCES

	1.	 	FLIGHT OPERATIONS TRAINING
	 
	1.1	 	Flight Crew Training 
	 
	 	 	The Seller will provide flight crew training (regular transition) up
to CAT III free of charge for [***] crews per Aircraft.
Alternatively, the Seller may provide training for [***] crews per
Aircraft provided that at least [***] of such crews are already
certified on Airbus A320 family aircraft and thereby qualify for a
condensed course.
	 
	 	 	The Seller will also provide transition training and instructor
training for [***] of the Buyer’s instructor pilots, including, but
not limited to, instruction in simulator operation.
	 
	1.2	 	Flight Crew Line Initial Operating Experience
	 
	 	 	The Seller will provide to the Buyer pilot instructor(s) for [***]
pilot instructor months to assist with flight-crew initial operating
experience.
	 
	 	 	The maximum number of pilot instructors present at any one time
will be [***].
	 
	1.3	 	Cabin Attendants’ Familiarization Course
	 
	 	 	The Seller will provide to the Buyer up to [***] cabin attendants’
training familiarization courses free of charge for no more than [***]
in total number of the Buyer’s cabin attendants.
	 
	1.4	 	Dispatch/Performance/Operations Course(s)
	 
	 	 	The Seller will provide to the Buyer [***] trainee days of
dispatch/performance/operations training free of charge for the
Buyer’s dispatchers, performance engineers and load-master
specialists.
	 
	 	 	The above trainee days will be used solely for the
performance/operations training courses as defined in the Seller’s
applicable Training Course Catalog.
	 
	2.	 	MAINTENANCE TRAINING
	 
	2.1	 	Maintenance Training Courses
	 
	 	 	The Seller will provide to the Buyer [***] trainee days of maintenance
training free of charge for the Buyer’s personnel.

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	 	 	These trainee days will be used solely for the Maintenance training
courses as defined in the Seller’s applicable Training Course Catalog,
[***].
	 
	2.2	 	Line Maintenance Initial Operating Experience Training
	 
	 	 	The Buyer will have the right to replace any or all of the [***] pilot
instructor months provided in Paragraph 1.2 above, with maintenance
instructor months to assist with line maintenance initial operating
experience, it being understood that such line maintenance initial
operating experience will consist of maintenance instructors provided
by the Seller to provide on-the-job maintenance training at the
Buyer’s maintenance bases.
	 
	3.	 	TRAINEE DAYS ACCOUNTING
	 
	 	 	Trainee days are counted as follows:

	 	(i)	 	For instruction at the Seller’s training center
or affiliated training center, one day of instruction for one
(1) trainee equals one (1) trainee day, and, in the case of
cancellation or rescheduling by the Buyer [***].
	 
	 	(ii)	 	For instruction outside of the Seller’s training
center or affiliated training center, not including practical
training, one (1) day of instruction by one (1) Seller
instructor equals the actual number of trainees attending the
course or a minimum of [***] trainee days.
	 
	 	(iii)	 	For instruction outside of the Seller’s training
center or affiliated training center that is practical
training, one (1) day of instruction by one (1) Seller
instructor equals the actual number of trainees attending the
course or a minimum of [***] trainee days.

	 	 	In the event of training being provided outside of the Seller’s
training center or affiliated training centers specifically at the
Seller’s request, Paragraph 3(i) above shall be applicable to the
trainee days accounting for such training facility.
	 
	4.	 	TRAINING AIDS AND CBT SYSTEM FOR BUYER’S TRAINING ORGANIZATION
	 
	4.1	 	The Seller will provide to the Buyer one (1) “Airbus CBT System,” defined
in Paragraph 2.1.3 of Appendix C to Clause 16, related to the Aircraft.
The Seller will also provide free of charge updates to courseware in this
Paragraph below when developed by the Manufacturer, continuing through the
[***] year following delivery of the last Aircraft. To the extent any of
the courseware so provided is delivered to the Buyer in a printed or other
“hard” format, the Seller will provide the Buyer with an electronic
searchable copy of the same if available to the Seller.

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	 	 	The Airbus CBT System supplied to the Buyer will consist of

	 	–	 	one (1) Airbus CBT installation/utilization guide
	 
	 	–	 	one (1) set of CD-ROMs/DVDs with run time software related to the
delivered courseware.

	 	 	For Flight Operations Training
	 
	 	 	The A320 Family flight crew Airbus CBT courseware will be delivered with

	 	–	 	one (1) set of CD ROMs/DVDs with
Airbus CBT courseware files,
including but not limited to, [***]

	 	 	For Maintenance Training
	 
	 	 	The A320 Family maintenance Airbus CBT courseware will be delivered with

	 	–	 	one (1) set of CD ROMs with Airbus CBT courseware files
	 
	 	–	 	one (1) set of electronic training documentation masters, whenever applicable
	 
	 	–	 	one (1) set of menu listings
	 
	 	–	 	one (1) set of DVDs, whenever applicable

	 	 	For Performance/Operations Training
	 
	 	 	The A320 Family performance/operations Airbus CBT courseware will be delivered
with

	 	–	 	one (1) set of CD ROMs with Airbus CBT courseware files
	 
	 	–	 	one (1) set of electronic training documentation
masters, whenever applicable
	 
	 	–	 	one (1) set of menu listings
	 
	 	–	 	one (1) Training Interface for Performance and
Weight and Balance (TIPWB)

	 	 	For Inflight Training
	 
	 	 	The A320 Family Inflight Airbus CBT courseware will be delivered with

	 	–	 	one (1) set of CD ROMs with Airbus CBT courseware files
	 
	 	–	 	one (1) set of electronic training documentation
masters, whenever applicable
	 
	 	–	 	one (1) set of menu listings

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APPENDIX B TO CLAUSE 16

MINIMUM RECOMMENDED QUALIFICATION

IN RELATION TO TRAINING REQUIREMENTS

(Standard Transition Courses)

The prerequisites listed below are the minimum recommended requirements
specified for Airbus training. If the appropriate Aviation Authority or the
specific airline policy of the trainee demand greater or additional
requirements, such requirements will be considered as prerequisites, unless the
Parties otherwise agree.

	–	 	CAPTAIN prerequisites

	 	•	 	Fluency in English
	 
	 	•	 	1500 hours minimum flying experience as pilot
	 
	 	•	 	1000 hours experience on FAR/JAR 25 aircraft
	 
	 	•	 	200 hours experience as airline, corporate pilot or military pilot
	 
	 	•	 	Must have flown transport type aircraft, as flying pilot, within the last 12 months.

	–	 	FIRST OFFICER prerequisites

	 	•	 	Fluency in English
	 
	 	•	 	500 hours minimum flying experience as pilot of fixed wing aircraft
	 
	 	•	 	300 hours experience on FAR/JAR 25 aircraft
	 
	 	•	 	200 hours flying experience as airline pilot or a corporate pilot or military pilot
	 
	 	•	 	Must have flown transport type aircraft, as flying pilot, within the last 12 months.
	 
	 	 	 	For both CAPTAIN and FIRST OFFICER, if one or several
of the above criteria are not met, unless otherwise agreed by
the Buyer and Seller, the trainee must follow

	 	(i)	 	an adapted course or
	 
	 	(ii)	 	an Entry Level Training (ELT) program before
entering the regular or the adapted course.
	 
	 	 	 	Such course(s), if required, will be at the Buyer’s expense.

	–	 	MAINTENANCE PERSONNEL prerequisites

	 	(i)	 	For all Maintenance courses:

	 	•	 	Fluency in English

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	 	•	 	Experience on first or second generation jet transport
category aircraft

	 	(ii)	 	Additional prerequisites for Aircraft
Rigging, Engine Run-Up and Maintenance Initial Operating
Course:

	 	•	 	Qualified as line or line and
base mechanic on the concerned Airbus aircraft type
(for Maintenance Initial Operating Experience Course).

	 	(iii)	 	Maintenance Training Difference Courses additional prerequisites:

	 	•	 	Be currently qualified on one of the A320 family aircraft types.

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APPENDIX C TO CLAUSE 16

     LICENSE FOR USE OF AIRBUS COMPUTER BASED TRAINING AND AQP MATERIAL

	1.	 	GRANT
	 
	 	 	The Seller grants the Buyer the right, pursuant to the terms and
conditions herein, to use the Airbus CBT System for the term (defined in
Paragraph 4 below) of this license (the “License”).
	 
	2.	 	DEFINITIONS
	 
	2.1	 	For the purpose of this Appendix C to Clause 16, the following
definitions will apply :
	 
	2.1.1	 	“Airbus CBT Courseware” means the programmed instructions that provide
flight crew and maintenance training.
	 
	2.1.2	 	“Airbus CBT Software” means the system software that permits the use of
the Airbus CBT Courseware.
	 
	2.1.3	 	“Airbus CBT System” means the combination of the Airbus CBT Software and
the Airbus CBT Courseware.
	 
	2.1.4	 	“Student/Instructor Mode” means the mode that allows the user to run the
Airbus CBT Courseware.
	 
	2.1.5	 	“Airbus CBT Training” means the training enabling the Buyer to load and
use the Airbus CBT System.
	 
	2.1.6	 	“AQP Material” means any relational database
        system comprising flight-crew training objectives and training and task
        analysis developed by the Manufacturer, for use by the Buyer to develop
        training curriculum, training courseware and student training materials
        up to Phase III of AQP.
	 
	2.1.7	 	“User Guide” means the documentation, which may be in electronic format
designed to assist the Buyer to use the Airbus CBT.
	 
	2.2	 	For the purpose of clarification, it is hereby stated that all related
hardware required for the operation of the Airbus CBT System is not part
of the Airbus CBT System and all related hardware required for the
operation of the AQP Material will be procured under the sole
responsibility of the Buyer.
	 
	3.	 	COPIES

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	3.1	 	The Buyer will be permitted to copy (i) the Airbus CBT System for back-up
and archiving purposes and for loading of the Airbus CBT System and (ii)
the AQP Material exclusively on the Buyer’s workstations and for the
Buyer’s training its own personnel or the Buyer’s third-party contract
maintenance provider. In such cases, the Buyer will advise the Seller in
writing stating the number and purpose of any copies made. Any other
copying is strictly prohibited.
	 
	3.2	 	The Buyer agrees to reproduce the copyright and other notices as they
appear on or within the original media on any copies that the Buyer makes
of the Airbus CBT Software or AQP Material.
	 
	4.	 	TERM
	 
	 	 	The rights under this License will be granted to the Buyer for as long as
the Buyer operates the aircraft model to which the Airbus CBT Software,
Airbus CBT courseware or AQP Material applies. When the Buyer stops
operating said Aircraft model, the Buyer will use its commercially
reasonable efforts to return the Airbus CBT System and AQP Material and
any copies thereof to the Seller, accompanied by a note certifying that
the Buyer has returned the Airbus CBT System and/or AQP Material, as
applicable, and any copies thereof (or, to the degree applicable, has so
exerted its commercially reasonable efforts).
	 
	5.	 	PERSONAL ON-SITE LICENSE 
	 
	5.1	 	The License granted herein is personal to the Buyer for use of the Airbus
CBT System and AQP Material within the Buyer’s premises only, and is
nontransferable and nonexclusive.
	 
	5.2	 	Except as otherwise agreed in writing by the Parties, the Buyer may not
(i) distribute or sublicense any portion of the Airbus CBT System or AQP
Material, (ii) modify or prepare derivative works from the Airbus CBT
Software or AQP Material, (iii) publicly display visual output of the
Airbus CBT Software or AQP Material, or (iv) transmit the Airbus CBT
Software or AQP Material electronically by any means.
	 
	5.3	 	The Buyer will use the Airbus CBT exclusively in the technical
environment defined in the User Guide.
	 
	 	 	Notwithstanding the above, the right to use the Airbus CBT on the Buyer’s
internal network installation is granted to the Buyer subject to the
Buyer strictly complying with the conditions of use and the
confidentiality commitments set forth in this Airbus CBT License.
	 
	6.	 	CONDITIONS OF USE
	 
	6.1	 	Use of the Airbus CBT Software
	 
	 	 	For the student delivery mode, the Buyer will use the Airbus CBT
Software for the exclusive purpose of

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	 	(i)	 	including students on the roster for one or several courses
syllabi in order to follow students’ progression, and
	 
	 	(ii)	 	rearranging course syllabi or creating new ones using
available courseware modules, it being understood that the Seller
disclaims any responsibility regarding any course(s) that may be
modified or rearranged by the Buyer.

	6.2	 	Use of the Airbus CBT Courseware
	 
	 	 	The Buyer will use the Airbus CBT Courseware for the exclusive purpose of
performing training instructions for its personnel, or for third party
personnel contracted to perform work on the Aircraft on behalf of the
Buyer. Such training will be performed at the Buyer’s facility or at a
subcontractor’s facility provided it is conducted by the Buyer’s
personnel.
	 
	 	 	The Buyer will use the AQP Material for the exclusive purpose of
designing training programs for the Buyer’s personnel conducted within
the Buyer’s own training program.
	 
	6.3	 	Intranet Use
	 
	 	 	For the purposes of this paragraph, the following definitions shall
apply:
	 
	 	 	“Network” means the group of the Buyer’s computers connected to each
other allowing the transmission of data and instructions which can be
used by all or some of the Buyer’s computers so linked.
	 
	 	 	“Server” means the computer dedicated to the administration of a Network
and on which the Airbus CBT System is installed and can be accessed
through the Network.
	 
	 	 	“Intranet” means the Buyer’s private and local Network using the same
technical protocols as internet but which is not open to public
connection, the hosting of which may be subcontracted to a third party.
	 
	 	 	It is agreed that when technically possible the Buyer is authorized to
use the Airbus CBT System on the Server, on the Network or on the
Intranet provided that the access is limited to the Buyer’s employees.
Furthermore, the Buyer shall take all commercially reasonable measures to
ensure the security and integrity of its Network. Upon the Seller’s
request, the Buyer will describe in reasonable detail the nature of the
security measures in place at the time of such request with respect to
the Intranet and will reasonably cooperate with the Seller in resolving
reasonable concerns the Seller may have with regard to the security of
the Airbus CBT system when installed on the Intranet.
	 
	7.	 	PROPRIETARY RIGHTS AND NONDISCLOSURE
	 
	 	 	The Airbus CBT Software, Airbus CBT Courseware and AQP Material, the
copyrights and any and all other author rights, intellectual, commercial
or industrial proprietary rights of

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	 	 	whatever nature in the Airbus CBT Software, Airbus CBT Courseware and AQP
Material are and will remain with the Seller or its suppliers, as the
case may be. The Airbus CBT Software, Airbus CBT Courseware and AQP
Material and their contents are designated as confidential. The Buyer
will not take any commercial advantage by copy or presentation to third
parties of the Airbus CBT Software, the documentation, the Airbus CBT
Courseware, or the AQP Material and/or any rearrangement, modification or
copy thereof.
	 
	 	 	The Buyer acknowledges the Manufacturer’s proprietary rights in the
Airbus CBT System and the AQP Material and undertakes not to disclose the
Airbus CBT Software, Airbus CBT Courseware or AQP Material or parts
thereof or their contents to any third party without the prior written
consent of the Seller, except to the extent permitted in Clause 22.7 of
the Agreement. Insofar as it is necessary to disclose aspects of the
Airbus CBT Software, Airbus CBT Courseware or AQP Material to the Buyer’s
personnel, such disclosure is permitted only for the purpose for which
the Airbus CBT Software, Airbus CBT Courseware and AQP Material are
supplied to the Buyer under the License for Use of Airbus Computer Based
Training and AQP Material. Notwithstanding the foregoing, the Buyer may
disclose the Airbus CBT Software or Airbus CBT Courseware to the Buyer’s
Aviation Authority to the extent required by such Aviation Authority or
to the extent required by third party service providers assisting the
Buyer in implementing such software or courseware into the Buyer’s
curriculum for the Buyer’s training needs provided that such service
providers (i) are not an airframe manufacturer or an Affiliate of an
airframe manufacturer other than the Manufacturer or its Affiliates and
(ii) agree to be bound in writing by the same terms and conditions as the
Buyer under this License with regard to the confidential treatment of the
Airbus CBT Software or Airbus CBT Courseware and recognition of the
proprietary rights of the Seller, the Manufacturer and/or their suppliers
in the Airbus CBT Software or Airbus CBT Courseware.
	 
	8.	 	LIMITED WARRANTY
	 
	8.1	 	The Seller warrants that the Airbus CBT System and AQP Material are
prepared in accordance with the state of the art at the date of their
development. Should the Airbus CBT System or AQP Material be found to
contain any nonconformity or defect, the Buyer will notify the Seller
promptly thereof, and the sole and exclusive liability of the Seller under
this Paragraph 8.1 of this License for Use of Airbus Computer Based
Training and AQP Material will be to correct the same at its own expense.
	 
	8.2	 	EXCLUSIVITY OF LIABILITY
	 
	 	 	THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND REMEDIES OF
THE BUYER SET FORTH IN THIS LICENSE ARE EXCLUSIVE AND IN SUBSTITUTION
FOR, AND THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES, ALL OTHER
WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE SELLER AND RIGHTS, CLAIMS
AND REMEDIES OF THE BUYER AGAINST THE SELLER, EXPRESS OR IMPLIED, ARISING
BY LAW OR OTHERWISE WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN

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	 	 	AIRBUS CBT SYSTEM DELIVERED UNDER THIS LICENSE INCLUDING BUT NOT LIMITED
TO:
	 
	 	 	ANY WARRANTY AGAINST HIDDEN DEFECTS;
	 
	 	 	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
	 
	 	 	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE;
	 
	 	 	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER CONTRACTUAL OR
IN TORT AND WHETHER OR NOT ARISING FROM THE SELLER’S NEGLIGENCE, ACTUAL
OR IMPUTED; AND
	 
	 	 	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO
ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART THEREOF.
	 
	 	 	THE SELLER WILL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR
LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY NONCONFORMITY OR DEFECT IN THE
AIRBUS CBT SYSTEM DELIVERED UNDER THIS LICENSE.
	 
	 	 	FOR THE PURPOSES OF THIS CLAUSE 8.2, THE “SELLER” WILL INCLUDE THE SELLER
AND ITS AFFILIATES.

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	17 –	 	SUPPLIER PRODUCT SUPPORT 
	 
	17.1	 	Equipment Supplier Product Support Agreements
	 
	 	 	The Seller represents and warrants to the Buyer that all transferable
warranties and service life policies applicable to Supplier Parts in
respect of each aircraft are contained in the Supplier Product
Support Agreements and will be transferred and assigned to the Buyer
at Delivery of such Aircraft. The Supplier Product Support
Agreements are contained in a CD-ROM. The Seller will update the
Buyer with respect to any increase in such warranties and will
transfer and support the same. The Seller further represents to the
Buyer that [***].
	 
	 	 	The Supplier Product Support Agreements address the following areas:

	 	(i)	 	Technical data and manuals required to operate,
maintain, service and overhaul the Supplier items will (a) be
prepared in accordance with the applicable provisions of ATA
Specification 100 and 101 in accordance with Clause 14 of this
Agreement, (b) include revision service, and (c) be published
in the English language. The Seller recommends that software
data, supplied in the form of an appendix to the Component
Maintenance Manual, be provided in compliance with ATA
Specification 102 up to level 3 to protect Supplier’s
proprietary interests.
	 
	 	(ii)	 	Warranties and guarantees, including, but not
limited to, Suppliers’ standard warranties, and in the case of
Suppliers of landing gear, service life policies for selected
landing gear structures.
	 
	 	(iii)	 	Training to ensure efficient operation,
maintenance and overhaul of the Suppliers’ items for the
Buyer’s instructors, shop and line service personnel.
	 
	 	(iv)	 	Spares data in compliance with ATA Specification
200 or 2000, initial provisioning recommendations, spares and
logistics service, including, but not limited to, routine and
emergency deliveries.
	 
	 	(v)	 	Technical service to assist the Buyer with
maintenance, overhaul, repair, operation and inspection of
Supplier items as well as required tooling and spares
provisioning.

	17.2	 	Supplier Compliance
	 
	17.2.1	 	The Seller will monitor Supplier compliance with support commitments
defined in the Supplier Product Support Agreements and, upon the Buyer’s
reasonable request, will take action together with the Buyer as may be
necessary to enforce such commitments.

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	17.2.2	 	[***].
	 
	17.3	 	Supplier Part Repair Stations
	 
	17.3.1	 	The Seller has developed with the Suppliers a comprehensive network of
repair stations in the United States of America and Canada for those
Supplier Parts originating from outside these countries. As a result,
most Supplier Parts are repairable in the United States of America and
Canada. The repair stations in the network are listed in the AOG and
Repair Guide, which is issued and regularly updated by the Manufacturer
	 
	 	 	Supplier Parts that have to be forwarded for repair will be sent
back to the Buyer with proper tagging as required by the FAA.
	 
	17.3.2	 	The Seller will support the Buyer in cases where the agreed repair turn
time of an approved repair station is not met by causing free-of-charge
loans or exchanges as specified in the relevant Supplier Product Support
Agreements to be offered to the Buyer.
	 
	18 –	 	BUYER FURNISHED EQUIPMENT 
	 
	18.1	 	Administration
	 
	18.1.1	 	Without additional charge and in accordance with the Specification, the
Seller will cause the Manufacturer to provide for the installation of the
Buyer Furnished Equipment (BFE), provided that the BFE is referred to in
the Airbus BFE Catalog of Approved Suppliers by Products valid at the time
stipulated in the Customization Milestones Chart for “Customer Definition
Freeze” or as otherwise mutually agreed. Seller agrees to provide the
Buyer with revised copies of such Airbus BFE Catalog of Approved Suppliers
as the same become available. Upon the Buyer’s request, the Parties will
address the conditions, including additional costs, under which BFE [***]
may be installed on the Aircraft.
	 
	 	 	The Seller will cause the Manufacturer to advise the Buyer
reasonably in advance of the dates by, and location to which, in
the planned release of engineering for the Aircraft, the Seller
requires a written detailed engineering definition. This
definition will include the description of the dimensions and
weight of BFE, the information related to its certification and
information necessary for the installation and operation thereof.
The Buyer will furnish such detailed description and information by
the dates specified. Thereafter, no information, dimensions or
weights will be revised unless authorized by an SCN.
	 
	 	 	The Seller will also provide the Buyer with a schedule of dates and
shipping addresses for delivery of BFE reasonably in advance of the
applicable on-dock dates for BFE in order to permit installation of
the BFE in the Aircraft and delivery of the Aircraft in accordance
with the delivery schedule. When

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	 	 	reasonably requested by the Seller, the Buyer will arrange for the
availability of additional spare BFE to permit installation in the
Aircraft and Delivery of the Aircraft in accordance with the
delivery schedule, provided that [***] as described in Clause
18.4), [***] under this Clause [***]. The Buyer will provide the
BFE by such dates in a serviceable condition, to allow performance
of any assembly, test, or acceptance process in accordance with the
industrial schedule.
	 
	 	 	The Buyer will also provide or cause to be provided, when
reasonably requested by the Manufacturer, at Airbus France S.A.S.’s
works and/or at Airbus Deutschland Gmbh’s works, as applicable and
needed, adequate field service, including, but not limited to,
support from BFE suppliers to act in a technical advisory capacity
to the Seller in the installation and calibration of any BFE.
	 
	18.1.2	 	The BFE will be imported into France or into Germany by the Buyer under
a suspensive customs system (“Régime de l’entrepôt industriel pour
fabrication coordonnée” or
“Zollverschluss”) without application of any
French or German tax or customs duty, and will be Delivered Duty Unpaid
(DDU) (as defined in Incoterms 2000: ICC Official Rules for the
Interpretation of Trade Terms, published by the International Chamber
of Commerce), to

	 	 	AIRBUS FRANCE S.A.S.

316 Route de Bayonne

31300 Toulouse

FRANCE
	 
		 	or

AIRBUS DEUTSCHLAND GMBH

Division Hamburger Flugzeugbau

Kreetslag 10

21129 HAMBURG

FEDERAL REPUBLIC OF GERMANY
	 
	 	 	as provided in Clause 18.1.1.

	18.1.3	 	If the Buyer requests the Seller to supply directly certain items that
are considered BFE according to the Specification, and if such request is
notified to the Seller in due time in order not to affect the Delivery
Date of the Aircraft, (i) the Seller may agree to order such items subject
to the execution of an SCN reflecting the effect on price, escalation
adjustment, and any other conditions of the Agreement; (ii) the Seller
will be entitled to the payment of a reasonable handling charge, which
will be reflected in the applicable SCN , which will be reflected in such
SCN; and (iii) the Seller will bear no liability in respect of delay
(unless such delay is caused by the Seller) and product support
commitments for such items.
	 
	18.2	 	Requirements

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	 	 	The Buyer is responsible for assuring and warranting, at its
expense, that BFE will (i) be manufactured by a qualified supplier
in accordance with the provisions of Clause 18.1.1 above, (ii) meet
the requirements of the applicable Specification, (iii) comply with
applicable requirements incorporated by reference to the Type
Certificate and listed in the Type Certificate Data Sheet, and (iv)
be approved by the applicable Aviation Authority delivering the
Export Certificate of Airworthiness and by the Buyer’s Aviation
Authority for installation and use on the Aircraft at the time of
Delivery of such Aircraft. The Seller will be entitled to refuse
any item of BFE that does not comply with the applicable
Specification; the engineering definition mentioned above in Clause
18.1.1 or the certification requirements.
	 
	18.3	 	Buyer’s Obligation and Seller’s Remedies
	 
	18.3.1	 	Any delay or failure in

	 	(i)	 	furnishing the BFE in serviceable condition at
the requested delivery date provided pursuant to Clause
18.1.1,
	 
	 	(ii)	 	complying with the warranty in Clause 18.2 or in
providing the descriptive information or service
representatives mentioned in Clause 18.1.1, or
	 
	 	(iii)	 	obtaining any required approval for such
equipment under the above mentioned Aviation Authorities
regulations.

	 	 	may cause delay in the performance of any act to be performed by
the Seller, and may, to the extent such delay in performance by the
Seller was caused by the delay or failure described in Clauses
18.3.1(i) through (iii), cause the Final Contract Price of the
Aircraft to be adjusted in accordance with the updated delivery
schedule. Also, the Buyer will reimburse the Seller for any
additional reasonable costs the Seller incurs that are attributable
to the delay or failure described above, such as storage, taxes,
insurance and costs of out-of sequence installation. The Seller
will provide the Buyer reasonably prompt notice of noncompliance
with Clause 18.3.1, and include in such notice the date by which
such BFE must be brought into compliance in order not to affect the
manufacture and/or Delivery of the Aircraft.
	 
	18.3.2	 	In addition to the consequences outlined in Clause 18.3.1, in the event
of a delay or failure described in Clause 18.3.1,

	 	(i)	 	[***], the Seller may select, purchase and
install equipment similar to the BFE at issue, in which event
the Final Contract Price of the affected Aircraft will also be
increased by the purchase price of such equipment, plus
reasonable costs and expenses incurred by the Seller for
handling charges,

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	 	 	 	transportation, insurance, packaging and, if required and not
already provided for in the price of the Aircraft, for
adjustment and calibration; or
	 
	 	(ii)	 	if the BFE is delayed more than thirty (30) days
beyond, or unapproved within thirty (30) days of the date
pursuant to Clause 18.1.1, then the Seller may deliver or the
Buyer may elect to have the Aircraft delivered without the
installation of such equipment, notwithstanding the terms of
Clause 7.2 insofar as it may otherwise have applied, whereon
the Seller will be relieved of all obligations to install such
equipment.

	18.4	 	Title and Risk of Loss
	 
	 	 	Title to and risk of loss of BFE will at all times remain with the
Buyer, except that risk of loss (limited to cost of replacement of
said BFE and excluding in particular loss of use) will be with the
Seller for as long as the BFE is in the care, custody and control of
the Seller. In addition to the foregoing, the Seller’s
responsibility with respect to such BFE is as chargeable to a bailee
for hire. Nothing in this Clause 18.4 will be deemed to contravene
Clause 10 or 11 of the Agreement; and the Parties will reasonably
cooperate to minimize the extent of and eliminate any delay [***].
	 
	18.5	 	Disposition of BFE following Termination
	 
	18.5.1	 	If a termination of this Agreement pursuant to the provisions of Clause
21 hereof occurs with respect to an Aircraft in which all or any part of
the BFE has been installed prior to the date of such termination, the
Seller will be entitled, but not required, to remove all items of BFE
which can be removed without damage to the Aircraft and to undertake
commercially reasonable efforts to facilitate the sale of such items of
BFE to other customers, retaining and applying the proceeds of such sales
to reduce Seller’s damages resulting from the termination.
	 
	18.5.2	 	The Buyer will cooperate with the Seller in facilitating the sale of BFE
pursuant to Clause 18.5.1 above and will be responsible for all costs
incurred by the Seller in removing and facilitating the sale of such BFE.
The Buyer will reimburse the Seller for all such costs within five (5)
Business Days of receiving documentation of such costs from the Seller.
	 
	18.5.3	 	The Seller will notify the Buyer as to those items of BFE not sold by
the Seller pursuant to Clause 18.5.1 above and, at the Seller’s request,
the Buyer will undertake to remove such items from the Seller’ facility
within thirty (30) days of the date of such notice. The Buyer will have no
claim against the Seller for damage or destruction of any item of BFE
removed from the Aircraft and not removed from Seller’s facility within
such period.
	 
	18.5.4	 	The Buyer will have no claim against the Seller for damage to or
destruction of any item of BFE damaged or destroyed in the process of
being deinstalled from

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	 	 	the Aircraft, provided that the Seller will use reasonable care in
such deinstallation.
	 
	18.5.5	 	The Buyer will grant title to the Seller for any BFE items that cannot
be removed from the Aircraft without causing damage to the Aircraft or
rendering any system in the Aircraft unusable.
	 
	19 –	 	INDEMNITIES AND INSURANCE
	 
	19.1	 	Seller’s Indemnities

	 	(a)	 	The Seller will, except in the case of gross
negligence or willful misconduct of the Buyer, its Affiliates
and each of their directors, officers, agents, or and
employees, be solely liable for and will indemnify and will
hold harmless the Buyer, its directors, officers, agents or
employees and its Affiliates and their insurers against all
losses, liabilities, claims, damages, costs and expenses,
including, but not limited to, court costs and reasonable
attorneys’ fees (“Losses”), arising from claims for injuries
to, or deaths of, the Seller’s, Manufacturer’s or any
Associated Contractor’s respective directors, officers, agents
or employees, or loss or damage to property of the Seller,
Manufacturer or any Associated Contractor or their respective
employees when such Losses occur during or are incidental to
(i) the Buyer’s exercise of its inspection rights under Clause
6, (ii) the Technical Acceptance Process described in Clause
8, (iii) the provision of Resident Customer Support
Representative’s assistance pursuant to Clause 15, or (iv) the
provision of training pursuant to Clause 16, or (v) otherwise
to the extent such Loss occurs at the Buyer’s facilities.
	 
	 	(b)	 	The Seller will, except in the case of gross
negligence or willful misconduct of the Buyer, its directors,
officers, agents, or employees, be solely liable for and will
indemnify and will hold harmless the Buyer, its directors,
officers, agents or employees, and its Affiliates against
all, Losses arising from claims for injuries to or deaths of
third parties, or loss of property of third parties, occurring
during, or incidental to (i) the Buyer’s exercise of its
inspection rights pursuant to Clause 6 or (ii) the Technical
Acceptance Process described in Clause 8.

	19.2	 	Buyer’s Indemnities
	 
	 	 	The Buyer will, except in the case of gross negligence or willful
misconduct of the Seller, the Manufacturer, any Affiliates thereof,
any Associated Contractor (or any of their affiliates) and their
respective directors, officers, agents and employees, be solely
liable for and will indemnify and will hold harmless the Seller,
the Manufacturer, each of the Associated Contractors and their
Affiliates, the Seller’s representatives, and the respective
assignees, directors, officers, agents, and employees of each of
the foregoing, against all Losses arising from:

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	 	(a)	 	claims for injuries to or deaths of the Buyer’s
directors, officers, agents or employees, or Losses or damage
to property of the Buyer or its employees or agents, when such
Losses occur during or are incidental to (i) the Buyer’s
exercise of its inspection rights under Clause 6; (ii) the
Technical Acceptance Process described in Clause 8, (iii) the
provision of Field Assistance pursuant to Clause 15, or (iv)
the provision of training pursuant to Clause 16, or (v) or
otherwise to the extent such Loss occurs at Seller’s
facilities; and
	 
	 	(b)	 	claims for injuries to or deaths of third
parties, or loss of property of third parties, where such
Losses occur during or incidental to (i) the provision of
Field Services under Clause 15 or (ii) arise out of the
provision of training pursuant to Clause 16.

	19.3	 	Notice and Defense of Claims

	 	(a)	 	If any claim is made or suit is brought against a
party or entity entitled to indemnification under this Clause
19 (the “Indemnitee”) for damages for which liability has been
assumed by the Party responsible to indemnify such party or
entity entitled to indemnification under this Clause 19, (the
“Indemnitor”), the Indemnitee will promptly give notice to the
Indemnitor and the Indemnitor (unless otherwise requested by
the Indemnitee) will assume and conduct the defense, or
settlement, of such suit, as the Indemnitor will deem prudent,
but in no event will the Indemnitor be allowed to so defend or
settle such suit in a manner that admits liability or breach
of law of any Indemnitee without such Indemnitee’s express
prior written permission to do so. Notice of the claim or
suit will be accompanied by all information pertinent to the
matter as is reasonably available to the Indemnitee and will
be followed by such cooperation by the Indemnitee as the
Indemnitor or its counsel may reasonably request at the
expense of the Indemnitor.
	 
	 	(b)	 	If the Indemnitor fails or refuses to assume the
defense of any claim or lawsuit notified to it under this
Clause 19, the Indemnitee will have the right to proceed with
the defense or settlement of the claim or lawsuit as it deems
prudent and will have a claim against the Indemnitor for any
resulting judgments, settlements, costs or expenses, including
reasonable attorneys’ fees. Further, in such event, the
Indemnitor will be deemed to have waived any objection or
defense to the Indemnitee’s claim based on the reasonableness
of any settlement.

	19.4	 	Insurance
	 
	 	 	For all training periods on any Aircraft pursuant to Clause 16, the
Buyer will cause the Seller, as defined in Clause 19.5 hereof, its
Affiliates and its Suppliers, to be named as additional insureds
([***]) under the Buyer’s Comprehensive Aviation Legal Liability
insurance policies, including War Risks and Allied Perils, to the
extent of the Buyer’s undertaking set forth in Clause 19.2. With

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	 	 	respect to the Buyer’s Hull All Risks and Hull War Risks insurances
and Allied Perils, the Buyer will cause the insurers of the Buyer’s
hull insurance policies to waive all rights of subrogation against
the Seller (except for aircraft manufacturer’s liability), as
defined in Clause 19.5 hereof, its Affiliates and its Suppliers, to
the extent of the Buyer’s undertaking set forth in Clause 19.2.
	 
	 	 	Any applicable deductible will be borne by the Buyer. With respect
to the above policies, the Buyer will furnish to the Seller, not
less than seven (7) working days prior to the start of any such
training period, certificates of insurance, in English, evidencing
the limit of liability cover and period of insurance to the Seller
from the Buyer’s insurance broker(s) certifying that such policies
have been endorsed as follows:

	 	(i)	 	under the Comprehensive Aviation Legal Liability
Insurances, the Buyer’s policies are primary and
non-contributory to any insurance maintained by the Seller.
	 
	 	(ii)	 	Such insurance can only be cancelled or
materially altered by the giving of not less than thirty (30)
days’ (but seven (7) days’ or such lesser period as may be
customarily available in respect of War Risks and Allied
Perils and [***]) prior written notice thereof to the Seller;
and
	 
	 	(iii)	 	Under any such cover, all rights of subrogation
against the Seller, its Affiliates and its Suppliers have been
waived ([***]) to the extent of the Buyer’s undertaking and
specially referring to Clause 19.2 and to this Clause 19.4.

	 	 	For the purposes of this Clause 19, “the Seller and its Affiliates”
includes, but is not limited to, the Seller, its Affiliates, ANACS,
Hua-Ou Airbus — CASC Aviation Training Center, the Associated
Contractors, Airbus S.A.S. and its shareholders, each of the
associated subcontractors, the assignees of each of the foregoing,
and their respective directors, agents and employees.
	 
	19.5	 	Notice of Claims
	 
	 	 	If any claim is made or suit is brought against either Party (or
its respective directors, officers, agents or employees) for
damages for which liability has been assumed by the other Party in
accordance with the provisions of this Agreement, the party against
which a claim is so made or suit is so brought will promptly give
notice to the other Party, and the latter will (unless otherwise
requested by the former Party against which a claim is so made or
suit is so brought, in which case the other party nevertheless will
have the right to) assume and conduct the defense thereof, or
effect any settlement which it, in its opinion, deems proper.
	 
	20	 	ASSIGNMENTS AND TRANSFERS

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	20.1	 	Assignments by Buyer
	 
	 	 	Except as hereinafter provided, the Buyer may not sell, assign or
transfer its rights or obligations under this Agreement to any person
without the prior written consent of the Seller.
	 
	20.2	 	Assignments on Sale, Merger or Consolidation
	 
	 	 	The Buyer will be entitled to assign its rights under this Agreement
at any time due to a merger, consolidation or a sale of all or
substantially all of its assets, provided the Buyer first obtains the
written consent of the Seller. The Seller will provide its consent
if

	 	(i)	 	the surviving or acquiring entity is
organized and existing under the laws of the United
States;
	 
	 	(ii)	 	the surviving or acquiring entity has
executed an assumption agreement, in form and substance
reasonably acceptable to the Seller, agreeing to assume
all of the Buyer’s obligations under this Agreement;
	 
	 	(iii)	 	at the time, and immediately following
the consummation, of the merger, consolidation or sale,
no event of default exists or will have occurred and be
continuing;
	 
	 	(iv)	 	there exists with respect to the surviving
or acquiring entity no basis for a Termination Event
within the meaning of Clause 21 of this Agreement;
	 
	 	(v)	 	the surviving or acquiring entity holds an
Operating Certificate [***] issued by the FAA or
relevant Aviation Authority at the time, and
immediately following the consummation, of such sale,
merger or consolidation; and
	 
	 	(vi)	 	following the sale, merger or
consolidation, in a financial condition at least equal
to that of the Buyer at time of execution of the
Agreement.

	20.3	 	Designations by Seller
	 
	 	 	The Seller may at any time by notice to the Buyer designate
facilities or personnel of the Manufacturer, ANACS, [***] or any
Affiliate of the Manufacturer [***] at which or by whom the services
to be performed under this Agreement will be performed. The Seller
may also designate the Manufacturer, ANACS, any Associated Contractor
or any Affiliate of the Manufacturer or any Affiliate of an
Associated Contractor as the party

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	 	 	responsible on behalf of the Seller for providing to the
Buyer all or any of the services described in or receiving
money due the Seller under this Agreement. Notwithstanding
such designation, the Seller will remain ultimately
responsible for fulfillment of all obligations undertaken by
the Seller in this Agreement.
	 
	20.4	 	Transfer of Rights and Obligations upon Reorganization
	 
	 	 	If at any time until the date upon which all the obligations and
liabilities of the Seller under this Agreement have been discharged,
the legal structure, the membership or the business of the Seller is
reorganized or the legal form of the Seller is changed and as a
consequence thereof the Seller wishes the Buyer to accept the
substitution of the Seller by another entity within the restructured
Airbus group (or the Seller in its new legal form)
(“Newco”) as
contemplated below, the Seller will promptly notify the Buyer of its
wish.
	 
	 	 	In such event, the Seller may request the Buyer to enter into a
novation agreement and/or other agreement having the same effect,
whereby the Seller’s rights and obligations under this Agreement are
novated or transferred in favor of Newco. Upon receipt of such
request, the Buyer will enter into a novation agreement and/or other
appropriate agreement, provided that the Buyer’s rights and
obligations under this Agreement are not materially adversely
affected by such novation and/or other agreement.
	 
	 	 	Until any such novation agreement/other appropriate documentation has
come into effect, this Agreement will remain in full force and
effect, and each party will act diligently and in good faith to
implement the novation agreement and/or other appropriate
documentation as soon as practicable after Newco has come into
existence.
	 
	21 –	 	 TERMINATION
	 
	21.1	 	Termination Events
	 
	 	 	Each of the following will constitute a “Termination Event”:

	 	(1)	 	The Buyer or any of its Affiliates will commence
in any jurisdiction any case, proceeding or other action with
respect to the Buyer or any of its Affiliates or their
respective properties relating to bankruptcy, insolvency,
reorganization, winding-up, liquidation, dissolution or other
relief from, or with respect to, or readjustment of, the
Buyer’s or any of its Affiliates’ debts or obligations.
	 
	 	(2)	 	An action is commenced in any jurisdiction
seeking the appointment of a receiver, trustee, custodian or
other similar official for the Buyer or any of its Affiliates
or for all or any substantial part of their respective assets,
and

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	 	 	 	such action remains unstayed, undismissed or undischarged for
sixty (60) days, or the Buyer or any of its Affiliates makes
a general assignment for the benefit of the Buyer’s or any of
its Affiliates’ its creditors.
	 
	 	(3)	 	An action is commenced in any jurisdiction
against the Buyer or any of its Affiliates seeking issuance of
a warrant of attachment, execution, distraint or similar
process against all or any substantial part of their
respective assets, and [***].
	 
	 	(4)	 	The Buyer or any of its Affiliates becomes the
object, in any jurisdiction, of a case, proceeding or action
similar or analogous to any of the events mentioned in Clause
21.1.(1), (2) or (3).
	 
	 	(5)	 	The Buyer or any of its Affiliates will
generally not, or will be unable to, or will admit in writing
its inability to, pay its debts as they become due.
	 
	 	(6)	 	The Buyer or any of its Affiliates commences
negotiations with significant creditors, existing or
potential, with the intention of restructuring all or
substantially all of either’s outstanding obligations or in
preparation for a bankruptcy filing under the U.S. Bankruptcy
Code.
	 
	 	(7)	 	The Buyer or any of its Affiliates fails to
make (i) any payment required to be made under this Agreement
or any other material agreement between the Buyer or any of
its Affiliates and the Seller or any of its Affiliates when
such payment is due, (ii) any Predelivery Payment required to
be made under this Agreement when such payment is due, or
(iii) payment of all or part of the Final Contract Price of
any Aircraft required to be made under this Agreement.
	 
	 	(8)	 	The Buyer repudiates, cancels or terminates
this Agreement in whole or in part.
	 
	 	(9)	 	The Buyer defaults in its obligation to take
delivery of an Aircraft as required in this Agreement.
	 
	 	(10)	 	The Buyer or any of its Affiliates defaults in
the observance or performance of any other covenant,
undertaking or obligation contained in this Agreement or any
other material agreement between the Buyer or its Affiliates,
on the one hand, and the Seller or any of its Affiliates on
the other hand, provided that, if such breach or default is
capable of being cured, such breach or default is not cured
within any specified cure period, or if no cure period is
specified, within ten (10) days of such breach or default.
	 
	 	(11)	 	The Buyer defaults under the terms of any
financing agreement between the Buyer and the Seller or any
of the Seller’s Affiliates or under the terms of any
agreements contemplated by such financing, including any
sell-

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	 	 	 	down of said financing by the financing party.
	 
	 	(12)	 	The Buyer defaults in making any payment as it
becomes due to or for the benefit of (i) the Propulsion
Systems manufacturer under any financing provided or caused
to be provided by the Propulsion Systems manufacturer for
A320 Family Aircraft or (ii) any operating lessor under any
lease by the Buyer for A320 Family Aircraft, provided that
the cure period applicable to such payment, if any, has
expired.
	 
	 	(13)	 	Any other event that the parties will have
agreed in writing constitutes a Termination Event hereunder.

	21.2	 	If a Termination Event will occur, the Buyer will be in material breach
of this Agreement, and the Seller will have the right to resort to any
remedy under applicable law, and may, without limitation, by written
notice to the Buyer, immediately:

	 	(1)	 	Elect to: (i) suspend its performance under this
Agreement with respect to any or all Aircraft, (ii) reschedule
the Schedule Delivery Month of any or all Aircraft remaining
to be delivered under this Agreement, (iii) reschedule the
date for performance under this Agreement with respect to any
or all equipment, services, data and other items, and/or (iv)
cancel or terminate this Agreement (a “Termination”) with
respect to any or all Aircraft, equipment, services, data
and/or other items related thereto;
	 
	 	(2)	 	In addition, claim of and receive payment from
the Buyer a sum equal to the Seller’s actual damages resulting
from such Termination Event, except that in the event of a
Termination under the foregoing Clause 21.2 (1) (iv) only, the
Seller will, in lieu of actual damages, be entitled to receive
payment from the Buyer, as liquidated damages and not as a
penalty, an amount equal to, for each Affected Aircraft (as
defined below), the sum of (A) and (B) below, where

	 	(A)	 	is the amount set forth as
follows:

	 	(i)	 	if the Applicable Date
(as defined below) occurs before the first day of
the [***] month prior to the Scheduled Delivery
Month of such Aircraft: [***] percent ([***]%) of
the Escalated Price per such Aircraft,
	 
	 	(ii)	 	if the Applicable Date
occurs on or after the first day of the [***]
month but before the first day of the [***] month
prior to the Scheduled Delivery Month of such
Aircraft: [***] percent ([***]%) of the Escalated
Price per such Aircraft,

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	 	(iii)	 	if the Applicable Date
occurs on or after the first day of the [***]
month but before the first day of the [***] month
prior to the Scheduled Delivery Month of such
aircraft: [***] percent ([***]%) of the Escalated
Price per such Aircraft,
	 
	 	(iv)	 	if the Applicable Date
occurs on or after the first day of the [***]
month but before the first day of the [***] month
prior to the Scheduled Delivery Month of such
Aircraft: [***] percent ([***]%) of the Escalated
Price per such Aircraft,
	 
	 	(v)	 	if the Applicable Date
occurs on or after the first day of the [***]
month but before the first day of the [***] month
prior to the Scheduled Delivery Month of such
Aircraft: [***] percent ([***]%) of the Escalated
Price per such Aircraft,
	 
	 	(vi)	 	if the Applicable Date
occurs on or after the first day of the [***]
month before the Scheduled Delivery Month but
before the Delivery Date of such Aircraft: [***]
percent ([***]%) of the Escalated Price per such
Aircraft, and

	 	(B)	 	is interest on the foregoing
amounts at the rate of [***]% per month from the
relevant Applicable Date to the date of actual
payment of such amount.

	 	(3)	 	Actual or liquidated damages will be payable by
Buyer promptly, and in any event within ten (10) days of the
date of written notice and demand therefore from the Seller,
such demand to set forth in reasonable detail the calculation
of such actual or liquidated damages and will identify the
Termination Event upon which the Seller is relying. The
parties agree that the remedy of actual or liquidated damages
is not to be denied the Seller due to the inability of the
Seller to deliver a notice and demand for payment thereof due
to the operation of law following a bankruptcy or other
Termination Event under Clause 21.1.1(1) — (4). The parties
further agree that in circumstances where a Termination Event
has occurred and the Seller seeks to recover its actual
damages resulting therefrom, the amount of actual damages
payable by the Buyer will not exceed the amount of liquidated
damages that could have been claimed by the Seller pursuant to
Clause 21.2 (2) had the Seller elected to claim, as a result
of such Termination Event, liquidated damages pursuant to
Clause 21.2(2).
	 
	 	(4)	 	The parties to this Agreement are commercially
sophisticated parties represented by competent counsel. The
parties expressly agree and declare that damages for material
breach of this Agreement by the Buyer resulting in a
Termination of this Agreement as to any or all Aircraft have been liquidated at amounts which are reasonable in light of
the anticipated or actual harm caused by the Buyer’s breach,
the difficulties of proof of 

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	 	 	 	loss and the nonfeasibility of
otherwise obtaining an adequate remedy. It is understood and
agreed by the parties that the amount of liquidated damages
set forth herein is the total amount of monetary damages, no
more and no less, to which the Seller will be entitled for
and with respect to any Aircraft as recovery for material
breach of this Agreement by Buyer resulting in a Termination
by the Seller of this Agreement as to such Aircraft.
However, it is understood that the Seller’s rights to payment
for services or spare parts actually delivered to the Buyer
will not be limited by the liquidated damages provision
included herein.

	21.3	 	The terms “Affected Aircraft,” “Applicable Date” and “Escalated Base
Price” are defined as follows:
	 
	 	 	“Affected Aircraft” — any or all Aircraft with respect to which the
Seller has cancelled or terminated this Agreement pursuant to
Clause 21.2 (1)(iv).
	 
	 	 	“Applicable Date” — for any Affected Aircraft the date of the
Termination Event which the Seller specifies in its notice and
demand for payment of liquidated damages delivered under Clause
21.2.(3).
	 
	 	 	“Escalated Price” — the sum of (i) the Base Price of the Airframe
(set forth in Clause 3.1.1 hereof), (ii) the Base Price of SCNs and
MSCNs entered into after the date of this Agreement, and (iii) the
Reference Price of the Propulsion Systems, all as escalated to the
Applicable Date in accordance with the provisions of Clause 4 of
this Agreement.
	 
	21.4	 	Promptly upon obtaining knowledge of the occurrence of a Termination
Event by the Buyer, the Buyer will notify the Seller of such occurrence in
writing, provided, that any failure by the Buyer to notify the Seller will
not prejudice the Seller’s rights or remedies hereunder.
	 
	21.5	 	If at any time prior to Scheduled Delivery Date of an Aircraft, the
Seller has reasonable grounds for insecurity as to the ability of the
Buyer to perform its obligation to take Delivery of such Aircraft, then
the Seller will send the Buyer a written demand for adequate assurance of
performance. If adequate assurance acceptable to the Seller is not
received within thirty (30) days following the date of such written
demand, then the Seller will have the right to either (a) exercise the
remedies provided under Section 2-609 of the Uniform Commercial Code or
(b) exercise any of its remedies under Clause 21.2 of this Agreement.
	 
	22 –	 	MISCELLANEOUS PROVISIONS
	 
	22.1	 	Data Retrieval

	 
	 	 	On the Seller’s reasonable written request at a frequency to be
mutually agreed, the Buyer will provide the Seller with data, as
customarily compiled by the Buyer

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	 	 	or as otherwise agreed by the
Parties pertaining to the operation and maintenance of the Aircraft
and its components, to assist the Seller in making a survey of all
reliability, maintenance, operational and cost data with a view to
improving the Buyer’s safety, availability and operational costs of
the Aircraft.
	 
	22.2	 	Notices
	 
	 	 	All notices and requests required or authorized hereunder will be
given in writing either by personal delivery to a responsible officer
of the party to whom the same is given or by commercial courier or
facsimile (with proof of delivery) at the addresses and numbers set
forth below. The date on which any such notice or request is [***]
delivered, [***] (as evidenced by the proof of delivery supplied by
the server or courier), will be deemed to be the effective date of
such notice or request. Certain classes of notices must be made as
follows:

	 	(i)	 	Notices of [***] must be made either by
personal delivery to a responsible officer of the party
to whom the same is given or by commercial courier.
	 
	 	(ii)	 	Notices of [***] must be made by both
facsimile with proof of successful transmission and
e-mail with confirmation of delivery to the sender.
Notices to the Buyer will be sent by facsimile and email
to both the Chief Financial Officer and the General
Counsel. In addition in the case of email a copy will be
sent to the Comptroller. Failure of transmission by
either facsimile or email, but not both, due to failure
in or non-operation of the receiving Party’s facsimile or
email systems will not invalidate the effectivity of the
notice.
	 
	 	(iii)	 	Notices for reasons other than those
listed in Clause 22.2(i) or (ii) above may be made by
either facsimile with proof of successful transmission or
e-mail with confirmation of delivery to the sender.
Failure of successful transmission by email due to
failure in or non-operation of the receiving Party’s
email system will not invalidate the effectivity of the
notice.

	 	 	The Seller will be addressed at:

	 
	 	 	2, rond-point Maurice Bellonte

31700 BLAGNAC FRANCE

Attention: Director — Contracts
	 
	 	 	Telephone: 33 05 61 30 40 12

Fax: 33 05 61 30 40 11

E-mail: to be notified to the Buyer

	 	 	The Buyer will be addressed at:

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	 	 	45200 Business Court

Dulles, Virginia 20166

Attention: Chief Financial Officer
	 
	 	 	Telephone: 703-650-6000

Fax: 703-650-6294

E-mail: to be notified to the Seller

	 
	 	 	and

	 
	 	 	45200 Business Court

Dulles, Virginia 20166

Attention: General Counsel

	 
	 	 	Telephone: 703-650-6000

Fax: 703-650-6201

E-mail: to be notified to the Seller
	 
	 	 	Either Party may, from time to time by written notice designate for
itself another address or another person to whose attention such
notice is sent.

	22.3	 	Waiver
	 
	 	 	The failure of either Party to enforce at any time any of the
provisions of this Agreement, to exercise any right herein provided
or to require at any time performance by the other Party of any of
the provisions hereof will in no way be construed to be a present or
future waiver of such provisions nor in any way to affect the
validity of this Agreement or any part hereof or the right of the
other party thereafter to enforce each and every such provision. The
express waiver by either Party of any provision, condition or
requirement of this Agreement will not constitute a waiver of any
future obligation to comply with such provision, condition or
requirement.
	 
	22.4	 	INTERPRETATION AND LAW
	 
	22.4.1	 	THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND THE PERFORMANCE
THEREOF WILL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAWS PROVISIONS THAT WOULD
RESULT IN THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION.
	 
	 	 	Each Party (i) hereby irrevocably submits itself to the
nonexclusive jurisdiction of [***] the United States District Court
for the [***], for the purposes of any suit, action or other
proceeding arising out of this Agreement, the subject matter hereof

97

 

	 	 	or any of the transactions contemplated hereby brought by any Party
hereto, and (ii) hereby waives, and agrees not to assert, by way of
motion, as a defense or otherwise, in any such suit, action or
proceeding, to the extent permitted by applicable law, any defense
based on sovereign or other immunity or that the suit , action or
proceeding which is referred to in clause (i) above is brought in
an inconvenient forum, that the venue of such suit, action or
proceeding is improper, or that this Agreement or the subject
matter hereof or any of the transactions contemplated hereby may
not be enforced in or by these courts.
	 
	 	 	THE PARTIES HEREBY ALSO AGREE THAT THE UNITED NATIONS CONVENTION ON
CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS WILL NOT APPLY TO
THIS TRANSACTION.
	 
	22.4.2	 	The assumption in Clause 22.4.3 below made for the purpose of effecting
the service of process will not affect any assertion of diversity by
either party hereto initiating a proceeding in the Federal Courts of
[***].
	 
	22.4.3	 	Service of process in any suit, action or proceeding in respect of any
matter as to which the Seller or the Buyer has submitted to jurisdiction
under Clause 22.4 may be made on the Seller by delivery of the same
personally or by dispatching the same via Federal Express, UPS, or similar
international air courier service prepaid to, CT Corporation, New York
City offices as agent for the Seller, it being agreed that service upon CT
Corporation will constitute valid service upon the Seller or by any other
method authorized by the laws of the State of New York, and (ii) may be
made on the Buyer by delivery of the same personally or by dispatching the
same by Federal Express, UPS, or similar international air courier service
prepaid, return receipt requested to: Chief Financial Officer, 45200
Business Court, Dulles, VA 20166, or by any other method authorized by
the laws of the State of New York.
	 
	22.5	 	Waiver of Jury Trial
	 
	 	 	EACH OF THE PARTIES HERETO WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY
LITIGATION ARISING OUT OF OR RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM OR CROSS-CLAIM THEREIN.
	 
	22.6	 	No Representations Outside of This Agreement
	 
	 	 	Both Parties declare that, prior to the execution of this
Agreement, they, with the advice of their respective counsel,
apprised themselves of sufficient relevant data in order that they
might intelligently exercise their own judgments in deciding
whether to execute this Agreement and in deciding on the contents
of this
Agreement. Each Party further declares that its decision to execute
this Agreement is not predicated on or influenced by any
declarations or representations by any other person, party, or any
predecessors in interest, 

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	 	 	successors, assigns, officers, directors,
employees, agents or attorneys of any said person or party, except
as set forth in this Agreement. This Agreement resulted from
negotiation involving counsel for both of the Parties and no term
herein will be construed or interpreted against any Party under the
contra proferentum or any related doctrine.
	 
	22.7	 	Confidentiality
	 
	 	 	Subject to any legal or governmental requirements of disclosure,
the Parties (which for this purpose will include their respective
employees, agents and advisors, the Manufacturer, their Affiliates,
and the Associated Contractors and their affiliates) will maintain
the terms and conditions of this Agreement and any reports or other
data furnished hereunder strictly confidential. Without limiting
the generality of the foregoing, each of the Parties will guard the
confidentiality of this Agreement and each of its provisions with
the same diligence and to the same standards they would guard their
own proprietary, confidential information. The Parties agree to
limit the disclosure of the contents of this Agreement to the
extent legally permissible (or [***]) in any filing required to be
made by such Party with any governmental agency and will make such
applications as will be necessary to implement the foregoing. With
respect to any public disclosure or filing, each Party agrees to
submit to the other Party a copy of the proposed document to be
filed or disclosed and will endeavor to give such other Party a
reasonable period of time in which to review said document. The
Buyer and the Seller will consult with each other prior to the
making of any public disclosure or filing, permitted hereunder, of
this Agreement or the terms and conditions thereof.
	 
	 	 	[***],
	 
	 	 	The provisions of this Clause 22.7 will survive any termination of
this Agreement.
	 
	22.8	 	Severability
	 
	 	 	If any provision of this Agreement should for any reason be held to
be without effect, the remainder of this Agreement will remain in
full force and effect. To the extent permitted by applicable law,
each party hereto hereby waives any provision of law which renders
any provision of this Agreement prohibited or unenforceable in any
respect.
	 
	22.9	 	Alterations to Contract
	 
	 	 	This Agreement, including its Exhibits and Appendices, contains the
entire agreement between the Parties with respect to the subject
matter hereof and thereof and supersedes any previous understanding,
commitments or
representations whatsoever, whether oral or written. This
Agreement will not be amended or modified except by an instrument
in writing of even date herewith or 

99

 

	 	 	subsequent hereto executed by
both Parties or by their fully authorized representatives.
	 
	22.10	 	Inconsistencies
	 
	 	 	In the event of any inconsistency between the terms of this
Agreement and the terms contained in either (i) the Specifications
annexed in Exhibit A-1 hereto, or (ii) any other Exhibit hereto, in
each such case the terms of this Agreement will prevail over the
terms of the Specifications or any other Exhibit hereto. For the
purpose of this Clause 22.10, the term Agreement will not include
the Specifications or any other Exhibit hereto.
	 
	22.11	 	Language
	 
	 	 	All correspondence, documents and any other written matters in
connection with this Agreement will be in English.
	 
	22.12	 	Headings
	 
	 	 	All headings in this Agreement are for convenience of reference only
and do not constitute a part of this Agreement.
	 
	22.13	 	Counterparts
	 
	 	 	This Agreement may be signed by the Parties in separate
counterparts, each of which when so executed and delivered will be
an original, but all such counterparts will together constitute but
one and the same instrument.
	 
	22.14	 	Information Covenants
	 
	 	 	For so long as the Buyer has Aircraft firmly ordered hereunder that
have not yet been delivered, Buyer will supply Seller the following
information:

	 	(a)	 	Quarterly Statements. As soon as
practicable after the end of the first, second, and third
quarterly fiscal periods in each fiscal year of Buyer, and in
any event within sixty (60) days thereafter, duplicate copies,
in English, of:

	 	(i)	 	a consolidated balance sheet of ACAH
as at the end of such quarter,
	 
	 	(ii)	 	consolidated statements of income and
retained earnings of ACAH for such quarterly period, and

	 
	 	(iii)	 	consolidated statements of cash flow
of ACAH for the portion of the fiscal year ending with
said quarter;

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	 	 	 	provided, that while Buyer or ACAH is subject to the
reporting requirements of the Securities Exchange Act of
1934, the posting on the SEC’s website of a copy of Buyer’s
or ACAH’s report on Form 10-Q for such fiscal quarter
(excluding exhibits) will satisfy this clause (a);
provided, further, that if Buyer is no longer a
consolidated subsidiary of ACAH, Buyer shall provide the
statements and forms listed in clauses (i), (ii), and (iii)
above for and of Buyer for such period or periods.
	 
	 	b)	 	Annual Statements. As soon as practicable
after the end of each fiscal year, and in any event within one
hundred eighty (180) days thereafter, duplicate copies, in
English, of:

	 	(i)	 	a consolidated balance sheet of ACAH
as at the end of such year, and
	 
	 	(ii)	 	consolidated statements of income and
retained earnings and of cash flow of ACAH for such
year, prepared in accordance with generally accepted
accounting principles (except as set forth in the
auditor’s opinion) accompanied by an auditor’s report of
a firm of independent certified public accountants of
recognized standing in the United States (which report
may be adverse, qualified or disclaim an opinion);
	 
	 	 	 	provided, that while Buyer or ACAH is subject to
the reporting requirements of the Securities Exchange
Act of 1934, the posting on the SEC’s website of a copy
of Buyer’s or ACAH’s report on Form 10-K for such
fiscal year (excluding exhibits) will satisfy this
clause (b); provided, further, that if
Buyer is no longer a consolidated subsidiary of ACAH,
Buyer shall provide the statements and forms listed in
clauses (i) and (ii) above for and of Buyer for such
period or periods.

	 	c)	 	Additional Information. Buyer will
furnish to Seller such other information reasonably requested
by Seller with respect to the financial condition, operations,
business and property of Buyer, concerning Buyer’s business
which Buyer releases or otherwise makes available to ACAH
stockholders and/or creditors generally.

	23 –	 	CERTAIN REPRESENTATIONS OF THE PARTIES
	 
	23.1.	 	Buyer’s Representations
	 
	 	 	The Buyer represents and warrants to the Seller:

101

 

	 	(i)	 	the Buyer is a corporation organized and existing
in good standing under the laws of the State of California
and has the corporate power and authority to enter into and
perform its obligations under this Agreement;
	 
	 	(ii)	 	neither the execution and delivery by the Buyer
of this Agreement, nor the consummation of any of the
transactions by the Buyer contemplated thereby, nor the
performance by the Buyer of the obligations thereunder,
constitutes a breach of any agreement to which the Buyer is a
party or by which its assets are bound;
	 
	 	(iii)	 	this Agreement has been duly authorized,
executed and delivered by the Buyer and constitutes the legal,
valid and binding obligation of the Buyer.

	23.2	 	Seller’s Representations
	 
	 	 	The Seller represents and warrants to the Buyer:

	 	(i)	 	the Seller is a societe à responsabilité limitée
organized and existing in good standing under the laws of the
Republic of France and has the corporate power and authority
to enter into and perform its obligations under the Agreement;
	 
	 	(ii)	 	neither the execution and delivery by the Seller
of this Agreement, nor the consummation of any of the
transactions by the Seller contemplated thereby, nor the
performance by the Seller of the obligations thereunder,
constitutes a breach of any agreement to which the Seller is a
party or by which its assets are bound;
	 
	 	(iii)	 	this Agreement has been duly authorized,
executed and delivered by the Seller and constitutes the
legal, valid and binding obligation of the Seller.

IN WITNESS WHEREOF, these presents were entered into as of the day and year
first above written.

	 	 	 	 	 
	 	AVSA, S.A.R.L.

 	 
	 	By:  	 	 
	 	 	 	 
	 	Title:  	 	 
	 	 	 	 
	 	Date: 	 	 

	 	 	 	 	 

102

 

	 	 	 	 	 
	 	ATLANTIC COAST AIRLINES

 	 
	 	By:  	 	 
	 	 	 	 
	 	Title:  	 	 
	 	 	 	 
	 	Date: 	 	 

103

 

GUARANTY

The undersigned, AIRBUS S.N.C, a societe en nom collectif, established under
the laws of the French Republic (the “Guarantor”), is delivering this consent
and guaranty (the “Guaranty”) pursuant to the A319/320/321 Purchase Agreement
dated as of             , 2004 between AVSA, S.A.R.L., a société à responsabilité
limitée organized and existing under the laws of the French Republic (the
“Seller”) and Atlantic Coast Airlines, a corporation duly organized and
existing under the laws of California (the “Buyer”) (the “Purchase Agreement”).
Capitalized terms used herein and not otherwise defined have the same
definitions applied to them in the Purchase Agreement.

1.      Consent. The Guarantor hereby acknowledges notice of and consents to
all of the terms of the Purchase Agreement, including, without limitation, the
assignment by the Seller to the Buyer of its rights under its agreements with
the Guarantor contained in Clauses 12 and 13 of the Purchase Agreement
(collectively, the “Seller’s Rights”), and agrees that:

	(a)	 	all representations, warranties, indemnities and agreements of the
Guarantor regarding the Seller’s Rights under its arrangements with the
Seller with respect to the Aircraft (the “Arrangements”) shall inure to
the benefit of the Buyer to the same extent as if originally named the
“Buyer” therein, irrespective of any action or inaction on the part of the
Seller;
	 
	(b)	 	the Buyer shall not be liable for any of the obligations or duties of the
Seller under the Arrangements, nor shall the assignment of the Seller’s
Rights to the Buyer give rise to any duties or obligations whatsoever on
the part of the Buyer owing to the Guarantor or any of its subsidiaries
except as specifically set forth in the Clauses 12 and 13 of the Purchase
Agreement;
	 
	(c)	 	anything contained in the Arrangements to the contrary notwithstanding,
the Buyer shall not have any responsibility to the Guarantor for failure
by the Buyer to comply with any of the other terms of the Arrangements
with respect to any of the Aircraft;
	 
	(d)	 	from and after the Delivery of any Aircraft and payment in full therefore
pursuant to the Purchase Agreement, neither the Guarantor nor any of the
Associated Contractors will assert any lien or claim against such Aircraft
or any part thereof arising with respect to or in connection with any work
or other services performed before Delivery and acceptance of such
Aircraft; and
	 
	(e)	 	it will not enter into any amendment of the Seller’s Rights without the
prior written consent of the Buyer.

2.      Unconditional Guaranty. The Guarantor hereby irrevocably and unconditionally
guarantees to the Buyer, subject to the terms and limitations contained in the
Purchase Agreement, the due and punctual payment and performance by the Seller
of all of the Seller’s obligations under the Purchase Agreement (the
“Guaranteed Obligations”) provided that, as regards any Guaranteed Obligations
not involving the payment of money, to be performed

104

 

outside the French Republic, the Guarantor’s obligations hereunder shall be to
cause such Guaranteed Obligations to be performed by the Seller or another
person designated by the Guarantor and not by the Guarantor itself if the
Guarantor’s own performance of such Guaranteed Obligations would require it to
register or qualify to do business in or subject itself to the taxing or
regulatory jurisdiction of, any other country. Subject to the aforesaid, the
Guarantor’s guaranty hereunder is an absolute, unconditional guaranty of
performance and, where applicable, of payment and shall not be released,
discharged or otherwise affected by any matter whatsoever, including, without
limitation, (i) the bankruptcy, insolvency, reorganization or dissolution of
the Seller or the disaffirmance in whole or in part of any of the Guaranteed
Obligations in any such proceeding, or any action taken by any trustee or
receiver or by any court in any such proceeding, (ii) any modification or
amendment of or supplement to the Purchase Agreement or the Guaranteed
Obligations, (iii) any consent, release or waiver by the Seller with respect to
any of its rights under the Purchase Agreement, (iv) any assignment or transfer
of the Purchase Agreement or of any rights or obligations thereunder in
accordance with the terms thereof, (v) any merger or consolidation of the
Seller into or with any other corporation, or any sale, lease or other transfer
of any of the assets of the Seller to any other person or entity, or (vi) any
lack of authority or lack of authorization for the Seller to incur the
Guaranteed Obligations.

3.      Demand on Guaranty. This Guaranty is callable only in case of failure by the
Seller to perform its Guaranteed Obligations upon the Buyer’s first making a
written demand upon the Seller performance of such Guaranteed Obligations
delivered to the Seller in accordance with the notice provisions of the
Purchase Agreement. In the event that the Buyer shall have made such a demand
upon the Seller and the Seller has not complied with such demand and such non
compliance is not otherwise excused under the Purchase Agreement, the Buyer
shall not be required to take further steps to enforce any of the Guaranteed
Obligations, and shall provide written notice to the Guarantor of such
non-compliance by the Seller. Performance of the unsatisfied Guaranteed
Obligation(s) by the Guarantor under the foregoing guaranty shall be due
fifteen (15) days following such notice to the Guarantor of the Seller’s
failure to perform such Guaranteed Obligation(s). Notwithstanding the
foregoing, in the event that any injunction, stay or the like enjoins or
otherwise prohibits the Buyer from making a demand upon the Seller, which would
otherwise be required or permitted, for payment or performance of the
Guaranteed Obligations, the Buyer may demand payment or performance directly
from the Guarantor, without making demand upon the Seller.

4.      Rights to deal with the Seller. At any time and from time to time, without
terminating, affecting or impairing the validity of this Guaranty or the
obligations of the Guarantor hereunder, the Buyer may deal with the Seller in
the same manner and as fully as if this Guaranty did not exist and shall be
entitled, among other thing, to grant the Seller such extension or extensions
of time to perform, or to waive any obligations of the Seller to perform any
act or acts as may be deemed by Buyer to be advisable; provided however
that no such waiver or extension shall in any way limit or otherwise affect any
of the rights of the Buyer in respect of the Guarantor’s obligations hereunder
other than to the extent of such waiver or extension.

105

 

5.      Recourse Obligations. The obligations of the Guarantor set forth herein
constitute the full obligations of the Guarantor enforceable against it to the
full extent of all its assets and properties.

6.      Representations. The Guarantor hereby represents and warrants to the Buyer
that (A) the Guarantor is a societe en nom collectif duly organized and
existing under the laws of the French Republic, (B) the making and performance
of the Arrangements and this Guaranty have been duly authorized by all
necessary action on the part of the Guarantor, do not require any approval of
the members of the Guarantor or any governmental authority or agency of the
French Republic or any subdivision thereof, and do not contravene any
indenture, credit agreement or other contractual agreement to which the
Guarantor is a party or by which it is bound, or any law binding on the
Guarantor, and (C) this Guaranty and the Arrangements constitute binding
obligations of the Guarantor enforceable against the Guarantor in accordance
with their respective terms, except as such enforceability may be limited by
bankruptcy, reorganization, insolvency, moratorium and other similar laws
affecting the enforcement of creditor’s rights and remedies generally.

7.      Notices. All notices to the Guarantor required to be served under this
Guaranty shall be in writing and shall be delivered by facsimile, commercial
overnight delivery services or registered mail and shall be addressed as
follows:

	 	 	 	Airbus S.N.C

1 Rond-Point Maurice Bellonte

BP 33

31707 Blagnac Cedex

FRANCE

Attn: Vice President Contracts and Pricing

or at such other address as the Guarantor may from time to time designate in
writing to the Buyer. All notices required to be served under this Guaranty
will be effective when received by the addressee.

8.      Assignment of the Purchase Agreement.

(a)     This Guaranty shall, without prior notice to the Guarantor, remain in full
force and effect with respect to, shall inure to the benefit of, and shall,
save as provided herein, be binding upon, any assignee of the Buyer permitted
by the Purchase Agreement (“Permitted Assignee”) insofar as it relates to the
Guaranteed Obligations under the Purchase Agreement. If requested by the Buyer
or any such Permitted Assignee, the Guarantor shall confirm that, upon
assignment of the Purchase Agreement to a Permitted Assignee, this Guaranty
remains in full force and effect in favor of such Permitted Assignee as to the
Guaranteed Obligations under the assigned Purchase Agreement without prior
notice to the Guarantor. On request by the Permitted Assignee and/or the Buyer,
the Guarantor agrees, upon assignment of the Purchase Agreement to a Permitted
Assignee, to execute and deliver to a Permitted Assignee a separate guaranty
(in substantially the form of this Guaranty) in respect of the Guaranteed
Obligations.

106

 

(b)     In the event of an assignment by the Seller of the Purchase Agreement as
permitted by Clause 20 thereof, this Guaranty shall remain in full force and
effect with respect to, shall continue to inure to the benefit of, and be
binding upon, the Buyer or any permitted assignee of the Buyer as though such
assignment by the Seller had not occurred.

9.      Replacement of the Guarantor

If at any time until the date upon which all the Guaranteed Obligations have
been fully paid or performed, the legal structure, the membership or the
business of the Guarantor is reorganized or the legal form of the Guarantor is
changed and as a consequence thereof the Guarantor wishes the Buyer or the
Permitted Assignee, as the case may be, to accept the substitution for the
Guarantor of the parent company of the Guarantor (Airbus S.A.S) or the
Guarantor in its new legal form (“New Guarantor”) as contemplated below, the
Guarantor shall promptly inform the Buyer of its wish.

In such event, the Guarantor may request the Buyer or any Permitted Assignee,
as the case may be, to accept the substitution for the Guarantor of New
Guarantor as the guarantor of the Seller’s obligations upon the same terms and
conditions as those contained in this Guaranty. Such substitution shall be
accepted and become effective vis-à-vis the Buyer upon proper service of such
request without any further action from any party being required.

10.     Governing Law; Jurisdiction. This Consent and Guaranty shall be governed
by, and construed in accordance with, the laws of New York without application
of any conflict of laws principles that would result in the application of the
law of any other jurisdiction.

ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS CONSENT AND GUARANTY OR THE
PURCHASE AGREEMENT OR ANY TRANSACTIONS IN CONNECTION WITH OR RELATING HERETO OR
THERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN), OR ANY ACTIONS OF THE BUYER OR THE GUARANTOR MAY BE BROUGHT
IN THE COURTS OF THE STATE OF VIRGINIA OR THE UNITED STATES DISTRICT COURT FOR
THE EASTERN DISTRICT OF VIRGINIA, AND THE GUARANTOR HEREBY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY
IRREVOCABLY WAIVES ANY OBJECTIONS, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR
PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS. THE GUARANTOR HEREBY IRREVOCABLY
CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN SUCH ACTION OR PROCEEDING BY
DELIVERY OF COPIES OF SUCH PROCESS BY COMMERCIAL COURIER TO THE GUARANTOR AT
ITS ADDRESS SPECIFIED ABOVE OR IN ANY OTHER MANNER PERMITTED BY LAW.

Nothing contained herein shall preclude the Buyer from bringing any legal suit,
action or proceeding against the Guarantor in the courts of any jurisdiction
where the Guarantor or any of

107

 

its property or assets may be found or located. To the extent permitted by the
applicable laws of any such jurisdiction, the Guarantor hereby irrevocably
submits to the jurisdiction of any such court and expressly waives, in respect
of any such suit, action or proceeding, the jurisdiction of any court or courts
which now or hereafter, by reason of its present or future domiciles, or
otherwise, may be available to it.

11.     Miscellaneous. If any terms in this Guaranty or any application thereof
shall be invalid or unenforceable, the remainder of this Guaranty and any other
application of such terms shall not be affected thereby. The terms of this
Guaranty shall not be waived, altered or modified, amended or terminated
whatsoever except by written instrument signed by the parties thereto. This
Guaranty shall be binding upon the Guarantor, its successors and assigns. This
Guaranty may be executed in several counterparts, such counterparts together
constituting but one and the same instrument.

108

 

Atlantic Coast Airlines — Selection List

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
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109

 

Atlantic Coast Airlines — Selection List

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
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110

 

Atlantic Coast Airlines — Selection List

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
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111

 

Atlantic Coast Airlines — Selection List

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
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112

 

AVSA SPECIFICATION CHANGE NOTICE

(SCN) PAGE AS FOLLOWING

	 	 	 
	AVSA

SPECIFICATION CHANGE NOTICE

(SCN)

	 	SCN No.

Issue

Dated

Page No.

TITLE

DESCRIPTION

EFFECT ON WEIGHT

Manufacturer’s Weight Empty Change:

Operational Weight Empty Change:

Allowable Payload Change:

REMARKS/REFERENCES

Response to RFC

SPECIFICATION CHANGED BY THIS SCN

THIS SCN REQUIRES PRIOR OR CONCURRENT ACCEPTANCE OF THE FOLLOWING SCN(s)

PRICE PER AIRCRAFT

US DOLLARS:

AT DELIVERY CONDITIONS:

This change will be effective on            Aircraft No.             and subsequent
provided approval is received by                                     .

	 	 	 
	BUYER APPROVAL

	 	SELLER APPROVAL
	 
	 	 
	By:

	 	By:

113

 

	 	 	 
	Title: (Authorized Finance Department Officer)

	 	Date:

By:

Title: (Authorized maintenance or flight operations officer)

Date:

	 	 	 
	AVSA

SPECIFICATION CHANGE NOTICE

(SCN)

	 	SCN No.

Issue

Dated

Page No.

SCOPE OF CHANGE (FOR INFORMATION ONLY)

114

 

SELLER SERVICE LIFE POLICY

	1.	 	The Items of primary and auxiliary structure described hereunder are
covered by the Service Life Policy described in Subclause 12.2 of the
Agreement.
	 
	2.	 	WINGS — CENTER AND OUTER WING BOX
	 
	2.1	 	Spars
	 
	2.2	 	Ribs and stringers Inside the Wing Box
	 
	2.3	 	Upper and Lower panels of the wing box
	 
	2.4	 	Fittings
	 
	2.4.1	 	Attachment fittings for the flap structure
	 
	2.4.2	 	Attachment fittings for the engine pylons
	 
	2.4.3	 	Attachment fittings for the main landing gear
	 
	2.4.4	 	Attachment fittings for the center wing box
	 
	2.5	 	Auxiliary Support Structure
	 
	2.5.1	 	For the slats:
	 
	2.5.1.1	 	Ribs supporting the track rollers on wing box structure
	 
	2.5.1.2	 	Ribs supporting the actuators on wing box structure
	 
	2.5.2	 	For the ailerons:
	 
	2.5.2.1	 	Hinge brackets and ribs on wing box rear spar or shroud box
	 
	2.5.2.2	 	Actuator fittings on wing box rear spar or shroud box

115

 

SELLER SERVICE LIFE POLICY

	2.5.3	 	For airbrakes, spoilers, lift dumpers:
	 
	2.5.3.1	 	Hinge brackets and ribs on wing box rear spar or shroud box

	 
	2.5.3.2	 	Actuator fittings on wing box rear spar or shroud box
	 
	3.	 	FUSELAGE
	 
	3.1	 	Fuselage Structure
	 
	3.1.1	 	Fore and aft bulkheads
	 
	3.1.2	 	Pressurized floors and bulkheads surrounding the main and nose gear
wheel well and center wing box
	 
	3.1.3	 	Skins with doublers, stringers and frames from the forward pressure
bulkheads to the frame supporting the rear attachment of horizontal
stabilizer
	 
	3.1.4	 	Window and windscreen attachment structure but excluding transparencies
	 
	3.1.5	 	Passenger and cargo doors internal structure
	 
	3.1.6	 	Sills, excluding scuff plates, and upper beams surrounding passenger and
cargo door apertures
	 
	3.1.7	 	Cockpit floor structure and passenger cabin floor beams excluding floor
panels and seat rails
	 
	3.1.8	 	Keel beam structure
	 
	3.2	 	Fittings
	 
	3.2.1	 	Landing gear attachment fittings

116

 

EXHIBIT C

SELLER SERVICE LIFE POLICY

	3.2.2	 	Support structure and attachment fittings for the vertical and
horizontal stabilizers
	 
	4.	 	STABILIZERS
	 
	4.1	 	Horizontal Stabilizer Main Structural Box
	 
	4.1.1	 	Spars

117

 

EXHIBIT C

SELLER SERVICE LIFE POLICY

	4.1.2	 	Ribs
	 
	4.1.3	 	Upper and lower skins and stringers
	 
	4.1.4	 	Attachment fittings to fuselage and trim screw actuator
	 
	4.1.5	 	Elevator support structure
	 
	4.1.5.1	 	Hinge bracket
	 
	4.1.5.2	 	Servocontrol attachment brackets
	 
	4.2	 	Vertical Stabilizer Main Structural Box
	 
	4.2.1	 	Spars
	 
	4.2.2	 	Ribs
	 
	4.2.3	 	Skins and stringers
	 
	4.2.4	 	Attachment fittings to fuselage
	 
	4.2.5	 	Rudder support structure
	 
	4.2.5.1	 	Hinge brackets
	 
	4.2.5.2	 	Servocontrol attachment brackets
	 
	5.	 	Bearing and roller assemblies, bearing surfaces, bushings, fittings other
than those listed above, access and inspection doors, including manhole
doors, latching mechanisms, all system components, commercial interior
parts, insulation and related installation and connecting devices are
excluded from this Seller Service Life Policy.

118

 

CERTIFICATE OF ACCEPTANCE

for [A319][A320][A321] Aircraft

In accordance with the terms of that certain A319/A320/A321 Purchase Agreement
dated as of __________, between Atlantic Coast Airlines (“Atlantic Coast”)
and AVSA, S.A.R.L. (“AVSA”), (the “Purchase Agreement”), the acceptance tests
relating to the Airbus [A319][A320][A321] aircraft, Manufacturer’s Serial
Number: ______, U.S. Registration Number: _______ with two (2) [manufacturer]
__________ series Propulsion Systems installed thereon, serial nos. _______
(position #1) and _______ (position #2) (the “[A319][A320][A321] Aircraft”),
have taken place at ___________ on the ___ day of ________, ____.

In view of said tests having been carried out with satisfactory results,
Atlantic Coast hereby approves the [A319][A320][A321] Aircraft as being in
conformity with the provisions of the Purchase Agreement.

Said acceptance does not impair the rights of Atlantic Coast that may be
derived from the warranties relating to the [A319][A320][A321] Aircraft set
forth in the Purchase Agreement.

Subject to the terms of the Purchase Agreement, Atlantic Coast specifically
recognizes that it has waived any right it may have at law or otherwise to
revoke this acceptance of the [A319][A320][A321] Aircraft.

	 	 	 
		 	
RECEIPT AND ACCEPTANCE OF THE

ABOVE-DESCRIBED [A319][A320][A321] AIRCRAFT

ACKNOWLEDGED
	 
	 	 
	

	 	By: ___________________
	 
	 	 
	

	 	Atlantic Coast Airlines’s: __________________

119

 

BILL OF SALE for A319 Aircraft

Know all persons by these presents that AVSA, S.A.R.L. (“AVSA”), a société à
responsabilité limitée organized and existing under the laws of the Republic of
France,whose address is 2 rond-point Maurice Bellonte, 31700 Blagnac, FRANCE,
is the owner of the title to the following airframe (the “Airframe”), the
attached engines as specified (the “Engines”) and all appliances, components,
parts, instruments, accessories, furnishings, modules and other equipment of
any nature, excluding buyer furnished equipment, incorporated therein,
installed thereon or attached thereto on the date hereof (the “Parts”):

	 	 	 
	MANUFACTURER OF AIRFRAME:	 	MANUFACTURER OF ENGINES:
	 
	AIRBUS S.N.C.

	 	[                    ]
	 
	 	 
	MODEL:     A319-100

	 	MODEL:     [     ]
	 
	 	 
	SERIAL NUMBER:     [          ]

	 	SERIAL NUMBERS:
	

	 	LH :     [          ]
	REGISTRATION NO:     [          ]

	 	RH :     [          ]

The Airframe, Engines and Parts are hereafter together referred to as the
aircraft (the “A319 Aircraft”).

AVSA does this ____ day of ________ sell, transfer and deliver all of its
above described rights, title and interest to the A319 Aircraft to the
following company forever, said A319 Aircraft to be the property thereof:

[Customer] (the “Buyer”)

AVSA hereby warrants to the Buyer that it has on the date hereof good and
lawful right to sell, deliver and transfer title to the A319 Aircraft to the
Buyer and that there is hereby conveyed to the Buyer on the date hereof good,
legal and valid title to the A319 Aircraft, free and clear of all liens,
claims, charges, encumbrances and rights of others and that [***].

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed
by its duly authorized representative this ____ day of [               ]

AVSA, S.A.R.L.

By:

Title:

Signature:

120

 

BILL OF SALE for A320 Aircraft

Know all persons by these presents that AVSA, S.A.R.L. (“AVSA”), a société à
responsabilité limitée organized and existing under the laws of the Republic of
France,whose address is 2 rond-point Maurice Bellonte, 31700 Blagnac, FRANCE,
is the owner of the title to the following airframe (the “Airframe”), the
attached engines as specified (the “Engines”) and all appliances, components,
parts, instruments, accessories, furnishings, modules and other equipment of
any nature, excluding buyer furnished equipment, incorporated therein,
installed thereon or attached thereto on the date hereof (the “Parts”):

	 	 	 
	MANUFACTURER OF AIRFRAME:

	 	MANUFACTURER OF ENGINES:
	AIRBUS S.N.C.

	 	[                    ]
	 
	 	 
	MODEL:     A320-100

	 	MODEL:     [     ]
	 
	 	 
	SERIAL NUMBER:     [          ]

	 	SERIAL NUMBERS:
	

	 	LH :     [          ]
	REGISTRATION NO:     [          ]

	 	RH :     [          ]

The Airframe, Engines and Parts are hereafter together referred to as the
aircraft (the “A320 Aircraft”).

AVSA does this _____ day of __________ sell, transfer and deliver all of its
above described rights, title and interest to the A320 Aircraft to the
following company forever, said A320 Aircraft to be the property thereof:

[Customer] (the “Buyer”)

AVSA hereby warrants to the Buyer that it has on the date hereof good and
lawful right to sell, deliver and transfer title to the A320 Aircraft to the
Buyer and that there is hereby conveyed to the Buyer on the date hereof good,
legal and valid title to the A320 Aircraft, free and clear of all liens,
claims, charges, encumbrances and rights of others and that [***].

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed
by its duly authorized representative this _____ day of [            ]

AVSA, S.A.R.L.

By:

Title:

Signature:

121

 

BILL OF SALE for A321 Aircraft

Know all persons by these presents that AVSA, S.A.R.L. (“AVSA”), a société à
responsabilité limitée organized and existing under the laws of the Republic of
France,whose address is 2 rond-point Maurice Bellonte, 31700 Blagnac, FRANCE,
is the owner of the title to the following airframe (the “Airframe”), the
attached engines as specified (the “Engines”) and all appliances, components,
parts, instruments, accessories, furnishings, modules and other equipment of
any nature, excluding buyer furnished equipment, incorporated therein,
installed thereon or attached thereto on the date hereof (the “Parts”):

	 	 	 
	MANUFACTURER OF AIRFRAME:

	 	MANUFACTURER OF ENGINES:
	AIRBUS S.N.C.

	 	[                ]
	 
	 	 
	MODEL:     A321-100

	 	MODEL:     [     ]
	 
	 	 
	SERIAL NUMBER:     [          ]

	 	SERIAL NUMBERS:
	

	 	LH :     [          ]
	REGISTRATION NO:     [          ]

	 	RH :     [          ]

The Airframe, Engines and Parts are hereafter together referred to as the
aircraft (the “A321 Aircraft”).

AVSA does this ____ day of __________ sell, transfer and deliver all of its
above described rights, title and interest to the A321 Aircraft to the
following company forever, said A321 Aircraft to be the property thereof:

[Customer] (the “Buyer”)

AVSA hereby warrants to the Buyer that it has on the date hereof good and
lawful right to sell, deliver and transfer title to the A321 Aircraft to the
Buyer and that there is hereby conveyed to the Buyer on the date hereof good,
legal and valid title to the A321 Aircraft, free and clear of all liens,
claims, charges, encumbrances and rights of others and that [***].

IN WITNESS WHEREOF, the undersigned has caused this instrument to be executed
by its duly authorized representative this _____ day of [            ]

AVSA, S.A.R.L.

By:

Title:

Signature:

122

 

TECHNICAL DATA

GENERAL

	 	 	This Exhibit F lists the form, type, quantity and delivery dates for the
Technical Data and Software Services (hereinafter “Technical Data”) to be
provided to the Buyer pursuant to Clause 14 of the Agreement.
	 
	 	 	The Technical Data are published in accordance with ATA Specification 100
revision 23, with the exception of certain Component Maintenance Manuals,
which may be written to an ATA Specification 100 revision other than
revision 23.
	 
	 	 	The designation “C” after the title of a Technical Publication indicates
that such Technical Publication may be customized.
	 
	1.	 	ENGINEERING DOCUMENTS
	 
	1.1	 	Installation and Assembly Drawings (IAD) — C
	 
	 	 	The IAD will be delivered according to the Buyer’s standard for the major
Assembly and Installation drawings, including detail drawings.
	 
	1.2	 	Drawing Number Index (DNI) — C
	 
	 	 	The DNI lists applicable drawings of the Aircraft delivered under the Agreement.
	 
	1.3	 	Process and Material Specification (PMS)
	 
	 	 	The PMS contains data related to manufacturing processes, material
identification and treatments used in the construction and assembly of
the Aircraft.
	 
	1.4	 	Standards Manual (SM)
	 
	 	 	The SM contains data about Seller approved standards and includes
cross-reference lists. The SM will include US standards/equivalents for
all hardware clamps, O-rings, bearings, fasteners, sealants, adhesive and
compounds, raw materials, processes and procedures.
	 
	1.5	 	Electrical Load Analysis (ELA)

The Electrical Load Analysis provides the necessary minimum/maximum
electrical load used by the various aircraft systems/subsystems in
different configurations and flight phases.
	 
	2.	 	MAINTENANCE AND ASSOCIATED MANUALS

123

 

	2.1	 	APU Build-up Manual (ABM)
	 
	 	 	The ABM follows the format adopted for the Power Plant Build-up Manual.
	 
	2.2	 	Aircraft Maintenance Manual (AMM) — C
	 
	 	 	The component location section of the AMM will show those components
detailed in the AMM maintenance procedures. The troubleshooting part is
covered in Subparagraph 2.21 below.
	 
	 	 	*Aircraft Maintenance Manual Chapter 05 Time Limits (Service Life Limits)
and Maintenance Checks are only delivered in hard copies.
	 
	2.3	 	Aircraft Schematics Manual (ASM) — C
	 
	 	 	The ASM is part of the Wiring Manual. Supplied as a separate manual for schematics.
	 
	2.4	 	Aircraft Wiring Manual (AWM) — C
	 
	 	 	The AWM is part of the Wiring Manual. Supplied as a separate manual for wirings.
	 
	2.5	 	Aircraft Wiring Lists (AWL) — C
	 
	 	 	The AWL is part of the Wiring Manual. Supplied as a separate document
for lists. The AWL includes wire terminations, connector, terminal,
strip locations, wire routings, and clamping diagrams.
	 
	2.6	 	Component Location Manual (CLM)
	 
	 	 	The CLM is designed to provide a quick and accurate means to locate a component.
	 
	2.7	 	Consumable Material List (CML)
	 
	 	 	The CML details the characteristics and gives procurement sources of
consumable materials such as grease, oil, etc.
	 
	2.8	 	Duct Repair Manual (DRM)
	 
	 	 	The DRM contains all the data necessary to locate, identify, repair
and/or replace sub-assemblies of metallic ducts. It also includes
details of tests necessary after repair.
	 
	2.9	 	Fuel Pipe Repair Manual (FPRM)

124

 

	 	 	The FPRM provides workshop repair procedures and data for specific fuel
pipes, after removal from any aircraft of the Manufacturer of the type of
the Aircraft.
	 
	2.10	 	Illustrated Parts Catalog (IPC) — C
	 
	 	 	The IPC identifies and illustrates all line replaceable parts and units
of the aircraft, excluding the power plant parts.
	 
	2.11	 	Illustrated Parts Catalog (power plant) (PIPC) — C
	 
	 	 	The PIPC covers line replaceable parts and units of the power plant,
provided by the Propulsion Systems manufacturer.
	 
	2.12	 	Illustrated Tool and Equipment Manual (TEM)
	 
	 	 	The TEM provides information on Ground Equipment and Tools listed in the
Seller’s Aircraft Maintenance Manual.
	 
	2.13	 	Maintenance Facility Planning (MFP)
	 
	 	 	The MFP provides information that will assist airline personnel concerned
with long term planning of ramp or terminal operations, Aircraft
maintenance on the ramp and in the hangar, overhaul and testing of
structure and system components.
	 
	2.14	 	Maintenance Planning Document (MPD)
	 
	 	 	The MPD provides maintenance data necessary to plan and conduct Aircraft
maintenance checks and inspections.
	 
	2.15	 	Support Equipment Summary (SES)
	 
	 	 	The SES lists support equipment recommended by the Seller, the Propulsion
Systems manufacturer and Vendors.
	 
	2.16	 	Tool\Equipment Drawings (TED)
	 
	 	 	TEDs will be supplied in the form of aperture cards for the Seller and,
when available, Vendor maintenance tools.
	 
	2.17	 	Tool and Equipment Drawing Index (TEI)
	 
	 	 	The TEI is an alpha-numeric listing of the TED’s.
	 
	2.18	 	Tool and Equipment Bulletin (TEB)

125

 

	 	 	The TEB provides advance information related to tools and test equipment
development.
	 
	2.19	 	Trouble Shooting Manual (TSM) — C
	 
	 	 	The TSM complements the CFDS and provides trouble-shooting data in the
following three levels:

	 	Level 1 —	 	Aimed at line use. Fault isolation guidance for systems
or parts of systems monitored mainly by CFDS. Also guidance for
systems not monitored by CFDS.
	 
	 	Level 2 —	 	Aimed at hangar use. Fault isolation guidance for
non-CFDS monitored systems in the form of functional block diagrams,
charts and tables.
	 
	 	Level 3 —	 	Aimed at engineering use. List of CFDS messages and
decoding of troubleshooting data (decoding of coded messages
provided by the CFDS). Level 3 is supplied on floppy disk.

	3.	 	MISCELLANEOUS DOCUMENTATION
	 
	3.1	 	Airplane Characteristics for Airport Planning (AC)
	 
	 	 	The AC will be in general accordance with Specification NAS 3601.
	 
	3.2	 	Aircraft Recovery Manual (ARM)
	 
	 	 	The ARM provides the following planning information: preparing and
moving a disabled aircraft that may be obstructing airport traffic.
	 
	3.3	 	Cargo Loading System Manual (CLS)
	 
	 	 	The CLS details handling procedures for the Cargo Loading System.
	 
	3.4	 	Crash Crew Chart (CCC)
	 
	 	 	The CCC provides information concerning access to the Aircraft interior,
location of safety equipment, hazardous liquids, etc.
	 
	3.5	 	List of Radioactive and Hazardous Elements (LRE)
	 
	 	 	The LRE provides information on components and materials for which
specific precautions have to be taken.

126

 

	3.6	 	List of Applicable Publications (LAP) — C
	 
	 	 	The LAP will record the Seller’s various Airframe Technical Data
indicating the last valid revision number and issue date.
	 
	3.7	 	Livestock Transportation Manual (LTM)
	 
	 	 	The LTM details the facilities, equipment and procedures necessary for
live animal transportation in aircraft of the Manufacturer of the type of
the Aircraft.
	 
	3.8	 	Service Bulletins (SB) — C
	 
	 	 	The Buyer will receive all Service Bulletins applicable to the Aircraft.
	 
	3.9	 	Service Information Letters (SIL)
	 
	 	 	SILs give information of a general nature and also about minor changes or
inspections the Buyer may wish to apply under the Buyer’s authority.
	 
	3.10	 	Transportability Manual (TM)
	 
	 	 	The TM gives cargo hold dimensions for currently available cargo
Aircraft, transportation information and requirements for large Aircraft
components. Component dimensions, weights and shelf life limitations are
also given.
	 
	3.11	 	Supplier Product Support Agreements (SPSA)
	 
	 	 	The SPSA is a collection of product support conditions negotiated by the
Manufacturer with the suppliers of Aircraft equipment.
	 
	3.12	 	Vendor Information Manual (VIM)
	 
	 	 	The VIM provides Vendor contact information.
	 
	3.13	 	Vendor Information Manual (GSE) (VIM/GSE)
	 
	 	 	The VIM/GSE gives contact names and addresses of Ground Support Equipment
(GSE) vendors and their product support organizations.
	 
	4.	 	OPERATIONAL MANUALS
	 
	4.1	 	Abnormal\Emergency Check List\Quick Reference Handbook (CL\QRH) — C

127

 

	 	 	The CL is an extract from the FCOM presented as a booklet for quick in-flight use.
	 
	4.2	 	FAA Approved Flight Manual (FM) — C
	 
	 	 	The AFM provides Aircraft performance operating limitations and other
flight data required by the relevant Airworthiness Authorities for
certification. It includes the Configuration Deviation List (CDL).
	 
	4.3	 	Flight Crew Operating Manual (FCOM) — C
	 
	 	 	The FCOM provides Aircraft and systems descriptions, normal, abnormal and
emergency procedures as well as operational performance.
	 
	4.4	 	Master Minimum Equipment List (MMEL)
	 
	 	 	The MMEL defines the components and the related conditions under which,
when the components are defective, the Aircraft may be cleared for
flight. In addition, the MMEL provides the necessary information to
establish the Buyer’s own Minimum Equipment List (MEL).
	 
	4.5	 	Performance Engineering Program (PEP)
	 
	 	 	The PEP consists of a Low Speed Performance data base and a High Speed
Performance data base together with their respective programs. The
Performance Engineering Program may be used by the Buyer under the
license conditions set forth in Appendix 1 to this Exhibit F.
	 
	 	 	The Low Speed Performance programs consist of the Take-off and Landing
Chart computation program (TLC) which permits the computation of:
	 
	 	 	– regulatory take-off and landing performance,
	 
	 	 	– noncertified take-off performance accounting for runway data and
weather, together with the Tabulation and Interpolation program (TAB),
issued with the AFM, which permits the reading, editing and interpolation
of the tables listed in the AFM.
	 
	 	 	The High Speed Performance programs are the In Flight Performance
computation program (IFP) which permits computation of Aircraft
performance for each flight phase and the Aircraft Performance Monitoring
program (APM) which permits analysis of Aircraft cruise performance from
data recorded during stabilized flight periods.
	 
	4.6	 	Performance Program Manual (PPM)
	 
	 	 	The PPM is the users’ guide for the Performance Engineering Program (PEP).

128

 

	4.7	 	Weight and Balance Manual (WBM) and Weight and Balance
        Manual Supplements — C
	 
	 	 	The corresponding supplements:
	 	 	– Delivery Weighing Report,
	 	 	– Equipment List,
	 	 	will be delivered with each Aircraft.

129

 

	5.	 	OVERHAUL DATA
	 
	5.1	 	Cable Fabrication Manual (CFM)
	 
	 	 	The CFM contains all the data necessary to locate, identify, manufacture
and test control cables used on the Aircraft. An appendix contains cable
end fitting specification sheets, and detailed manufacturing
instructions.
	 
	5.2	 	Component Documentation Status (CDS) — C
	 
	 	 	The CDS lists Component Maintenance Manuals in accordance with
Subparagraphs 5.4 and 5.5 below.
	 
	5.3	 	Component Evolution List (CEL)
	 
	 	 	The CEL is a noncustomized document listing all components on the
Aircraft and also gives the evolution of each component.
	 
	 	 	The information is provided in order of:
	 
	 	 	- part number
	 
	 	 	- FSCM
	 
	 	 	- ATA reference.
	 
	5.4	 	Component Maintenance Manual Manufacturer (CMMM)
	 
	 	 	The CMMM contains all the data necessary to locate, identify and maintain
Aircraft components manufactured by the Seller.
	 
	5.5	 	Component Maintenance Manual Vendor (CMMV)
	 
	 	 	The Seller will ensure that each Vendor of repairable components will
deliver to the Buyer a Component Maintenance Manual Vendor with revision
service.
	 
	6.	 	STRUCTURAL MANUALS
	 
	6.1	 	Nondestructive Testing Manual (NTM)
	 
	 	 	The NTM supplies Airframe data necessary to carry out nondestructive testing.
	 
	6.2	 	Structural Repair Manual (SRM)
	 
	 	 	The SRM contains descriptive information for identification and repair of
the Airframe primary and secondary structure and will include substantial
structural analysis.

130

 

FORM

	 	 	 
	CD-A
	 	CD-ROM: Advanced Consultation and Navigation System

	CD-P
	 	CD-ROM: in PDF — Portable Document Format

	D
	 	DISKETTE (Floppy Disk)

	DD
	 	DIGITAL DATA. Stands generally for SGML format on CD-ROM.

	DVD
	 	DIGITAL VERSATILE DISK.

	OL-A
	 	ON-LINE through AOLS (Airbus On-Line Services): Advanced
Consultation and Navigation System

	OL-IDIS
	 	ON-LINE Interactive Distribution Information and Support: Central
Repository for Supplier Documentation accessible On-Line through AOLS.

	P1
	 	PRINTED ONE SIDE. Refers to manuals in paper with print on one side of the sheets only.

	P2
	 	PRINTED BOTH SIDES. Refers to manuals with print on both sides of the sheets.

TYPE

	 	 	 
	C
	 	CUSTOMIZED. Refers to manuals which are customized to specific MSNs.

	G
	 	GENERIC. Refers to manuals which are for all aircraft types/models/series.

	E
	 	ENVELOPE. Refers to manuals which are not customized.

	P
	 	PRELIMINARY. Refers to preliminary data or manuals which may consist of:

	 	 	-either one time issue not maintained by revision service, or

	 	 	-preliminary issues maintained by revision service until final manual or data delivery, or

	 	 	-supply of best available data under final format with progressive completion through revision service.

131

 

ATA

Manuals established in general compliance with ATA 100 Revision 23 and digital
Standards established in general compliance with ATA Specification 2200 (iSpec
2200) Information Standards for Aviation Maintenance.

Subsequent revisions of the ATA Specification will be considered.

DELIVERY

Delivery of Technical Data is expressed either as the number of days prior to
delivery of the first Aircraft or as nil (0), which designates the date of
delivery of the first Aircraft.

It is agreed that the number of days indicated will be rounded up to the next
regular revision release date.

QUANTITY

Self-Explanatory

MANUALS AVAILABLE (headlines)

1 — ENGINEERING DOCUMENTS

2 — MAINTENANCE & ASSOCIATED MANUALS

3 — MISCELLANEOUS PUBLICATIONS

4 — OPERATIONAL MANUALS AND DATA

5 — OVERHAUL DATA

6 — STRUCTURAL MANUALS

132

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOMENCLATURE
	 	Abbr
	 	Form
	 	Type
	 	ATA
	 	Qty
	 	Deliv
	 	Comments

	OPERATIONAL MANUALS AND DATA
	Flight Crew Operating Manual

	 	FCOM
	 	P2
	 	C
	 	NO
	 	 	1	 	 	 	90	 	 	Plus one copy per
Aircraft at delivery.
	

	 	FCOM
	 	CD-A
	 	C
	 	NO
	 	 	1	 	 	 	90	 	 	 
	

	 	FCOM
	 	OL-A
	 	C
	 	NO
	 	 	 	 	 	 	90	 	 	Consultation only.
	

	 	FCOM
	 	DD
	 	C
	 	NO
	 	 	1	 	 	 	90	 	 	SGML data for further
processing by the Buyer.
Applicable to SA and LR
Aircraft
	Flight Manual

	 	FM
	 	P1
	 	C
	 	NO
	 	 	2	 	 	 	0	 	 	Plus one copy per
Aircraft at delivery.
	Master Minimum Equipment List

	 	MMEL
	 	P2
	 	C
	 	NO
	 	 	 	 	 	 	180	 	 	Plus one copy per
Aircraft at delivery.
	

	 	MMEL
	 	DD
	 	C
	 	NO
	 	 	2	 	 	 	180	 	 	SGML data, including Part
1 and Part 2, for further
processing by the Buyer.
Applicable to SA and LR
Aircraft.
	Quick Reference Handbook

	 	QRH
	 	P2
	 	C
	 	NO
	 	 	4	 	 	 	90	 	 	Plus one copy per
Aircraft at delivery.
	Trim Sheet

	 	TS
	 	P2
	 	C
	 	NO
	 	 	1	 	 	 	0	 	 	Electronic file in Word
format, applicable to WB,
SA and LR Aircraft.
	Weight and Balance Manual

	 	WBM
	 	P1
	 	C
	 	YES
	 	 	2	 	 	 	0	 	 	For the WBM the flight
deck copy is an advance
copy only of the
customized manual, not
subject to revision or
updating. Weighing
Equipment List delivered
two weeks after Aircraft
delivery
	Performance Engineer’s Programs

	 	PEP
	 	CD-A
	 	C
	 	NO
	 	 	 	 	 	 	90	 	 	 
	

	 	PEP
	 	OL-A
	 	C
	 	NO
	 	 	1	 	 	 	90	 	 	 
	Performance Programs Manual

	 	PPM
	 	CD-A
	 	C
	 	NO
	 	 	 	 	 	 	90	 	 	Included in the PEP CD-Rom

WB = Wide Body: A310/A300-600

SA = Single Aisle: A318/A319/A320/A321

LR = Long range: A330/A340

133

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOMENCLATURE
	 	Abbr
	 	Form
	 	Type
	 	ATA
	 	Qty
	 	Deliv
	 	Comments

	MAINTENANCE AND ASSOCIATED MANUALS
	Aircraft Maintenance Manual

	 	AMM
	 	DVD
	 	C
	 	YES
	 	 	3	 	 	 	90	 	 	Contained on Basic AirN@v for SA and LR
Aircraft. (Limited to 3 copies per
customization).
	

	 	AMM
	 	CD-P
	 	C
	 	YES
	 	 	 	 	 	 	90	 	 	 
	

	 	AMM
	 	DD
	 	C
	 	YES
	 	 	1	 	 	 	90	 	 	SGML data for further processing by the
Buyer. Applicable to SA and LR Aircraft.
	Aircraft Schematics Manual

	 	ASM
	 	CD-P
	 	C
	 	YES
	 	 	3	 	 	 	90	 	 	 
	

	 	ASM
	 	DD
	 	C
	 	YES
	 	 	1	 	 	 	90	 	 	SGML data for further processing by the
Buyer. Applicable to WB, SA and LR
Aircraft.
	Aircraft Wiring Lists

	 	AWL
	 	CD-P
	 	C
	 	YES
	 	 	3	 	 	 	90	 	 	 
	

	 	AWL
	 	DD
	 	C
	 	YES
	 	 	1	 	 	 	90	 	 	SGML data for further processing by the
Buyer. Applicable to WB, SA and LR
Aircraft.
	Aircraft Wiring Manual

	 	AWM
	 	CD-P
	 	C
	 	YES
	 	 	3	 	 	 	90	 	 	 
	

	 	AWM
	 	DD
	 	C
	 	YES
	 	 	1	 	 	 	90	 	 	SGML data for further processing by the
Buyer. Applicable to WB, SA and LR
Aircraft.
	Component Location Manual

	 	CLM
	 	CD-P
	 	C
	 	NO
	 	 	3	 	 	 	90	 	 	For SA and LR Aircraft.
	Consumable Material List

	 	CML
	 	CD-P
	 	G
	 	YES
	 	 	3	 	 	 	180	 	 	 
	Duct Repair Manual

	 	DRM
	 	CD-P
	 	E
	 	NO
	 	 	3	 	 	 	90	 	 	 
	Ecam System Logic Data

	 	ESLD
	 	CD-P
	 	E
	 	NO
	 	 	3	 	 	 	90	 	 	For SA and LR Aircraft.
	Electrical Load Analysis

	 	ELA
	 	CD-P
	 	C
	 	NO
	 	 	1	 	 	 	0	 	 	For first delivered Aircraft
	Electrical Standard Practices Manual

	 	ESPM
	 	CD-P
	 	G
	 	YES
	 	 	3	 	 	 	90	 	 	 
	

	 	ESPM
	 	DD
	 	G
	 	YES
	 	 	1	 	 	 	90	 	 	SGML data for further processing by the
Buyer. Applicable to WB, SA and LR
Aircraft.
	Electrical Standard Practices booklet

	 	ESP
	 	P2
	 	G
	 	NO
	 	 	6	 	 	 	90	 	 	 
	Flight Data Recording Parameter Library

	 	FDRPL
	 	CD-A
	 	E
	 	NO
	 	 	3	 	 	 	90	 	 	For SA and LR Aircraft.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOMENCLATURE
	 	Abbr
	 	Form
	 	Type
	 	ATA
	 	Qty
	 	Deliv
	 	Comments

	MAINTENANCE AND ASSOCIATED MANUALS
	Fuel Pipe Repair Manual

	 	FPRM
	 	CD-P
	 	G
	 	NO
	 	 	3	 	 	 	90	 	 	 

134

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOMENCLATURE
	 	Abbr
	 	Form
	 	Type
	 	ATA
	 	Qty
	 	Deliv
	 	 
	Illustrated Parts Catalog

(Airframe)/Additional Cross Reference

Table

	 	IPC/ACRT
	 	DVD
	 	C
	 	YES
	 	 	 	 	 	 	90	 	 	Contained on Basic AirN@v
for SA and LR Aircraft.
(Limited to 3 copies per
customization).
	

	 	IPC/ACRT
	 	CD-P
	 	C
	 	YES
	 	 	3	 	 	 	90	 	 	 
	

	 	IPC/ACRT
	 	DD
	 	C
	 	YES
	 	 	1	 	 	 	90	 	 	Issue date to be
coordinated with Initial
Provisioning Data
delivery included in
EXHIBIT “E” Spare Parts
Procurement. SGML data
for further processing by
the Buyer. Applicable to
WB, SA and LR Aircraft.
	Illustrated Parts Catalog (Power Plant)

	 	PIPC
	 	CD-P
	 	C
	 	NO
	 	 	3	 	 	 	90	 	 	Integrated in the
Airframe IPC for SA and
LR Aircraft for IAE
engines (SA Aircraft) and
Rolls-Royce engines (A340
Aircraft).
For other Aircraft and
engine types, supplied by
Propulsion Systems
Manufacturer concurrently
with the Airframe IPC.
	Maintenance Facility Planning

	 	MFP
	 	CD-P
	 	E
	 	NO
	 	 	3	 	 	 	360	 	 	Grouped with AC on one
single CD-ROM.
	Maintenance Planning Document

	 	MPD
	 	CD-P
	 	E
	 	YES
	 	 	3	 	 	 	360	 	 	 
	Maintenance Review Board

	 	MRB
	 	P2
	 	E
	 	NO
	 	 	3	 	 	 	360	 	 	MRB Report includes the
Certification Maintenance
Requirements (CMR) and
Airworthiness Limitation
Items (ALI) documents.
	Support Equipment Summary

	 	SES
	 	CD-P
	 	G
	 	NO
	 	 	3	 	 	 	360	 	 	Grouped with TEM, TEI on
one single CD-ROM.
	Tool and Equipment Bulletins

	 	TEB
	 	OL-A
	 	E
	 	NO
	 	 	 	 	 	—
	 	 
	Tool and Equipment Drawings

	 	TED
	 	OL-A
	 	E
	 	NO
	 	 	1	 	 	 	360	 	 	Provided as Aperture

Cards until on-line

availability
	Tool and Equipment Index

	 	TEI
	 	CD-P
	 	E
	 	NO
	 	 	3	 	 	 	360	 	 	Grouped with TEM, SES on a single CD-ROM
	Illustrated Tool and Equipment Manual

	 	TEM
	 	CD-P
	 	E
	 	YES
	 	 	3	 	 	 	360	 	 	Grouped with TEI, SES on a single CD-ROM
	Trouble Shooting Manual

	 	TSM
	 	DD
	 	C
	 	YES
	 	 	1	 	 	 	90	 	 	SGML data for further
processing by the Buyer.
Applicable to SA and LR
Aircraft.

135

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOMENCLATURE
	 	Abbr
	 	Form
	 	Type
	 	ATA
	 	Qty
	 	Deliv
	 	 
	

	 	TSM
	 	DVD
	 	C
	 	YES
	 	 	 	 	 	 	90	 	 	Contained on Basic AirN@v
for SA and LR Aircraft.
(Limited to 3 copies per
customization).
	

	 	TSM
	 	D-P
	 	C
	 	YES
	 	 	3	 	 	 	90	 	 	 

SA = Single Aisle: A318/A319/A320/A321

LR = Long range: A330/A340

  

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	STRUCTURAL MANUALS
	Nondestructive Testing Manual

	 	NTM
	 	CD-P
	 	E
	 	YES
	 	 	3	 	 	 	90	 	 	 
	Nacelle Structural Repair Manual

	 	NSRM
	 	CD-P
	 	E
	 	YES
	 	 	3	 	 	 	90	 	 	Supplied by
Propulsion System
Manufacturer. The
Seller will ensure
that NSRM’s is
provided in PDF
format.
	Structural Repair Manual

	 	SRM
	 	CD-P
	 	E
	 	YES
	 	 	3	 	 	 	90	 	 	 
	

	 	SRM
	 	DD
	 	E
	 	YES
	 	 	1	 	 	 	90	 	 	SGML data for
further processing
by the Buyer.
Applicable for
A319, A320, A321
Single Aisle and
A330, A340 Long
range Aircraft SRM.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOMENCLATURE
	 	Abbr
	 	Form
	 	Type
	 	ATA
	 	Qty
	 	Deliv
	 	Comments

	OVERHAUL DATA
	Component Documentation Status

	 	CDS
	 	D
	 	C
	 	NO
	 	 	 	 	 	 	90	 	 	Revised until 180

days after Aircraft

delivery
	Component Evolution List

	 	CEL
	 	CD-P
	 	G
	 	NO
	 	 	 	 	 	 	—	 	 	Delivered as
follow-on for CDS.
	Component Maintenance Manual — Manufacturer

	 	CMMM
	 	CD-P
	 	E
	 	YES
	 	 	3	 	 	 	90	 	 	 
	Component Maintenance Manual — Vendor

	 	CMMV
	 	CD-P

OL-IDIS
	 	E
	 	YES
	 	 	3	 	 	 	90	 	 	Provided on paper
by the Component
Suppliers until
On-Line
availability.
	

	 	CMMV
	 	P2
	 	E
	 	YES
	 	 	 	 	 	 	90	 	 	If more than one(1)
Airbus aircraft
type in operation
with the Buyer,
dispatch of the
“common” CMMV shall
not be duplicated.
	Cable Fabrication Manual

	 	CFM
	 	CD-P
	 	E
	 	NO
	 	 	 	 	 	 	90	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOMENCLATURE
	 	Abbr
	 	Form
	 	Type
	 	ATA
	 	Qty
	 	Deliv
	 	Comments

	ENGINEERING DOCUMENTS
	Installation and Assembly Drawings

	 	IAD
	 	OL-A
	 	C
	 	NO
	 	 	 	 	 	 	0	 	 	Available on AOLS “AIDA”
	Process and Material Specification

	 	PMS
	 	E
	 	G
	 	NO
	 	 	 	 	 	 	0	 	 	 
	Parts Usage (Effectivity)

	 	PU
	 	OL-A
	 	E
	 	NO
	 	 	 	 	 	 	0	 	 	Available on AOLS “AIDA”
	Schedule (Drawing Nomenclature)

	 	S
	 	OL-A
	 	E
	 	NO
	 	 	 	 	 	 	0	 	 	Available on AOLS “AIDA”
	Standards Manual

	 	SM
	 	CD-P
	 	G
	 	NO
	 	 	3	 	 	 	180	 	 	 

136

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOMENCLATURE
	 	Abbr
	 	Form
	 	Type
	 	ATA
	 	Qty
	 	Deliv
	 	Comments

	MISCELLANEOUS PUBLICATIONS
	Airplane Characteristics for Airport Planning

	 	AC
	 	CD-P
	 	E
	 	NO
	 	 	7	 	 	 	360	 	 	Grouped with MFP on one single CD-ROM
	ATA Breakdown Index

	 	ATBI
	 	CD-P
	 	E
	 	NO
	 	 	1	 	 	 	360	 	 	Optional
	CADETS (Technical Publications Training)

	 	CADE
	 	CD-A
	 	G
	 	NO
	 	 	1	 	 	 	360	 	 	 
	Aircraft Recovery Manual

	 	ARM
	 	CD-P
	 	E
	 	YES
	 	 	 	 	 	 	90	 	 	Grouped with AC and MFP on one
single CD-ROM
	Crash Crew Chart

	 	CCC
	 	P1
	 	E
	 	NO
	 	 	2	 	 	 	180	 	 	Also available On-Line on seller’s
website
	Cargo Loading System Manual

	 	CLS
	 	CD-P
	 	E/C
	 	NO
	 	 	 	 	 	 	180	 	 	CLS is Envelope (E) for SA and LR
Aircraft and Customized (C) for WB
Aircraft.
	List of Applicable Publications

	 	LAP
	 	OL-A
	 	C
	 	NO
	 	 	2	 	 	 	90	 	 	 
	List of Radioactive and Hazardous Elements

	 	LRE
	 	CD-P
	 	G
	 	NO
	 	 	3	 	 	 	90	 	 	 
	Livestock Transportation Manual

	 	LTM
	 	CD-P
	 	E
	 	NO
	 	 	3	 	 	 	90	 	 	 
	Service Bulletins

	 	SB
	 	OL-A
	 	C
	 	YES
	 	 	 	 	 	 	0	 	 	 
	Service Information Letters

	 	SIL
	 	CD-A
	 	E
	 	YES
	 	 	3	 	 	 	0	 	 	On TPCI CD-ROM
	

	 	SIL
	 	OL-A
	 	E
	 	YES
	 	 	 	 	 	 	0	 	 	SIL

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOMENCLATURE
	 	Abbr
	 	Form
	 	Type
	 	ATA
	 	Qty
	 	Deliv
	 	Comments

	MISCELLANEOUS PUBLICATIONS
	Supplier Product Support Agreements
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Supplier Product Support Agreements 2000

	 	SPSA
	 	CD-P
	 	G
	 	NO
	 	 	3	 	 	 	360	 	 	Based on General Conditions of
Purchase (GCP) 2000
	Transportability Manual

	 	TM
	 	CD-P
	 	G
	 	NO
	 	 	3	 	 	 	180	 	 	 
	Vendor Information Manual

	 	VIM
	 	CD-A
	 	G
	 	NO
	 	 	3	 	 	 	360	 	 	 
	

	 	VIM
	 	OL-A
	 	G
	 	NO
	 	 	 	 	 	 	360	 	 	 
	Vendor Information Manual GSE

	 	VIM/GSE
	 	CD-A
	 	G
	 	NO
	 	 	3	 	 	 	360	 	 	 
	

	 	VIM/GSE
	 	OL-A
	 	G
	 	NO
	 	 	 	 	 	 	360	 	 	 

137

 

LICENSE FOR USE OF SOFTWARE

	1.	 	Definitions
	 
	 	 	For the purposes of this license the following definitions shall apply:
	 
	 	 	“Licensor” means the Seller.
	 
	 	 	“Licensee” means the Buyer.
	 
	 	 	“Software” means the set of programs, configurations, processes, rules and,
if applicable, documentation related to the operation of the data
processing.
	 
	 	 	“Freeware” means the Software furnished free of charge to the Licensee.
	 
	 	 	“Composite Work” means the work composed of various elements, such as
database, software or data, and which necessitates the use of the Software,
to the extent the same is embedded in the Software.
	 
	 	 	“User Guide” means the documentation, which may be in electronic format,
designed to assist the Licensee to use the Software, Freeware or Composite
Work, as applicable.
	 
	 	 	Capitalized terms used herein and not otherwise defined in this Software
License shall have the meaning assigned thereto in the Agreement.
	 
	2.	 	Grant
	 
	 	 	The Licensor grants the Licensee the right to use the Software under the
conditions set forth below (“the Software License”). The Software License
will also apply to any Freeware and/or Composite Work delivered by the
Licensor.
	 
	3.	 	Personal License
	 
	 	 	The sole right granted to the Licensee under this Software License is the
right to use the Software. The Software License is personal to the Licensee,
for its own internal use, and is non-transferable (except as provided in
[***] herein) and nonexclusive.
	 
	4.	 	Copies

138

 

	 	 	Use of the Software is limited to the number of copies delivered by the
Licensor to the Licensee and to the medium on which the Software is
delivered. No reproduction will be made without the written consent of the
Licensor. It is however agreed that the Licensee is authorized to copy the
Software for back-up and archiving purposes. Any copy authorized by the
Licensor to be made by the Licensee will be performed under the sole
responsibility of the Licensee. The Licensee agrees to reproduce the
copyright and other notices as they appear on or within the original media
on any copies that the Licensee makes of the Software.
	 
	5.	 	Term
	 
	 	 	Subject to the Licensee having complied with the terms of this Software
License, the rights under the Software License will be granted from the date
of first delivery of the Software to December 31st of the year of delivery.
For the following years, the rights under this Software License shall be
automatically granted to the Licensee from January 1st to
December 31st,
subject to compliance by the Licensee with its obligations under this
License.
	 
	 	 	The Licensee may terminate the Software License by notifying in writing to
the Licensor its desire not to renew the service for the following year.
Such notification must be received by the Licensor not later than November
30th of the current year.
	 
	 	 	In the event that the Licensor should offer a replacement product, the
conditions for using such product will be subject to a separate agreement
substantially similar to the terms of this Agreement.
	 
	6.	 	Conditions of Use
	 
	 	 	Under the present Software License, the Licensee will:

	 	•
	 	act diligently to maintain the Software and the relating
documentation in good working condition, in order to ensure the
correct operation thereof;
	 
	 	•
	 	use the Software in accordance with such documentation and
the User Guide, and ensure that the staff using the Software has
received the appropriate training;
	 
	 	•
	 	use the Software exclusively in the technical environment
defined in the applicable User Guide, except as otherwise agreed in
writing between the parties (subject to said agreement,
decompilation may be agreed to by the Licensor in order for the
Licensee to obtain the necessary information to enable the Software
to function in another technical environment);
	 
	 	•
	 	use the Software for its own internal needs and on its
network only, when technically possible, and exclusively on the
machine referenced and the site declared;

139

 

  	 	•
	 	not alter, reverse engineer, modify or adapt the Software, nor integrate
        all or part of the Software in any manner whatsoever into another software
        product;
	 
	 	•
	 	when the source code is provided to the Licensee, the Licensee shall
        have the right to study and test the Software, under reasonable conditions
        to be expressly specified by the Licensor, but in no event shall the Licensee
        have the right to correct, modify or translate the Software [***];
	 
	 	•
	 	not correct the Software, without Licensor’s prior written and
        express consent;
	 
	 	•
	 	not translate, disassemble or decompile the Software, nor create a software
        product derived from the Software [***];
	 
	 	•
	 	not attempt to or authorize a third party to discover or re-write the
        Software source codes in any manner whatsoever [***];
	 
	 	•
	 	not delete any identification or declaration relative to the intellectual
        property rights, trademarks or any other information related to ownership
        or intellectual property rights provided in the Software by the Licensor;
	 
	 	•
	 	not pledge, sell, distribute, grant, sub-license, lease, lend, whether
        on a free-of-charge basis or against payment, or permit access on a time-sharing
        basis or any other utilization of the Software, whether in whole or in
        part, for the benefit of a third party;
	 
	 	•
	 	not permit any third party to use the Software in any manner, including
        but not limited to, any outsourcing, loan, commercialization of the Software
        or commercialization by merging the Software into another software or
        adapting the Software, without prior written consent from the Licensor.

	 	 	The Licensor shall be entitled, subject to providing reasonable prior
written notice thereof to the Licensee, to come and make reasonable
inspections to verify in the Licensee’s facilities whether the conditions
specified in the present Software License are respected. This will not
however engage the responsibility of the Licensor in any way whatsoever.
	 
	7.	 	Training
	 
	 	 	In addition to the User Guide provided with the Software, training and other
assistance will be provided upon the Licensee’s request at rates set forth
in the ANACS General Terms and Conditions of Sale.
	 
	8.	 	Proprietary Rights

140

 

	 	 	The Software is proprietary to the Licensor or the Licensor has acquired the
intellectual property rights necessary to grant this Software License. The
copyright and all other proprietary rights in the Software are and will
remain the property of the Licensor.
	 
	 	 	The Licensor reserves the right to modify any Software at its sole
discretion without prior notice to the Licensee.
	 
	9.	 	Copyright Indemnity
	 
	 	 	The Licensor will defend and indemnify the Licensee against any claim that
the normal use of the Software infringes the intellectual property rights of
any third party, provided that the Licensee:
	 
	•
	 	Promptly notifies the Licensor, upon Licensee’s actual
knowledge of any
claim or potential claim;
	 
	•
	 	Makes no decision or settlement of any claim;
	 
	•
	 	Allows the Licensor to have sole control over all negotiations for its settlement;
	 
	•
	 	Gives the Licensor all reasonable assistance in connection therewith.
	 
	 	 	Should the Licensee be prevented from using the Software by any enforceable
court decision, the Licensor will at its own costs and at its choice either
modify the Software to avoid infringement or obtain for the Licensee the
right to use the Software.
	 
	10.	 	Confidentiality
	 
	 	 	The Software and its contents are designated as confidential. Unless
compelled by applicable law, (in which case Licensee will inform licensor
reasonably in advance of any such disclosure). The Licensee undertakes not
to disclose the Software or parts thereof to any third party without the
prior written consent of the Licensor. In so far as it is necessary to
disclose aspects of the Software to the employees, such disclosure is
permitted solely for the purpose for which the Software is supplied and only
to those employees who need to know the same.
	 
	 	 	The obligations of the Licensee to maintain confidentiality will survive the
termination of the Software License grant for a period of ten (10) years.
	 
	11.	 	Warranty
	 
	 	 	The Licensor warrants that the Software is prepared in accordance with the
state of art at the date of its conception and will perform substantially in
accordance with its functional and technical specification at the time of
delivery. Should the Software be found to contain any non-conformity or
defect, the Licensee will notify the Licensor promptly thereof and the sole
and exclusive liability of the Licensor under this Software License will be
to correct the same.

141

 

	 	 	THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE LICENSOR AND/OR ITS
SUPPLIERS AND REMEDIES OF THE LICENSEE ARE EXCLUSIVE AND IN SUBSTITUTION
FOR, AND THE LICENSEE HEREBY WAIVES, RELEASE AND RENOUNCES, ALL OTHER
WARRANTIES, OBLIGATIONS AND LIABILITIES OF THE LICENSOR AND/OR ITS SUPPLIERS
AND RIGHTS, CLAIMS AND REMEDIES OF THE LICENSEE AGAINST THE LICENSOR, ITS
SUPPLIERS AND/OR THEIR INSURERS, EXPRESS OR IMPLIED, ARISING BY LAW OR
OTHERWISE WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN ANY SOFTWARE
DELIVERED UNDER THIS SOFTWARE LICENSE INCLUDING BUT NOT LIMITED TO:

	 	(A)	 	ANY WARRANTY AGAINST HIDDEN DEFECTS;
	 
	 	(B)	 	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
	 
	 	(C)	 	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
DEALING OR USAGE OF TRADE;
	 
	 	(D)	 	ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY, WHETHER
CONTRACTUAL OR IN TORT AND WHETHER OR NOT ARISING FROM THE LICENSOR’S
AND/OR ITS SUPPLIERS’ NEGLIGENCE, ACTUAL OR IMPUTED; AND
	 
	 	(E)	 	[***].

	 	 	THE LICENSOR AND/OR ITS SUPPLIERS SHALL HAVE NO OBLIGATION OR LIABILITY,
HOWSOEVER ARISING, FOR LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER
DIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES WITH RESPECT TO ANY
NON-CONFORMITY OR DEFECT IN ANY SOFTWARE DELIVERED UNDER THIS SOFTWARE
LICENSE.
	 
	 	 	FOR THE PURPOSES OF THIS CLAUSE 11, “THE LICENSOR” WILL INCLUDE THE
LICENSOR, ITS AFFILIATES AND ANY OF THEIR RESPECTIVE INSURERS.
	 
	 	 	The Licensor shall have no liability for data that is entered into the
Software by the Licensee and/or used for computation purposes.
	 
	12.	 	Liability and Indemnity
	 
	 	 	The Software is supplied under the express condition that, except as
provided in Paragraph 9 hereof, the Licensor will have no liability in
contract or in tort arising from or in connection with the use or
possession by the Licensee of the Software and that the Licensee will
indemnify and hold the Licensor harmless from and against any liabilities
and claims resulting from such use or possession.

142

 

	13.	 	Force Majeure
	 
	13.1	 	The Licensor will not be responsible nor be deemed to be in default on
account of delays in delivery or otherwise in the performance of this
Software License or any part thereof due to causes reasonably beyond
Licensor’s or its subcontractors’ control including but not limited to:
natural disasters, fires, floods, explosions or earthquakes, epidemics or
quarantine restrictions, serious accidents, total or constructive total
loss, any act of the government of the country of the Licensee or the
governments of the countries of Licensor or its subcontractors, war,
insurrections or riots, failure of transportation, communications or
services, strikes or labor troubles causing cessation, slow down or
interruption of services, inability after due and timely diligence to
procure materials, accessories, equipment or parts, failure of a
subcontractor or vendor to furnish materials, accessories, equipment or
parts due to causes reasonably beyond such subcontractor’s or vendor’s
control or failure of the Licensee to comply with its obligations arising
out of the present Software License.
	 
	13.2	 	The Licensor will, as soon as practicable after becoming aware of any
delay falling within the provisions of this Clause, notify the Licensee of
such delay and of the probable extent thereof and shall, subject to the
conditions as hereinafter provided and as soon as practicable after the
removal of the cause or causes for delay, resume performance under the
Software License.
	 
	14.	 	Termination
	 
	 	 	In the event of breach of an obligation set forth in this Software License
by either the Licensor or the Licensee, which is not cured within 30 days
from the date of receipt of a written notice notifying the breach, the
non-breaching party will be entitled to terminate this Software License.
	 
	 	 	In the event of termination for any cause, the Licensee will no longer have
any right to use the Software and shall return to the Licensor all copies of
the Software and any relating documentation together with an affidavit to
that effect. In case of breach by the Licensee, the Licensor will be
entitled to retain any amount paid for the ongoing year.
	 
	15.	 	General Provisions
	 
	15.1	 	[***] this Software License or part thereof will not be assigned to a
third party without the prior written consent of the other party.
	 
	15.2	 	This Software License will be governed by the laws of the State of New
York, USA.
	 
	15.3	 	In the event that any provision of this Software License should for any
reason be held ineffective or unenforceable, such provision shall be
deemed deleted from this License and the remainder of this Software License
shall remain in full force and effect.

143

 

	 	 	The invalid provision shall be replaced by such valid one as the parties
would have chosen had they been aware of such invalidity.
	 
	15.4	 	Notices
	 
	 	 	All notices and requests required or authorized hereunder will be
given in writing either by personal delivery to a responsible officer
of the party to whom the same is given or by commercial courier or
facsimile (with proof of delivery) at the addresses and numbers set
forth below. The date on which any such notice or request is so
personally delivered, or if such notice or request is given by
commercial courier, facsimile or e-mail, the date on which it is
received (as evidenced by the proof of delivery supplied by the
server or courier), will be deemed to be the effective date of such
notice or request. Certain classes of notices must be made as
follows:

	 	 	 	The Seller will be addressed at:
	 
	 	 	 	2, rond-point Maurice Bellonte

31700 BLAGNAC FRANCE

Attention: Director — Contracts
	 
	 	 	 	Telephone: 33 05 61 30 40 12

Fax: 33 05 61 30 40 11

E-mail: to be notified to the Buyer
	 
	 	 	 	The Buyer will be addressed at:
	 
	 	 	 	45200 Business Court

Dulles, Virginia 20166

Attention: Chief Financial Officer
	 
	 	 	 	Telephone: 703-650-6000

Fax: 703-650-6294

E-mail: to be notified to the Seller
	 
	 	 	 	Either Party may, from time to time by written notice
designate for itself another address or another person to whose
attention such notice is sent.

144

 

LICENSE FOR

USE OF

AIRBUS ON-LINE SERVICES

 

LICENSE AGREEMENT

This License Agreement (the “Agreement”) is made this       day of                , 200  
by and between Airbus North America Customer Services, Inc., with a principal
place of business at 198 Van Buren Street, Suite 300, Herndon, Virginia
(“ANACS”) and                                                   , a                              
                      corporation
with its principal place of business at                                                             
(“User”):

WHEREAS Airbus has developed and owns an original database containing technical
and commercial documentation and information on aircraft manufactured by Airbus
(as more fully defined below, the “Database”), via a set of services known as
“Airbus On Line Services” (“AOLS”) and

WHEREAS Airbus has granted a license for use of AOLS to access the Database to
its affiliate AVSA, S.A.R.L. (“AVSA”) and ANACS has obtained a license thereof
from AVSA and

WHEREAS, ANACS’s license entitles ANACS to further sublicense use of AOLS to
User under the terms and conditions set forth herein, and User wishes to obtain
such sublicense in order to have access to the Database through AOLS in its
operation of Airbus aircraft,

NOW THEREFORE, the parties, wishing to be mutually and legally bound, hereby
agree as follows:

definitions

     The following capitalized terms will have the meanings set forth below:

145

 

	 	 	 
	“Access Procedure Kit”

	 	the information necessary for accessing the Database
and made available to the User either on-line or on a CD-ROM.
	 
	 	 
	“Administrator”

	 	the person appointed by the User to be responsible for
qualifying, suspending or canceling the qualification of an Authorized
User, gathering identification information relative to such Authorized
User, applying to the Certification-Service-Provider for the appropriate
Certificate, providing the necessary access equipment, registering the
Authorized User and the Authorized User-related Certificate with ANACS
and managing the Authorized Users.
	 
	 	 
	“AOLS Technical Description
and Commercial Proposal”

	 	the document attached to this Agreement as
Attachment I and Attachment II to this Appendix 2, which contains a
comprehensive description of AOLS Services, hardware and software
requirements and the “Request for Connection” form, respectively, to be
completed by the User to specify the services to be accessed under this
License
	 
	 	 
	“Authorized User”

	 	a natural person who has been authorized by the
Administrator to access the Database pursuant to the license granted
herein.
	 
	 	 
	“Certificate”

	 	an electronic record (file) that binds a Public Key to the
identity of the owner of a Public — Private Key pair and is signed by
the Certificate Service Provider.
	 
	 	 
	“Certificate Service Provider”

	 	an entity or a legal or natural person retained by
ANACS or Airbus, who issues Certificates and/or provides
other services related to Electronic Signature
	 
	 	 
	“Data”

	 	the usual representation of a piece of information — whether
collected or produced on any medium — so as to facilitate its
processing on the Database.
	 
	 	 
	“Database”

	 	the Data of Airbus and ANACS organized in such a manner as to
be used by (a) computer programs forming distinct applications to
facilitate electronic or telecommunication data exchange and (b)
computer programs comprising the necessary electronic elements for

146

 

	 	 	 
	

	 	the operation of such Database, including a thesaurus, a Database index,
viewing systems, and Database services such as AOLS.
	 
	 	 
	“Electronic Signature”

	 	data in electronic form which are attached to or
logically associated with other electronic data and which serve as a
method of authentication.
	 
	 	 
	“Extracting”

	 	the temporary or permanent transfer of Data from a Database by
any means or media.
	 
	 	 
	“Multibase”

	 	a set of databases, which compose the Database.
	 
	 	 
	“On-Line Help”

	 	on-line orientation and assistance.
	 
	 	 
	“Public key”

	 	the public cryptographic key used for the purpose of verifying
an Electronic Signature.
	 
	 	 
	“Public Key Infrastructure”

	 	the system organizing the generation and
distribution of keys and Certificates.
	 
	 	 
	“Private Key”

	 	the private cryptographic key used for the purpose of
creating an Electronic Signature.
	 
	 	 
	“Reader”

	 	equipment to be acquired by the User to be used with the Smartcard
for authentication of the Authorized Users.
	 
	 	 
	“Request for Connection”

	 	the form, found as Attachment II to Appendix 2, to
be completed by the User. The User’s selection of services shall
define the scope of the data accessed under this License.
	 
	 	 
	“Smartcard”

	 	a card supplied by Airbus, memorizing the Authorized User’s
identity, personal password and Private Key for use with the Reader
for authentication and security purposes.
	 
	 	 
	“Substantial Extraction”

	 	permanent or temporary transfer of a substantial
part of the Data from the Database by any means or to any media.
	 
	 	 
	“Use”

	 	means viewing, Extracting, reviewing, printing, reproducing, on
any media, of Data from the Database
	 
	 	 
	“User Guide”

	 	means documentation, which may be in electronic format,
designed to assist the Authorized User to use the Database.

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	2.	 	GRANT OF LICENSE
	 
	 	 	ANACS hereby grants, and User hereby accepts, a non-exclusive,
non-assignable and non-transferable license (the “License”) to User for the
Use of AOLS to access the Database. The License will be consistent with
User’s Request for Connection and is issued under the terms and conditions
set forth herein.
	 
	3.	 	LIMITATION OF RIGHTS
	 
	 	 	The User will be entitled to exercise its rights under the License through
Authorized Users only and only for the purpose of maintaining and operating
Airbus aircraft. The User will not, under any circumstances, carry out a
Substantial Extraction of Data from the Database.
	 
	4.	 	TECHNICAL CHARACTERISTICS/CONFIGURATION CHANGES
	 
	 	 	AOLS Database technical characteristics are defined in Appendix 1.
	 
	 	 	The configuration of the Database, of the operating systems involved, and
of the relevant information systems are subject to adjustment, modification
and improvement by Airbus or ANACS from time to time; neither ANACS nor
Airbus will be held liable for any consequences to User of such
adjustments, modifications or improvements.
	 
	5.	 	ADMINISTRATOR AND AUTHORIZED USERS
	 
	5.1	 	The User will appoint one or more Administrators who will be responsible
for:

   (i) gathering and screening identification information on potential
Authorized Users;

   (ii) qualifying and managing Authorized Users and, where appropriate,
suspending or canceling the qualifications thereof;

   (iii) making application to the Certificate Service Provider for the
appropriate Certificates;

   (iv) registering the Authorized Users and the related Certificates
with ANACS

   (iv) providing the equipment necessary to access AOLS.

	5.2	 	Once an Authorized User obtains a Smartcard and a Certificate is
properly issued for such Authorized User, the Authorized User will access
AOLS by logging onto the Airbus On-Line Services website in accordance
with procedures set forth in the Access Procedure Kit made available to
the User.

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	 	 	The User is solely responsible for the choice of services accessed, for
defining its research strategy and for evaluating and defining the use of,
the search results.
	 
	5.3	 	The User will take every reasonable measure necessary to prevent
unauthorized access to the Database, the Data and to the documentation,
including the User Guide. Positive authentication of an Authorized User
will render the User responsible in all respects for
each and every transaction performed by such Authorized User and the User
expressly waives any right to repudiate any transaction resulting from such
Use.
	 
	5.4	 	The User will comply with the security procedures defined by Airbus
and/or ANACS.
	 
	6.	 	DATABASE AVAILABILITY
	 
	 	 	The Database will be available to the User via the Airbus On-Line Services
website on a 24 hours a day / 7 days a week basis. Notwithstanding the
above, Airbus has reserved the right to suspend temporarily the access to
AOLS where such suspension is necessary to address security problems,
perform maintenance services, correct errors and bugs, update and/or
upgrade the Database. ANACS will inform the User before any scheduled
suspension, unless security concerns prevent such notification.
	 
	7.	 	ELECTRONIC LOGS
	 
	 	 	The electronic logs produced by the information system supporting AOLS will
be evidence of the communications, transactions and payments made between
ANACS and the User. ANACS will assure that such logs are stored in a
reasonably secure manner and that the data contained in such logs are not
modified following initial recording.
	 
	8.	 	ELECTRONIC SIGNATURE
	 
	 	 	The use by the User of the Certificates together with the Readers will
constitute the Electronic Signature of the User and the Authorized Users,
authenticating the identities of both and of the Data communicated by
and/or to each of them.
	 
	9.	 	CERTIFICATES
	 
	 	 	ANACS or Airbus will appoint a Certificate Service Provider, who will
provide for the issuance of certificates to Authorized Users.
	 
	 	 	Such Certificate Service Provider shall, upon the User’s application, issue
one or more Certificates containing:

	 	(i)	 	the identification of the Certificate Service Provider;

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	 	(ii)	 	the country in which such Certificate was issued:
	 
	 	(iii)	 	the identification of the User and the Authorized User;
	 
	 	(iv)	 	the User’s and the Authorized User’s Public Key corresponding
to the User’s and the Authorized User’s Private Key(s);
	 
	 	(v)	 	the identity code of the Certificate;
	 
	 	(vi)	 	the Electronic Signature of the Certification Service Provider
issuing the Certificate, and
	 
	 	(vii)	 	limitations, if any, on the scope of the Certificate

	 	 	All reasonable dues or fees charged by the Certificate Service Provider
will be the responsibility of the User.
	 
	10.	 	PROTECTION OF INTELLECTUAL PROPERTY RIGHTS
	 
	10.1	 	The User acknowledges that AOLS, the Database and all documentation
supplied in connection therewith, including the Airbus On Line Services
Catalog, the User Guide and all On-Line Help, are and will remain the
property of Airbus and the User agrees to take no action inconsistent
with Airbus’ ownership rights in same. The User will not deactivate the
Database-integrated security system.
	 
	10.2	 	The User will not make representations regarding, or market or promote
the Database or any Data from the Database, whether gratuitously or for
consideration. The User will not adapt, modify, alter, arrange or
translate the Database for any reason, or alter the Database’s
architecture in any manner without the Seller’s prior express written
consent.
	 
	10.3	 	The User will not use any information regarding the structure, content or
operation of AOLS to create a database designed to compete with the
Database.
	 
	10.4	 	The User will inform its employees, agents and representatives of the
terms of this License and in particular of this section 10, and will take
all other reasonable measures to prevent unauthorized access to the
Database. The User will preserve all copyright notations appearing on the
Database, Data and documentation (including the User Guide and the Airbus
On Line Services Catalog), and on any media.
	 
	11.	 	INTELLECTUAL PROPERTY RIGHTS INDEMNITY
	 
	 	 	ANACS will indemnify the User against any claims that the normal Use of the
Database infringes the intellectual property rights of any third party,
provided that the User (a)

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	 	 	promptly notifies ANACS of any such claim, (b)
makes no admission or settlement of any claim, (c) allows ANACS to conduct
the defense or settlement of such claim (but in no event will ANACS admit
the liability of the User without User’s prior written consent) and (d)
provides ANACS with all reasonable assistance in connection therewith.
	 
	12.	 	PRICE AND PAYMENT
	 
	 	 	AOLS described in Paragraph A of Attachment I to this Appendix 2 are
available free of charge to the Buyer for so long as the Buyer has one
Aircraft in its fleet. AOLS described in Paragraph B of Attachment I to
this Appendix 2 are available for a fee to be provided upon request by the
User.
	 
	13.	 	WARRANTY
	 
	 	 	ANACS, in its capacity as “User,” has obtained from Airbus, through its
license with AVSA, the following warranty. ANACS hereby assigns to User
and User hereby accepts, all of the rights and obligations of ANACS in its
capacity as “User” under the aforementioned license, and ANACS subrogates
the User into all such rights and obligations in respect of the License.
ANACS hereby warrants that it has the requisite authority to make the
foregoing assignment and effect the foregoing subrogation to and in favor
of the User and that it will not enter into any amendment of the provisions
so assigned without the prior written consent of the User. Capitalized
terms used in the following provisions have the meanings assigned thereto
in this License, except that “User” refers to ANACS.
	 
	 	 	QUOTE
	 
	 	 	Airbus warrants that the Database has been developed in accordance with the
state of art current as of the date of such development, taking into
account the diversity of the information sources presented and the
complexity of the information processing involved.
	 
	 	 	IN THE EVENT THAT THE DATABASE IS FOUND TO CONTAIN A DEFECT, THE LIABILITY OF AIRBUS SHALL BE LIMITED TO CORRECTION OF THE DEFECT AT
ITS EXPENSE.
	 
	 	 	THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF AIRBUS AND REMEDIES OF
THE USER SET FORTH IN THIS LICENSE ARE EXCLUSIVE AND IN SUBSTITUTION
FOR, AND THE USER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER
WARRANTIES, OBLIGATIONS AND LIABILITIES OF AIRBUS AND RIGHTS, CLAIMS
AND REMEDIES OF THE USER AGAINST AIRBUS, EXPRESS OR IMPLIED, ARISING
BY LAW OR OTHERWISE, WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN
THE DATABASE MADE

151

 

	 	 	AVAILABLE UNDER THIS LICENSE BY ANACS, INCLUDING BUT
NOT LIMITED TO:

	 	(A)	 	ANY WARRANTY AGAINST HIDDEN DEFECTS;
	 
	 	(B)	 	ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;
	 
	 	(C)	 	ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE
OF DEALING OR USAGE OF TRADE;
	 
	 	(D)	 	[***].

	 	 	AIRBUS WILL HAVE NO OBLIGATION OR LIABILITY, HOWSOEVER ARISING, FOR LOSS OF
USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES WITH RESPECT TO ANY NON-CONFORMITY OR DEFECT IN THE DATABASE MADE
AVAILABLE UNDER THIS LICENSE BY ANACS.
	 
	 	 	The above warranty will not apply to:

(i) data transmission;

(ii) the performance of the website or the internet;

(iii) the telecommunications lines, information systems hardware or
software products, proprietary or otherwise, interfacing with the
Database, including the browser;

(iv) malfunctions or defects attributable to the availability or speed
or other inherent limitations in the world wide web or search engines
employed with respect thereto;

(v) any consequence of the interface of User’s software with the
Database.

	 	 	The User will inform Airbus of any error or missing Data of which it may
become aware during it use of the Database.

UNQUOTE

14.      NONDISCLOSURE

	 	 	Except as compelled by applicable law (in which circumstances, if allowed
by applicable law, the User will notify ANACS prior to such disclosure),
the User will not disclose the Database, related documentation, or parts
thereof, to any third party without the prior written consent of ANACS. In
so far as it is necessary to disclose aspects of the Database to

152

 

	 	 	employees, such disclosure is permitted only for the purpose for which the Database is
supplied and only to the employee with a need to know.

15.    PERSONAL DATA PROTECTION

	 	 	If necessary, ANACS and the User will register with the relevant authority
or authorities any personal data files or personal data automated
processing systems as provided under applicable local laws and will inform
each other of any information system evolution, which could affect such
registration(s).
	 
	 	 	Personal data may be accessed and any errors therein corrected, by notice
in writing ANACS. The User will notify Authorized Users of this right and
will itself abide by applicable rules on personal data protection.

16.    FORCE MAJEURE

	16.1	 	Neither ANACS nor its affiliates will be responsible for, or be deemed to
be in default on account of, delays in availability of the services
licensed hereunder due to causes reasonably beyond ANACS’s, Airbus’ or their respective subcontractors’ control
including but not limited to: natural disasters, fires, floods, explosions
or earthquakes, epidemics or quarantine restrictions, serious accidents,
total or constructive total loss, any act of the government of the country
of the User or the governments of the countries of Airbus or its
subcontractors, war, insurrections or riots, failure of transportation,
communications or services, strikes or labor troubles causing cessation,
slow down or interruption of services, inability after due and timely
diligence to procure materials, accessories, equipment or parts, failure of
a subcontractor or vendor to furnish materials, accessories, equipment or
parts due to causes reasonably beyond such subcontractor’s or vendor’s
control or failure of the User to comply with its obligations under this
License (all of the foregoing defined as “Excusable Delay”).
	 
	16.2	 	ANACS will, as soon as practicable after becoming aware of any Excusable
Delay, notify the User of such delay and of the probable duration thereof
and will, subject to the conditions as hereinafter provided and as soon as
practicable after the removal of the cause or causes for the Excusable
Delay, resume performance under this License.

  
17.    TERMINATION
  

	17.1	 	In the event of a material breach of any provision of this License by
either party, which is not cured within 30 days from the date of receipt
of a written notice of such breach, the non-breaching party will be
entitled to terminate this License.

153

 

	17.2	 	In the event of termination for cause, the User’s rights to Use of the
Database will terminate and, unless such breach is attributable to gross
negligence or willful misconduct on the part of ANACS, ANACS will retain
any amount paid for the then current year.

  
18.   GENERAL PROVISIONS
  

	18.1	 	Assignment
	 
	 	 	Except as may be provided in the Purchase Agreement, the License may
not be assigned to a third party without the prior consent of the
other party except that ANACS may assign all or part of this License
to any Affiliate.
	 
	18.2	 	Further Sublicense
	 
	 	 	The User shall not be entitled to further sublicense the License
absent the express written consent of ANACS.
	 
	18.2	 	Law
	 
	 	 	This Agreement is entered into and will be interpreted in accordance
with the law of the State of New York, USA, without regard to any conflict
of laws provisions which would result in the application of the law of any
other jurisdiction.
	 
	18.3	 	Invalidity
	 
	 	 	In the event that any provision of this Agreement is held to be legally
ineffective or unenforceable, such provision will be deemed deleted from
this Agreement and the remainder of this Agreement will remain in full
force and effect.
	 
	18.4	 	Notices
	 
	 	 	All notices and requests required or authorized hereunder will be
given in writing either by personal delivery to a responsible officer
of the party to whom the same is given or by commercial courier or
facsimile (with proof of delivery) at the addresses and numbers set
forth below. The date on which any such notice or request is so
personally delivered, or if such notice or request is given by
commercial courier, facsimile or e-mail, the date on which it is
received (as evidenced by the proof of delivery supplied by the
server or courier), will be deemed to be the effective date of such
notice or request. Certain classes of notices must be made as
follows:

	 	 	 	The Seller will be addressed at:
	 
	 	 	 	2, rond-point Maurice Bellonte

31700 BLAGNAC FRANCE

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	 	 	 	Attention: Director — Contracts
	 
	 	 	 	Telephone: 33 05 61 30 40 12

Fax: 33 05 61 30 40 11

E-mail: to be notified to the Buyer
	 
	 	 	 	The Buyer will be addressed at:
	 
	 	 	 	45200 Business Court

Dulles, Virginia 20166

Attention: Chief Financial Officer
	 
	 	 	 	Telephone: 703-650-6000

Fax: 703-650-6294

E-mail: to be notified to the Seller
	 
	 	 	 	Either Party may, from time to time by written notice
designate for itself another address or another person to whose
attention such notice is sent.

	18.5	 	Entire Agreement
	 
	 	 	This Agreement contains the entire understanding of the parties hereto
regarding the subject hereof, and supercedes and renders
void all other prior written or oral agreements thereon.
This Agreement may not be amended except by a writing signed by both
parties.
	 
	 	 	Wherefore, the Parties have agreed and have executed this License on the
date first above written:
	 
	 	 	AIRBUS NORTH AMERICA CUSTOMER SERVICES, INC.
	 
	 	 	By:                                                   
	 
	 
	 	 	[User]
	 
	 
	 	 	By:                                                   

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AOLS CATALOG

A. AIRBUS ON-LINE SERVICES — BASIC SERVICES

Maintenance & Engineering

     Engineering Technical Data Service (ETDS)

	 	 	The ETDS service shall provide access, via a document index, to the
contents of:

	 	•	 	Service Bulletins — issued since beginning of
1993 (SB’s after July 1997 in SGML; SB’s between 1993 and July
1997 in PDF)
	 
	 	•	 	Modification Information Document (MID)
	 
	 	•	 	All Operators Telex (AOT)
	 
	 	•	 	Flight Operations Telex (FOT)
	 
	 	•	 	Service Information Letter (SIL)
	 
	 	•	 	Consignes de Navigabilité (CN)
	 
	 	•	 	Airworthiness Directives (AD)
	 
	 	•	 	Technical follow-up (TFU)
	 
	 	•	 	Operators Information Telex (OIT)

     Quarterly Service Report (QSR)

	 	 	The QSR-WEB is the new electronic format of the Quarterly Service Report,
featuring Web technology.
	 
	 	 	It contains, for all Airbus aircraft types:

	 	•	 	The aircraft life history
	 
	 	•	 	The main monthly operational reliability characteristics
for each operator (such as Aircraft in service, daily utilization,
average flight duration, Dispatch and Operational Reliability)
	 
	 	•	 	Engine removal reliability data
	 
	 	•	 	ETOPS operations (if applicable)

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     Repair guide (ARG/AOG)

	 	 	 	This service shall provide the Buyer with information about Suppliers’
authorized repair stations and the AOG stock locations.

     Modification comparison list (ACCL)

	 	 	 	The purpose of this service is to provide the Buyer with Modification
Comparison Lists that are created for each and every aircraft delivered.

Training

	 	 	 	The training catalog is available.

Material

     Spares Ordering

	 	 	 	This service is already available in an autonomous mode
(http://spares.airbus.com). The integration in Airbus On-Line Services
Basic services is in progress.

General information

     Customer Services Catalog

	 	 	 	The Customer Services Catalog is available.

     Warranty Claim (CAWA)

	 	 	 	Four main functions are available:

	 	 	 	Warranty claims booking
	 
	 	 	 	Consultation of the warranty claims status
	 
	 	 	 	Consultation of statistics on response time regarding closed/open files
	 
	 	 	 	Consultation of warranty guide

	 	 	 	Note : Warranty Services are aimed at people who have authority to
file warranty claims.

     Vendor Information Manual (VIM)

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	 	 	 	The VIM/E gives contact for major equipment Suppliers, who have signed
Customer Support agreements with the Seller, including their Regional
Customer Support facilities and equipment by aircraft type.

     Supplier Product Support Agreement (SPSA)

	 	 	 	The SPSA is the collection of the Agreements that the Seller has reached
with its major Suppliers; these Agreements are transferable to the Buyer.
These Agreements are based on the Seller’s GCP/General Conditions of
Purchase, Part II, 450, 650 and 2000.

B. AIRBUS ON-LINE SERVICES — OPTIONAL SERVICES

	1.	 	Airbus Industrie Drawing Access (AIDA)
	 
	 	 	The AIDA service offers:

	 	•	 	Mechanical Drawings for all Airbus aircraft types.
	 
	 	•	 	Data available: Drawing pictures (in raster format (TIFF/CCITTG4)) and
Parts List / Parts Usage (in PDF).
	 
	 	•	 	Data access:

	 	–	 	Access control: Information applicable to user fleet,
	 
	 	–	 	Direct access by drawing number, Parts List or Part Number,
	 
	 	–	 	Top down navigation by using the Part Lists,
	 
	 	–	 	Bottom up navigation by using the Part Usage,
	 
	 	–	 	Printing and downloading of any drawing,
	 
	 	–	 	Back up service: fax copy of the data.

	2.	 	Flight Crew Operating Manual (FCOM) Service
	 
	 	 	FCOM service offers:

	 	•	 	Delivery on CD-ROM’s of the 4 volumes of the FCOM, under a specific format (HTML
format) allowing a smart consultation on portable PC’s of the manual.
	 
	 	•	 	Possible customization of the manual, using a tool delivered to the same CD-ROM and
allowing the customer to create its own CD-ROM’s for its pilots or make accessible the
customized FCOM through its internal network.
	 
	 	•	 	This service offered today through LPC (Less Paper Cockpit) is now accessible through
Airbus On-Line Services.
	 
	 	•	 	Possibility for end-users to download onto their personal computer the latest TRs and OEBs released by Airbus. Immediately
after the latter are downloaded, the consultation process on

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	 	 	 	the personal computer takes the information contained in the
FCOM CD-ROM as baseline and amends this information with the TRs’ and OEBs’ information.
	 
	 	•	 	Possibility for users to provide Airbus with feedback through
an e-mail tool integrated within the application.

	 	 	If this option is not selected by you, the only media available for FCOM
remains paper.

Note: this service is not available for wide body aircraft (A300 / A300-600 /
A310)

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AOLS TECHNICAL CHARACTERISTICS

	1.	 	Workstation Specifications
	 
	•	 	Hardware requirements

	 	–	 	PC Pentium 200 MHz with 128 MB RAM (256 MB recommended)
	 
	 	–	 	17 inches (20 inches recommended for Mechanical Drawings service) screen
	 
	 	–	 	Screen resolution 1024X768 with 64K colors
	 
	 	–	 	1 GB hard drive
	 
	 	–	 	Modem 56Kbps V90 if using dial up or Ethernet board through WAN
	 
	 	–	 	Printer 300 dpi Laser A3/A4, Adobe compliant

	•	 	Software requirements

	 	–	 	Windows 95, 98, NT4
	 
	 	–	 	Netscape Navigator 4.51 or 4.7 US version Internet
Explorer 5.01 SP1 or 5.5 SP1/SP2 US version
	 
	 	–	 	For MSIE the minimum requirement for the Java Virtual
Machine (JVM) is 5.0 Relaease 5.0.0.3167
	 
	 	–	 	Winzip 7.0
	 
	 	–	 	Browser PDF plug-in: Acrobat Reader 4.05 or higher
	 
	 	–	 	TIFF browser plug-in recommendations:

	•	 	ViewDirector Prizm 2.3

	 	 	 	Company: TMS Sequoia

http://www.tmssequoia.com

	•	 	CSView 150

	 	 	 	Company: CSU Software Solutions

http://www.csu-software-solutions.com

	2.	 	Network Specifications
	 
	 	 	ANACS will support the following TCP/IP networks for accessing AOLS:

	•	 	SITA AeroNet
	 
	•	 	Internet
	 
	•	 	ISDN/PSTN
	 
	•	 	Direct lines (leased lines)

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	 	 	The User has the choice of the network (company, bandwidth) according to its
needs and budget, but ANACS recommends the following minimum configurations
in terms of bandwidth for accessing services such as Airbus Mechanical
Drawings:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Number of Users

	Services
	 	1 to 10
	 	11 to 25
	 	26 to 50

	FCOM
	 	128 Kbps	 	256 Kbps	 	512 Kbps
	ETDS
	 	128 Kbps	 	256 Kbps	 	512 Kbps
	Drawings
	 	256 kbps	 	512 Kbps	 	1 MKbps

Notes:

	 	•	 	If you do not have the exact data rate as in the above table,
choose the nearest proposed bandwidth which maximizes your data rate.
	 
	 	•	 	To access more than one service, add the number of users and
maximize the data rate selecting higher service used (considering that
Mechanical Drawings is the dimensioning service compare to ETDS and
FCOM).

	3.	 	Certificate Specification
	 
	 	 	Connection to AOLS requires a Certificate (standard X509) delivered via the
User’s Administrator. This Certificate shall be embedded into the user
browser and protected by an 8-digit password.
	 
	 	 	All procedures, rules and responsibilities associated with such Certificate
are described in the Certificate Practice Statement (CPS).

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     With this form completed, the Company will be provided with a free of
charge access to the following:

	•	 	One (1) or two (2) Administrator certificates and a reasonable
quantity of end-user certificates, depending on the Airbus fleet
operated by the company.
	 
	•	 	Basic Services , (free of charge)
	 
	•	 	Technical Data in PDF Format: free of charge when [the Company]
already subscribed to the revision service (valid Purchase order or
contractual clause)
	 
	•	 	Optional Services: free of charge when already covered by a Purchase
Order or a valid contractual clause.

This information will be detailed in Airbus acknowledgement.

The access to Airbus On-Line Services shall be subject to the Airbus On-Line
Services License Agreement, Appendix 2 to Exhibit F to the Purchase Agreement
signed by [the Company].

For and on behalf of [the Company]

Signature

Name

Title

Date

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EXHIBIT G

SELLER PRICE REVISION FORMULA

	1	 	Base Price
	 
	 	 	The Base Price of the applicable Airframe quoted in Clause 3 of the
Agreement is subject to adjustment for changes in economic conditions
as measured by data obtained from the US Department of Labor, Bureau
of Labor Statistics, and in accordance with the provisions hereof.
	 
	2	 	Base Period
	 
	 	 	The Base Price of the Airframe has been established in accordance with
the average economic conditions prevailing in December 2001, January
2002, February 2002 and corresponding to a theoretical delivery in
January 2003 as defined by “ECIb” and “ICb” index values indicated
hereafter.
	 
	 	 	“ECIb” and “ICb” index values indicated herein will not be subject to
any revision.
	 
	3	 	Indexes
	 
	 	 	Labor Index: “Employment Cost Index for Workers in Aerospace
manufacturing” hereinafter referred to as “ECI 3721W”, quarterly
published by the US Department of Labor, Bureau of Labor Statistics,
in “NEWS”, and found in Table 6, “WAGES and SALARIES (not seasonally
adjusted): Employment Cost Indexes for Wages and Salaries for private
industry workers by industry and occupational group,” or such other
name that may be from time to time used for the publication title
and/or table (Aircraft manufacturing, standard industrial
classification code SIC 3721). (Base month and year June 1989 =
100.)
	 
	 	 	The quarterly value released for a certain month (March, June,
September and December) shall be the one deemed to apply for the two
preceding months.
	 
	 	 	Index code for access on the Web site of the US Bureau of Labor
Statistics: ECU28102i.
	 
	 	 	Material Index: “Industrial Commodities” (hereinafter referred
to as “IC”) as published in “Producer Price Indexes” (Table 6.
Producer price indexes and percent changes for commodity groupings and
individual items). (Base Year 1982 = 100.)
	 
	 	 	Index code for access on the Web site of the US Bureau of Labor
Statistics: PU03THRU15.
	 
	4	 	Revision Formula

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SELLER PRICE REVISION FORMULA

	 	 	 
	Pn =

	 	(Pb + F) x [(0.75 x (ECIn/ECIb)) + (0.25 x (ICn/ICb))]
	 
	 	 
	Where:
	 	 
	 
	 	 
	Pn:

	 	Base Price of the Airframe as revised as of the delivery date of the Aircraft
	 
	 	 
	Pb:

	 	Base Price of the Airframe at economic conditions December 2001, January 2002, February 2002 averaged
(January 2003 delivery conditions)
	 
	 	 
	F:

	 	(0.005 x N x Pb)
where N = the calendar year of Delivery of the Aircraft minus 2003
	 
	 	 
	ECIn:

	 	the arithmetic average of the latest published values of the ECI SIC 3721W available at the delivery
date of the Aircraft for the 11th, 12th and 13th months prior to the month of Aircraft Delivery
	 
	 	 
	ECIb:

	 	ECI SIC 3721W for December 2001, January 2002, February 2002, averaged (=160.4)
	 
	 	 
	ICn:

	 	the arithmetic average of the latest published values of the IC available at the delivery date of the
Aircraft for the 11th, 12th and 13th months prior to the month of Aircraft Delivery
	 
	 	 
	ICb:

	 	IC for December 2001, January 2002, February 2002, averaged (=129.2)

	5	 	General Provisions
	 
	5.1	 	Roundings
	 
	 	 	The Labor Index average and the Material Index average will be computed to the first decimal. If the next succeeding place
is five (5) or more, the preceding decimal place will be raised to the next higher figure.
	 
	 	 	Each quotient shall be rounded to the nearest ten-thousandth (4 decimals). If the next succeeding place is five (5) or
more, the preceding decimal place will be raised to the next higher figure.
	 
	 	 	The final factor will be rounded to the nearest ten-thousandth (4 decimals).

164

 

SELLER PRICE REVISION FORMULA

	 	 	The final price will be rounded to the nearest whole number (0.5 or
more rounded to 1).
	 
	5.2	 	Substitution of Indexes for Seller Price Revision Formula
	 
	 	 	If;

	 	(i)	 	the United States Department of Labor
substantially revises the methodology of calculation of
the Labor Index or the Material Index as used in the
Seller Price Revision Formula, or
	 
	 	(ii)	 	the United States Department of Labor discontinues, either
temporarily or permanently, such Labor Index or such Material
Index, or
	 
	 	(iii)	 	the data samples used to calculate such Labor Index or
such Material Index are substantially changed;

	 	 	the Seller will select a substitute index for inclusion in the
Seller Price Revision Formula (the “Substitute Index”).
	 
	 	 	The Substitute Index will reflect as closely as possible the actual
variance of the labor costs or of the material costs used in the
calculation of the original Labor Index or Material Index as the
case may be.
	 
	 	 	As a result of the selection of the Substitute Index,
the Seller will make an appropriate adjustment to the Seller
Price Revision Formula to combine the successive utilization of
the original Labor Index or Material Index (as the case may be)
and of the Substitute Index.
	 
	5.3	 	Final Index Values
	 
	 	 	The index values as defined in Paragraph 4 above will be considered
final and no further adjustment to the base prices as revised at
Delivery of the Aircraft will be made after Aircraft Delivery for any
subsequent changes in the published index values.

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EXHIBIT H

PROPULSION SYSTEMS PRICE REVISION FORMULA

	1	 	Reference Price of the Engines
	 
	 	 	The Reference Price of a set of two (2) of the applicable Propulsion
Systems is set forth in Clause 3 of the Agreement.
	 
	 	 	This Reference Price is subject to adjustment for changes in economic
conditions as measured by data obtained from the US Department of
Labor, Bureau of Labor Statistics, and in accordance with Paragraphs 4
and 5 of this Exhibit H.
	 
	2	 	Reference Period
	 
	 	 	The above Reference Price has been established in accordance
with the averaged economic conditions prevailing in June 2000,
July 2000, August 2000 (delivery conditions January 2001), as
defined, according to INTERNATIONAL AERO ENGINES by the ECIb and
ICb index values indicated in Clause 4 of this Exhibit H.
	 
	3	 	Indexes
	 
	 	 	Labor Index: “Employment Cost Index for Workers in Aerospace
manufacturing” hereinafter referred to as “ECI SIC 3721W,” published
quarterly by the US Department of Labor, Bureau of Labor Statistics,
in “NEWS,” and found in Table 6, “WAGES and SALARIES (not seasonally
adjusted): Employment Cost Indexes for Wages and Salaries for private
industry workers by industry and occupational group,” or such other
name that may be from time to time used for the publication title
and/or table. (Aircraft manufacturing, standard industrial
classification code SIC 3721, base month and year June 1989 = 100.)
	 
	 	 	The quarterly value released for a certain month
(March, June, September and December) shall be the one deemed
to apply for the two preceding months.
	 
	 	 	Material Index: “Industrial Commodities” (hereinafter
referred to as “IC”) as published in “PPI Detailed report”
(found in Table 6. “Producer price indexes and percent changes
for commodity groupings and individual items not seasonally
adjusted” or such other names that may be from time to time
used for the publication title and/or table). (Base Year 1982
= 100.)

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	4	 	Revision Formula
	 
	 	 	PROPULSION SYSTEMS PRICE REVISION FORMULA
	 
	 	 	Pn = (Pb+F) x [(0.65 x (ECIn/ECIb)) + (0.35 x (ICn/ICb))]
	 
	 	 	Where:

	 	 	 
	F:

	 	(0.005 x N x Pb)
where N = the calendar year of Delivery of the Aircraft minus 2001
	 
	 	 
	Pn:

	 	Revised Reference Price at Aircraft Delivery.
	 
	 	 
	Pb:

	 	Reference Price at averaged economic conditions June 2000, July 2000, August 2000
	 
	 	 
	ECIn:

	 	ECI SIC 3721W for the fifth (5th), sixth (6th) and seventh (7th) months averaged
prior to the month of Aircraft Delivery
	 
	 	 
	ECIb:

	 	ECI SIC 3721W for June 2000, July 2000, August 2000 averaged (=149.5)
	 
	 	 
	ICn:

	 	IC for the fifth (5th), sixth (6th) and seventh (7th) months averaged prior to
the month of Aircraft Delivery.
	 
	 	 
	ICb:

	 	IC for June 2000, July 2000, August 2000 averaged (=135.7)

	5.	 	General Provisions
	 
	5.1	 	Roundings

	 	(i)	 	ECIn and ICn shall be calculated to the nearest
tenth (1 decimal).
	 
	 	(ii)	 	Each quotient (ECIn/ECIb) and (ICn/ICb) shall be
calculated to the nearest ten-thousandth (4 decimals).
	 
	 	(iii)	 	The final factor shall be rounded to the nearest
ten-thousandth (4 decimals). If the next succeeding place is five (5) or more the preceding
decimal place shall be raised to the nearest higher figure.

	 	 	After final computation Pn shall be rounded to the nearest whole
number (0.5 rounds to 1).

167

 

	5.2	 	Final Index Values
	 
	 	 	PROPULSION SYSTEMS PRICE REVISION FORMULA
	 
	 	 	The Revised Reference Price at the date of Aircraft delivery shall be the final price and shall not be subject to any
further adjustments in the indexes.
	 
	 	 	If no final index values are available for any of the applicable months, the then published preliminary figures shall be
the basis on which the Revised Reference Price shall be computed.
	 
	5.3	 	Interruption of Index Publication
	 
	 	 	If the US Department of Labor substantially revises the methodology of calculation or discontinues any of the indexes
referred to hereabove, the Seller shall reflect the substitute for the revised or discontinued index selected by
INTERNATIONAL AERO ENGINES, such substitute index to lead in application to the same adjustment result, insofar as
possible, as would have been achieved by continuing the use of the original index as it may have fluctuated had it not been
revised or discontinued.
	 
	 	 	Appropriate revision of the formula shall be made to accomplish this result.
	 
	5.4	 	Annulment of Formula
	 
	 	 	Should the above escalation provisions become null and void by action of the US Government, the price shall be adjusted due
to increases in the costs of labor and material which have occurred from the period represented by the applicable Reference
	 
	 	 	Price Indexes to the average of the fifth (5th), sixth (6th) and seventh (7th) months prior to the scheduled Aircraft
Delivery.
	 
	5.5	 	Limitation
	 
	 	 	Should the Revised Reference Price be lower than the Reference Price, the final price shall be computed with the Reference
Price.

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LETTER AGREEMENT NO. 1

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: SPARE PARTS PROCUREMENT

Dear Ladies and Gentlemen,

Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”), have
entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even date
herewith (the “Agreement”), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 1 (the “Letter Agreement”) certain
additional terms and conditions regarding the sale of the Aircraft. For the
purposes of this Letter Agreement only, references herein to Aircraft shall be
deemed to include Leased Aircraft within the meaning of Letter Agreement No. 9
to the Agreement. Capitalized terms used herein and not otherwise defined in
this Letter Agreement will have the meanings assigned thereto in the Agreement.
The terms “herein,” “hereof” and “hereunder” and words of similar import refer
to this Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

169

 

CONTENTS

CLAUSES

	 	 	 	 
	1 -
	 	GENERAL	171
	 
	 	 
	2 -
	 	INITIAL PROVISIONING	173
	 
	 	 
	3 -
	 	STORES	178
	 
	 	 
	4 -
	 	DELIVERY	179
	 
	 	 
	5 -
	 	PRICE	180
	 
	 	 
	6 -
	 	PAYMENT PROCEDURES AND CONDITIONS	181
	 
	 	 
	7 -
	 	TITLE	182
	 
	 	 
	8 -
	 	PACKAGING	182
	 
	 	 
	9 -
	 	DATA RETRIEVAL	183
	 
	 	 
	10 -
	 	BUY-BACK	183
	 
	 	 
	11 -
	 	WARRANTIES	184
	 
	 	 
	12 -
	 	LEASING	187
	 
	 	 
	13 -
	 	TERMINATION	197
	 
	 	 
	14 -
	 	ASSIGNMENT	197

170

 

	1.	 	GENERAL
	 
	1.1	 	Material
	 
	 	 	This Letter Agreement covers the terms and conditions for the
services offered by the Seller to the Buyer (“Material Support”) in
respect of Aircraft spare parts itemized below in Subparagraphs
1.1(a) through 1.1(f) (“Material”).
	 
	 	 	The Material will comprise:

	 	(a)	 	Seller Parts (industrial proprietary components,
equipment, accessories or parts of the Manufacturer
manufactured to the detailed design of the Manufacturer or a
subcontractor of it and bearing official part numbers of the
Manufacturer or material for which the Seller has exclusive
sales rights in the United States). The definition of Seller
Parts will not include parts manufactured by a third party
pursuant to a parts manufacturing authority.
	 
	 	(b)	 	Supplier Parts classified as Repairable Line
Maintenance Parts in accordance with ATA Specification 2000.
	 
	 	(c)	 	Supplier Parts classified as Expendable Line
Maintenance Parts in accordance with ATA Specification 2000.
	 
	 	(d)	 	Ground Support Equipment (GSE) and
“Specific-To-Type”) tools, which are designed for use only on
the A320 Family Aircraft.
	 
	 	(e)	 	Hardware and standard material.
	 
	 	(f)	 	Consumables and raw material as a package.

	1.2	 	Scope of Material Support
	 
	1.2.1	 	The Material Support to be provided by the Seller under the conditions
hereunder covers the following:

	 	(a)	 	all Material in Paragraphs 1.1(a) through 1.1(d)
and Material in Paragraphs 1.1(e) and 1.1(f) purchased during
the “Initial Provisioning Period” (defined below in
Paragraph 2.1), and
	 
	 	(b)	 	the Seller’s leasing of Seller Parts to the Buyer
for the Buyer’s use on Aircraft in air transport service as
set forth in Paragraph 12 of this Letter Agreement.

171

 

	1.2.2	 	Propulsion Systems, including associated parts and spare parts
therefore, and Buyer Furnished Equipment, including associated parts and
spare parts therefore, are not covered under this Letter Agreement and
will be subject to direct negotiations between the Buyer and the
respective manufacturers of the Propulsion Systems and the BFE. [***].
	 
	1.2.3	 	During a period commencing on the date hereof and continuing as long as
at least five (5) aircraft of the same type as the A320 Family Aircraft
are operated in commercial air transport service by any operator (the
“Term”), the Seller will maintain or cause to be maintained such stock of
Seller Parts as the Seller deems reasonable and will furnish or cause to
be furnished at reasonable prices Seller Parts adequate to meet the
Buyer’s needs for maintenance of the Aircraft. Such Seller Parts will be
sold and delivered in accordance with Paragraphs 4 and 5 of this Letter
Agreement, upon receipt of the Buyer’s orders.
	 
	 	 	The Seller will use [***] efforts to obtain a similar service from
all Suppliers of parts that are originally installed on the
Aircraft and not manufactured by the Manufacturer.
	 
	1.3	 	Spare Parts Field Representative
	 
	 	 	The Seller hereby agrees to provide, free of charge, one spare
parts representative for up to six (6) months to assist with the
Initial Provisioning, to be provided sufficiently in advance of the
entry into service of the first Aircraft.
	 
	1.4	 	Manufacture of Seller Parts by the Buyer
	 
	1.4.1	 	The Seller will support the Buyer’s or its designees’ manufacturer of
Seller Parts for its own use by providing necessary data in the following
cases:

	 	(a)	 	after expiration of the Term, if at such time the
Seller is out of stock of a
required Seller Part;
	 
	 	(b)	 	at any time, to the extent Seller Parts are
needed to effect AOG repairs on any Aircraft delivered under
the Agreement and are not available from the Seller within a
lead time shorter than or equal to the time in which the Buyer
can procure said Seller Parts, provided the Buyer will sell or
lease such Seller Parts only if they are installed in an
Aircraft that is sold or leased;
	 
	 	(c)	 	in the event that the Seller fails to fulfill its
obligations with respect to any Seller Parts pursuant to
Paragraph 1.2 above within a reasonable period after written
notice thereof from the Buyer; and

172

 

	 	(d)	 	when, with respect to certain Seller Parts, the
Seller has granted, under the Illustrated Parts Catalog
supplied in accordance with this Letter Agreement, the right
of local manufacture of Seller Parts.

	1.4.2	 	The rights granted to the Buyer in Paragraph 1.4.1 will not in any way
be construed as a license, nor will they in any way obligate the Buyer to
pay any license fee, royalty or obligation whatsoever, nor will they in
any way be construed to affect the rights of third parties.
	 
	1.4.3	 	The Seller will promptly provide the Buyer, [***], all technical data
reasonably necessary for the Buyer’s use, for the manufacture of Seller
Parts, in the event the Buyer is entitled to do so pursuant to Paragraph
1.4.1 of this Letter Agreement. The proprietary rights to such technical
data will be subject to the terms of Clause 14.13 of the Agreement.
	 
	1.4.4	 	Nothing in this Agreement will preclude the Buyer from purchasing from
any source and installing parts on the Aircraft that can be lawfully
installed on an Aircraft.
	 
	1.5	 	Language
	 
	1.5.1	 	Words and expressions used in this Letter Agreement will have the same
meanings as they do in Clauses 0-23 of the Agreement, unless otherwise
stated in this Letter Agreement.
	 
	1.5.2	 	Technical and trade items used but not defined herein or in the
Agreement will be defined as generally accepted in the aircraft
manufacturing industry.
	 
	2.	 	INITIAL PROVISIONING
	 
	2.1	 	Definitions 
	 
	 	 	The period up to and expiring on the ninetieth (90th) day after
Delivery of the last Aircraft will hereinafter be referred to as
the Initial Provisioning Period.
	 
	 	 	All Material the Buyer purchases from the Seller and its Affiliates
during the Initial Provisioning Period is hereinafter referred to
as the “Initial Provisioning.”
	 
	2.2	 	Seller-Supplied Data
The Seller will prepare and supply to the Buyer the following data:
	 
	2.2.1	 	Initial Provisioning Data

173

 

	 	 	The Seller will provide the Buyer initial provisioning data
provided for in Chapter 1 of ATA 2000 for A319 Aircraft, Chapter 2B
of ATA 2000 Revision 23 for A320 Aircraft and Chapter 1 of ATA 2000
for A321 Aircraft (“Initial Provisioning Data”) in a form, format
and within a time period to be mutually agreed upon.
	 
	 	 	A free of charge revision service will be effected every ninety
(90) days and will be provided to [***] (i) [***] the end of the
Initial Provisioning Period and (ii) [***] the Initial Provisioning
Data.
	 
	 	 	In any event, the Seller will ensure that Initial Provisioning Data
are released to the Buyer in time to allow the necessary evaluation
time by the Buyer and the on-time delivery of ordered Material.
	 
	2.2.2	 	Supplementary Data
	 
	 	 	The Seller will provide the Buyer with supplementary data [***] and
Local Manufacture Tables (X-File [***]), subject to the provisions
of Clause 14.13 of the Agreement, as part of the Illustrated Parts
Catalog (Additional Cross-Reference Tables), which will be a part
of the Initial Provisioning Data Package.
	 
	2.2.3	 	Data for Standard Hardware
	 
	 	 	The Initial Provisioning Data provided to the Buyer shall include
data for hardware and standard material.
	 
	2.2.4	 	Initial Provisioning Data for Exercised Options
	 
	2.2.4.1	 	Each Option Aircraft that becomes an Aircraft will be included in the
revision to the provisioning data that is issued after such Option
Aircraft becomes an Aircraft if such revision is not scheduled to be
issued within four (4) weeks from option exercise of such Option Aircraft.
If the option exercise date does not allow the Seller four (4) weeks’
preparation time, the Aircraft concerned will be included in the next
scheduled revision.
	 
	2.2.4.2	 	The Seller will, from the date an Option Aircraft becomes an Aircraft
until three (3) months after Delivery of such Aircraft, submit to the
Buyer details of particular Supplier components being installed on such
Aircraft and will recommend the quantity to order. A list of such
Supplier components will be supplied at the time of the provisioning data
revision as specified above.
	 
	2.2.4.3	 	At Delivery of each Option Aircraft that has become an Aircraft, the
data with respect to Material will at least cover such Aircraft’s
technical configuration as known six (6) months before Aircraft delivery
and will be updated to reflect the

174

 

	 	 	final build status of such Aircraft. Such update will be included
in the data revisions issued three (3) months after Delivery of
such Aircraft.
	 
	2.3	 	Supplier-Supplied Data
	 
	2.3.1	 	General
	 
	 	 	All data provided hereunder will be in the English language.
	 
	 	 	Suppliers will prepare and issue T-Files for those Supplier
components for which the Buyer has elected to receive data, and the
[***].
	 
	 	 	Said data (initial issue and revisions) will be transmitted to the
Buyer through the Suppliers and/or the Seller. The Seller will
[***].
	 
	 	 	The Seller will not be responsible for the substance and accuracy
of such data. The Seller will [***]. The Seller will [***].
	 
	2.3.2	 	Initial Provisioning Data
	 
	 	 	Initial Provisioning Data for Supplier products provided for in
Chapter 1 of ATA Specification 2000 for A319 Aircraft, Chapter 2B
of ATA Specification 2000 Revision 23 for A320 Aircraft and Chapter
1 of ATA Specification 2000 for A321 Aircraft will be furnished as
mutually agreed upon during a Preprovisioning Meeting (defined
below), with free of charge revision provided [***] (i) the end of
the Initial Provisioning Period and (ii) [***] Initial Provisioning
Data.
	 
	2.4	 	Preprovisioning Meeting
	 
	2.4.1	 	The Seller will organize a meeting at the ANACS Spares Center in order
to formulate an acceptable schedule and working procedure to accomplish
the Initial Provisioning of Material (the “Preprovisioning Meeting”).
	 
	2.4.2	 	The date of the Preprovisioning Meeting will be mutually agreed upon,
but it will take place no later than a date sufficient to allow for the
support of the introduction of the Aircraft into the Buyer’s fleet.
	 
	2.5	 	Initial Provisioning Training
	 
	 	 	The Seller will furnish, at the Buyer’s request and at no charge,
training courses related to the Seller’s provisioning documents,
purchase order administration and handling at ANACS’s northern
Virginia facilities. The Seller shall familiarize the Buyer with
the provisioning. During the Initial Provisioning Conference, the
Seller will explain to the Buyer the technical and commercial
Initial Provisioning

175

 

	 	 	Data and will familiarize the Buyer with the Seller’s purchase
order administration system.
	 
	2.6	 	Initial Provisioning Conference
	 
	 	 	The Seller will organize an Initial Provisioning conference at
ANACS that will include participation of Suppliers, as agreed upon
during the Preprovisioning Meeting (the “Initial Provisioning
Conference”). Pursuant to the Initial Provisioning Conference, and
based on Initial Provisioning Data and information provided by
Buyer, the Seller will produce a recommended quantity of Material
to be purchased by the Buyer during the Initial Provisioning
Period.
	 
	2.7	 	Initial Provisioning Data Compliance
	 
	2.7.1	 	Initial Provisioning Data generated by the Seller and supplied to the
Buyer will comply with the latest configuration of the Aircraft to which
such data relate, as known [***] before the data are issued. Said data
will enable the Buyer to order Material conforming to its Aircraft as
required for maintenance and overhaul.
	 
	 	 	This provision will not cover Buyer modifications that are unknown
to the Seller, and modifications not agreed to by the Seller.
	 
	2.7.2	 	During the Initial Provisioning Period, Material will conform with the
latest configuration standard of the affected Aircraft and with the
Initial Provisioning Data transmitted by the Seller. Should the Seller
default in this obligation with respect to Material, it will immediately
replace such Material and/or authorize return shipment at no
transportation cost to the Buyer, and the Seller will provide the Buyer a
product-support related goods and services credit in an amount equal to the
amount the Buyer paid for such returned Material. The Seller, in
addition, will use [***] efforts to cause Suppliers to provide a similar
service for their items.
	 
	2.8	 	Delivery of Initial Provisioning Material
	 
	2.8.1	 	To support the operation of the Aircraft, the Seller will use [***]
efforts to deliver Initial Provisioning Material in Paragraph 1.1 of this
Letter Agreement against the Buyer’s orders from the Seller and according
to the following schedule, provided the orders are received by the Seller
in accordance with published lead time. Notwithstanding the foregoing
proviso, [***]. Except for Seller Parts that are hardware, standard
material, consumable or raw material, if any, Material listed in
Paragraphs 1.1(e) and 1.1(f) of this Letter Agreement are available only
as a package when supplied as part of the Initial Provisioning.

176

 

	 	 	The number of Aircraft comprising each block of Aircraft referred
to in subparagraphs (a) through (d) below will be agreed during the
Initial Provisioning Conference.

	 	(a)	 	At least fifty percent (50%) of the ordered
quantity of each Line Replacement or Line Maintenance item
three (3) months before Delivery of the first Aircraft of each
block of Aircraft for which the Buyer has placed Initial
Provisioning orders for Material defined above in Paragraph
1.1 (b) and (c).
	 
	 	(b)	 	At least seventy-five percent (75%) of the
ordered quantity of each Line Replacement or Line Maintenance
item one (1) month before Delivery of the first Aircraft of
each block of Aircraft for which the Buyer has placed Initial
Provisioning orders for Material defined above in Paragraph
1.1 (b) and (c).
	 
	 	(c)	 	Fifty percent (50%) of the ordered quantity of
each item except as specified in Paragraphs 2.8.1 (a) and
2.8.1 (b) above at Delivery of the first Aircraft of each
block of Aircraft for which the Buyer has placed Initial
Provisioning orders for Material defined above in Paragraph
1.1(a), (d), (e) and (f).
	 
	 	(d)	 	One hundred percent (100%) of the ordered
quantity of each item, three (3) months after Delivery of the
first Aircraft of each block of Aircraft for which the Buyer
has placed Initial Provisioning orders for Material, as
defined above in Paragraph 1.1. If said one hundred percent
(100%) cannot be accomplished, the Seller will have such items
available at its facilities for immediate supply, in case of
an AOG.

	2.8.2	 	In the event that [***] Initial Provisioning Material defined above in
Paragraph 1.1(a), [***] provisions set forth above in Paragraph 2.8.1(d)
[***] Excusable Delay as defined in Clause 10 of the Agreement, [***].
Paragraph 4.4 of this Letter Agreement will apply to the [***]
undertakings under this Paragraph 2.8.2.
	 
	 	 	[***].
	 
	2.8.3	 	The Buyer may cancel or modify Initial Provisioning orders placed with
the Seller with no cancellation charge as follows (as reflected in the
Initial Provisioning Data):

	 	(a)	 	“Long Lead-Time Material” (lead time exceeding
twelve (12) months)
not later than six (6) months before scheduled delivery of
said Material,
	 
	 	(b)	 	normal lead time Material not later than three
(3) months before scheduled

177

 

	 	 	 	delivery of said Material, provided, however, that for
Material that has three (3) months’ lead time or less, the
cancellation period will be equal to the ordering lead time
for that Material plus two (2) weeks.
	 
	 	(c)	 	Buyer-specific Material and Material in
Paragraphs 1.1(b) through 1.1(f)
no later than the quoted lead time before scheduled delivery
of said Material.

	2.8.4	 	Should the Buyer cancel or modify any orders for Material outside the
time limits defined above in Paragraph 2.8.3, the Seller will have no
liability for the cancellation or modification, and the Buyer will
reimburse the Seller for any direct cost incurred in connection therewith
to the extent that [***].
	 
	3.	 	STORES
	 
	3.1	 	ANACS Spares Center
	 
	 	 	The Seller has established and will maintain or cause to be
maintained, as long as at least five (5) aircraft of the same type
as the A320 Family Aircraft are operated on the operation
specification of any US operator (the “US Term”), a US store
adjacent to Dulles International Airport, Washington, DC, known as
the ANACS Spares Center — Washington (“ANACS Spares Center”). The
ANACS Spares Center will be operated twenty-four (24) hours/day,
seven (7) days/week, all year for the handling of AOG and critical
orders for Seller Parts. ANACS Spares Center will maintain a stock
of Seller Parts, including but not limited to insurance parts as
listed in Appendix A (with such parts available for lease). In the
event of the [***] ANACS Spares Center, [***] ANACS Spares Center
[***].
	 
	3.2	 	Material Support Center, Germany
	 
	 	 	The Manufacturer has set up and will maintain or cause to be
maintained during the Term a store of Seller Parts at the Seller’s
Material Support Center in Hamburg, Germany (“MSC”). MSC will be
operated twenty-four (24) hours/day, seven (7) days/week, all year.
	 
	3.3	 	Shipment Terms
	 
	 	 	The Seller will not charge the Buyer for any customs, duty,
shipping, withholding, or other similar charges for Seller Parts
shipped FCA ANACS Spares Center. If the Buyer, in the interest of
expedited delivery, requires a Seller Part to be drop shipped, then
the Buyer will be responsible for all customs, duty, shipping,
withholding and other similar charges from the point of shipment to
the delivery location.

178

 

	4.	 	DELIVERY
	 
	4.1	 	General
	 
	 	 	The Buyer’s purchase orders will be administered in accordance with
ATA Specification 2000.
	 
	 	 	The provisions of Paragraph 4.2 do not apply to Initial
Provisioning Data and Material as described in Clause 2 of this
Letter Agreement.
	 
	4.2	 	Lead Times
	 
	4.2.1	 	In general, the lead times are (and, unless otherwise agreed, will at
all times be) in accordance with the definition in the “World Airline and
Suppliers Guide” (latest edition).
	 
	4.2.2	 	Material will be dispatched within the lead times quoted in the
published Seller’s price catalog for Material described in Paragraph
1.1(a), and within the Supplier’s or supplier’s lead time augmented by the
Seller’s own order and delivery processing time (such in-house processing
time not to exceed fifteen (15) days) for Material described in Paragraphs
1.1(b) through 1.1(d). The Seller will [***].
	 
	4.2.3	 	Expedite Service
	 
	 	 	The Seller will make available through the Manufacturer access to a
twenty-four (24) hour-a-day, seven (7) day-a-week expedite service
to supply Seller Parts in the Seller’s stock, workshops and
assembly line, including but not limited to high-cost long-
lead-time items, to the international airport nearest the location
of such items (the “Expedite Service”).
	 
	 	 	The Seller will notify the Buyer of the action taken to effect the
Expedite Service as follows:

	 	(a)	 	[***] hours after receipt of an AOG order,
	 
	 	(b)	 	[***] hours after receipt of a critical order
(imminent AOG or work stoppage),
	 
	 	(c)	 	[***] days after receipt of an expedite order from the Buyer.

	 	 	The Seller, ANACS and their subcontractors will deliver Seller
Parts requested on an expedited basis against normal orders
previously placed by the Buyer or upon requests by telephone,
facsimile or e-mail by the Buyer’s representatives, such

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	 	 	requests to be confirmed by the Buyer’s subsequent order for such
Seller Parts within a reasonable time.
	 
	4.2.4	 	All Material with a shelf-life delivered by the Seller to the Buyer
[***].
	 
	4.3	 	Delivery Status
	 
	 	 	The Seller agrees to report to the Buyer the status of supplies
against orders on a monthly basis or on a mutually agreed
timeframe.
	 
	4.4	 	Excusable Delay
	 
	 	 	Subclause 10.1 of the Agreement will apply to the Material support
as defined in Paragraph 1 of this Letter Agreement.
	 
	4.5	 	Shortages, Overshipments, Nonconformance in Orders
	 
	4.5.1	 	Within [***] days after the Buyer’s receipt of [***] Material delivered
pursuant to a purchase order, the Buyer will advise the Seller of any
alleged shortages or overshipments with respect to such order and of all
nonconformance to specification of parts in such order inspected by the
Buyer.
	 
	4.5.2	 	In the event that the Buyer reports overshipments or nonconformance to
the specifications within the period defined above in Paragraph 4.5.1, the
Seller will either replace the Material concerned or credit the Buyer for
Material returned. In such case, transportation charges will be borne by
the Seller.
	 
	4.6	 	Cessation of Deliveries
	 
	 	 	The Seller reserves the right to stop or otherwise suspend
deliveries if the Buyer fails to meet its obligations under
Paragraph 6 of this Letter Agreement.
	 
	5.	 	PRICE
	 
	5.1	 	The Material prices will be Free Carrier (FCA) ANACS Spares Center [***].
	 
	5.2	 	Validity of Prices
	 
	5.2.1	 	The prices are the Seller’s published prices in effect on the date of
receipt of the order (subject to reasonable quantities and delivery time)
and will be exclusively expressed in US dollars.
	 
	5.2.2	 	Prices of Seller Parts will be in accordance with the Seller’s Spare
Parts Price List current at the time of order. Prices will be firm for
each calendar year. The Seller,

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	 	 	however, reserves the right to revise the prices of Seller Parts
during the course of the calendar year in the event of significant
error in estimation of any price.
	 
	 	 	In the event of [***].
	 
	5.2.3	 	Prices of Material as defined above in Paragraphs 1.1(b) through 1.1(d)
will be the valid list prices of the Supplier augmented by the Seller’s
handling charge. The percentage of the handling charge will vary with the
Material’s value and will be determined item by item, [***].
	 
	5.2.4	 	The Seller warrants that, should the Buyer purchase from the Seller one
hundred percent (100%) of the recommended Initial Provisioning of Material
defined above in Paragraphs 1.1(b) through 1.1(d), the average handling
charge on the total package will not exceed fifteen percent (15%).
	 
	5.2.5	 	Prices of Material as defined above in Paragraphs 1.1(e) and 1.1(f) will
be the Seller’s purchase prices augmented by a variable percentage of
handling charge, [***].
	 
	6.	 	PAYMENT PROCEDURES AND CONDITIONS
	 
	6.1	 	Currency
	 
	 	 	Payment will be made in immediately available funds in US dollars.
	 
	6.2	 	Time and Means of Payment
	 
	 	 	Payment will be made by the Buyer to the Seller within thirty (30)
days from the date of receipt of the invoice (except that with
respect to [***]). [***]. The Buyer will only be invoiced for
Materials after the same have been shipped to the Buyer.
	 
	6.3	 	Bank Accounts
	 
	 	 	The Buyer will make all payments hereunder to the accounts listed
below, unless otherwise directed by the Seller (but in any event
all such accounts must be within the United States of America):

	 	(a)	 	For wire transfer, in favor of Airbus North
America Customer Services, Inc.:
	 
	 	 	 	CoreStates Bank N.A.

Account Number 14096-31312

ABA Number 031000011

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	 	(b)	 	For direct deposit (lockbox), in favor of Airbus
North America Customer Services, Inc.:
	 
	 	 	 	Airbus North America Customer Services, Inc.:

PO Box 8500

Lock Box No. 4555

Philadelphia, PA 19178-4555

	6.4	 	Taxes
	 
	 	 	With respect to sums received by Seller under this Letter
Agreement, Clause 5.8 of the Agreement is hereby incorporated by
reference.
	 
	6.5	 	If any payment due under this Letter Agreement is not received in
accordance with the time period provided above in Paragraph 6.2, [***],
the Seller will have the right to claim from the Buyer and the Buyer will
promptly pay to the Seller interest on the unpaid amount at the Overdue
Rate to be calculated from (and including) the due date to (but excluding)
the date payment is received by the Seller. The foregoing sentence
supersedes all other agreements between the Parties to the contrary with
respect to interest payable under this Letter Agreement. The Seller’s
claim to such interest will not prejudice any other rights the Seller may
have under this Letter Agreement.
	 
	6.6	 	No terms or conditions attached to or incorporated by reference in a
purchase order or invoice will have effect with respect to purchase orders
or invoices issued in conjunction with the transactions contemplated under
this Letter Agreement. Such purchase orders and invoices may be used,
however, to reflect the Parties’ agreement as to amounts of Material
ordered, description of the Material, price of Material, delivery location
for Material, the date of the order, and similar clerical information that
is not in conflict with the terms of this Letter Agreement.
	 
	7.	 	TITLE
	 
	 	 	Title and risk of loss to Material purchased hereunder from the
Seller or ANACS pass to the Buyer upon [***].
	 
	8.	 	PACKAGING
	 
	 	 	All material will be packaged in accordance with ATA 300
specification, Category III for consumable/expendable Material and
Category II for rotables. Category I containers will be used if
requested by the Buyer and the difference between Category I and
Category II packaging costs will be paid by the Buyer together with
payment for the respective Material.

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	9.	 	DATA RETRIEVAL
	 
	 	 	The provisions of Clause 22.1 of the Agreement will apply to this
Paragraph 9.
	 
	10.	 	BUY-BACK
	 
	10.1	 	Buy-Back of Obsolete Seller Parts
	 
	 	 	Seller Parts that have been recommended by the Seller that cannot be
used on the Aircraft because of incompatibility with Aircraft
configuration at the time of the first Aircraft Delivery are referred
to as “obsolete.”
	 
	 	 	The Seller agrees to buy back [***]. In respect of such obsolete
Seller Parts, the Seller will grant the Buyer a credit equal to the
purchase price paid by the Buyer for such Seller Parts, such credit
being limited to quantities ordered pursuant to the Seller’s Initial
Provisioning recommendations.
	 
	 	 	In addition, the Seller has obtained for the Buyer similar protection
from Suppliers.
	 
	10.2	 	Buy-Back of Surplus Material
	 
	10.2.1	 	The Seller agrees that [***], the Buyer will have the right to return to
the Seller, at a credit of one hundred percent (100%) of the original
purchase price paid by the Buyer, unused and undamaged Material set forth
above in Paragraphs 1.1(a) and 1.1(b) originally purchased from the Seller
under the terms hereof, provided (i) that the selected protection level
for all such Material does not exceed ninety-six percent (96%) with a
turnaround time of forty-five (45) days, (ii) that said Material does not
exceed the provisioning quantities recommended by the Seller in the
Initial Provisioning recommendations, and (iii) that such Material is
returned with the Seller’s original documentation and any such
documentation (including tags, certificates) required to identify,
substantiate the condition of and enable the resale of such Material.
	 
	10.2.2	 	However, if [***] (or, if [***] pursuant to the Initial Provisioning
recommendation) [***].
	 
	10.2.3	 	The Seller’s agreement in writing, which will not be unreasonably
withheld, is necessary before any Material in excess of the Seller’s
recommendation may be considered for buy-back.
	 
	10.2.4	 	Further, it is expressly understood and agreed that all credits referred
to above in Paragraph 10.1 will be provided by the Seller to the Buyer for
use exclusively for

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	 	 	the purchase of goods (other than Aircraft) and services from the
Seller or its Affiliates.

	10.3	 	All transportation costs for the return of obsolete and surplus Material
to ANACS Spares Center under this Paragraph 10, including any applicable
insurance charges or other related expenditures, will be borne by [***].
	 
	11.	 	WARRANTIES
	 
	 	 	The Seller represents and warrants that the Manufacturer has
provided to the Seller the following warranties with respect to the
Seller Parts (including, for the purposes of this Letter Agreement,
any Seller Parts, including, without limitation, expendable Seller
Parts, with a list value of over $100) (US dollars — one hundred)),
which are reproduced below between the words QUOTE and UNQUOTE and
which are subject to the terms, conditions, limitations and
restrictions (including, but not limited to, the Exclusivity of
Warranties and General Limitations of Liability and Duplicate
Remedies provisions) as hereinafter set out, and that the same are
in full force and effect and have not been amended. The Seller
hereby assigns to the Buyer, and the Buyer hereby accepts, all of
the Seller’s rights and obligations as the “Buyer” under the said
warranties for Seller Parts delivered to the Buyer pursuant to this
Letter Agreement, and the Seller subrogates the Buyer to all such
rights and obligations in respect of such Seller Parts. The Seller
hereby warrants to the Buyer that (i) it has all requisite
authority to make the foregoing assignment to and to effect the
foregoing subrogation in favor of the Buyer, (ii) such assignment
and subrogation are effective to confer on the Buyer all of the
foregoing rights and obligations of the Seller, and (iii) the
Seller will not enter into any amendment of the provisions so
assigned without the prior written consent of the Buyer.
	 
	 	 	It is understood that, in the provisions below between the words
QUOTE and UNQUOTE, capitalized terms have the meanings assigned
thereto in this Agreement, except that (i) the term “Seller” which
means the Manufacturer as between the Manufacturer and the Seller,
also means the Manufacturer in this Agreement, and (ii) the term
“Buyer” which means the Seller as between the Manufacturer and the
Seller, means the Buyer in this Agreement.

QUOTE

	11.1	 	Seller Parts
	 
	 	 	Subject to the limitations and conditions as hereinafter provided,
the Seller warrants to the Buyer that all Seller Parts as defined
above in Paragraph 1.1(a) will at the time of delivery to the
Buyer:

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	 	(a)	 	be free from defects in material,
	 
	 	(b)	 	be free from defects in workmanship, including,
without limitation, processes of manufacture,
	 
	 	(c)	 	be free from defects in design (including,
without limitation, selection of materials) having regard to
the state of the art at the date of such design,
	 
	 	(d)	 	[***];
	 
	 	(e)	 	be free and clear of all liens and other encumbrances.

	11.2	 	Warranty Period
	 
	11.2.1	 	The warranty period for defects in new Seller Parts is either thirty-six
(36) months after [***] of such Seller Parts or [***] years after [***],
whichever occurs first (the “Seller Part Warranty Period”).
	 
	11.2.2	 	The standard warranty period for used Seller Parts delivered by and/or
repaired by the Seller is twelve (12) months after delivery of such parts
to the Buyer.
	 
	11.3	 	Buyer’s Remedy and Seller’s Obligation
	 
	 	 	The Buyer’s remedy and Seller’s obligation and liability under this
Paragraph 11 are limited to the repair, replacement or correction,
at the Seller’s expense, of any defective Seller Part.
	 
	 	 	The Seller, at its option, may furnish a credit to the Buyer for
the purchase of product-support related goods and services equal to
the price at which the Buyer is then entitled to acquire a
replacement for the defective Seller Part from the Seller or any
Affiliate of the Seller.
	 
	 	 	The provisions of Clauses 12.1.5, 12.1.6 and 12.1.7 of the
Agreement will, as applicable, also apply to this Paragraph 11.
	 
	11.4	 	EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY and
DUPLICATE REMEDIES
	 
	 	 	[***], THIS PARAGRAPH 11 (INCLUDING ITS SUBPROVISIONS) SETS FORTH
THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE
OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO
THE BUYER, WHETHER UNDER THIS LETTER AGREEMENT OR OTHERWISE,
ARISING FROM ANY DEFECT

185

 

	 	 	OR NONCONFORMITY OF ANY KIND IN ANY SELLER PART DELIVERED BY THE
SELLER UNDER THIS LETTER AGREEMENT.
	 	 
	 	 	THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN
THIS PARAGRAPH 11 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER
FROM ANY DEFECT OR NONCONFORMITY OF ANY KIND IN ANY SELLER PART
SUPPLIED UNDER THIS LETTER AGREEMENT. THE BUYER HEREBY WAIVES,
RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS,
GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS,
CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER
EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR
OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OF ANY KIND
IN ANY SELLER PART DELIVERED BY THE SELLER UNDER THIS LETTER
AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	 	(1)	 	ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR
FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;
	 
	 	(2)	 	ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM
COURSE OF PERFORMANCE, COURSE OF DEALING, OR USAGE OF TRADE;
	 
	 	(3)	 	ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;
	 
	 	(4)	 	ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY
THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT
LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, [***],
PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;
	 
	 	(5)	 	ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE
UNIFORM COMMERCIAL CODE, OR ANY OTHER STATE OR FEDERAL
STATUTE;
	 
	 	(6)	 	ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY
REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL,
NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;
	 
	 	(7)	 	ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE
COMPENSATED FOR:

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	 	(a)	 	LOSS OF USE OR REPLACEMENT OF ANY
AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART
PROVIDED UNDER THE AGREEMENT;
	 
	 	(b)	 	LOSS OF, OR DAMAGE OF ANY KIND TO,
ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART
PROVIDED UNDER THE AGREEMENT;
	 
	 	(c)	 	LOSS OF PROFITS AND/OR REVENUES;
	 
	 	(d)	 	ANY OTHER INCIDENTAL OR CONSEQUENTIAL
DAMAGE.

	 	 	THE WARRANTIES PROVIDED BY THIS LETTER AGREEMENT WILL NOT BE
EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED
BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF
THIS PARAGRAPH 11 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR
OTHERWISE UNENFORCEABLE, THE REMAINDER OF THIS PARAGRAPH 11 WILL
REMAIN IN FULL FORCE AND EFFECT.

UNQUOTE

	 	 	The remedies provided to the Buyer under this Paragraph 11 as to
any defect in respect of Seller Part thereof are mutually exclusive
and not cumulative. The Buyer will be entitled to the remedy that
provides the maximum benefit to it, as the Buyer may elect,
pursuant to the terms and conditions of this Paragraph 11 for any
such particular defect for which remedies are provided under this
Paragraph 11; provided, however, that the Buyer will not be
entitled to elect a remedy under one part of this Paragraph 11 that
constitutes a duplication of any remedy elected by it under any
other part hereof for the same single defect. If the Seller fails
in its performance of its duties and obligations arising under
these warranties, the measure of the Buyer’s rights and remedies
expressed in monetary terms shall be limited to the amount the
Buyer expends procuring a correction or replacement for any covered
part subject to a defect or due to nonperformance covered by this
Paragraph 11. [***] as covered by this Paragraph 11.

	12.	 	LEASING
	 
	12.1	 	Applicable Terms
	 
	 	 	The terms and conditions of this Paragraph 12 will apply to the
Lessor’s (as defined below) stock of Seller Parts listed in
Appendix “A” to this Paragraph 12 (“Leased Parts”) and will form a
part of each lease of any Leased Part by the

187

 

	 	 	Buyer from the Seller after the date hereof. Except for the
description of the Leased Part, the Lease Term, the Leased Part
delivery and return locations and the Lease Charges (defined below
in Paragraph 12.4), all other terms and conditions appearing on any
order form or other document pertaining to Leased Parts will be
deemed inapplicable, and in lieu thereof the terms and conditions
of this Paragraph 12 will prevail. For purposes of this Paragraph
12, the term “Lessor” refers to the Seller and the term “Lessee”
refers to the Buyer. Parts not included in Appendix “A” to this
Paragraph 12 may be supplied under a separate lease agreement
between the Seller and the Buyer; any such lease will be in the
form of Attachment A hereto.

	12.2	 	Lease Procedure: Spare Parts Leased
	 
	 	 	At the Lessee’s request by telephone (to be confirmed promptly in
writing), facsimile, e-mail, letter or other written instrument,
the Lessor will lease Leased Parts, which will be made available in
accordance with Paragraph 4.2.3 of this Letter Agreement, to the
Lessee as substitutes for parts withdrawn from an Aircraft for
repair or overhaul. Each lease of Leased Parts will be evidenced
by a lease document (“Lease”) issued by the Lessor to the Lessee no
later than seven (7) calendar days after delivery of the Leased
Part.
	 
	12.3	 	Lease Term: Return
	 
	 	 	The term of the lease (“Lease Term”) will commence on the date of
receipt of the Leased Part by the Lessee or its shipping agent in a
serviceable condition and will end on the date of receipt at the
Lessor’s facility of the Leased Part or exchanged part in a
serviceable condition. Notwithstanding the foregoing, the Lease
Term will end in the event, and upon the date, of the Lessee’s
purchase or exchange of the Leased Part, as provided herein.
	 
	12.4	 	Lease Charges and Taxes
	 
	 	 	The Lessee will pay the Lessor (a) a daily rental charge for the
Lease Term in respect of each Leased Part equal to
one-three-hundred-sixty-fifth (1/365) of the catalog price of such
Leased Part, as set forth in the Seller’s Spare Parts Price List in
effect on the date of commencement of the Lease Term, (b) any
reasonable additional costs which may be incurred by the Lessor as
a direct result of such Lease, such as inspection, test, repair,
and repackaging costs as required to place the Leased Part in
serviceable condition for lease to a subsequent customer, provided,
however that notwithstanding the foregoing, such costs will not
exceed fifteen percent (15%) of the catalog price of such new
Leased Part in effect on the date of commencement of the Lease Term
or alternatively, the Buyer may have the applicable inspection,
test, repair, and repackaging work done at an approved repair
station at the Buyer’s cost and have the applicable Leased Part
returned to

188

 

	 	 	the ANACS Spares Center, (c) all transportation and insurance
charges and (d) any taxes (except income taxes) imposed upon the
Lessor as a result of the lease, sale, delivery, storage or
transfer of any Leased Part (the “Lease Charges”). All shipments
of Leased Parts by the Lessor to the Lessee will be from ANACS
Spares Center.
	 
	 	 	The Lessor will invoice the Lessee for the Leased Part every thirty
(30) days during the Lease Term. All payments due hereunder will
be made in accordance with Paragraph 6 of this Letter Agreement.
	 
	 	 	In the event that the Leased Part has not been returned to the
Lessor’s designated facilities within the time period provided in
Paragraph 12.3 above, the Lessor will be entitled, in addition to
any other remedy it may have at law or under this Paragraph 12, to
charge to the Lessee, and the Lessee will pay, all of the charges
referred to in this Paragraph 12.4 accruing for each day after the
end of the Lease Term and for as long as such Leased Part is not
returned to the Lessor and as though the Lease Term were extended
to the period of such delay.
	 
	 	 	During the Lease Term, the [***] referred to above in Paragraph
12.4(a) [***].
	 
	12.5	 	Title
	 
	 	 	Title to each Leased Part will remain with the Lessor at all times
unless the Lessee exercises its option to purchase it in accordance
with Paragraph 12.8 of this Letter Agreement, in which case title
will pass to the Lessee in accordance with Paragraph 7 of this
Letter Agreement.
	 
	12.6	 	Risk of Loss
	 
	 	 	Except for normal wear and tear, each Leased Part will be returned
to the Lessor in the same condition as when delivered to the Lessee
without regard to hours, cycles, or calendar limits. However, the
Lessee will perform scheduled maintenance on the Leased Part but
will not without the Lessor’s prior written consent to repair,
modify or alter any Leased Part. Risk of loss or damage (except
damage resulting from a defect or failure of the part arising out
of the design, workmanship or material employed in connection with
the manufacture of the part) to each Leased Part will remain with
the Lessee until such Leased Part is redelivered to the Lessor at
the return location specified in the applicable Lease. If a Leased
Part is lost or damaged beyond repair, the Lessee will be deemed to
have exercised its option to purchase the part in accordance with
Paragraph 12.8 of this Letter Agreement, as of the date of such
loss or damage.
	 
	12.7	 	Record of Flight Hours

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	 	 	All flight hours accumulated by the Lessee on each Leased Part
during the Lease Term will be documented by the Lessee. Records
will be delivered to the Lessor upon return of such Leased Part to
the Lessor. In addition, all documentation pertinent to
inspection, maintenance and/or rework of the Leased Part as
maintained serviceable in accordance with the standards of the
Lessor will be delivered to the Lessor upon return of the Leased
Part to the Lessor on termination of the Lease.
	 
	 	 	Such documentation will include but not be limited to evidence of
incidents such as hard landings, abnormalities of operation and
corrective action taken by the Lessee as a result of such
incidents.
	 
	12.8	 	Option to Purchase
	 
	12.8.1	 	The Lessee may at its option, exercisable by written notice given to the
Lessor, elect during or at the end of the Lease Term to purchase the
Leased Part, in which case the then current purchase price for such Leased
Part as set forth in the Seller’s Spare Parts Price List will be paid by
the Lessee to the Lessor. The immediately preceding sentence will apply
to new Leased Parts only. In the event the Leased Part is used, [***]
percent ([***]%) of the then current purchase price for such Leased Part
will be paid by the Lessee to the Lessor. Such option will be contingent
upon the Lessee providing the Lessor with evidence satisfactory to the
Lessor that the original part fitted to the Aircraft is beyond economical
repair. Should the Lessee exercise such option, [***] percent ([***]%) of
the Lease rental charges already invoiced pursuant to Paragraph 12.4 (a)
will be credited to the Lessee against the said purchase price of the
Leased Part.
	 
	 	 	Should the Lessee fail to return the Leased Part to the Lessor at
the end of the Lease Term, such failure will be deemed to be an
election by the Lessee to purchase the Leased Part pursuant to the
terms of Paragraph 12.8.1.
	 
	12.8.2	 	In the event of purchase, the Leased Part will be warranted in
accordance with Clause 11 of this Letter Agreement as though such Leased
Part were a Seller Part; provided, however, that (i) the Seller will
prorate the full Seller Part Warranty Period granted to the Buyer
according to the actual usage of such Leased Part and (ii) in no event
will such Seller Part Warranty Period be less than six (6) months from the
date of purchase of such Leased Part. A warranty granted under this
Paragraph 12.8.2 will be in substitution for the warranty granted under
Paragraph 12.9 at the commencement of the Lease Term.
	 
	12.9	 	Warranties
	 
	 	 	The Lessor, in its capacity as “Lessee,” represents and warrants
that the Manufacturer, in its capacity as “Lessor,” has provided
to the Lessor the

190

 

	 	 	following warranties with respect to the Leased Parts, which are
reproduced below between the words QUOTE and UNQUOTE and which are
subject to the terms, conditions, limitations and restrictions
(including, but not limited to, the Exclusivity of Warranties and
General Limitations of Liability and Duplicate Remedies provisions)
as hereinafter set out, and that the same are in full force and
effect and have not been amended. The Lessor hereby assigns to the
Lessee, and the Lessee hereby accepts all of the rights and
obligations of Lessor as “Lessee”, and the Lessor subrogates the
Lessee to all of the rights and obligations of Lessor as “Lessee”
under the warranties for Leased Parts set forth between QUOTE and
UNQUOTE in respect of such Leased Parts during the Lease Term with
respect thereto. The Lessor hereby warrants to the Lessee that (i)
it has all requisite authority to make the foregoing assignment to
and to effect the foregoing subrogation in favor of the Lessee,
(ii) such assignment and subrogation are effective to confer on the
Lessee all of the foregoing rights and obligations of the Lessor,
and (iii) the Seller will not enter into any amendment of the
provisions so assigned without the prior written consent of the
Lessee.

QUOTE

	12.9.1	 	The Lessor warrants that each Leased Part will at the time of delivery
thereof:

	 	(a)	 	conform to the applicable specification for such part,
	 
	 	(b)	 	be free from defects in material,
	 
	 	(e)	 	be free from defects in workmanship, including
without limitation processes of manufacture,
	 
	 	(d)	 	be free from defects in design (including,
without limitation, selection of materials having regard to
the state of the art at the date of such design), and
	 
	 	(e)	 	be free and clear of liens.

	12.9.2	 	Survival of Warranties
	 
	 	 	With respect to each Leased Part, the warranty set forth above in
Subparagraph 12.9.1(a) will not survive delivery, and the
warranties set forth above in Subparagraphs 12.9.1(b) and 12.9.1(c)
will survive delivery only upon the conditions and subject to the
limitations set forth below in Subparagraphs 12.9.3 through 12.9.8.
	 
	12.9.3	 	Warranty and Notice Periods

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	 	 	The Lessee’s remedy and the Lessor’s obligation and liability under
this Subparagraph 12.9, with respect to each defect, are
conditioned upon (i) the defect having become apparent to the
Lessee within the Lease Term and (ii) the Lessor’s warranty
administrator having received written notice of the defect from the
Lessee within sixty (60) days after the defect became apparent to
the Lessee.
	 
	12.9.4	 	Return and Proof
	 
	 	 	The Lessee’s remedy and the Lessor’s obligation and liability under
this Subparagraph 12.9, with respect to each defect, are also
conditioned upon:

	 	(a)	 	the return by the Lessee as soon as practicable
to the return location specified in the applicable Lease, or
such other place as may be mutually agreeable, of the Leased
Part claimed to be defective, and
	 
	 	(b)	 	the submission by the Lessee to the Lessor’s
warranty administrator of reasonable proof that the claimed
defect is due to a matter embraced within the Lessor’s
warranty under this Subparagraph 12.9 and that such defect did
not result from any act or omission of the Lessee, including
but not limited to any failure to operate or maintain the
Leased Part claimed to be defective or the Aircraft in which
it was installed in accordance with applicable governmental
regulations and the Lessor’s applicable written instructions.

	12.9.5	 	Remedies
	 
	 	 	The Lessee’s remedy and the Lessor’s obligation and liability under
this Subparagraph 12.9 with respect to each defect are limited to
the repair of such defect in the Leased Part in which the defect
appears, or, as mutually agreed, to the replacement of such Leased
Part with a similar part free from defect.
	 
	 	 	Any replacement part furnished under this Subparagraph 12.9.5 will
for the purposes of this Letter Agreement be deemed to be the
Leased Part so replaced.
	 
	12.9.6	 	Suspension and Transportation Costs
	 
	12.9.6.1	 	If a Leased Part is found to be defective and is covered by this
warranty, the Lease Term and the Lessee’s obligation to pay rental charges
as provided in Subparagraph 12.4(a) of this Letter Agreement will be
suspended from the date on which the Lessee notifies the Lessor of such
defect until the date on which the Lessor has repaired, corrected or
replaced the defective Leased Part, provided, however, that the Lessee has
withdrawn such defective Leased Part from use, promptly after giving such
notice to the Lessor. If the defective Leased Part is replaced, such
replacement will be deemed to no longer be a Leased Part under

192

 

	 	 	the Lease as of the date on which such part was received by the
Lessor at the return location specified in the applicable Lease.
	 
	 	 	If a Leased Part is found to be defective on first use by the
Lessee and is covered by this warranty, rental charges as provided
in Subparagraph 12.4(a) will not accrue and will not be payable by
the Lessee until the date on which the Lessor has repaired,
corrected or replaced the defective Leased Part.
	 
	12.9.6.2	 	All transportation and insurance costs associated with the return of
the defective Leased Part to the Lessor and the return of the repaired,
corrected or replacement part to the Lessee will be borne by the Lessor.
	 
	12.9.7	 	Wear and Tear
	 
	 	 	Normal wear and tear and the need for regular maintenance and
overhaul will not constitute a defect or nonconformance under this
Subparagraph 12.9.
	 
	12.9.8	 	EXCLUSIVITY OF WARRANTIES AND GENERAL LIMITATIONS OF LIABILITY and DUPLICATE REMEDIES
	 
	 	 	[***], THIS PARAGRAPH 12 (INCLUDING ITS SUBPROVISIONS) SETS FORTH
THE EXCLUSIVE WARRANTIES, EXCLUSIVE LIABILITIES AND EXCLUSIVE
OBLIGATIONS OF THE SELLER, AND THE EXCLUSIVE REMEDIES AVAILABLE TO
THE BUYER, WHETHER UNDER THIS LETTER AGREEMENT OR OTHERWISE,
ARISING FROM ANY DEFECT OR NONCONFORMITY OF ANY KIND IN ANY LEASED
PART DELIVERED BY THE SELLER UNDER THIS LETTER AGREEMENT.
	 
	 	 	THE BUYER RECOGNIZES THAT THE RIGHTS, WARRANTIES AND REMEDIES IN
THIS PARAGRAPH 12 ARE ADEQUATE AND SUFFICIENT TO PROTECT THE BUYER
FROM ANY DEFECT OR NONCONFORMITY OF ANY KIND IN ANY LEASED PART
SUPPLIED UNDER THIS LETTER AGREEMENT. THE BUYER HEREBY WAIVES,
RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS,
GUARANTEES AND LIABILITIES OF THE SELLER AND ALL OTHER RIGHTS,
CLAIMS AND REMEDIES OF THE BUYER AGAINST THE SELLER, WHETHER
EXPRESS OR IMPLIED BY CONTRACT, TORT, OR STATUTORY LAW OR
OTHERWISE, WITH RESPECT TO ANY NONCONFORMITY OR DEFECT OF ANY KIND
IN ANY LEASED PART DELIVERED BY THE SELLER UNDER THIS LETTER
AGREEMENT, INCLUDING BUT NOT LIMITED TO:

	 	(13)	 	ANY IMPLIED WARRANTY OF MERCHANTABILITY AND/OR
FITNESS FOR ANY GENERAL OR PARTICULAR PURPOSE;

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	 	(2)	 	ANY IMPLIED OR EXPRESS WARRANTY ARISING FROM
COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE;
	 
	 	(3)	 	ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT;
	 
	 	(4)	 	ANY RIGHT, CLAIM OR REMEDY FOR TORT, UNDER ANY
THEORY OF LIABILITY, HOWEVER ALLEGED, INCLUDING, BUT NOT
LIMITED TO, ACTIONS AND/OR CLAIMS FOR NEGLIGENCE, [***],
PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN;
	 
	 	(5)	 	ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE
UNIFORM COMMERCIAL CODE, OR ANY OTHER STATE OR FEDERAL
STATUTE;
	 
	 	(6)	 	ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY
REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL,
NATIONAL, STATE OR LOCAL STATUTE OR AGENCY;
	 
	 	(7)	 	ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE
COMPENSATED FOR:

	 	(a)	 	LOSS OF USE OR REPLACEMENT OF ANY
AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART
PROVIDED UNDER THE AGREEMENT;
	 
	 	(b)	 	LOSS OF, OR DAMAGE OF ANY KIND TO,
ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART
PROVIDED UNDER THE AGREEMENT;
	 
	 	(c)	 	LOSS OF PROFITS AND/OR REVENUES;
	 
	 	(d)	 	ANY OTHER INCIDENTAL OR CONSEQUENTIAL
DAMAGE.

	 	 	THE WARRANTIES PROVIDED BY THIS LETTER AGREEMENT WILL NOT BE
EXTENDED, ALTERED OR VARIED EXCEPT BY A WRITTEN INSTRUMENT SIGNED
BY THE SELLER AND THE BUYER. IN THE EVENT THAT ANY PROVISION OF
THIS PARAGRAPH 12 SHOULD FOR ANY REASON BE HELD UNLAWFUL, OR
OTHERWISE

194

 

	 	 	UNENFORCEABLE, THE REMAINDER OF THIS PARAGRAPH 12 WILL REMAIN IN
FULL FORCE AND EFFECT.

UNQUOTE

	 	 	In consideration of the assignment and subrogation by the Seller
under this Subparagraph 12.9 in favor of the Buyer in respect of
the Seller’s rights against and obligations to the Manufacturer
under the provisions quoted above, the Buyer hereby accepts such
assignment and subrogation and agrees to be bound by all of the
terms, conditions and limitations therein contained.
	 
	 	 	The remedies provided to the Buyer under this Paragraph 12 as to
any defect in respect of any Leased Part thereof are mutually
exclusive and not cumulative. The Buyer will be entitled to the
remedy which provides the maximum benefit to it, as the Buyer may
elect, pursuant to the terms and conditions of this Paragraph 12
for any such particular defect for which remedies are provided
under this Paragraph 12; provided, however, that the Buyer will not
be entitled to elect a remedy under one part of this Paragraph 12
which constitutes a duplication of any remedy elected by it under
any other part hereof for the same defect. If the Seller fails in
its performance of its duties and obligations arising under these
warranties, the measure of the Buyer’s rights and remedies
expressed in monetary terms shall be limited to the amount the
Buyer expends procuring a correction or replacement for any covered
part subject to a defect or due to nonperformance covered by this
Paragraph 12. [***] by this Paragraph 12.
	 
	12.9.9	 	NEGOTIATED AGREEMENT
	 
	 	 	The Buyer and the Seller agree that this Subparagraph 12.9 has been
the subject of discussion and negotiation and is fully understood
by the parties, and that the price of the Aircraft and the other
mutual agreements of the parties set forth in the Agreement were
arrived at in consideration of, inter alia, the
Exclusivity of Warranties provisions and General Limitations of
Liability provisions set forth in Subparagraph 12.9.8 above.

195

 

APPENDIX “A” TO CLAUSE 12 OF LETTER AGREEMENT 1

SELLER PARTS LEASING LIST

(Leased Parts)

AILERONS

AUXILIARY POWER UNIT (APU) DOORS

CARGO DOORS

PASSENGER DOORS

ELEVATORS

FLAPS

LANDING GEAR DOORS

RUDDER

TAIL CONE

WING SLATS

SPOILERS

AIRBRAKES

WING TIPS

196

 

	13.	 	TERMINATION
	 
	 	 	Any termination under Clause 10, 11 or 21 of the Agreement will
discharge all obligations and liabilities of the Parties hereunder
with respect to such undelivered Material, services, data or other
items to be purchased hereunder that are applicable to those
Aircraft as to which the Agreement has been terminated. It is
understood that the Seller’s rights to payment for services or
spare parts actually delivered to the Buyer will not be limited by
the liquidated damages provision included in Clause 21 of the
Agreement.
	 
	14.	 	ASSIGNMENT
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the
Agreement, this Letter Agreement and the rights and obligations of
the Buyer hereunder will not be assigned or transferred in any
manner without the prior written consent of the Seller, and any
attempted assignment or transfer in contravention of the provisions
of this Paragraph 14 will be void and of no force or effect.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.

Very truly yours,

AVSA, S.A.R.L.

By:                                                                                 

Its:                                                                                 

Date:                                                                                 

Accepted and Agreed

Atlantic Coast Airlines

By:                                                                                 

Its:                                                                                 

197

 

Attachment A to Letter Agreement 1

	 	 
	 	LEASE DOCUMENT

ORDER No.:          DATE:

Dear Mr.,

Upon your request, the following item (hereinafter “the Leased Item”) was
furnished to you (hereafter “the Customer”) on lease, based on the contractual
agreements as concluded between your company and Airbus North America Customer
Services, Inc. (hereafter “AIRBUS”) and subject to the term of this document:

	 	 	 	 	 	 	 
	Part Number

	 	 	 	 	 	AWB No.
	Serial Number

	 	 	 	 	 	Date:
	Description:

	 	 	 	 	 	Flight:
	AIRBUS’s New Part’s Sales Price:

	 	 	$	 	 	 
	Lease Fee Per Day:

	 	 	$	 	 	 

Lease Conditions

The terms and conditions of the Product Support Agreement, of the aircraft
purchase agreement including the provisions of the Clause “Seller Parts
Leasing” and the service terms and conditions mentioned in AIRBUS’current Spare
Parts Price List as well as its Proprietary Parts Repair Guide, including the
general Terms and Conditions of Supply, shall apply to this lease, except as
modified hereafter:

	1.	 	Lease Fees

	 	•	 	The lease fee is [***] based on the current new part’s sales
price.

	2.	 	Lease Period

	 	•	 	The total lease period shall be counted from (and including) the
day the Leased Item is dispatched, up to (and including) the day of
receipt and acceptance of the Leased Item back at AIRBUS or any other
address indicated by AIRBUS.
	 
	 	•	 	The lease fee will continue until return of the Leased Item is
accepted by AIRBUS’ Quality Assurance.
	 
	 	•	 	If a Leased Item is not returned by the customer within 310 days,
the lease shall be converted into a Sale.

198

 

	 	•	 	The chargeable period to lease a part is minimum 7 days. If the
shipment of the lease item has been arranged and the customer cancels
the lease order, the minimum chargeable period of 7 days will apply.

	3.	 	Treatment, Maintenance and Repair of a Leased Item

	 	•	 	Transportation and routing of the Leased Item from and to AIRBUS or
any other place as specified by AIRBUS is handled by the Customer.
Freight charges from and to the specified locations are to be borne by
the Customer.
	 
	 	•	 	The Customer shall pay all charges for customs duties and taxes for
transporting, importing and exporting the Leased Item and packaging for
the return of the Leased item. The Leased Item shall be returned in
the same packaging as that in which it was received from AIRBUS.
	 
	 	•	 	The Customer shall handle the Leased Item in a good, professional
manner to standard industrial practice and in accordance with
provisions of the appropriate technical manuals.
	 
	 	•	 	The customer shall be liable for maintaining and storing the Leased
Item in accordance with all applicable rules of the relevant aviation
authorities and the technical documentation and other instructions
issued by Airbus.
	 
	 	•	 	The Leased Item shall be repaired solely at repair stations approved by AIRBUS. If during the lease period any repair is carried out, the Customer
shall provide details about the scope of work performed, including respective inspection/work/test reports.
	 
	 	•	 	The leased item shall not be lent to a third party.

	4.	 	Return of the Lease Item

	 	•	 	The Customer shall reference the Return Authorization Number on the
return shipping documents.
	 
	 	•	 	Unless otherwise instructed, the customer is requested to return
the Leased Item to the address indicated below:

AIRBUS NORTH AMERICA CUSTOMER SERVICES, INC

21780 Filigree Court

Ashburn, Virginia USA 20147-6205

	 	•	 	The return shipping document shall indicate lease order number and
the removal data including:

	 	•	 	Aircraft Manufacturer’s Serial Number or aircraft registration number
	 
	 	•	 	Removal Date
	 
	 	•	 	Total flight hours and flight cycles accumulated during the lease period
	 
	 	If the Customer cannot provide the above mentioned data for the Leased
Item, the Customer will be invoiced for 75% of the current AIRBUS sales
price for a new part,

199

 

	 	plus 50% of the accumulated lease fees. According to AIRBUS quality
standards, parts are not serviceable without the maintenance history data
outlined above.

	 	•	 	The removal tag issued by the Customer and the original
Airbus certification documents must accompany the Leased Item.
	 
	 	•	 	The Leased Item is to be returned in the same shipping
container as delivered, with the same paint as received from AIRBUS
(Airbus grey or primary paint). The container must be in
serviceable condition, except for normal wear and tear.
	 
	 	•	 	The return of an equivalent part with a different serial
number from that received from AIRBUS is not permitted without
previous agreement by AIRBUS.
	 
	 	•	 	Any cost arising for necessary recertification, repair or
removal of paint will be invoiced to the Customer.

	 	 	 
	

	 	Your Sincerely,
	 
	 	 
	Leased by:
	 	 
	 
	 	 
	Name:                                    

	 	Mike McManus

Manager, Customer Spares Accounts
	Title:                                      
	 	 
	 
	 	 
	                                               
Signature
	 	 

200

 

LETTER AGREEMENT NO. 2

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: CONCESSIONS

Dear Ladies and Gentlemen,

Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”), have
entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even date
herewith (the “Agreement”), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 2 (the “Letter Agreement”) certain
additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

201

 

CONTENTS

CLAUSES

	 	 	 	 
	1 -

	 	CREDITS	203
	 
	 	 
	2 -

	 	[***] CREDIT MEMORANDUM	207
	 
	 	 
	3 -

	 	[***]	207
	 
	 	 
	4 -

	 	CREDIT MEMORANDUM STATUS	208
	 
	 	 
	5 -

	 	[***]	208
	 
	 	 
	6 -

	 	INVOICING PROCEDURE	208
	 
	 	 
	7 -

	 	EXPIRATION OF CREDIT MEMORANDA	209
	 
	 	 
	8 -

	 	CLAUSE 3 OF THE AGREEMENT	209
	 
	 	 
	9 -

	 	CLAUSE 4 OF THE AGREEMENT	209
	 
	 	 
	10 -

	 	CLAUSE 5 OF THE AGREEMENT	209
	 
	 	 
	11 -

	 	CLAUSE 7 OF THE AGREEMENT	211
	 
	 	 
	12 -

	 	CLAUSE 8 OF THE AGREEMENT	213
	 
	 	 
	13 -

	 	CLAUSE 9 OF THE AGREEMENT	215
	 
	 	 
	14 -

	 	CLAUSES 10 AND 11 OF THE AGREEMENT	216
	 
	 	 
	15 -

	 	CLAUSE 12 OF THE AGREEMENT	220
	 
	 	 
	16 -

	 	[***]	220
	 
	 	 
	17 -

	 	CLAUSE 18 OF THE AGREEMENT	220
	 
	 	 
	18 -

	 	CLAUSE 21 OF THE AGREEMENT	221
	 
	 	 
	19 -

	 	AGREEMENT AT TIME OF DELIVERY	223
	 
	 	 

202

 

  	1.	 	CREDITS
	 	 	 
	1.1	 	Types of Credits
	 	 	 
	1.1.1	 	The credits more fully described in this Paragraph 1 may be applied
        by the Buyer against either the Final Contract Price of the applicable
        Aircraft or the price of goods and services available from the Seller
        or any of its Affiliates or, if applicable, to [***]. How each
        credit memorandum may be applied is stated below.
	 
	1.1.2	 	[***], then Seller will ensure that the Buyer will be able
        to use credits then available under the Agreement for such goods and services.
	 
	1.2	 	Credits Against Final Contract Price or Goods and Services
	 
	1.2.1	 	All Aircraft
	 
	 	 	On Delivery of each Aircraft, the Seller will provide the Buyer with
        the credit memoranda described below in paragraphs (i) through (vi):

	 	(i)	 	The “AVSA Credit Memorandum” which is
	 
	 	(a)	 	for each A319 Aircraft, US$ [***] (US dollars —
[***]),
	 
	 	(b)	 	for each A320 Aircraft, US$ [***] (US dollars —
[***]), and
	 
	 	(c)	 	for each A321 Aircraft, US$ [***] (US dollars —
[***]).
	 
	 	(ii)	 	The “[***] Credit Memorandum” which is
	 
	 	(a)	 	for each A319 Aircraft, US$ [***] (US dollars —
[***]),
	 
	 	(b)	 	for each A320 Aircraft, US$ [***] (US dollars — [***]) and
	 
	 	(c)	 	for each A321 Aircraft, US$ [***] (US dollars — [***]).
	 
	 	(iii)	 	The “[***] Credit Memorandum” which is
	 
	 	(a)	 	for each A319 Aircraft, US$ [***] (US dollars — [***]), and
	 
	 	(b)	 	for each A320 Aircraft, US$ [***] (US dollars —
[***]).
	 
	 	(iv)	 	The “[***] Credit Memorandum” which is
	 
	 	(a)	 	for each A319 Aircraft, US$ [***] (US dollars — [***]), and
	 
	 	(b)	 	for each A320 Aircraft, US$ [***] (US dollars —
[***]).

203

 

	 	(v)	 	The “[***] Credit Memorandum” which is, for each A320 Aircraft,
provided that [***] have been delivered to the Buyer, US$ [***] (US
dollars — [***]).
	 
	 	 	 	However, if at the time of Delivery of an A320 Aircraft, the Buyer
has less than a total of [***] firmly ordered and/or delivered to
it, then, the amount of the A320 Final Airframe Credit for such
A320 Aircraft will be equal to:
	 
	 	 	 	N multiplied by A divided by [***]
	 
	 	 	 	where “N” is a number ([***]) equal to the sum of A320 Aircraft
delivered under the Agreement plus A320 Aircraft remaining to be
delivered under the Agreement, and “A” is US$ [***] (US dollars —
[***]).
	 
	 	 	 	The [***] Credit Memorandum will be applied by the Seller against
the Final Contract Price of such A320 Aircraft at Delivery of such
Aircraft.
	 
	 	(vi)	 	The “[***] Credit” which will be available only if the Parties
have signed an SCN (EPAC reference N. 34.41.200 in Attachment N. 1
to Exhibit A-2 to the Agreement) (and the Buyer later takes
delivery of the corresponding A319 Aircraft or A320 Aircraft with
such SCN incorporated) for either (a) the single weather radar
system (ARIC 708A) with PWS and multiscan (Rockwell Collins), when
available and if certified or (b) the single weather radar system
(ARIC 708A) with PWS activation (Rockwell Collins) (if (a)
immediately above is not then certified). Such “[***] Credit” will
be equal to $ [***] (US dollars [***]) per A319 Aircraft and per
A320 Aircraft

	 
	1.2.2	 	Firm Aircraft Only
	 
	 	 	The Seller will provide the Buyer with the credit memoranda for Firm
Aircraft described below in paragraphs (i) and (ii):

	 	(i)	 	On Delivery of each Firm Aircraft, a credit of
US$ [***] (US dollars — [***]) (the “[***] Credit
Memorandum”).
	 
	 	(ii)	 	On Delivery of each Firm Aircraft, the Seller
will make available to the Buyer an [***] credit memorandum
equal to US$ [***] (US dollars — [***]) for each Firm Aircraft
(the “[***] Credit Memorandum”).

	1.2.3	 	Option Aircraft Only
	 
	 	 	On Delivery of each Option Aircraft, the Seller will provide the
Buyer with a “[***] Credit,” which is:

	 	(a)	 	[***],
	 
	 	(b)	 	[***],

204

 

	 	(c)	 	[***],
	 
	 	(d)	 	[***], and
	 
	 	(e)	 	[***],

	1.2.4	 	[***] Credit Memorandum
	 
	 	 	The Seller will provide the Buyer with credits of US$ [***] (US
dollars — [***]) (each an “[***] Credit Memorandum”) as follows:

	 	(a)	 	For [***] the Buyer will [***] Credit Memoranda
[***] Credit Memorandum [***] Credit Memoranda, it being
understood that the [***] Credit Memorandum [***] Credit
Memorandum is [***]. If the [***] Credit Memorandum and [***]
Credit Memorandum [***]. In such case, the [***] Credit
Memorandum [***].
	 
	 	(b)	 	If, [***]:
	 
	 	 	 	If [***] Credit Memoranda [***] Credit Memoranda [***] Credit
Memoranda in accordance with [***], as follows:

	 	(i)	 	[***] of Letter Agreement No. 3 to
the Agreement, as applicable, [***].
	 
	 	(ii)	 	[***] Credit Memorandum [***] (1) by
[***] Credit Memorandum [***] and (2) by [***], except
that to the extent [***] Credit Memorandum [***].

	1.2.5	 	Adjustment of Credit Memoranda
	 
	 	 	The AVSA Credit Memorandum, [***] Credit Memorandum, [***] Credit
Memorandum, [***] Credit Memorandum, [***] Credit Memorandum, [***]
Credit, [***] Credit Memorandum, [***] Credit Memorandum, [***]
Credit Memorandum and [***] Credit Memorandum, the amounts of which
are listed above in Paragraphs 1.2.1, 1.2.2, 1.2.3 and 1.2.4, are
all expressed at January 2003 delivery conditions. Each such credit
memorandum will be adjusted from January 2003 delivery conditions to
the delivery month of each applicable Aircraft in accordance with
the Seller Price Revision Formula.
	 
	1.2.6	 	Use of Credit Memoranda
	 
	 	 	At the Buyer’s option, each AVSA Credit Memorandum, [***] Credit
Memorandum, [***] Credit Memorandum, [***] Credit Memorandum, [***]
Credit, [***] Credit Memorandum, [***] Credit Memorandum, [***]
Credit Memorandum and [***] Credit Memorandum will be (i) applied by
the Seller against the Final Contract Price of the applicable
Aircraft on Delivery of such Aircraft or (ii) used by the Buyer on
or after such Delivery for the purchase of

205

 

  	 	 	product support related goods and services from the Seller or its Affiliates
        or if applicable pursuant to Paragraph [***]. The Buyer will
        give written notice to the Seller at least ten (10) days before Delivery
        of each Aircraft as to how it chooses to apply each of the credit memoranda
        listed in this Paragraph 1.2.6. In the absence of such written notice,
        each of the above credit memoranda will be applied by the Seller in accordance
        with Paragraph (i) of this Paragraph 1.2.6 hereof. Notwithstanding
        the foregoing, in respect of an Aircraft [***].
	 	 	 
	1.3	 	Credit Memoranda Against Goods and Services Only
	 
	1.3.1	 	Credit Memoranda Adjusted to Delivery of the Applicable Aircraft
	 
	1.3.1.1	 	[***] Credit Memorandum
	 
	 	 	In recognition of the Buyer’s desire to effect a [***],
        the Seller will provide the Buyer with a US$ [***] (US dollars
        — [***]) credit memorandum on Delivery of each Aircraft
        (the “[***] Credit Memorandum”).
	 
	 	 	The [***]Credit Memorandum is available to the Buyer [***].
	 
	1.3.1.2	 	[***] Credit Memorandum
	 
	 	 	On Delivery of each Aircraft, the Seller will provide the Buyer with
        a [***] credit memorandum (the “[***] Credit
        Memorandum”), which is:

	 	(i)	 	for each A319 Aircraft, US$ [***] (US dollars — [***]), and
	 
	 	(ii)	 	for each A320 Aircraft, US$ [***] (US dollars —
[***]).

	 	 	The [***] Credit Memorandum may be used for [***].
	 
	1.3.1.3	 	The [***] Credit Memorandum and [***] Credit Memorandum, the amounts
for which are listed above in Paragraphs 1.3.1.1 and 1.3.1.2, are both
expressed at January 2003 delivery conditions. Each such credit
memorandum will be adjusted from January 2003 delivery conditions to the
delivery month of each applicable Aircraft in accordance with the Seller
Price Revision Formula.
	 
	1.3.2	 	Fixed Credit Memoranda
	 
	1.3.2.1	 	[***] Credit Memorandum
	 
	 	 	On Delivery of each Aircraft, the Seller will provide the Buyer
with a Credit Memorandum of US$ [***] (US dollars — [***])
exclusively for the [***], if applicable, [***] the Credit
Memorandum [***].
	 
	1.3.2.2	 	[***] Credit Memorandum
	 
	1.3.2.2.1	 	The Seller will make available to the Buyer a fixed amount of up to
$[***] (the “[***] Credit Memorandum”) for the Buyer [***]:

206

 

	 	(i)	 	[***]

	 	(a)	 	[***]
	 
	 	(b)	 	[***]
	 
	 	(c)	 	[***]
	 
	 	(d)	 	[***]
	 
	 	(e)	 	[***]

	 	 	 	or
	 
	 	(ii)	 	support goods and services from the Seller or its Affiliates.

	 	 	If the Buyer utilizes the [***] Credit Memorandum to acquire or
cause to be acquired any items listed in Paragraph 1.3.2.2.1 [***],
the Buyer agrees that (subject to [***]).
	 
	1.3.2.2.2	 	In respect of Paragraph 1.3.2.2.1(i), the Seller will (i) [***],
or (ii) [***], it being understood that in each of the cases (i) and
(ii) above, [***] Credit Memorandum.
	 
	 	 	Notwithstanding the foregoing, the Seller grants the Buyer the
right, exercisable at any time prior to Delivery of the last five
(5) Firm Aircraft, to cause the Seller to [***] Credit Memorandum
[***]. The Buyer will exercise this right by written notification
to the Seller made at least [***].
	 
	2.	 	[***] CREDIT MEMORANDUM
	 
	 	 	The Seller offers the Buyer a one-time, fixed credit memorandum of
$[***] Credit Memorandum”). The [***] Credit Memorandum is
available [***] (as such terms is defined in Letter Agreement No.
9 to the Agreement), as the case may be. Advances will be made on
the basis of [***]. Up to $[***] of the credit memorandum will be
available for the [***].
	 
	3.	 	[***]
	 
	3.1	 	[***]Training Allowances 
	 
	 	 	[***]:

	 
	 	(i)	 	[***] Credit Memorandum
	 
	 	 	 	Under Paragraph [***] of Appendix A to Clause [***] of the
Agreement, the Seller will provide flight crew training for
[***] per aircraft to the Buyer. [***] Credit Memorandum”),
[***].
	 
	 	(ii)	 	[***]

207

 

	 	 	 	Under Paragraph [***] Clause [***] of the Agreement, the
Seller grants the Buyer [***]of [***]. Notwithstanding the
foregoing, [***] (the “[***] Credit Memorandum”) [***].
	 
	 	 	 	[***].

	3.2	 	Adjustment of Credit Memoranda
	 
	 	 	The [***] Credit Memorandum and the [***] Credit Memorandum are each
expressed at January 2003 delivery conditions. Each such credit
memorandum will be adjusted from January 2003 delivery conditions to
the month of delivery of the applicable Aircraft in accordance with
the Seller Price Revision Formula.
	 
	3.3	 	Use of Credit Memoranda
	 
	 	 	The [***] Credit Memorandum and the [***] Credit Memorandum, [***]
as set forth above in Paragraphs 3.1(i) or (ii), as applicable,
will be available to the Buyer to be applied (i) by the Seller,
upon the Buyer’s request, as a reduction of outstanding support
invoices from the Seller, ANACS or any of their Affiliates, or (ii)
applied by the Buyer against the purchase of product support
related goods and services from the Seller, ANACS or any of their
Affiliates. Such credits will expire as stated in Paragraph 8
below.
	 
	4.	 	CREDIT MEMORANDUM STATUS
	 
	 	 	The Seller will provide the Buyer with status reports of the
balance of all credit Memoranda set forth in this Letter Agreement
and any other applicable letter agreement to the Agreement. These
reports will be issued by the Seller every other month at the
beginning of such month commencing with the delivery of the first
Leased Aircraft until the last Firm Aircraft is delivered and
thereafter on a schedule to be agreed by the Parties.
	 
	5.	 	[***]
	 
	5.1	 	With respect to [***].

          This [***] will be calculated using the following formula:

        
	 
	 	 	[***].
	 
	5.2	 	Should the Buyer exercise its rescheduling rights pursuant to
Paragraph 3 of Letter Agreement No. 3 or [***].
	 
	6.	 	INVOICING PROCEDURE
	 
	 	 	At least ten (10) Working Days before each Delivery, the Seller
will submit to the Buyer for review, a provisional invoice for the
applicable Aircraft and the Parties

208

 

	 	 	will, in good faith, agree upon such invoiced amount at least five
(5) Working Days prior to such Delivery (the “Invoice Review
Period”) with credit memoranda allocated in accordance with this
Letter Agreement.

	7.	 	EXPIRATION OF CREDIT MEMORANDA
	 
	 	 	Unused credit memoranda provided under the Agreement will expire on
the [***] or, if, prior to such date, [***] (or [***] as the case
may be) [***].
	 
	 	 	Notwithstanding the foregoing, credit memoranda available [***].
	 
	8.	 	CLAUSE 3 OF THE AGREEMENT
	 
	 	 	Clause 3.3.2 of the Agreement is hereby superseded and replaced by
the text below between the words QUOTE and UNQUOTE:

     QUOTE

	3.3.2	 	[***] to the extent provided in Clause 5.8.

     UNQUOTE

	9.	 	CLAUSE 4 OF THE AGREEMENT
	 
	 	 	Clause 4.3 of the Agreement is hereby superseded and replaced by
the text below between the words QUOTE and UNQUOTE:

     QUOTE

	 	 	The Parties represent that they have each received confirmation
from the manufacturer of the Propulsion Systems that the Reference
Prices for the Propulsion Systems set forth in Clause 3 of the
Agreement and in the Propulsion Systems Price Revision Formula will
be valid for Propulsion Systems installed on Aircraft delivered to
the Buyer through [***]. The immediately preceding sentence shall
not be deemed to otherwise amend or modify any provisions of the
Propulsion Systems Revision Formula and shall not be deemed to
amend or modify (i) any agreement between the Buyer and the
manufacturer of the Propulsion Systems or (ii) any agreement
between the Seller and the manufacturer of the Propulsion Systems,
concerning Propulsion Systems pricing or price revision.

     UNQUOTE

	10.	 	CLAUSE 5 OF THE AGREEMENT

209

 

	10.1	 	Clause 5.5 of the Agreement is hereby superseded and replaced by the
following text between the words “QUOTE” and “UNQUOTE.”

     QUOTE

	5.5	 	Payment Set Off
	 
	5.5.1	 	Subject to Clause 5.5.2 below, notwithstanding any other rights the
Parties may have in contract or at law, the Parties agree that [***] this
Clause 5.5.1 [***].
	 
	5.5.2	 	[***]

	 	(i)	 	If [***], then [***]:

	 	(a)	 	[***],
	 
	 	(b)	 	[***], and
	 
	 	(c)	 	[***].

	 	(ii)	 	If [***], then [***]:

	 	(a)	 	[***],
	 
	 	(b)	 	[***],
	 
	 	(c)	 	[***], and
	 
	 	(d)	 	[***].

	5.5.2	 	[***]
	 
	5.5.2.1	 	[***]
	 
	 	 	[***],
	 
	5.5.2.2	 	[***]
	 
	 	 	[***].

     UNQUOTE

	10.2	 	Clause 5.8 of the Agreement is hereby superseded and replaced by the
following text between the words “QUOTE” and “UNQUOTE.”

     QUOTE

	5.8	 	[***]

210

 

  	 	 	The Buyer’s obligation to make payments to the Seller hereunder
        [***]. If and to the extent to which [***] (a) [***]
        this Clause 5.8 or (b) [***] as herein before described at this
        Clause 5.8(3)). In the event that [***] this Clause 5.8(3),
        [***] to the extent possible, [***] this Clause 5.8(3).
	 	 	 
	 	 	[***]
	 
	 	 	UNQUOTE

	11.	 	CLAUSE 7 OF THE AGREEMENT
	 
	 	 	Clause 7 of the Agreement is superseded and replaced by the
following text between the words “QUOTE” and “UNQUOTE.”

QUOTE

	7 -	 	CERTIFICATION
	 
	 	 	Except as set forth in this Clause 7, the Seller will not be
required to obtain any certificate or approval with respect to the
Aircraft.
	 
	7.1	 	Type Certification
	 
	 	 	The Aircraft have been type certificated under EASA procedures for
joint certification in the transport category. The Seller will
obtain or cause to be obtained an FAA type certificate (the “Type
Certificate”) to allow the issuance of the Export Certificate of
Airworthiness.
	 
	7.2	 	Export Certificate of Airworthiness
	 
	 	 	Each Aircraft will be delivered to the Buyer with an Export
Certificate of Airworthiness issued by the DGAC or the LBA, as
applicable, and in a condition enabling the Buyer (or an eligible
person under then applicable law) to obtain at the time of Delivery a
Standard Airworthiness Certificate for transport category aircraft
issued pursuant to Part 21 and in compliance with Part 25 of the US
Federal Aviation Regulations. (“FARs”). If under Part 21 or Part 25 of
the FARs the FAA does not find that the Aircraft conforms to the Type
Certificate (including the type design) and is in condition for safe
operation, the Seller shall modify the Aircraft until the FAA is
prepared to issue to the Buyer a Standard Airworthiness Certificate
for transport category aircraft.
	 
	 	 	If, as a condition to the issuance of the Export Certificate of
Airworthiness, after the effective date of this Agreement, the FAA or
the EASA requires a modification to an Aircraft to allow the Aircraft
to comply with additional aircraft import requirements, the Parties
will sign an SCN for such modification, which the Seller will
incorporate as specified in such SCN.

211

 

	7.3	 	Specification Changes Before Delivery
	 
	7.3.1	 	If, any time before the date on which the Aircraft is Ready for
Delivery, any law, rule or regulation is enacted, promulgated, becomes
effective and/or an interpretation of any law, rule or regulation issued
by the EASA and/or the FAA that requires any change to the Specification,
to the Technical Publications or to the Aircraft delivery documentation
for the purposes of obtaining the Export Certificate of Airworthiness for
such Aircraft (a “Change in Law”), the Seller will make the required
modification. The Parties will sign an SCN. If such Change in Law is a
result of [***].”
	 
	7.3.2	 	The Seller will as far as reasonably practicable, without prejudice to
Clause 7.3.3, take into account the information available to it concerning
any proposed law, rule or regulation or interpretation that could become a
Change in Law, in order to minimize the costs of changes to the
Specification as a result of such proposed law, regulation or
interpretation becoming effective before the applicable Aircraft is Ready
for Delivery.
	 
	7.3.3	 	The cost of implementing the modifications required pursuant to a Change
in Law [***] will be:

	 	(i)	 	for the account of the Seller if a Change in Law
became effective before the date of this Agreement;
	 
	 	(ii)	 	[***];
	 
	 	(iii)	 	[***];
	 
	 	(iv)	 	[***].

	7.3.4	 	Notwithstanding the provisions of Clauses 7.3.3, if a Change in Law
relates to an item of BFE or to the Propulsion Systems, the costs will be
borne in accordance with such arrangements as may be made separately
between the Buyer and the manufacturer of the BFE, or the Propulsion
Systems, as applicable, and the Seller will have no obligation with
respect thereto.
	 
	 	 	The cost of implementing any changes applicable to the Buyer in
order to permit the Buyer to operate the Aircraft under Part 121 of
the FARs are for the account of the Buyer.
	 
	7.4	 	Specification Changes After Delivery
	 
	 	 	Nothing in Clause 7.3 will require the Seller to make any changes
or modifications to, or to make any payments or take any other
action with respect to, any Aircraft that is Ready for Delivery
before the compliance date of any law or regulation referred to in
Clause 7.3. Any such changes or modifications made to an Aircraft
after it is Ready for Delivery will be at the Buyer’s expense.

212

 

	 	 	Notwithstanding any language in Clause 2.1.2.2 to the contrary, the
Buyer (at its cost and expense) may require an SCN with respect to
any Change of Law known prior to when the Aircraft is Ready for
Delivery, but not yet effective, to address such Change of Law in
any Aircraft not yet delivered to Buyer, provided that (i) at such
time an SCN for such Change of Law is available from the
Manufacturer and (ii) such SCN can be reasonably incorporated on an
Aircraft without adverse effect on the Delivery Date for such
Aircraft, unless otherwise agreed by the Parties at the time
	 
	7.5	 	Certificate of Sanitary Construction and Water Sterilization Certificate
	 
	 	 	The Seller will assist the Buyer in obtaining a Certificate of Sanitary Construction issued by the US Public Health
Service Food and Drug Administration at time of delivery of the first A319 Aircraft, first A320 Aircraft, first A321
Aircraft and at time of delivery of any subsequent Aircraft in which the galley configuration has been modified from that
of a delivered Aircraft of the same type. Each Aircraft will be delivered to the Buyer in a condition enabling the Buyer to
obtain such certificate.
	 
	 	 	[***]

     UNQUOTE

	12.	 	CLAUSE 8 OF THE AGREEMENT
	 
	 	 	Clause 8 of the Agreement is superseded and replaced by the
following text between the words “QUOTE” and “UNQUOTE.”

     QUOTE

	8.	 	BUYER’S TECHNICAL ACCEPTANCE
	 
	8.1	 	Technical Acceptance Process
	 
	8.1.1	 	The technical acceptance process for the Aircraft will include ground
inspection and functional tests and an acceptance flight test and shall be
conducted in accordance with the Manufacturer’s ground inspection and
flight test procedures referenced in the Manufacturer’s Customer
Acceptance Manual (A319, A320 or A321, as applicable) as such process may
be revised from time to time by mutual agreement to incorporate the
Buyer’s reasonable requests (the “Technical Acceptance Process”). The
Seller will give to the Buyer not less than thirty (30) days’ notice of
the date when the Technical Acceptance Process is scheduled to be
conducted; this information will be contained in the notification provided
pursuant to Clause 9.1.2. A copy of the Customer Acceptance Manual shall
be provided to the Buyer at the commencement of the Technical Acceptance
Process, and (absent the Parties’ agreement to the contrary) [***].

213

 

	 	 	The Technical Acceptance Process will take place at the Delivery
Location and will be carried out by the personnel of the Seller
(accompanied, if the Buyer wishes, by representatives of the Buyer
in accordance with Clause 8.2.2 below). The Buyer will be allowed
to participate in the Technical Acceptance Procedure except as
prohibited by applicable law. During flight tests, the Buyer’s
representatives will comply with the instructions of the Seller’s
representatives. The Manufacturer will not normally be required in
the course of such Technical Acceptance Process to fly any of the
Aircraft for more than three (3) hours, it being understood that
the Manufacturer may be required to fly an Aircraft for an
additional period of time to demonstrate the elimination of a
non-compliance, defect or material damage as set forth in Clause
8.1.3 hereof. The Seller and/or Manufacturer shall provide the
Buyer with the required briefing regarding the schedule and
contents of the flight test in advance of such flight tests. [***]
the Technical Acceptance Process.
	 
	8.1.2	 	The Seller will cause or cause to be provided, [***]. This briefing
will provide specific information related to acceptance flights.
	 
	8.1.3	 	The Seller shall provide the Buyer with the results of the Technical
Acceptance Process. The successful completion of the Technical Acceptance
Process will demonstrate the satisfactory functioning and condition of the
Aircraft [***], and satisfactory results will be deemed to demonstrate
compliance with the Specification. During the Technical Acceptance
Process, [***], with the Buyer to make reasonable efforts to not unduly
delay the Technical Acceptance Process in accessing such interior
equipment, parts and components. The Buyer will further be permitted
ground checks, and, with respect to the Propulsion Systems, engine runs.
	 
	 	 	If required, the Seller will carry out any necessary repairs,
and/or changes and, as soon as practicable thereafter, resubmit the
Aircraft for new acceptance tests (including but not limited to, if
necessary and applicable, additional flight tests) to demonstrate
(i) the elimination of the noncompliance or material damage and
(ii) as reasonably necessary, that the repairs and/or changes have
not adversely affected other systems or components of the Aircraft.
	 
	8.2	 	Buyer’s Attendance
	 
	8.2.1	 	The Buyer is entitled to attend and participate in the Technical
Acceptance Process as contemplated in this Clause 8, subject to any
applicable regulatory limitations on such participation.
	 
	8.2.2	 	If the Buyer attends the Technical Acceptance Process, the Buyer

	 	(i)	 	will comply with the reasonable requirements of
the Seller, with the intention of completing the Technical
Acceptance Process within five (5)

214

 

	 	 	 	Working Days, it being understood that [***] the Technical
Acceptance Process [***], and
	 
	 	(ii)	 	may have a maximum of four (4) of its
representatives (no more than three (3) of whom will have
access to the cockpit at any one time) accompany the Seller’s
representatives on the technical acceptance flight, during
which the Buyer’s representatives will comply with the
instructions of the Seller’s representatives.

	8.2.3	 	Except as provided below, if the Buyer does not attend or fails to
reasonably cooperate in the Technical Acceptance Process, the Seller will
[***] the Technical Acceptance Process) [***]. However, [***] the
Technical Acceptance Process [***] Technical Acceptance Process [***].
Nothing in this Clause 8 will impair the rights of the Buyer that derive
from the warranties for the Aircraft.
	 
	8.2.4	 	If the Seller [***].
	 
	8.3	 	Certificate of Acceptance
	 
	 	 	Upon successful completion of the Technical Acceptance Process, the
Buyer will, on or before the Delivery Date, sign and deliver to the
Seller a certificate of acceptance in respect of the Aircraft in
the form of Exhibit D (the “Certificate of Acceptance”) hereto.
	 
	 	 	If the Seller [***], then, [***] the Technical Acceptance Process
[***].
	 
	8.4	 	Finality of Acceptance
	 
	 	 	The Buyer’s signature of the Certificate of Acceptance for the
Aircraft will constitute waiver by the Buyer of any right it may
have under the Uniform Commercial Code as adopted by the State of
New York or otherwise to revoke acceptance of the Aircraft for any
reason, whether known or unknown to the Buyer at the time of
acceptance. Nothing in this clause 8.4 [***].
	 
	8.5	 	Aircraft Utilization
	 
	 	 	The Seller will, without payment, be entitled to use the Aircraft
before Delivery for [***] to obtain the certificates required under
Clause 7. Such limitation in use will not apply to flying time
required to certify modifications to be embodied in an Aircraft
pursuant to an SCN. Such use will not prejudice the Buyer’s
obligation to accept Delivery hereunder. [***].

     UNQUOTE

	13.	 	CLAUSE 9 OF THE AGREEMENT

215

 

	 	 	Clause 9.1.5 of the Agreement is superseded and replaced by the
following text between the words “QUOTE” and “UNQUOTE.”

     QUOTE

	9.1.5	 	If, [***] Technical Acceptance Process, the [***].

     UNQUOTE

	14.	 	CLAUSES 10 AND 11 OF THE AGREEMENT
	 
	 	 	Clause 10 and 11 of the Agreement are hereby supplemented or
amended, as appropriate, by the provisions of this Paragraph 14.
	 
	14.1.	 	Excusable Delay and Total Loss
	 
	14.1.1	 	[***]
	 
	 	 	The provisions of Clause [***] of the Agreement and of Paragraphs
[***] and [***] of this Letter Agreement notwithstanding, [***].

	 	(i)	 	in the event of an Excusable Delay [***]
	 
	 	(ii)	 	in the event of a Total Loss of such Aircraft
under Clause 10.4 of the Agreement (provided [***].

	 	 	The provisions of Clause [***] of the Agreement and of Paragraphs
[***] and [***] of this Letter Agreement notwithstanding, the
[***].

	 	(i)	 	in the event of an Excusable Delay [***]
	 
	 	(ii)	 	in the event of a Total Loss of such Aircraft
under Clause 10.4 of the Agreement (provided [***].

	 	 	[***].
	 
	14.1.2	 	[***]
	 
	 	 	[***] the subject of an Excusable Delay and has [***] pursuant to
the provisions of Clause [***] or [***] of the Agreement or
Paragraph [***] of this Letter Agreement. After an Excusable Delay
and pursuant to a [***].
	 
	 	 	In addition,

	 	(i)	 	in the case of Excusable Delay [***]

	 	(a)	 	[***], and

216

 

	 	(b)	 	notwithstanding Paragraph 5.2.3.5.2
of Letter Agreement No. 11 to the Agreement, [***]; and

	 	(ii)	 	in the case of the Buyer’s acceptance of a
replacement Aircraft under Clause 10.4 of the Agreement,

	 	(a)	 	[***]
	 
	 	(b)	 	notwithstanding Paragraph 5.2.3.5.2
of Letter Agreement No. 11 to the Agreement, [***]
Payment Date (as such term is referred to in Clause 5.2
of the Agreement, as amended in Paragraph 1 of Letter
Agreement No. 11 to the Agreement), [***].

	 	 	In the event of a [***] an Aircraft pursuant to Clause [***] or
[***] of the Agreement or Paragraph [***] of this Letter Agreement,
[***].
	 
	 	 	In the event of a [***] an Aircraft pursuant to Clause [***] of the
Agreement, [***].
	 
	14.1.3	 	[***]
	 
	 	 	Clauses [***] and [***] of the Agreement are superseded and
replaced by the following text between the words “QUOTE” and
“UNQUOTE.”

     QUOTE

	[***]	 	If any [***] as a result of [***] for [***], as the case may be. However, [***].
	 
	[***]	 	If any [***] as a result of [***] for [***], as the case may be. However, [***] under this Clause 10.3.2. [***].

     UNQUOTE

	14.1.4	 	Clause 10.5 of the Agreement is superseded and replaced by the following
text between the words “QUOTE” and “UNQUOTE.”

     QUOTE

	10.5	 	REMEDIES
	 
	 	 	[***], THIS CLAUSE 10 SETS FORTH THE SOLE AND EXCLUSIVE REMEDY OF
THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO DELIVER, DUE TO
TOTAL LOSS OR EXCUSABLE DELAY, AND THE BUYER HEREBY WAIVES ALL
RIGHTS TO WHICH WOULD OTHERWISE BE ENTITLED IN RESPECT THEREOF,
INCLUDING,

217

 

	 	 	WITHOUT LIMITATION, ANY RIGHTS TO INCIDENTAL AND CONSEQUENTIAL
DAMAGES OR SPECIFIC PERFORMANCE. THE BUYER WILL NOT BE ENTITLED TO
CLAIM THE REMEDIES AND RECEIVE THE BENEFITS PROVIDED IN THIS CLAUSE
10 WHERE THE DELAY REFERRED TO IN THIS CLAUSE 10 IS CAUSED BY THE
NEGLIGENCE OR FAULT OF THE BUYER OR ITS REPRESENTATIVES.

     UNQUOTE

	14.2	 	Inexcusable Delay
	 
	14.2.1	 	[***]
	 
	 	 	[***]
	 
	 	 	[***]
	 
	14.2.2	 	[***]
	 
	 	 	[***]
	 
	 	 	[***]

	 	(i)	 	[***]
	 
	 	(ii)	 	notwithstanding Paragraph 5.2.3.5.2 of Letter
Agreement No. 11 to the Agreement, [***] Payment Date (as such
term is referred to in Clause 5.2 of the Agreement, as amended
in Paragraph 1 of Letter Agreement No. 11 to the Agreement),
[***].

	 	 	[***]
	 
	14.2.3	 	[***] under Letter Agreement No. 8
	 
	 	 	In the case of [***] pursuant to Paragraph 3.1 of Letter Agreement
No. 8 to the Agreement, (i) [***] and (ii) notwithstanding
Paragraph 5.2.3.5.2 of Letter Agreement No. 11 to the Agreement,
[***] Payment Date (as such term is referred to in Clause 5.2 of
the Agreement, as amended in Paragraph 1 of Letter Agreement No. 11
to the Agreement) [***].
	 
	14.2.4	 	Termination for Inexcusable Delay
	 
	14.2.4.1	 	If the Seller terminates this Agreement in respect of an affected
Aircraft, then [***] Clause 11.5 of the Agreement, [***] under Clause
11.5.2 [***].
	 
	14.2.4.2	 	Clause 11.5 of the Agreement is superseded and replaced by the following text
between the words “QUOTE” and “UNQUOTE.”

218

 

     QUOTE

	11.5	 	Termination
	 
	11.5.1	 	[***]
	 
	 	 	If, as a result of an Inexcusable Delay, pursuant to Clause 11.4,
[***], as the case may be, [***] pursuant to Clause 11.3.
	 
	11.5.2	 	[***]
	 
	 	 	If, as a result of an Inexcusable Delay, Delivery does not occur
within [***] months after the last day of the Scheduled Delivery
Month and the Parties have not renegotiated the Scheduled Delivery
Month pursuant to Clause 11.4, or, [***], to terminate this
Agreement in respect of the affected Aircraft. However,
notwithstanding the foregoing, [***] such Inexcusable Delay [***]
Inexcusable Delay [***] such Inexcusable Delay. In the event of
termination, [***].

     UNQUOTE

	14.3	 	Clause 11.6 of the Agreement is superseded and replaced by the following
text between the words “QUOTE” and “UNQUOTE.”

     QUOTE

	11.6	 	REMEDIES
	 
	 	 	EXCEPT IN THE CASE OF [***], THIS CLAUSE 11 SETS FORTH THE SOLE AND
EXCLUSIVE REMEDY OF THE BUYER FOR DELAYS IN DELIVERY OR FAILURE TO
DELIVER, OTHER THAN SUCH DELAYS AS ARE COVERED BY CLAUSE 10, AND
THE BUYER HEREBY WAIVES ALL RIGHTS TO WHICH IT WOULD OTHERWISE BE
ENTITLED IN RESPECT THEREOF, INCLUDING WITHOUT LIMITATION ANY
RIGHTS TO INCIDENTAL AND CONSEQUENTIAL DAMAGES OR SPECIFIC
PERFORMANCE.

     UNQUOTE

	14.4	 	Short Term Delivery Delays
	 
	 	 	[***] under Clause 9.1.2 of the Agreement, [***].
	 
	14.5	 	[***]
	 
	 	 	If (a) [***] (i) Clause [***] of the Agreement, (ii) [***] of the
Agreement and/or (iii) Clause 11.5 of the Agreement and (b) [***].

219

 

	 	 	[***] to this Paragraph 14.5.
	 
	15.	 	CLAUSE 12 OF THE AGREEMENT
	 
	15.1	 	Clause 12.1.1 of the Agreement is amended by the addition of the
following text between the words “QUOTE” and “UNQUOTE.”

     QUOTE

	 	 	If the Buyer is entitled to a credit for goods and services
pursuant to the terms of this Clause 12, the Buyer will be entitled
to apply such credit to product-support related goods (not
including Aircraft) and services from the Seller, and any of its
Affiliates, or, if applicable pursuant to Paragraph 1.1.2 of Letter
Agreement No. 2, [***]; and the Seller will cause its Affiliates
[***], if applicable, to honor such credits.

     UNQUOTE

	15.2	 	[***] Clause 12.1.4.2 of the Agreement [***].
	 
	16.	 	[***]
	 
	16.1	 	[***]:

	 	(i)	 	[***], and
	 
	 	(ii)	 	[***].

	16.2	 	[***].
	 
	16.3	 	[***] Paragraphs 16.1 and 16.2 [***]:

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

	17.	 	CLAUSE 18 OF THE AGREEMENT
	 
	 	 	Clause 18.5 of the Agreement is superseded and replaced by the text
below between the words “QUOTE” and “UNQUOTE.”

     QUOTE

	18.5	 	[***]

220

 

	18.5.1	 	If [***] of this Agreement pursuant to the provisions of Clause 10, 11
or 21 hereof [***], except as provided in Clause 18.5.4, [***].
	 
	18.5.2	 	[***].
	 
	18.5.3	 	[***].
	 
	18.5.4	 	[***] under the terms of this Clause 18.5.4, [***].
	 
	 	 	[***].
	 
	18.5.5	 	[***].
	 
	18.5.6	 	[***].
	 
	18.5.7	 	[***].

     UNQUOTE

	18.	 	CLAUSE [***] OF THE AGREEMENT
	 
	 	 	Clause [***] of the Agreement is superseded and replaced by the
text below between the words “QUOTE” and “UNQUOTE.”

     QUOTE

	[***]	 	[***]
	 
	[***]	 	[***]
	 
	 	 	Each of the following will constitute a [***]”:
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].

221

 

	 	 	[***].
	 
	 	 	[***].
	 
	 	 	For the purposes [***].
	 
	21.1.2	 	[***]:

	 	(1)	 	[***];
	 
	 	(2)	 	[***] pursuant to 21.1.2(1)(iii), [***]:
	 
	 	 	 	[***],
	 
	 	 	 	[***];
	 
	 	 	 	[***];
	 
	 	 	 	[***] pursuant to Clause 21.1.2(1)(iv) [***].
	 
	 	(3)	 	[***].
	 
	 	(4)	 	To the extent that, [***].

	21.1.3	 	The terms [***] and [***] are defined as follows:
	 
	 	 	[***].
	 
	 	 	[***].
	 
	21.1.4	 	[***].
	 
	21.1.5	 	[***].
	 
	21.2	 	[***].
	 
	21.2.1	 	Each of the following will constitute a [***]:
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].

222

 

	 	 	[***].
	 
	 	 	[***].
	 
	21.2.2	 	[***].
	 
	 	 	The parties to this Agreement are commercially sophisticated
parties represented by competent counsel. The Parties expressly
agree and declare that damages for material breach of this
Agreement by the Seller resulting in a Termination of this
Agreement as to any or all Aircraft have been liquidated at amounts
which are reasonable in light of the anticipated or actual harm
caused by the Seller’s breach, the difficulties of proof of loss
and the nonfeasibility of otherwise obtaining an adequate remedy.
It is understood and agreed by the Parties that the amount of
liquidated damages set forth herein is the total amount of monetary
damages, no more and no less, to which the Buyer will be entitled
for and with respect to any Aircraft as recovery for material
breach of this Agreement by Seller resulting in a Termination by
the Buyer of this Agreement as to such Aircraft.
	 
	21.2.3	 	If at any time prior to Scheduled Delivery Month of an Aircraft, the
Buyer has reasonable grounds for insecurity as to the ability of the
Seller to perform its obligation to take Delivery of such Aircraft, then
the Buyer will send the Seller a written demand for adequate assurance of
performance. If adequate assurance acceptable to the Buyer is not
received within thirty (30) days following the date of such written
demand, then the Buyer will have the right to either (a) exercise the
remedies provided under Section 2-609 of the Uniform Commercial Code or
(b) [***].

     UNQUOTE

	19.	 	AGREEMENT AT TIME OF DELIVERY
	 
	 	 	The Parties may agree, at time of Delivery of an Aircraft, record
in a letter a noncompliance to the Specification, defect or damage,
discovered in the Technical Acceptance Process that the Parties
agree can be remedied following Delivery of the affected Aircraft
(the “Letter”). The Letter will set forth in reasonable detail (i)
the nature of the noncompliance, defect or damage so discovered,
(ii) the agreed means of resolving such noncompliance, defect or
damage, (iii) the date or maintenance event by which such
noncompliance, defect or damage must be remedied, (iv) the Party
who is to resolve such noncompliance, defect or damage (or, if so
agreed, that a qualified third party may resolve such
noncompliance, defect or damage), and (v) any other commercial or
technical commitment between the Parties. Any commitment
undertaken by the Seller under the Letter will be in addition to,
and not in place of, any warranty available to the Buyer under the
Agreement.
	 
	20.	 	SPECIFICATION MATTERS

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	 	 	If and when available, the Parties agree to execute an SCN
incorporating the Rockwell Collins single weather radar system
(ARIC 708A) with predictive windshear and multiscan (“Rockwell
Collins PWS and Multiscan”) (EPAC reference N. 34.41.200 in Exhibit
A-2 to the Agreement). Provided that the Rockwell Collins avionics
suite of equipment (consisting of the Distance Measuring Equipment
(DME);Multi-mode Receiver (MMR);Very High Frequency (VHR); Radio
altimeter, Digital Distance and Radio Magnetic Indicator (DDRMI),
VHF and Omnidirectional Range (VOR) and AOC Software) is installed
on the Aircraft on which the Rockwell Collins PWS and Multiscan is
installed, then, the [***] the Rockwell Collins PWS and
Multiscan [***]), [***] in accordance with the terms of the
Agreement. [***] Rockwell Collins [***] Rockwell Collins PWS and
Multiscan [***] the Seller Price Revision Formula in accordance
with terms of the Agreement.
	 
	 	 	If and when available, the Parties agree to execute an SCN
incorporating the ACSS/Thales T2CAS (EPAC reference N. 34.43.250 in
Exhibit A-2 to the Agreement). The price to the Buyer for the
ACSS/Thales T2CAS will be $32,500 (US dollars-thirty-two thousand
five hundred), per unit. This amount is expressed is January 2003
delivery conditions and will be adjusted in accordance with the
[***] to the delivery month of each applicable Aircraft in
accordance with the terms of the Agreement.
	 
	21.	 	PERFORMANCE OF SELLER OBLIGATIONS
	 
	 	 	Seller agrees that when this Agreement contemplates parties other
than the Seller providing goods or services to the Buyer (or
parties other than the Seller accepting goods and services
credits), the Seller will cause such other parties to honor such
obligations.
	 
	22.	 	ASSIGNMENT
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the
Agreement, this Letter Agreement and the rights and obligations of
the Buyer hereunder will not be assigned or transferred in any
manner without the prior written consent of the Seller, and any
attempted assignment or transfer in contravention of the provisions
of this Paragraph 20 will be void and of no force or effect.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.

	 	 	 	 	 
	 	 	Very truly yours,
	 	 	AVSA, S.A.R.L.
	 	 	By:	 	 

	 	 	Its:	 	 

	 	 	Date:
	 	 

224

 

	 	 	 	 	 
	Accepted and Agreed	 	 
	ATLANTIC COAST AIRLINES	 	 
	By:	 	
 

	 	 
	Its:	 	
 

	 	 

225

 

LETTER AGREEMENT NO. 3

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: FLEXIBILITY

Dear Ladies and Gentlemen:

Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”), have
entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even date
herewith (the “Agreement”), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 3 (the “Letter Agreement”) certain
additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

	1.	 	OPTION AIRCRAFT 
	 
	1.1	 	Initial Option Aircraft, Rolling Option Aircraft and Additional
Rolling Option Aircraft
	 
	 	 	The Seller offers the Buyer options for up to [***] A319-100, A320-200 or
A321-200 aircraft comprising [***] Initial Option Aircraft, [***] Rolling
Option Aircraft and [***] Additional Rolling Option Aircraft.
	 
	1.2	 	Initial Option Aircraft
	 
	1.2.1	 	Delivery Positions

	 	 	Delivery positions for Initial Option Aircraft are provided as follows:

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	 	(i)	 	The Seller guarantees availability of delivery positions for
Initial Option Aircraft as follows:

	 	(a)	 	In [***], the Seller will guarantee availability
of [***] Aircraft.
	 
	 	 	 	Should the Buyer wish to purchase an A320 Aircraft in lieu of
such A319 Aircraft, then the Seller will use reasonable best
efforts to offer the Buyer a delivery month for each such
A320 Aircraft that is as close as possible to the Scheduled
Delivery Month of the A319 Aircraft, subject to the Seller’s
and the Manufacturer’s commercial and industrial constraints
at the time of such conversion.
	 
	 	(b)	 	In [***], the Seller will guarantee availability
of [***].
	 
	 	 	 	In [***], the total number of Initial Option Aircraft firmly
ordered by the Buyer [***]. If, by July 1, 2006, the Buyer
has not exercised its right to firmly order all of the
Initial Option Aircraft, [***] the Initial Option Aircraft
[***]. The Seller will guarantee availability of [***]. The
Buyer will exercise its rights to firmly order such Initial
Option Aircraft in accordance with the provisions of
Paragraph 1.2.3.1. [***] in accordance with the terms of
this Letter Agreement [***].

	 	(ii)	 	No later than December 31, 2004, and periodically thereafter
(as may be mutually agreed), the Parties will meet to review the
Buyer’s future fleet requirements, with the objective of conferring
about the Buyer’s anticipated needs for each of the Initial Option
Aircraft [***], the Initial Option Aircraft [***]. A similar review
will take place by [***], should the Buyer not have exercised its
rights to firmly order all of the Initial Option Aircraft by such
date.

	1.2.2	 	Option Fee
	 
	 	 	The Buyer will pay the Seller a nonrefundable ([***]) option fee of U.S. $[***] (US dollars —  [***]) (the “Option
Fee”) [***] Initial Option Aircraft, which represents a total of US $[***] (US dollars — [***]). Each Option Fee is
due at signature of the Agreement and will be credited without interest against the first Predelivery Payment due as
set forth in Paragraph 1.5 below.
	 
	 	 	In the event of a termination of the entirety of the Agreement pursuant to Clause 10, Clause 11 or Clause 21 of the
Agreement, [***] Initial Option Aircraft [***], the Option Fee [***] Initial Option Aircraft.
	 
	1.2.3	 	Option Exercise
	 
	1.2.3.1	 	The Buyer will exercise its option to purchase each Initial Option Aircraft as follows:

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	 	(i)	 	No later than the [***] Working Days prior to the first day
of the month that is [***] months prior to the first month of the
applicable calendar quarter, the Buyer will request in writing from
the Seller the specific delivery months for the Initial Option
Aircraft scheduled within such calendar quarter and indicate the
type and the number of such Aircraft the Buyer desires in accordance
with Paragraph 1.2.1(i) above. Within [***] Working Days following
the Buyer’s request, the Seller will provide the Buyer with specific
delivery months for each such Initial Option Aircraft (such Seller’s
notice being the “Initial Option Delivery Notice”). The Seller
will use reasonable efforts to offer the Buyer the Buyer’s preferred
delivery month within the applicable calendar quarter for each such
Initial Option Aircraft, [***]. Following issuance of the Initial
Option Delivery Notice, the delivery positions so offered will be
held by the Seller for [***] Working Days for the exclusive option
exercise of the Buyer.
	 
	 	(ii)	 	The Buyer will exercise its option to purchase such Initial
Option Aircraft by (a) providing written acceptance of the A320
Family Aircraft and delivery month for such A320 Family Aircraft
offered by the Seller within [***] Working Days following receipt of
the Initial Option Delivery Notice, and (b) concurrently with such
written confirmation, paying the Seller any Predelivery Payments for
such Initial Option Aircraft due in accordance with Paragraph 1.5
below.

	1.2.3.2	 	The Buyer’s satisfaction of the conditions in Paragraph 1.2.3.1 no
later than the first Working Day of the month that is [***] months prior
to the first day of the month of the applicable quarter will constitute
the conversion of each such Initial Option Aircraft into A319 Aircraft,
A320 Aircraft or A321 Aircraft (as such term is defined below in Paragraph
1.6).
	 
	1.2.3.3	 	In respect of each Initial Option Aircraft for which the Buyer does not
exercise its rights pursuant to Paragraphs 1.2.3.1 and 1.2.3.2, the Buyer
and the Seller will have no more rights or obligations.
	 
	 	 	Notwithstanding the foregoing provision, if the Initial Option
Aircraft Delivery Notice provides for delivery [***] Initial Option
Aircraft [***] Initial Option Aircraft [***] Initial Option
Aircraft [***].
	 
	1.2.3.4	 	Furthermore, if the Buyer does not initiate the written notice process
for firmly ordering an Initial Option Aircraft pursuant to the process
described in 1.2.3.1(i) above, the Buyer shall retain all rights to
exercise its option to purchase such Initial Option Aircraft at any time
permitted under Paragraph 1.2.3.1(i) hereof and within the limits set
forth in 1.2.1(i) above. For the avoidance of doubt, the Buyer may [***]
the Initial Option Aircraft request informally the Seller to advise the
Buyer on availability of specific delivery months and Initial Option
Aircraft type within a given delivery quarter.
	 
	1.3	 	Rolling Option Aircraft 

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	 	 	The Buyer will [***] Rolling Option Aircraft [***] Initial Option
Aircraft [***] Rolling Option Aircraft.
	 
	 	 	Upon the Buyer’s written request (which will [***]) to the Seller
for Rolling Option Aircraft, the Seller will offer the Buyer in
writing, delivery positions for the Rolling Option Aircraft, [***]
(such Seller’s notice being the “Rolling Option Delivery Notice”).
For the ten (10) Working Day period following issuance of the
Rolling Option Delivery Notice, the delivery month, number and A320
Family Aircraft type so offered will be held by the Seller for the
exclusive option exercise of the Buyer. The Buyer will exercise
its option to purchase such Rolling Option Aircraft by (i)
providing written acceptance of the A320 Family Aircraft type and
delivery position for such A320 Family Aircraft offered by the
Seller within ten (10) Working Days following receipt of the
Rolling Option Delivery Notice, and (ii) concurrently with such
written confirmation, paying the Seller any Predelivery Payments
for such Rolling Option Aircraft due in accordance with Paragraph
1.5 below.
	 
	 	 	Delivery positions for Rolling Option Aircraft will remain subject
to prior sale and other disposition until firmly ordered by the
Buyer in accordance with the provisions of this paragraph, and
Paragraph 1.6 will apply mutatis mutandis to Rolling Aircraft.
	 
	1.4	 	Additional Rolling Option Aircraft 
	 
	 	 	For each of the [***] Rolling Option Aircraft that
the Buyer has converted to firm order, the Buyer will [***]
Additional Rolling Option Aircraft for delivery from [***].
	 
	 	 	Upon the Buyer’s written request (which will specify
the number and A320 Family Aircraft type) to the Seller for
Additional Rolling Option Aircraft, the Seller will offer in
writing to the Buyer delivery positions for the Additional
Rolling Option Aircraft, [***] (such Seller’s notice being the
“Additional Rolling Option Delivery Notice”). For the ten
(10) Working Day period following issuance of the Additional
Rolling Option Delivery Notice, the delivery month, number and
A320 Family Aircraft type so offered will be held by the
Seller for the exclusive option exercise of the Buyer. The
Buyer will exercise its option to purchase such Additional
Rolling Option Aircraft by (i) providing written acceptance of
the A320 Family Aircraft type and delivery position for such
A320 Family Aircraft offered by the Seller within ten (10)
Working Days following receipt of the Additional Rolling
Option Delivery Notice, and (ii) concurrently with such
written confirmation, paying the Seller any Predelivery
Payments for such Additional Rolling Option Aircraft due in
accordance with Paragraph 1.5 below.

229

 

	 	 	Delivery positions for Additional Rolling Option Aircraft will
remain subject to prior sale and other disposition until firmly
ordered by the Buyer in accordance with the provisions of this
paragraph, and Paragraph 1.6 will apply mutatis mutandis to
Additional Rolling Option Aircraft.
	 
	1.5	 	Predelivery Payments
	 
	 	 	Predelivery Payments for Option Aircraft converted to an Aircraft
are due in accordance with the terms of Letter Agreement No. 11 to
the Agreement.
	 
	1.6	 	Applicable Terms
	 
	 	 	Upon the Buyer’s exercise of its rights to purchase an Option
Aircraft in accordance with the procedures set forth in Paragraphs
1.2 through 1.4, as applicable, such Option Aircraft will be deemed
an Aircraft. Unless otherwise specified in the Agreement, an
Option Aircraft that is [***] for all purposes of the Agreement.
	 
	1.7	 	[***] Option Exercise Deadline
	 
	 	 	The Seller will have no obligations to the Buyer with respect to any
Option Aircraft after [***]. Notwithstanding the foregoing, [***]
Rolling Option Aircraft [***] Additional Rolling Option Aircraft,
[***] Option Aircraft [***] Initial Option Aircraft [***] Rolling
Option Aircraft [***] Additional Rolling Option Aircraft [***],
subject to (i) the board approval of the Seller, (ii) the agreement
of the Propulsion Systems manufacturer and (iii) such later delivery
positions being [***]. In such event, the Buyer will exercise its
rights to firmly order such Option Aircraft in accordance with the
provisions of Paragraphs 1.3 or 1.4 above as applicable.
	 
	1.8.	 	Option Aircraft Conversion Lead Times
	 
	 	 	The Seller will review with the Buyer on a regular basis the
Buyer’s future Aircraft requirements. Where opportunities exist to
reduce the option conversion lead time set forth in Paragraph 1.2.3
above, the Seller will provide the Buyer with the benefit of such
reduced lead times. In addition, if reduced option aircraft
conversion lead times [***].
	 
	2.	 	CONVERSION RIGHTS
	 
	2.1	 	The Seller grants the Buyer the right to convert [***] subject to the
following (the “Conversion Right”):

	 	(i)	 	Aircraft may be converted into [***] (each, a
“Converted Aircraft”) one time only as more specifically set
forth below. There will be no further conversion of an
Aircraft in respect of which a Conversion Right has been
exercised.

230

 

	 	(ii)	 	With respect to (a) each [***] and (b) each
[***], as the case may be, that the Buyer wishes to convert
into an [***], the Buyer will give the Seller written notice
to this effect [***].
	 
	 	(iii)	 	With respect to (a) each [***] and (b) each
[***] that the Buyer wishes to convert into an [***], the
Buyer will give the Seller written notice to this effect
[***].
	 
	 	(iv)	 	With respect to each [***], the “Special
Conversion Right” described below in Paragraph 2.2 will
apply.
	 
	 	(v)	 	With respect to each [***] converted to an
[***] that the Buyer wishes to convert into an [***], as the
case may be, the Buyer will give the Seller written notice
to this effect no later than [***].
	 
	 	(vi)	 	With respect to each [***] converted to an
[***] that the Buyer wishes to convert into an [***], the
Buyer will give the Seller written notice to this effect no
later than [***].
	 
	 	(vii)	 	The Seller will use its reasonable best
efforts to offer the Buyer a delivery month for the
Converted Aircraft that is as close as possible to the
Scheduled Delivery Month for the Aircraft from which it is
converted, subject to the Seller’s and the Manufacturer’s
commercial and industrial constraints at the time of such
conversion.
	 
	 	(viii)	 	Upon conversion of an Aircraft into a Converted Aircraft,
[***] (as defined below) [***].
	 
	 	 	 	[***]

	 	(a)	 	[***] under the applicable [***] for
such Converted Aircraft (as set forth in [***]), [***]
	 
	 	(b)	 	[***] applicable to such Converted
Aircraft) [***]

	 	(ix)	 	Further, upon conversion of an Aircraft into a Converted
Aircraft, [***] (listed under the column heading of such name)
pursuant to the terms of Paragraph 5.2.3.5 of Letter Agreement No.
11 to the Agreement [***] (listed under the column heading of such
name) under the [***] for such Converted Aircraft.
	 
	 	(x)	 	Agreement by the Propulsion Systems manufacturer.

	2.2	 	Special [***] Conversion Right
	 
	2.2.1	 	The Buyer will have a one-time right to convert each of the [***] to an
[***] Aircraft (each, a “Special Conversion Aircraft,”) which, upon
conversion, will be deemed to be an [***] (the “Special [***] Conversion
Right”). The Buyer 

231

 

	 	 	will send written notice to the Seller specifying the
number of [***] in respect of which it intends to exercise the Special
[***] Conversion Right no later than the first Working Day of the month
that is [***] months prior to the first month of the delivery quarter of
the first [***].
	 
	2.2.2	 	The delivery month for each Special Conversion Aircraft will be [***].
	 
	2.2.3	 	The amount of Predelivery Payments for an A320 Firm Aircraft will be
[***].
	 
	3.	 	RESCHEDULING RIGHT
	 
	 	 	[***], the Buyer will have the one-time irrevocable right to
reschedule certain Aircraft (“Rescheduling Right”) as follows:

	 	(i)	 	The Rescheduling Right will be available for
[***]. If the [***], provided however, that [***]. The
Rescheduling Right is subject to the following terms and
conditions:

	 	(a)	 	The Buyer will [***].
	 
	 	(b)	 	[***].
	 
	 	(c)	 	The Seller will retain all
Predelivery Payments previously paid by the Buyer in
respect of each Rescheduled Aircraft for application in
accordance with the terms of the revised Predelivery
Payment schedule applicable to such Rescheduled
Aircraft.

	4.	 	ASSIGNMENT
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the
Agreement, this Letter Agreement and the rights and obligations of
the Buyer hereunder will not be assigned or transferred in any
manner without the prior written consent of the Seller, and any
attempted assignment or transfer in contravention of the provisions
of this Paragraph 4 will be void and of no force or effect.
	 
	 	 	If the foregoing correctly sets forth our understanding, please
execute the original and one (1) copy hereof in the space provided
below and return both copies to AVSA.

Very truly yours,

AVSA, S.A.R.L.

By:                                                                                 

Its:                                                                                 

Accepted and Agreed

232

 

ATLANTIC COAST AIRLINES

By:                                                                                 

Its:                                                                                 

233

 

LETTER AGREEMENT NO. 4

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: PRODUCT SUPPORT AND TECHNICAL MATTERS

Dear Ladies and Gentlemen,

     Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the “Agreement”), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have
agreed to set forth in this Letter Agreement No. 4 (the “Letter Agreement”)
certain additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

	1.	 	TRAINING
	 
	1.1	 	In addition to the goods and services the Seller will provide to the
Buyer under Clause 16 of the Agreement, the Seller will provide the Buyer
the following [***] training goods and services.
	 
	1.1.1	 	Flight-Crew Training

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	 	 	Upon Buyer’s request, the Seller will assist the Buyer with its
flight-crew training program and development of a pilot training
program and training materials, by [***]:

	 	(i)	 	[***];

	 	(a)	 	[***].
	 
	 	(b)	 	[***].
	 
	 	(c)	 	[***].

	 	(ii)	 	[***].

	1.1.2	 	Inflight Training
	 
	 	 	The Seller will assist the Buyer with its inflight training program
by [***]

	 	(i)	 	[***] above under Paragraph 1.1.1(ii) [***].
	 
	 	(ii)	 	[***].

	1.1.3	 	Maintenance Training
	 
	 	 	The Seller will assist the Buyer with its maintenance-training
program as follows:

	 	(i)	 	The Seller will [***].
	 
	 	(ii)	 	The Seller will [***] under Paragraph 2.1 of
Appendix A to Clause 16 of the Agreement [***].

	 	 	It is understood and agreed by the Parties [***] pursuant to the
preceding paragraph [***].
	 
	1.1.4	 	If, at the Buyer’s request, any such training services that can be
provided at an Airbus/CAE Cooperation Network Training Center is provided
by the Seller’s instructors at another location, then the Buyer will
reimburse the Seller for all the expenses, defined in Clauses 16.6.2.2,
16.6.2.3, 16.6.2.4 and 16.6.2.5 of the Agreement, related to the
assignment of such instructors and their performance of the duties as
aforesaid.
	 
	1.1.5	 	Any unused training allowances provided under the terms of this Letter
Agreement will expire on the first anniversary of the delivery of the last
Aircraft.
	 
	1.1.6	 	[***] Pricing 

235

 

	 	 	The prices for [***] for [***],:

	 	(i)	 	For the [***], US$ [***] (US dollars — [***]),
and
	 
	 	(ii)	 	For the [***], the following:

	 	(a)	 	[***]: US$ [***] (US dollars —
[***]), and
	 
	 	(b)	 	[***]: US$ [***] (US dollars —
[***]).

	 	 	The above prices are quoted at January 2003 delivery conditions.
If the [***], as adjusted by the Seller Price Revision Formula to
the month and year of such purchase. [***].
	 
	1.1.7	 	Simulator Training Availability
	 
	1.1.7.1	 	The Seller will ensure the availability of simulator time and location
required to meet the Buyer’s flight crew training schedule in accordance
with a training plan developed and agreed during the Training Conference.
Such training plan will be based on the [***].
	 
	1.1.7.2	 	The Seller agrees to [***] pursuant to Paragraph 1.1.7.1 above [***].
	 
	1.1.7.3	 	If, [***] pursuant to Paragraph 1.1.7.2 above, [***].
	 
	1.1.8	 	The Seller [***].
	 
	2.	 	TECHNICAL PUBLICATIONS
	 
	 	 	In addition to the goods and services to be provided the Buyer
under Clause 14 of the Agreement, the Seller will provide the Buyer
the following:

	 	(i)	 	[***].
	 
	 	(ii)	 	Notwithstanding Clause 14.6 of the Agreement,
revision service under Clause 14 [***] as stated in such
Clause 14.6, revision service [***].
	 
	 	(iii)	 	[***] provided under Clause 14 of the Agreement,
[***].
	 
	 	(iv)	 	[***]:

	 	(a)	 	[***]
	 
	 	(b)	 	[***].

	 	(v)	 	The Seller will provide to the Buyer [***].

236

 

	 	(vi)	 	Airn@v
	 
	 	 	 	[***] to the provisions of Clause 14.11.2 of the Agreement,
Airn@v [***].

	3.	 	NO FAULT FOUND POLICY
	 
	 	 	Notwithstanding the provisions of Clause 12.1.7(vii) in respect of
a Warranted Part, if a Warranted Part, Seller Part or Supplier Part
categorized as a Line Replaceable Unit is sent by the Buyer for
repair to an authorized repair station accompanied by a Post-Flight
report indicating an in-flight fault condition with respect to such
part, the Buyer will not be charged for the test, related
transportation costs, or any other costs allocable to such No Fault
Found finding if such authorized repair station returns a No Fault
Found finding.
	 
	 	 	The Seller will [***] set forth in Paragraph 2.1 of Appendix A to
Clause 16 of the Agreement, [***].
	 
	4.	 	AIRTAC
	 
	 	 	The Buyer will have free-of-charge access to the Airbus Technical
AOG Center (AirTac), which is operated twenty-four (24) hours a
day, seven (7) days a week to assist airline operators with defect
investigation, aircraft troubleshooting and airframe structural
repair requirements.
	 
	5.	 	[***]
	 
	 	 	[***] provided under Clauses 12, 14, 15 and 16 of the Agreement and
under Letter Agreement No. 1 to the Agreement and this Letter
Agreement [***].
	 
	 	 	[***].
	 
	6.	 	[***]
	 
	6.1	 	[***] Clause 12.2.3 of the Agreement.
	 
	6.2	 	[***] this Paragraph 6.
	 
	7.	 	[***]
	 
	 	 	[***].
	 
	8.	 	PROPULSION SYSTEMS

237

 

	 	 	Should any Aircraft be dual rated with respect to the thrust
ratings of the Propulsion Systems, [***].
	 
	9.	 	[***]
	 
	 	 	[***].
	 
	10.	 	REPETITIVE REMOVAL OF SELLER PARTS OR WARRANTED PARTS
	 
	 	 	[***].
	 
	11.	 	ASSIGNMENT
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the
Agreement, this Letter Agreement and the rights and obligations of
the Buyer hereunder will not be assigned or transferred in any
manner without the prior written consent of the Seller, and any
attempted assignment or transfer in contravention of the provisions
of this Paragraph 11 will be void and of no force or effect.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.

Very truly yours,

AVSA, S.A.R.L.

By:                                                                                 

Its:                                                                                 

Date:                                                                                 

Accepted and Agreed

Atlantic Coast Airlines

By:                                                                                 

Its:                                                                                 

238

 

Attachment No. 1 to Letter Agreement No. 4 to the Agreement

[***]

[***]

[***]

[***]

     [***].

     [***]:

           ü            [***]

           ü            [***]

           ü            [***]

           ü            [***]

           ü            [***]

           ü            [***]

           ü            [***]

     [***].

     [***].

     [***].

239

 

LETTER AGREEMENT NO. 5A

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: PERFORMANCE GUARANTEES 

Dear Ladies and Gentlemen,

Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”), have
entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even date
herewith (the “Agreement”), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 5A (the “Letter Agreement”) certain
additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

The Seller represents and warrants that the Manufacturer has provided to the
Seller the performance guarantees with respect to the Aircraft, which
guarantees are reproduced below between the words QUOTE and UNQUOTE and which
are subject to the terms, conditions, limitations and restrictions all as
hereinafter set out, and that such guarantees are in full force and effect and
have not been amended. The Seller hereby assigns to the Buyer and the Buyer
hereby accepts, all of the Seller’s rights and obligations as the “Buyer” under
the said performance guarantees and the Seller subrogates the Buyer to all such
rights and obligations in respect of the A319 Aircraft covered thereby ([***]).
The Seller hereby warrants to the Buyer that (i) it has all the requisite
authority to make the foregoing assignment to and effect the foregoing
subrogation in favor of the Buyer, (ii) such assignment and subrogation are
effective to confer on the Buyer all of the foregoing rights and obligations of
the Seller and the Seller is bound by said assignment and subrogation, and
(iii) the Seller shall not enter into any amendment of the provisions so
assigned or subrogated without the prior written consent of the Buyer.

It is understood that, in the provisions below between the words QUOTE and
UNQUOTE, capitalized terms have the meanings assigned thereto in this
Agreement, except that (i) the term “Seller” which means the Manufacturer as
between the Manufacturer and the Seller, also means the Manufacturer in this Agreement, and (ii) the term “Buyer” which means the
Seller as

240

 

between the Manufacturer and the Seller, means the Buyer in this Agreement.

QUOTE

	1	 	AIRCRAFT CONFIGURATION
	 
	 	 	The guarantees defined below (the “Guarantees”) are applicable to the
A319 Aircraft described in the A319 Standard Specification, as amended
by the SCNs defined below:
	 
	(i)	 	for increases in the Design Weights to:

	 	 	 	Maximum Take-Off Weight     166,450 lb     (75,500 kg)

Maximum Landing Weight      137,789 lb     (62,500 kg)

Maximum Zero Fuel Weight    128,970 lb     (58,500 kg)

	 	 	and powered by IAE V2524-A5 engines without taking into account any
further changes thereto as provided in the Agreement (the
“Specification”)
	 
	 	 	Notwithstanding the foregoing, the Seller reserves the right to
increase the Design Weights above the weights shown in the
Specification, at no charge to the Buyer, in order to satisfy the
Guarantees.
	 
	2	 	GUARANTEED PERFORMANCE
	 
	2.1	 	Take-off
	 
	 	 	Federal Aviation Regulations (“FAR”) take-off field length at an
Aircraft gross weight of 166,450 lb at the start of ground run at sea
level pressure altitude and at a temperature of 86°F shall be not more
than a guaranteed value of [***] ft.
	 
	2.2	 	Second Segment Climb
	 
	 	 	The A319 Aircraft shall meet the FAR requirements for one engine
inoperative climb after take-off, undercarriage retracted, at a weight
corresponding to the stated weight at the start of ground run at the
altitude and temperature and in the configuration of flap angle and
safety speed required to comply with the performance guaranteed in
Paragraph 2.1 above.
	 
	2.3	 	Speed
	 
	 	 	Level flight speed at an A319 Aircraft gross weight of 140,000 lb at a
pressure altitude of 37,000 ft in ISA conditions using a thrust not
exceeding maximum cruise thrust shall not be less than a guaranteed
true Mach number of M=[***].
	 
	2.4	 	Landing Field Length

241

 

	 	 	FAR certified dry landing field length at an A319 Aircraft gross
weight of 137,789 lb at sea level pressure altitude with zero wind and
slope shall be not more than a guaranteed value of [***] ft.
	 
	2.5	 	Range
	 
	 	 	Range starting at an initial cruise weight of 145,000 lb and
consuming 15,000 lb of fuel during cruise whilst flying at a pressure
altitude of 37,000 feet in ISA conditions at a true Mach number of
0.780 using thrust not exceeding maximum cruise thrust shall not be
less than a guaranteed value of [***] statute miles.
	 
	3	 	MISSION GUARANTEES
	 
	3.1	 	Mission Payload Guarantee SAN-IAD
	 
	 	 	The A319 Aircraft will be capable of carrying not less than a
guaranteed payload of [***] lb over a still air stage distance of
2,240 statute miles (representative of SAN to IAD with a 15 knots
tailwind) when operated under the conditions defined below:
	 
	3.1.1	 	The departure airport conditions are as defined below (assumed
representative of SAN runway 27)

	 	 	 
	Pressure Altitude:
	 	14 feet
	Outside Air Temperature:
	 	83 °F
	Take-off Run Available:
	 	9,400 feet
	Take-off Distance Available:
	 	9,400 feet
	Accelerate-stop Distance Available:
	 	9,400 feet
	Wind:
	 	None
	Runway Condition:
	 	Dry
	Slope:
	 	0.02% Uphill
	Obstacles (height and distance from brake release)

	 	 
	Height:
	 	61/215 feet
	Distance:
	 	10,173/14,926 feet

	 	 	The destination airport conditions are such as to allow the required
landing weight to be used without restriction. Pressure altitude is
12 ft.
	 
	3.1.2	 	An allowance of 280 lb of fuel is included for 10 minutes start-up and
taxi-out at the departure airport.
	 
	3.1.3	 	An allowance of 455 lb of fuel is included for take-off and climb to
1,500 ft above the departure airport at a temperature of 83°F.
	 
	3.1.4	 	Climb from 1,500 ft above the departure airport up to 3,000 ft above the
departure airport using max climb thrust, 5 min. holding at 3,000 ft above
the departure

242

 

	 	 	airport, continued climb using max. climb thrust to pressure
altitude 28,000 ft, 10 min. cruise at a fixed Mach number of M=0.78 at
pressure altitude 28,000ft, continued climb to cruise altitude using
maximum climb thrust and cruise at a true Mach number of M=0.78 at
pressure altitude 37,000 ft, descent to pressure altitude 9,000 ft, 5 min.
cruise at 9,000 ft at a fixed Mach number of M=0.445, followed by a
descent to 1,500 ft above the destination airport are carried out are
carried out in ISA conditions. Climb and descent speeds below 10,000 ft
shall be 250 knots CAS.
	 
	3.1.5	 	An allowance of 200 lb of fuel is included for approach and landing at
the destination airport.
	 
	3.1.6	 	An allowance of 125 lb of fuel is included for 5 minutes taxi-in at the
destination airport.
	 
	3.1.7	 	Stage distance is defined as the distance covered during climb, cruise
and descent as described in Paragraph 3.1.4 above.
	 
	 	 	Trip fuel is defined as the fuel required for take-off, climb, cruise,
descent and approach and landing as described in Paragraphs 3.1.3 to
3.1.5 inclusive above.
	 
	3.1.8	 	At the end of approach and landing 6,860 lb of fuel will remain in the tanks.
This represents the estimated fuel required for:

	 	1)	 	45 minutes continued cruise
	 	2)	 	Missed approach
	 	3)	 	Diversion in ISA conditions over a ground
distance of 150 statute miles ending at 1,500ft pressure
altitude
	 	4)	 	Approach and landing at the diversion airport

	3.2	 	Mission Fuel Burn Guarantee
	 
	 	 	In carrying a fixed payload of 31,290 lb over a still air stage
distance of 2,240 statute miles (representative of SAN to IAD with a
15 knots tailwind) the trip fuel burned as defined in Paragraph 3.1.7
above shall not be more than a guaranteed value of [***] lb when
operated under the conditions defined in Paragraph 3.1 above.
	 
	3.3	 	Operating Weight Empty (OWE)
	 
	 	 	The mission payload and mission fuel burn guarantees defined in
Paragraphs 3.1 and 3.2 above are based on a fixed Operating Weights
Empty (“OWE”) of 90,815 lb.
	 
	4	 	MANUFACTURER’S WEIGHT EMPTY GUARANTEE
	 
	 	 	The Seller guarantees a Manufacturer’s Weight Empty of 80,661 lb
[***].

243

 

	 	 	This is the Manufacturer’s Weight Empty as defined in Section
13-10.00.00 of the Specification and is subject to adjustment as
defined in Paragraph 7.2 below.
	 
	5	 	GUARANTEE CONDITIONS
	 
	5.1	 	The performance certification requirements for the A319 Aircraft, except
where otherwise noted, will be as stated in Section 02 of the
Specification.
	 
	5.2	 	For the determination of FAR take-off and landing performance a hard
level dry runway surface with no runway strength limitations, no line-up
allowance, no obstacles, zero wind, atmosphere according to ISA, except as
otherwise noted and the use of speed brakes, flaps, landing gear and
engines in the conditions liable to provide the best results will be
assumed.
	 
	5.2.1	 	When establishing take-off and second segment performance no air will
be bled from the engines for cabin air conditioning or anti-icing.
	 
	5.3	 	Climb, cruise and descent performance associated with the Guarantees
will include allowances for normal electrical load and for normal engine
air bleed and power extraction associated with maximum cabin differential
pressure as defined in Section 21-30.31 of the Specification.
	 
	 	 	Cabin air conditioning management during performance
demonstration as described in Paragraph 6.3 may be such as to
optimize the A319 Aircraft performance while meeting the minimum
air conditioning requirements defined above. Unless otherwise
stated no air will be bled from the engines for anti-icing.
	 
	5.4	 	The engines will be operated using not more than the A319 Propulsion
Systems manufacturer’s maximum recommended outputs for take-off, maximum
go-round, maximum continuous, maximum climb and cruise for normal
operation unless otherwise stated.
	 
	5.5	 	Where applicable the Guarantees assume the use of an approved fuel
having a density of 6.70 lb / US gallon and a lower heating value of
18,590 BTU/lb.
	 
	6	 	GUARANTEE COMPLIANCE
	 
	6.1	 	Compliance with the Guarantees shall be demonstrated using operating
procedures and limitations in accordance with those defined by the FAA
and, if not inconsistent with those defined by the FAA, those defined by
the Seller.
	 
	6.2	 	Compliance with the take-off, second segment and landing elements of the
Guarantees will be demonstrated with reference to the FAA approved Flight
Manual.
	 
	6.3	 	Compliance with those parts of the Guarantees not covered by the
requirements of the FAA shall be demonstrated by calculation based on
data obtained during flight

244

 

	 	 	tests conducted on one (or more, at the
Seller’s discretion) A319-100 aircraft of the same aerodynamic
configuration as the A319 Aircraft.
	 
	6.4	 	Compliance with the Manufacturer’s Weight Empty Guarantee defined in
Paragraph 4 shall be demonstrated with reference to a weight compliance
report.
	 
	6.5	 	Data derived from tests will be adjusted as required using conventional
methods of correction, interpolation or extrapolation in accordance with
established aeronautical practices to show compliance with the
Guarantees.
	 
	6.6	 	Compliance with the Guarantees is not contingent on engine performance
defined in the Propulsion System manufacturer’s specification.
	 
	6.7	 	The Seller undertakes to furnish the Buyer with a report or reports
demonstrating compliance with the Guarantees at, or as soon as possible
after, the delivery of each of the A319 Aircraft.
	 
	7	 	ADJUSTMENT OF GUARANTEES
	 
	7.1	 	In the event any change to any law, governmental regulation or
requirement or interpretation thereof (“Rule Change”) by any governmental
agency made subsequent to the date of the Agreement affects the A319
Aircraft configuration or performance or both required to obtain
certification, the Guarantees shall be appropriately modified to reflect
the effect of any such Rule Change.
	 
	7.2	 	The Guarantees apply to the A319 Aircraft as described in paragraph 1
and may be adjusted to reflect the net effect of:

	 	a)	 	any further configuration change which is
the subject of an SCN
	 	b)	 	variation in actual weights of items defined
in Section 13-10 of the Specification
	 	c)	 	changes required to obtain certification
which cause changes to the performance or weight of the
Aircraft

	 	 	Without in any way limiting the Seller’s obligations under Clause 2
of the Agreement, the Seller will [***].
	 
	8.	 	EXCLUSIVE GUARANTEES
	 
	 	 	The Guarantees are exclusive and are provided in lieu of any and all
other performance and weight guarantees of any nature that may be
stated, referenced or incorporated in the Specification or any other
document (but without prejudice to the obligations of the Seller under
the Agreement to build the Aircraft in accordance
with the Specification including, without limitation, specifications
regarding performance, weight and noise requirements).

245

 

	9	 	UNDERTAKING REMEDIES
	 
	9.1	 	Should any A319 Aircraft fail to meet any of the Guarantees specified in
this Letter Agreement, the Seller will take such action described in and
in the order of Paragraphs 9.2 and 9.3 below.
	 
	9.2	 	Should any Aircraft fail to meet any of the Guarantees specified in this
Letter Agreement, the Seller will use its commercially reasonable efforts
to correct the deficiency to comply with the subject Guarantee.
	 
	9.3	 	Should the Seller fail to develop and make available corrective means
(including but not limited to kits, procedures, adjustment of design
weights) for the above said deficiency within one (1) year from Delivery
of the affected A319 Aircraft, then the Seller shall in respect of such
A319 Aircraft pay to the Buyer by way of liquidated damages, subject to
the Seller’s maximum liability under this Letter Agreement, on the
anniversary date of the Delivery and for as long as the deficiency
remains, an amount of:

	 	 	 	US$ [***] (US dollars- [***]) per one percent (1%) deficient
per A319 Aircraft per year resulting from the deficiency
expressed as a percentage of the Mission Fuel Burn or Range
Guarantees (part of a percent to be prorated).
	 
	 	 	 	US$ [***] (US dollars- [***]) per pound deficient per A319
Aircraft and per year based on the deficiency expressed in
pounds of the Mission Payload Guarantee defined in Paragraph
3 above.
	 
	 	 	 	US$ [***] (US dollars- [***]) per pound deficient per A319
Aircraft and per year based on the deficiency expressed in
pounds of the Manufacturer’s Weight Empty Guarantee.

	 	 	In all cases, such liquidated damages will be prorated for the
number of days in the year (based on a 365 day year) that the
relevant Aircraft does not comply with the guaranteed level.
	 
	9.4	 	The Seller’s maximum liability under this Letter Agreement in respect of
a deficiency in performance of any Aircraft shall be limited to the
payment of liquidated damages for a period of not more than [***] years
following Delivery of the affected A319 Aircraft and up to an aggregated
value of US$ [***] (US dollars - [***]) for each deficient A319 Aircraft,
whichever occurs first. Payment of liquidated damages shall be deemed to
settle all claims and remedies the Buyer would have against the Seller in
respect of performance deficiencies
under this Letter Agreement, provided however, that nothing herein
will relieve the Seller of its obligations under Paragraph 9.2
above.
	 
	10.	 	SELLER’S LIABILITY

246

 

	 	 	The Seller’s liability under these Guarantees shall be governed
solely by the terms of this Letter Agreement.

UNQUOTE

	 	 	In consideration of the assignment and subrogation by the Seller
under this Letter Agreement in favor of the Buyer in respect of the
Seller’s rights against and obligations to the Manufacturer under
the provisions quoted above, the Buyer hereby accepts such
assignment and subrogation and agrees to be bound by all of the
terms, conditions and limitations therein contained. The Buyer and
the Seller recognize and agree that the obligations of the Seller
and the remedies of the Buyer as set forth in this Letter Agreement
No. 5A are subject to the provisions of Clause 12 of the Agreement.
	 
	11.	 	ASSIGNMENT
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the
Agreement, this Letter Agreement and the rights and obligations of
the Buyer hereunder will not be assigned or transferred in any
manner without the prior written consent of the Seller, and any
attempted assignment or transfer in contravention of the provisions
of this Paragraph 11 will be void and of no force or effect.

     If the foregoing correctly sets forth our understanding, please
execute the original and one (1) copy hereof in the space provided below
and return both copies to AVSA.

Very truly yours,

 

AVSA, S.A.R.L.

By:                                         

Its:                                         

Accepted and Agreed

ATLANTIC COAST AIRLINES

By:                                         

Its:                                         

247

 

LETTER AGREEMENT NO. 5B

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: PERFORMANCE GUARANTEES 

Dear Ladies and Gentlemen,

     Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the
“Seller”), have entered into an Airbus A319/A320/A321 Purchase Agreement
dated as of even date herewith (the “Agreement”), which covers, among
other things, the sale by the Seller and the purchase by the Buyer of
certain Aircraft, under the terms and conditions set forth in said
Agreement. The Buyer and the Seller have agreed to set forth in this
Letter Agreement No. 5B (the “Letter Agreement”) certain additional
terms and conditions regarding the sale of the Aircraft. Capitalized
terms used herein and not otherwise defined in this Letter Agreement will
have the meanings assigned thereto in the Agreement. The terms “herein,”
“hereof” and “hereunder” and words of similar import refer to this Letter
Agreement.

     Both parties agree that this Letter Agreement will constitute an
integral, nonseverable part of said Agreement, that the provisions of
said Agreement are hereby incorporated herein by reference, and that this
Letter Agreement will be governed by the provisions of said Agreement,
except that if the Agreement and this Letter Agreement have specific
provisions which are inconsistent, the specific provisions contained in
this Letter Agreement will govern.

     The Seller represents and warrants that the Manufacturer has
provided to the Seller the performance guarantees with respect to the
Aircraft, which guarantees are reproduced below between the words QUOTE
and UNQUOTE and which are subject to the terms, conditions, limitations
and restrictions all as hereinafter set out, and that such guarantees are
in full force and effect and have not been amended. The Seller hereby
assigns to the Buyer and the Buyer hereby accepts, all of the Seller’s
rights and obligations as the “Buyer” under the said performance
guarantees and the Seller subrogates the Buyer to all such rights and
obligations in respect of the A320 Aircraft covered thereby ([***]). The
Seller hereby warrants to the Buyer that (i) it has all the requisite
authority to make the foregoing assignment to and effect the foregoing
subrogation in favor of the Buyer, (ii) such assignment and subrogation
are effective to confer on the Buyer all of the foregoing rights and
obligations of the Seller and the Seller is bound by said assignment and
subrogation, and (iii) the Seller shall not enter into any amendment of
the provisions so assigned or subrogated without the prior written
consent of the Buyer.

It is understood that, in the provisions below between the words QUOTE
and

248

 

 UNQUOTE, capitalized terms have the meanings assigned thereto in this
Agreement, except that (i) the term “Seller,” which means the
Manufacturer as between the Manufacturer and the Seller, also means the
Manufacturer in this Agreement, and (ii) the term “Buyer,” which means
the Seller as between the Manufacturer and the Seller, means the Buyer in
this Agreement.

QUOTE

	1	 	AIRCRAFT CONFIGURATION
	 
	 	 	The guarantees defined below (the “Guarantees”) are applicable to the
A320 Aircraft described in the A320 Standard Specification the SCNs
defined below:

	 	(i)	 	for increases in the Design Weights to:

	 	 	 	 	 
	Maximum Take-Off Weight

	 	169,756 lb
	 	(77,000 kg)
	Maximum Landing Weight

	 	142,198 lb
	 	(64,500 kg)
	Maximum Zero Fuel Weight

	 	134,482 lb
	 	(61,000 kg)

	 	(ii)	 	and powered by IAE V2527-A5 engines without taking into
account any further changes thereto as provided in the Agreement
(the “Specification”).

	 	 	Notwithstanding the foregoing the Seller reserves the right to
increase the Design Weights above the weights shown in the
Specification at no charge to the Buyer in order to satisfy the
Guarantees.
	 
	2	 	GUARANTEED PERFORMANCE
	 
	2.1	 	Take-off
	 
	 	 	Federal Aviation Regulations (“FAR”) take-off field length at an
Aircraft gross weight of 169,756 lb at the start of ground run at sea
level pressure altitude and at a temperature of 86°F shall be not more
than a guaranteed value of [***] ft.
	 
	2.2	 	Second Segment Climb
	 
	 	 	The A320 Aircraft shall meet the FAR requirements for one engine
inoperative climb after take-off, undercarriage retracted, at a
weight corresponding to the stated weight at the start of ground run
at the altitude and temperature and in the configuration of flap
angle and safety speed required to comply with the performance
guaranteed in Paragraph 2.1 above.
	 
	2.3	 	Speed

249

 

	 	 	Level flight speed at an A320 Aircraft gross weight of 150,000
lb at a pressure altitude of 35,000 ft in ISA conditions using a
thrust not exceeding maximum cruise thrust shall not be less than a
guaranteed true Mach number of M=[***].
	 
	2.4	 	Landing Field Length
	 
	 	 	FAR certified dry landing field length at an A320 Aircraft gross
weight of 142,198 lb at sea level pressure altitude with zero wind and
slope shall be not more than a guaranteed value of [***] ft.
	 
	2.5	 	Range
	 
	 	 	Range starting at an initial cruise weight of 150,000 lb and
consuming 15,000 lb of fuel during cruise while flying at a pressure
altitude of 37,000 feet in ISA conditions at a true Mach number of
0.780 using thrust not exceeding maximum cruise thrust shall not be
less than a guaranteed value of [***] statute miles.
	 
	3	 	MISSION GUARANTEES
	 
	3.1	 	Mission Payload Guarantee IAD-SFO
	 
	 	 	The Aircraft will be capable of carrying not less than a
guaranteed payload of [***] lb over an still air stage distance of
2,810 statute miles (representative of IAD to SFO with a 53 knot
headwind) when operated under the conditions defined below:
	 
	3.1.1	 	The departure airport conditions are as defined below (assumed
representative of IAD runway 30)

	 	 	 
	Pressure Altitude:

	 	288 feet
	Outside Air Temperature:

	 	83 °F
	Take-off Run Available:

	 	10,501 feet
	Take-off Distance Available:

	 	10,501 feet
	Accelerate-stop Distance Available:

	 	10,501 feet
	Wind:

	 	None
	Runway Condition:

	 	Dry
	Slope:

	 	0.21% Uphill
	Obstacles

	 	none

	 	 	The destination airport conditions are such as to allow the
required landing weight to be used without restriction. Pressure
altitude is 11 ft.
	 
	3.1.2	 	An allowance of 280 lb of fuel is included for 10 minutes start-up
and taxi-out at the departure airport.

250

 

	 
	3.1.3	 	An allowance of 515 lb of fuel is included for take-off and climb to
1,500 ft above the departure airport at a temperature of 83°F.
	 
	3.1.4	 	Climb from 1,500 ft above the departure airport up to 3,000 ft above
the departure airport using max climb thrust, 5 min. holding at 3,000
ft above the departure airport, continued climb using max. climb thrust
to pressure altitude 28,000 ft, 10 min. cruise at a fixed Mach number
of M=0.78 at pressure altitude 28,000ft, continued climb to cruise
altitude using maximum climb thrust and cruise at a true Mach number of
M=0.78 at pressure altitudes 33,000 ft and 37,000 ft, descent to
pressure altitude 9,000 ft, 5 min. cruise at 9,000 ft at a fixed Mach
number of M=0.445, followed by a descent to 1,500 ft above the
destination airport are carried out are carried out in ISA conditions.
Climb and descent speeds below 10,000 ft shall be 250 knots CAS.
	 
	3.1.5	 	An allowance of 200 lb of fuel is included for approach and landing
at the destination airport.
	 
	3.1.6	 	An allowance of 125 lb of fuel is included for 5 minutes taxi-in at
the destination airport.
	 
	3.1.7	 	Stage distance is defined as the distance covered during climb,
cruise and descent as described in Paragraph 3.1.4 above.
	 
	 	 	Trip fuel is defined as the fuel required for take-off, climb,
cruise, descent and approach and landing as described in
Paragraphs 3.1.3 to 3.1.5 inclusive above.
	 
	3.1.8	 	At the end of approach and landing 7,320 lb of fuel will remain in the tanks.
This represents the estimated fuel required for:

	 	1)	 	45 minutes continued cruise
	 
	 	2)	 	Missed approach
	 
	 	3)	 	Diversion in ISA conditions over a ground distance of 150
statute miles ending at 1,500ft pressure altitude
	 
	 	4)	 	Approach and landing at the diversion airport

	3.2	 	Mission Fuel Burn Guarantee 
	 
	 	 	In carrying a fixed payload of 35,250 lb over an equivalent
still air distance of 2,810 statute miles (representative of IAD
to SFO with a 53 knot headwind) the trip fuel burned as defined
in Paragraph 3.1.7 above shall not be more than a guaranteed
value of [***] lb when operated under the conditions defined in
Paragraph 3.1 above.
	 
	3.3	 	Operating Weight Empty (OWE)

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	 	 	The mission payload and mission fuel burn guarantees defined in Paragraphs 3.1 and 3.2 above are based on a fixed Operating
Weights Empty (“OWE”) of 94,412 lb.
	 
	4	 	MANUFACTURER’S WEIGHT EMPTY GUARANTEE
	 
	 	 	The Seller guarantees a Manufacturer’s Weight Empty of 83,196 lb [***].
This is the Manufacturer’s Weight Empty as defined in Section 13-10.00.00 of the Specification and is subject to adjustment
as defined in Paragraph 7.2 below.
	 
	5	 	GUARANTEE CONDITIONS
	 
	5.1	 	The performance certification requirements for the A320
Aircraft, except where otherwise noted, will be as stated in Section
02 of the Specification.
	 
	5.2	 	For the determination of FAR take-off and landing performance a
hard level dry runway surface with no runway strength limitations, no
line-up allowance, no obstacles, zero wind, atmosphere according to
ISA, except as otherwise noted and the use of speedbrakes, flaps,
landing gear and engines in the conditions liable to provide the best
results will be assumed.
	 
	5.2.1	 	When establishing take-off and second segment performance no air
will be bled from the engines for cabin air conditioning or
anti-icing.
	 
	5.3	 	Climb, cruise and descent performance associated with the
Guarantees will include allowances for normal electrical load and for
normal engine air bleed and power extraction associated with maximum
cabin differential pressure as defined in Section 21-30.31 of the
Specification.
	 
	 	 	Cabin air conditioning management during performance demonstration
as described in Paragraph 6.3 may be such as to optimize the A320
Aircraft performance while meeting the minimum air conditioning
requirements defined above. Unless otherwise stated no air will be
bled from the engines for anti-icing.
	 
	5.4	 	The engines will be operated using not more than the A320
Propulsion Systems manufacturer’s maximum recommended outputs for
take-off, maximum go-round, maximum continuous, maximum climb and
cruise for normal operation unless otherwise stated.
	 
	5.5	 	Where applicable the Guarantees assume the use of an approved
fuel having a density of 6.70 lb / US gallon and a lower heating value
of 18,590 BTU/lb.
	 
	6.	 	GUARANTEE COMPLIANCE
	 
	6.1	 	Compliance with the Guarantees shall be demonstrated using
operating procedures and limitations in accordance with those
defined by the FAA and if not inconsistent with those defined by
the FAA, those defined by the Seller.

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	6.2	 	Compliance with the take-off, second segment and landing
elements of the Guarantees will be demonstrated with reference to
the FAA approved Flight Manual.
	 
	6.3	 	Compliance with those parts of the Guarantees not covered by the
requirements of the FAA shall be demonstrated by calculation
based on data obtained during flight tests conducted on one (or
more, at the Seller’s discretion) A320-200 aircraft of the same
aerodynamic configuration as the A320 Aircraft.
	 
	6.4	 	Compliance with the Manufacturer’s Weight Empty
Guarantee defined in Paragraph 4 shall be demonstrated with
reference to a weight compliance report.
	 
	6.5	 	Data derived from tests will be adjusted as required using
conventional methods of correction, interpolation or
extrapolation in accordance with established aeronautical
practices to show compliance with the Guarantees.
	 
	6.6	 	Compliance with the Guarantees is not contingent on engine performance
defined in the Propulsion System manufacturer’s specification.
	 
	6.7	 	The Seller undertakes to furnish the Buyer with a report or reports
demonstrating compliance with the Guarantees at, or as soon as possible
after, the delivery of each of the A320 Aircraft.
	 
	7	 	ADJUSTMENT OF GUARANTEES
	 
	7.1	 	In the event any change to any law, governmental regulation or
requirement or interpretation thereof (“Rule Change”) by any governmental
agency made subsequent to the date of the Agreement affects the A320
Aircraft configuration or performance or both required to obtain
certification, the Guarantees shall be appropriately modified to reflect
the effect of any such Rule Change.
	 
	7.2	 	The Guarantees apply to the A320 Aircraft as described in paragraph 1 and
may be adjusted to reflect the net effect of:

	 	a)	 	any further configuration change which is the subject
of an SCN
	 
	 	b)	 	variation in actual weights of items
defined in Section 13-10 of the Specification

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	 	c)	 	changes required to obtain
certification which cause changes to the performance or
weight of the Aircraft

	 	 	Without in any way limiting the Seller’s obligations under
Clause 2 of the Agreement, the Seller will [***].
	 
	8	 	EXCLUSIVE GUARANTEES
	 
	 	 	The Guarantees are exclusive and are
provided in lieu of any and all other performance and
weight guarantees of any nature that may be stated,
referenced or incorporated in the Specification or any
other document (but without prejudice to the obligations
of the Seller under the Agreement to build the Aircraft
in accordance with the Specification including, without
limitation, specifications regarding performance, weight
and noise requirements).
	 
	9	 	UNDERTAKING REMEDIES
	 
	9.1	 	Should any A320 Aircraft fail to meet any of the Guarantees
specified in this Letter Agreement the Seller will take such action
described in and in the order of Paragraphs 9.2 and 9.3 below.
	 
	9.2	 	Should any Aircraft fail to meet any of the Guarantees specified
in this Letter Agreement, the Seller will use its commercially
reasonable efforts to correct the deficiency to comply with the
subject Guarantee. Should the Seller fail to develop and make
available corrective means (including but not limited to kits,
procedures, adjustment of design weights) for the
above said deficiency within one (1) year from Delivery of
the affected A320 Aircraft, then the Seller shall in
respect of such A320 Aircraft pay to the Buyer by way of
liquidated damages, subject to the Seller’s maximum
liability under this Letter Agreement, on the anniversary
date of the Delivery for as long as the deficiency remains,
an amount of:

	 	–	 	US$ [***] (US dollars- [***]) per
one percent 1%) deficient per A320 Aircraft per year
resulting from the deficiency expressed as a percentage
of the Mission Fuel Burn or Range Guarantees (part of a
percent to be prorated).
	 
	 	–	 	US$ [***] (US dollars-
[***]) per pound deficient per A320 Aircraft
and per year based on the deficiency expressed
in pounds of the Mission Payload Guarantee
defined in Paragraph 3 above.

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	 	–	 	US$ [***] (US dollars- [***])
per pound deficient per A320 Aircraft and per year
based on the deficiency expressed in pounds of the
Manufacturer’s Weight Empty Guarantee.

	 	 	In all cases, such liquidated damages will be prorated for the
number of days in the year (based on a 365 day year) that the
relevant Aircraft does not comply with the guaranteed level.
	 
	9.3	 	The Seller’s maximum liability under this Letter Agreement in respect
of a deficiency in performance of any Aircraft shall be limited to the
payment of liquidated damages for a period of not more than [***]
([***]) years following Delivery of the affected Aircraft and up to an
aggregated value of US$ [***] (US dollars- [***]) for each deficient
Aircraft, whichever occurs first. Payment of liquidated damages shall
be deemed to settle all claims and remedies the Buyer would have
against the Seller in respect of performance deficiencies under this
Letter Agreement provided however, that nothing herein will relieve the
Seller of its obligations under Paragraph 9.2 above.
	 
	10.	 	SELLER’S LIABILITY
	 
	 	 	The Seller’s liability under these Guarantees shall be governed
solely by the terms of this Letter Agreement.

UNQUOTE

	 	 	In consideration of the assignment and subrogation by the Seller
under this Letter Agreement in favor of the Buyer in respect of
the Seller’s rights against and obligations to the Manufacturer
under the provisions quoted above, the
Buyer hereby accepts such assignment and subrogation and agrees
to be bound by all of the terms, conditions and limitations
therein contained. The Buyer and the Seller recognize and agree
that the obligations of the Seller and the remedies of the Buyer
as set forth in this Letter Agreement No. 5B are subject to the
provisions of Clause 12 of the Agreement.
	 
	11.	 	ASSIGNMENT
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the
Agreement, this Letter Agreement and the rights and obligations of
the Buyer hereunder will not be assigned or transferred in any
manner without the prior written consent of the Seller, and any
attempted assignment or transfer in contravention of the provisions
of this Paragraph 11 will be void and of no force or effect.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return both
copies to AVSA.

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	 	 	Very truly yours,
	 	 	AVSA, S.A.R.L.
	 	 	By:	 	 

	 	 	Its:	 	 

Accepted and Agreed

ATLANTIC COAST AIRLINES

	 	 	 	 	 
	By:	 	
 

	 	 
	Its:	 	
 

	 	 

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LETTER AGREEMENT NO. 6

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: RELIABILITY GUARANTEES 

Dear Ladies and Gentlemen,

     Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”),
have entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even
date herewith (the “Agreement”), which covers, among other things, the sale by
the Seller and the purchase by the Buyer of certain Aircraft, under the terms
and conditions set forth in said Agreement. The Buyer and the Seller have
agreed to set forth in this Letter Agreement No. 6 (the “Letter Agreement”)
certain additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Letter Agreement.

     Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

     The Seller represents and warrants that the Manufacturer has provided to
the Seller reliability guarantees with respect to the Aircraft, which
guarantees are reproduced below between the words QUOTE and UNQUOTE and which
are subject to the terms, conditions, limitations and restrictions all as
hereinafter set out, and that such guarantees are in full force and effect and
have not been amended. The Seller hereby assigns to the Buyer and the Buyer
hereby accepts all of the Seller’s rights and obligations as the “Buyer” with
respect to Aircraft under the said reliability guarantees, and the Seller
subrogates the Buyer to all such rights and obligations in respect of the
Aircraft. For the purposes of this Letter Agreement, the term [***]. The
Seller hereby warrants to the Buyer that (i) it has all the requisite authority
to make the foregoing assignment to and effect the foregoing subrogation in
favor of the Buyer, (ii) such assignment and subrogation are effective to
confer on the Buyer all of the foregoing rights and obligations of the Seller
and the Seller is bound by said assignment and subrogation, and (iii) the
Seller shall not enter into any amendment of the provisions so assigned or
subrogated without the prior written consent of the Buyer.

     It is understood that, in the provisions below between the words QUOTE and
UNQUOTE, capitalized terms have the meanings assigned thereto in this
Agreement, except that (i) the term “Seller,” which means the Manufacturer as
between the Manufacturer and the Seller, also means

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the Manufacturer in this Agreement, and (ii) the term “Buyer,” which means the
Seller as between the Manufacturer and the Seller, means the Buyer in this
Agreement.

QUOTE

	1.	 	SCOPE, COMMENCEMENT, DURATION
	 
	 	 	The reliability guarantees contained in this Letter Agreement (the
“Guarantees”) extend to the fleet of Aircraft. The Guarantees will
commence [***] and will remain in force for a period of [***] thereafter.
	 
	1.1	 	Suspension of Guarantee
	 
	 	 	The provisions under Paragraph 7 of this Letter Agreement (excluding
Paragraph 7.6) will be suspended for any Computation Period (defined
in Paragraph 2.6) during which:
	 
	 	 	RO < RF — 1.0 % D.R.
	 
	 	 	where :

	 	-	 	RF is the Dispatch Reliability, as computed
by the Seller and published in the
“Quarterly Service Report,” of the Aircraft
World Fleet for the aircraft model covered
under the present Dispatch Reliability
Guarantee and excluding the Aircraft during
a computation period, expressed as a
percentage.
	 
	 	-	 	RO is the Dispatch Reliability, as computed by the Seller and
published in the “Quarterly Service Report,” of the Aircraft fleet
during the same computation period, expressed as a percentage.

	1.2	 	However, if the cause of the low dispatch reliability is an Aircraft
Inherent Malfunction(s), then suspension of the provisions under Paragraph
7 of this Letter Agreement pursuant to Paragraph 1.1 above will be
terminated, and the remedies available to the Buyer under Paragraph 7 of
this Letter Agreement will be paid to the Buyer, retroactive to the date
such remedies would have otherwise been due.
	 
	2.	 	DEFINITIONS
	 
	2.1	 	Achieved Dispatch Reliability
	 
	 	 	The “Achieved Dispatch Reliability” is the actual Dispatch Reliability obtained by the Aircraft fleet in regular revenue
service adjusted in accordance with these Guarantees. ETOPS flights are not included in these Guarantees.
	 
	 	 	Achieved Dispatch Reliability, expressed as a percentage, will be computed every Computation Period as follows :

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	Achieved

Dispatch

Reliability
	 	=
	 	Total number of Scheduled Revenue

Flights without Chargeable Delays

or Chargeable Cancellations during the

Computation Period                     X 100

Total number of Scheduled Revenue Flights

scheduled during the Computation Period

and will be compared to the Guaranteed Dispatch

Reliability.

	2.2	 	Aircraft Inherent Malfunction
	 
	 	 	An “Aircraft Inherent Malfunction” is a condition whereby maintenance actions confirm that the operation of a system or
component is outside its specified limit:

	 	1)	 	as defined in the applicable Maintenance or Operations Manual(s),
	 
	 	2)	 	and has not been induced by a secondary cause or a consequence of
exclusions as defined in Paragraph 2.8.

	2.3	 	Chargeable Cancellation
	 
	 	 	A “Chargeable Cancellation” occurs when a Scheduled Revenue Flight is
not completed as a result of an Aircraft Inherent Malfunction.
	 
	2.4	 	Chargeable Delay
	 
	 	 	A “Chargeable Delay” occurs when an Aircraft Inherent Malfunction
causes a Scheduled Revenue Flight to be dispatched more than fifteen
(15) minutes later than the scheduled departure time,
	 
	 	 	or
	 
	 	 	a through-service or turn-around-flight remains on ground longer than
the allotted ground time by more than fifteen (15) minutes as a result
of an Aircraft Inherent Malfunction.
	 
	2.5	 	Completion Factor
	 
	 	 	The “Completion Factor” is the percentage of Scheduled Revenue Flights
that are completed.

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	 	 	Completion Factor, expressed as a percentage, shall be computed for
each Computation Period as follows:

	 	 	 	 	 
	Completion Factor
	 	=
	 	Total number of Scheduled Revenue Flights

without a Chargeable Cancellation

during the Computation Period          X 100

Total number of Scheduled Revenue Flights

scheduled during the Computation Period

	2.6	 	Computation Period
	 
	 	 	The “Computation Period” is a period consisting of [***] months commencing
on the first day of the first month following the [***] of the first
Aircraft.
	 
	2.7	 	Dispatched
	 
	 	 	An Aircraft will be deemed to have been “dispatched” when it leaves
the gate for a Scheduled Revenue Flight.
	 
	2.8	 	Exclusions
	 
	 	 	Delays and cancellations due to any of the following reasons are
specifically excluded from these Guarantees:

	 	a)	 	Servicing (No corrective maintenance performed)

	 	-	 	Struts
	 
	 	-	 	Oil
	 
	 	-	 	Hydraulic fluid
	 
	 	-	 	Lubrication
	 
	 	-	 	All servicing activities that do not require the mechanic
to physically adjust or
replace or to perform any corrective action to enable deferral of a
structural repair and replace hardware/software
	 
	 	-	 	Fueling related
	 
	 	-	 	Deicing
	 
	 	-	 	Water and waste
	 
	 	-	 	Sanitizing / Flushing
	 
	 	-	 	Moisture and condensation
	 
	 	-	 	Printer paper replacement
	 
	 	-	 	Routine cleaning
	 
	 	-	 	Tire pressure servicing
	 
	 	-	 	Oxygen servicing
	 
	 	-	 	Data loading

	 	b)	 	Precautionary Maintenance (No corrective Maintenance Performed)

	 	-	 	Installing/continuing placard
	 
	 	-	 	Fluid leaks — within specified limits contained in applicable maintenance manual
	 
	 	-	 	Manual closing or cycling passenger / crew / cargo door
	 
	 	-	 	Resetting circuit breakers

	 	c)	 	Normal Wear Maintenance

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	 	-	 	Passenger amenity items
	 
	 	-	 	Tires — worn past limits
	 
	 	-	 	Brakes — worn past limits
	 
	 	-	 	Decals / paint / appearance items

	 	d)	 	Scheduled Maintenance Activities

	 	-	 	Completion of scheduled / planned work content of :

	 	1)	 	Maintenance checks
	 
	 	2)	 	Maintenance set-ups

	 	e)	 	Parts Delays and Cancellations
	 
	 	f)	 	External Force Damage
	 
	 	 	 	Aircraft damage / lightning strikes, etc.
	 
	 	g)	 	Known Personnel Error and/or Known Damage by Passengers
	 
	 	h)	 	Secondary Delay or Cancellation
	 
	 	 	 	Delay(s) or cancellation(s) of Scheduled Revenue Flights that
result from a Chargeable Delay or Chargeable Cancellation.
	 
	 	i)	 	MEL Items
	 
	 	 	 	Delays caused by systems or components being designated as “Go” and “Go
If” in the Minimum Equipment List (MEL) as approved by the Buyer’s
Airworthiness Authorities for the Buyer’s operation of the Aircraft.
	 
	 	j)	 	Propulsion System
	 
	 	 	 	Delays attributable to the Propulsion Systems (ATA 70 to 80).
	 
	 	k)	 	BFE
	 
	 	 	 	Delays attributable to Buyer Furnished Equipment (BFE) or software
embodied therein, unless such delay is caused due to
faulty installation of the BFE by the Seller or by a defect in the
Seller’s BFE interface design.

	2.9	 	Scheduled Revenue Flight
	 
	 	 	A flight, as stipulated in the Buyer’s time table or a scheduled charter
flight, for any Aircraft is defined herein as a “Scheduled Revenue
Flight.”
	 
	3.	 	GUARANTEE
	 
	3.1	 	The “Guaranteed Dispatch Reliability” is the dispatch reliability
guaranteed in this Paragraph 3.1.
	 
	3.1.1	 	Guaranteed Dispatch Reliability for [***]

261

 

	 	 	The Seller guarantees that for the [***] of operation of the
Aircraft fleet in commercial service, on average, an Aircraft
available for dispatch will have a [***]% ([***] percent)
probability of being dispatched without a Chargeable Delay.
	 
	3.1.2	 	Guaranteed Dispatch Reliability after [***]
	 
	 	 	The Seller guarantees that, for the [***] of operation of the
Aircraft fleet in commercial service, on average, an Aircraft
available for dispatch will have a [***]% ([***] percent)
probability of being dispatched without a Chargeable Delay. If, in
the [***] of operation of the Aircraft fleet in commercial service,
on average, an Aircraft available for dispatch has less than a
[***]% ([***] percent) probability of being dispatched without a
Chargeable Delay, [***] Guarantee, to the extent that [***].
	 
	3.2	 	Completion Factor Guarantee
	 
	 	 	The Seller guarantees that for each Computation Period beginning
with the first Computation Period, the Completion Factor will be, on
average, no less than [***]% ([***] of one percent). If, in the
[***] of operation of the Aircraft fleet in commercial service, on
average, the Completion Factor is less than [***]% ([***] of one
percent), [***] Guarantee, to the extent that [***].
	 
	4.	 	BUYER’S AND SELLER’S OBLIGATION
	 
	4.1	 	Buyer’s Obligations

	 	a)	 	The Buyer will use all reasonable means to apply maintenance
and trouble shooting procedures by qualified personnel with the
objective of meeting the Guarantees.
	 
	 	b)	 	Buyer’s and Seller’s specialists will mutually agree on the
details of a Chargeable Delay reporting procedure before delivery
of the first Aircraft. The Buyer’s rights will not be impaired by
any failure of the Parties to so agree within such timeframe.
	 
	 	c)	 	The Buyer will submit Chargeable Delay data weekly or
monthly, not later than seven (7) days after a reporting week, and
fifteen (15) days after a reporting month. Such data must include
detailed information on delays and cancellations to allow the Seller
to assess the nature of system and/or component malfunctions. If the
Seller finds such data to be insufficiently detailed, the Buyer will
supply such additional data as the Seller may reasonably request
(and the Buyer’s rights will not be impaired unless the Buyer fails
to meet such reasonable requests).
	 
	 	d)	 	The Buyer will notify the Seller at any time but not later
than one (1) month after the end of a Computation Period that the
Achieved Dispatch Reliability or the Completion Factor is below the
Guaranteed Dispatch Reliability, or the Guaranteed Completion
Factor, as the case may be, and request the Seller to take
corrective actions. In such event, all reasonably necessary
additional detailed operational and engineering

262

 

	 	 	 	information will be provided by the Buyer in order to allow the Seller
to determine the necessary action.

	 	e)	 	If the Seller recommends procedures and modifications to
improve the Achieved Dispatch Reliability, the Buyer may choose to
apply such procedures and incorporate such modification. This will
be done as soon as is reasonably possible, consistent with the
Buyer’s maintenance program, following receipt of instructions and
parts (if applicable) by the Buyer, provided that:

	 	i)	 	the effectiveness of such a procedure or modification
is substantiated to the Buyer’s reasonable satisfaction, and
	 
	 	ii)	 	application of such a procedure or modification is
economical and practical as determined by the Buyer’s customary
analysis practice.

	 	 	 	If the Seller and the Buyer disagree as to the effectiveness of
procedures or modifications proposed by the Seller to increase the
Achieved Dispatch Reliability, the Buyer will demonstrate to the
Seller that, pursuant to its analysis, such a modification or
procedure is not effective, economic, or is otherwise impractical.
	 
	 	 	 	The Buyer may also decline to follow such revised procedures or to
install such modification as are referred to above. If the Buyer so
declines (unless such modification or procedure is not effective,
economic, or is otherwise impractical), the Seller may adjust the
Guaranteed Dispatch Reliability, or Guaranteed Completion Factor, as
the case may be, downwards by an amount consistent with the expected
improvement in the Achieved Dispatch Reliability or Completion Factor,
as the case may be, based on reasonable substantiation to the Buyer
and on other operators’ experience, if any, of the reliability
benefits of such modification or such revised procedures.
	 
	 	f)	 	Furthermore, the Buyer agrees to set its corporate goals for
Aircraft fleet technical dispatch reliability and completion factor
goals as shown in the Buyer’s regular reliability report (or
equivalent) at levels no lower than the Guaranteed Dispatch
Reliability and Completion Factor Guarantee, so that both the
Buyer’s and Seller’s technical staff can aggressively pursue
attainment of the Guaranteed Dispatch Reliability and Guaranteed
Completion Factor.

	4.2	 	Seller’s Obligations
	 
	 	 	During the term of the Guaranteed Dispatch Reliability and Guaranteed
Completion Factor, the Seller will

	 	(1)	 	provide technical and operational analyses of delays and
cancellations and develop corrections intended to reduce Chargeable
Delays and,
	 
	 	(2)	 	if the Achieved Dispatch Reliability is below the Guaranteed
Dispatch Reliability or

263

 

	 	 	 	Completion Factor falls below the Guaranteed Completion Factor, as the
case may be, not later than six (6) months where practicable after
notification by the Buyer and at no charge to the Buyer

	 	a)	 	provide modified Seller items, either hardware or
software, to improve Achieved Dispatch Reliability or Completion
Factor, as the case may be;
	 
	 	b)	 	make recommendations concerning the Aircraft operation
and maintenance programs, publications, and policies to improve
Achieved Dispatch Reliability or Completion Factor, as the case
may be;
	 
	 	c)	 	in addition to any other obligations of Seller under
the Agreement, assist the Buyer to motivate relevant suppliers to
take action to improve the Achieved Dispatch Reliability or
Completion Factor, as the case may be.

	 	(3)	 	The Dispatch Reliability Guarantee at [***]% provides a
guarantee level below
performance expectations as a baseline. The Seller recognizes
that the desired dispatch reliability performance level of the Buyer is
at least [***]%. In the event the Achieved Dispatch Reliability is
above the Guarantee but lower than the Buyer’s desired performance
level of [***]:

	 	•	 	[***] the Achieved Dispatch Reliability Level
	 
	 	•	 	[***] the Achieved Dispatch Reliability Level
	 
	 	•	 	[***] the Achieved Dispatch Reliability Level

	 	 	 	[***] in Paragraph 6 below, [***].

	5.	 	ADJUSTMENT
	 
	 	 	Any design, certification, regulatory, organizational structure or
Aircraft operation changes outside the Seller’s control that may have an
effect upon the operation and dispatch characteristics of the Aircraft
will be cause for reevaluation or adjustment of the Guaranteed Dispatch
Reliability or Guaranteed Completion Factor by mutual agreement between
the Buyer and the Seller.
	 
	6.	 	REVIEW MEETINGS
	 
	 	 	An Achieved Dispatch Reliability and Completion Factor review meeting
between the Seller’s and the Buyer’s representatives will be scheduled at
the end of each six (6) month period of Buyer’s Aircraft operation, or at
any other period to be mutually agreed. Representatives of the Buyer and
the Seller will participate in the meeting and will:

	 	a)	 	review current Achieved Dispatch Reliability and Completion
Factor,
	 
	 	b)	 	eliminate unsupported or non-Aircraft-inherent delay claims
from delay records to compute Achieved Dispatch Reliability and
Completion Factor,

264

 

	 	c)	 	consider corrective action, if required,
	 
	 	d)	 	review the Buyer’s incorporation of modifications as stated
in Subparagraph 4.1 of this Letter Agreement and requirements, if
any, for reduction of Guaranteed Dispatch Reliability and Completion
Factor Guarantee,
	 
	 	e)	 	review possible design, certification, regulatory,
organizational structure or Aircraft operation changes and
requirements, if any, necessitating adjustment of Guaranteed
Dispatch Reliability or Completion Factor Guarantee.

	7.	 	REMEDIES
	 
	7.1	 	At the end of each Computation Period, the Buyer and the Seller will
jointly compare the Achieved Dispatch Reliability Level with the
Guaranteed Dispatch Reliability Level. For each Computation Period during
which the Achieved Dispatch Reliability Level is below the Guaranteed
Dispatch Reliability Level (the “DR Shortfall”), the Seller will credit
the Buyer’s account in the amount of US$ [***] (US dollars — [***]) per
percentage point of the DR Shortfall or, in the case of a fraction of a
percentage point, with a prorated portion of this dollar amount (the “DR
Credit”). Such DR Credits will be used by the Buyer for the purchase of
goods and services from the Seller or any Affiliate thereof.
	 
	7.2	 	For each Computation Period during which the Achieved Dispatch
Reliability Level exceeds the Guaranteed Dispatch Reliability Level, the
Seller may apply against existing or future DR Credits, the amount of US$
[***] (US dollars — [***]) per percentage point by which the Achieved
Dispatch Reliability exceeds the Guaranteed Dispatch Reliability Level or,
in the case of a fraction of a percentage point, with a prorated portion
of this dollar amount (the “DR Debit”). If at any time during the Term
the DR Debit exceeds existing or future DR Credits, the credit balance in
the Seller’s favor will be carried forward into subsequent Computation
Periods until fully exhausted. However, at no time will the Buyer be
required to make payments to the Seller for credit balances in the
Seller’s favor.
	 
	7.3	 	At the end of each Computation Period, the Buyer and the Seller will
jointly compare the Completion Factor with the Completion Factor Guarantee
Level. For each Computation Period during which the Completion Factor is
below the Completion Factor Guarantee Level (the “CF Shortfall”), the
Seller will credit the Buyer’s account in the amount of US$ [***] (US
dollars — [***]) per one-tenth of a percentage point of the CF Shortfall
(the “CF Credit”). Such CF Credits will be used by the Buyer for the
purchase of goods and services from the Seller or any affiliate thereof.
	 
	7.4	 	For each Computation Period during which the Completion Factor exceeds
the Completion Factor Guarantee Level, the Seller may apply against
existing or future DR Credits, the amount of US$ [***] (US
dollars —
[***]) per one-tenth of one percentage point by which the Completion
Factor exceeds the Completion Factor Guarantee Level or, in the case of a
fraction of a percentage point, with a prorated portion of this
dollar amount (the “CF Debit”). If at any time during the Term the CF Debit
exceeds existing or future CF Credits, the credit balance in the Seller’s
favor will be carried forward into subsequent Computation Periods until
fully exhausted. However, at no time will the Buyer be required to make
payments to the Seller for credit balances in the Seller’s favor.

265

 

	7.5	 	The Seller and the Buyer acknowledge and agree that the maximum liability
of the Seller for Guarantees provided under this Letter Agreement will be
US$ [***] (US dollars — [***]).
	 
	7.6	 	Nothing herein shall relieve the Seller of any of its obligations under
Paragraph 4.2 of this Letter Agreement.
	 
	8.	 	DISRUPTION
	 
	 	 	The provisions of this Guarantee shall not apply during any period when
the Buyer experiences disruptions of operations (excluding disruptions of
operations relating to an Aircraft Inherent Malfunction(s)) and as long
after each such period that the Buyer has not fully restored normal
operations.
	 
	9.	 	EXCLUSIVE GUARANTEES
	 
	 	 	These Guarantees are exclusive and are provided in lieu of any and all
other guarantees from the Seller relating to reliability of any nature
that may be stated, referenced or incorporated in the Specification or
any other document (but without prejudice to the obligations of the
Seller under the Agreement to build the Aircraft in accordance with the
applicable Specification, including, without limitation, specifications
regarding performance, weight and noise requirements).
	 
	10.	 	SELLER’S LIABILITY
	 
	 	 	The Seller’s liability for failure to meet the Guaranteed Dispatch
Reliability values or Guaranteed Completion Factor values, as the case
may be, will be governed solely by the terms of these Guarantees.

UNQUOTE

	 	 	In consideration of the assignment and subrogation by the Seller under
this Letter Agreement in favor of the Buyer in respect of the Seller’s
rights against and obligations to the Manufacturer under the provisions
quoted above, the Buyer hereby accepts such assignment and subrogation
and agrees to be bound by all of the terms, conditions and limitations
therein contained. The Buyer and the Seller recognize and agree that the
obligations of the Seller and the remedies of the Buyer as set forth in
this Letter Agreement No. 6 are subject to the provisions of Clause 12 of
the Agreement.
	 
	11.	 	ASSIGNMENT

266

 

	 	 	Except as otherwise provided in Letter Agreement No. 10 to the Agreement,
this Letter Agreement and the rights and obligations of the Buyer
hereunder will not be assigned or transferred in any manner without the
prior written consent of the Seller, and any attempted assignment or
transfer in contravention of the provisions of this Paragraph 11 will be
void and of no force or effect.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return both
copies to AVSA.

Very truly yours,

AVSA, S.A.R.L.

By:                                                                                 

Its:                                                                                 

Accepted and Agreed

ATLANTIC COAST AIRLINES

By:                                                                                 

Its:                                                                                 

267

 

LETTER AGREEMENT NO. 7

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: [***] GUARANTEE

Dear Ladies and Gentlemen,

Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”), have
entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even date
herewith (the “Agreement”), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Letter Agreement No. 7 (the “Letter Agreement”) certain
additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

The Seller represents and warrants that the Manufacturer has provided to the
Seller a [***] guarantee with respect to the Aircraft, which guarantee is
reproduced below between the words QUOTE and UNQUOTE and which is subject to
the terms, conditions, limitations and restrictions all as hereinafter set out,
and that such guarantee is in full force and effect and has not been amended.
The Seller hereby assigns to the Buyer and the Buyer hereby accepts all of the
Seller’s rights and obligations as the “Buyer” with respect to Aircraft under
the said [***] guarantee, and the Seller subrogates the Buyer to all such
rights and obligations in respect of the Aircraft. For the purposes of this
Letter Agreement, the term [***]. The Seller hereby warrants to the Buyer that
(i) it has all the requisite authority to make the foregoing assignment to and
effect the foregoing subrogation in favor of the Buyer, (ii) such assignment
and subrogation are effective to confer on the Buyer all of the foregoing
rights and obligations of the Seller and the Seller is bound by said assignment
and subrogation, and (iii) the Seller shall not enter into any amendment of the
provisions so assigned or subrogated without the prior written consent of the
Buyer.

It is understood that, in the provisions below between the words QUOTE and
UNQUOTE, capitalized terms have the meanings assigned thereto in this
Agreement, except that (i) the term “Seller” which means the Manufacturer as
between the Manufacturer and the Seller, also means the Manufacturer in this
Agreement, and (ii) the term “Buyer” which means the Seller as

268

 

between the Manufacturer and the Seller, means the Buyer in this Agreement.

QUOTE

	1.	 	[***]
	 
	 	 	This [***] guarantee (the “Guarantee”) [***] as defined in Appendix 1
[***].
	 
	2.	 	[***]
	 
	 	 	The Guarantee [***].
	 
	3.	 	GUARANTEE
	 
	 	 	[***].
	 
	4.	 	ADJUSTMENTS
	 
	4.1	 	This Guarantee [***].
	 
	 	 	[***]
	 
	4.2	 	[***].
	 
	5.	 	REPORTING
	 
	 	 	[***].
	 
	6.	 	RESULTS
	 
	6.1	 	[***].
	 
	 	 	[***]
	 
	6.2	 	[***].
	 
	7.	 	EXCLUSIONS
	 
	7.1	 	This Guarantee [***]
	 
	7.2	 	[***]
	 
	8.	 	[***] PROCEDURES

269

 

	 	 	To be eligible for the Guarantee provided under this Letter Agreement, [***].
	 
	9.	 	AUDITS
	 
	 	 	[***].
	 
	10.	 	SERVICE BULLETINS
	 
	 	 	[***].
	 
	11.	 	ACCOUNTING SYSTEM
	 
	11.1	 	[***]
	 
	11.2	 	[***]
	 
	11.3	 	[***]
	 
	12.	 	[***]
	 
	 	 	The provisions of this Guarantee [***].
	 
	13.	 	LIMITATION
	 
	 	 	Notwithstanding Paragraph 6.1, [***].
	 
	14.	 	[***] GUARANTEES
	 
	 	 	These Guarantees [***].
	 
	15.	 	[***] LIABILITY
	 
	 	 	The [***] liability under this [***] Guarantee [***].

UNQUOTE

	 	 	In consideration of the assignment and subrogation by the Seller under
this Letter Agreement in favor of the Buyer in respect of the Seller’s rights
against and obligations to the Manufacturer under the provisions quoted above,
the Buyer hereby accepts such assignment and subrogation and agrees to be bound
by all of the terms, conditions and limitations therein contained. The Buyer
and the Seller recognize and agree that the obligations of the Seller and the
remedies of the Buyer as set forth in this Letter Agreement No. 7 are subject
to the
	 
	16.	 	ASSIGNMENT

270

 

	 	 	Except as otherwise provided in Letter Agreement No. 10 to the Agreement,
this Letter Agreement and the rights and obligations of the Buyer
hereunder will not be assigned or transferred in any manner without the
prior written consent of the Seller, and any attempted assignment or
transfer in contravention of the provisions of this Paragraph 16 will be
void and of no force or effect.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return both
copies to AVSA.

	 	 	 	 	 	 	 
	 	 	 	 	Very truly yours,
	 
	 	 	 	 	 	 
	 	 	 	 	AVSA, S.A.R.L.
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	 
	 
	 	 	 	 	 	 
	

	 	 	 	Its:	 	 
	 
	 	 	 	 	 	 
	Accepted and Agreed	 	 	 	 
	 
	 	 	 	 	 	 
	ATLANTIC COAST AIRLINES	 	 	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Its:
	 	 	 	 	 	 

271

 

APPENDIX 1 TO [***] GUARANTEE

[***]

	 	 	 	 	 
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]

	The seller has arranged that, upon request of the Buyer, the [***].	 	 

272

 

APPENDIX 1 TO [***] GUARANTEE

	 	 	 	 	 
	[***]
	 	[***]	 	[***]
	 
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	[***]
	 	[***]	 	[***]
	 
	 	 	 	 
	[***]
	 	 	 	 
	 
	 	 	 	 
	[***]
	 	 	 	 
	[***]
	 	 	 	 
	[***]
	 	 	 	 

273

 

LETTER AGREEMENT NO. 8

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: BUYER’S [***] RIGHT

Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”), have
entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even date
herewith (the “Agreement”), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 8 certain additional terms and
conditions regarding the sale of the Aircraft. Capitalized terms used herein
and not otherwise defined in this Letter Agreement will have the meanings
assigned thereto in the Agreement. The terms “herein,” “hereof” and
“hereunder” and words of similar import refer to this Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

	1.	 	[***]
	 
	1.1	 	[***].
	 
	1.2	 	[***].
	 
	2.	 	[***]
	 
	2.1	 	[***].
	 
	2.2	 	[***].
	 
	2.3	 	[***].
	 
	3.	 	[***]

274

 

[***]

	 	 	[***]
	 
	3.2	 	[***]
	 
	 	 	[***].
	 
	3.3	 	[***]
	 
	 	 	[***].
	 
	 	 	[***].
	 
	4	 	[***]
	 
	4.1	 	[***]
	 
	 	 	[***].
	 
	4.2	 	[***]
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].
	 
	 	 	[***].
	 
	4.3	 	[***]
	 
	 	 	[***].
	 
	5.	 	ASSIGNMENT
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the Agreement,
this Letter Agreement and the rights and obligations of the Buyer
hereunder will not be assigned or transferred in any manner without the
prior written consent of the Seller, and any attempted assignment or
transfer in contravention of the provisions of this Paragraph 5 will be
void and of no force or effect.

275

 

     If the foregoing correctly sets forth our understanding, please execute
the original and one (1) copy hereof in the space provided below and return
both copies to AVSA.

Very truly yours,

 

AVSA, S.A.R.L.

By:                               

Its:                               

Accepted and Agreed

ATLANTIC COAST AIRLINES

By:                               

Its:                               

276

 

LETTER AGREEMENT NO. 9

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

Re: LEASED AIRCRAFT MATTERS

Dear Ladies and Gentlemen:

Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”), have
entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even date
herewith (the “Agreement”), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 9 (the “Letter Agreement”) certain
additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

	1.	 	DEFINITIONS
	 
	 	 	The following terms will have the following meanings:
	 
	 	 	“Leased Aircraft” — each of the ten (10) A319-100 aircraft
delivered to the Buyer pursuant to the terms of binding, long-term lease
agreements having a base term of five (5) years or longer entered into on
or before signature of the Agreement between the Buyer and (i)
International Lease Finance Corporation, with respect to [***] (ii)
C.I.T. Leasing Corporation, with respect [***].
	 
	 	 	“Lessor(s)” — either or both of International Lease Finance
Corporation or C.I.T. Leasing Corporation.
	 
	 	 	“Seventh Leased Aircraft” — the A319-100 aircraft delivered to the
Buyer pursuant to a binding, long-term lease agreement having a base term
of five (5) years or longer entered into between the Buyer and
International Lease Finance Corporation on or before

277

 

	 	 	signature of the Agreement, which is in addition to the six (6)
Leased Aircraft from International Lease Finance Corporation.
	 
	 	 	“Eighth Leased Aircraft” — the A319-100 aircraft delivered to the
Buyer pursuant to a binding, long-term lease agreement having a base term
of five (5) years or longer to be entered into between the Buyer and
International Lease Finance Corporation no later than thirty (30) day’s
following signature of the Agreement, which is in addition to the six (6)
Leased Aircraft from International Lease Finance Corporation and the
Seventh Leased Aircraft.
	 
	 	 	References to Leased Aircraft will be deemed to [***] for the purposes
of [***].
	 
	 	 	Provided that nothing contained herein [***]
	 
	2.	 	[***] FOR LEASED AIRCRAFT
	 
	2.1	 	[***] — Leased Aircraft
	 
	 	 	[***].
	 
	2.2	 	[***]
	 
	 	 	As set forth in Subparagraph 2.1 of this Letter Agreement, [***].
	 
	 	 	[***].
	 
	 	 	[***].
	 
	3.	 	[***]
	 
	 	 	[***].
	 
	4.	 	[***] FOR LEASED AIRCRAFT
	 
	 	 	It is understood and agreed by the parties, that, with respect to the
Leased Aircraft, (i) [***] ([***]) [***] and (ii) [***] of [***].
	 
	5.	 	LEASED AIRCRAFT [***]
	 
	 	 	[***].
	 
	6.	 	[***]
	 
	 	 	[***] to the extent [***].
	 
	7.	 	APPLICABILITY OF [***]

278

 

	7.1	 	[***] provided to the Buyer pursuant to [***].
	 
	7.2	 	The second sentence of the second paragraph of Clause [***] of the
Agreement is hereby superseded and replaced by the following quoted text.

QUOTE

	 	 	[***].

UNQUOTE

	8.	 	ASSIGNMENT 
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the Agreement,
this Letter Agreement and the rights and obligations of the Buyer
hereunder will not be assigned or transferred in any manner without the
prior written consent of the Seller, and any attempted assignment or
transfer in contravention of the provisions of this Paragraph 8 will be
void and of no force or effect.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return both
copies to AVSA.

Very truly yours,

AVSA, S.A.R.L.

 

By:                               

Its:                               

Accepted and Agreed:

ATLANTIC COAST AIRLINES

By:                               

Its:                               

279

 

LETTER AGREEMENT NO. 10

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

	Re: 	 	ASSIGNMENTS

Dear Ladies and Gentlemen,

Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”), have
entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even date
herewith (the “Agreement”), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in the Agreement. The Buyer and the Seller have agreed to
set forth in this Letter Agreement No. 10 (this “Letter Agreement”) certain
additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
“herein”, “hereof”, and “hereunder” and words of similar import refer to this
Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
non-severable part of the Agreement, that the provisions of the Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of the Agreement, except that if the Agreement and
this Letter Agreement (other than provisions of the Agreement incorporated
herein by reference) have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement (other than provisions
of the Agreement incorporated herein by reference) will govern.

	1.	 	Clause 20
	 
	 	 	Clause 20 of the Agreement is hereby amended in its entirety and replaced
with the following quoted text:

     QUOTE

	20.1.	 	Assignments
	 
	20.1.1	 	Assignments Generally
	 
	 	 	Subject to the provisions of this Clause 20.1, the Agreement will inure
to the benefit of and be binding upon the successors and assigns of the
Parties hereto. The Agreement will not be assigned in whole or in part
by either Party without the prior written consent of the other Party,
such consent not to be unreasonably withheld, except as provided in this
Clause 20.1.

280

 

	20.1.2	 	Certain Assignments by Buyer
	 
	 	 	[***], upon prior notice to the Seller:

	 	(a)	 	The Buyer may assign all of its rights and obligations under
the Agreement to any Qualifying Affiliate, subject to the same terms
and conditions as are set forth in this Clause 20.1.2. A
“Qualifying Affiliate” shall mean an affiliate of the Buyer that
meets the following requirements: (1) either (i) the Buyer holds
greater than [***] ([***]%) of the stock of the affiliate or (ii
greater than [***] ([***]%)of the affiliate and the Buyer are owned
by the same party; (2 the affiliate is organized and existing under
the laws of the United States or any state thereof; (3) the
affiliate has executed an assumption agreement in form and substance
reasonably acceptable to the Seller; and (4) the affiliate holds an
Air Carrier Certificate issued by the FAA.
	 
	 	(b)	 	Before tender of delivery of the Aircraft by the Seller, the
Buyer may assign (or create a security interest in) the right of the
Buyer to purchase an Aircraft for the purchase price specified in
Clause 3 of the Agreement and, if desired, together with the rights
and obligations of the Buyer pursuant to Clauses 12, 13 and 17 of
the Agreement with respect to such Aircraft, to a person or entity
that provides debt or equity financing for the purchase of such
Aircraft (or any trustee or agent for such a person or entity),
pursuant to a purchase agreement assignment in a form customarily
accepted by the Seller.
	 
	 	(c)	 	Upon or after delivery of the Aircraft by the Seller, the
Buyer may assign (or create a security interest in) its rights and
obligations under Clauses 12, 13 and 17 of the Agreement with
respect to an Aircraft to any person or entity who buys such
Aircraft or to any person or entity providing debt or equity
financing with respect to such Aircraft (or any trustee or agent for
such a person or entity), pursuant to a purchase agreement
assignment in a form customarily accepted by the Seller.

	 	 	No assignment (or creation of a security interest) pursuant to this
Clause 20.1.2 shall have the effect of releasing Buyer from any
obligation or liability under the Agreement, or the Buyer’s guarantor
from its guarantee of the Buyer’s obligations under the Agreement, save
to the extent of actual performance of Buyer’s obligations under the
Agreement by any such assignee.
	 
	20.1.3	 	Reorganization Transactions of Buyer
	 
	 	 	The Buyer shall be permitted to consolidate with or merge into any other
person, or sell, convey, lease, or otherwise transfer all or
substantially all of its assets as an entirety (whether in one
transaction or a series of transactions) to any person (a “Reorganization
Transaction”), if:

	 	 	 	     (1) the person formed by such consolidation or surviving such
merger, or the person who acquires by sale, conveyance, transfer,
or lease all or substantially all of the Buyer’s assets as an
entirety (the “Successor”) is a citizen of the United

281

 

	 	 	 	States under 49 U.S.C. § 40102(a)(15) holding an air carrier
operating certificate issued by the Secretary of Transportation
pursuant to 49 U.S.C. chapter 447;
	 
	 	 	 	     (2) the Successor, if other than the Buyer, (aa) executes and
delivers to the Seller an agreement, in form and substance
reasonably satisfactory to the Seller, containing an assumption by
the Successor of the due and punctual performance and observance of
the Buyer’s obligations under the Agreement, and (bb) makes such
filings and recordings as are necessary to evidence such
consolidation, merger, sale, conveyance, transfer, or lease;
	 
	 	 	 	     (3) immediately after giving effect to such transaction, no
Termination Event (within the meaning of Clause 21 of the
Agreement) shall have occurred and be continuing; and
	 
	 	 	 	     (4) the Successor delivers to the Seller a certificate, signed
on the Successor’s behalf by a responsible officer, stating that
the conditions precedent set forth in Paragraphs (1), (2), and (3)
above have been complied with, and an opinion of counsel for the
Buyer or for the Successor, in form and substance reasonably
satisfactory to the Seller, (aa) stating that the agreements
entered into to effect such Reorganization Transaction and such
assumption agreements have been duly authorized, executed, and
delivered by the Successor and that they (and this Agreement as so
assumed) constitute legal, valid and binding obligations of the
Successor, enforceable in accordance with their terms, (bb) stating
that all conditions precedent provided for in sub-clauses (1) (2)
(bb) and 4 (aa) above and relating to such Reorganization
Transaction have been fulfilled and (cc) containing such other
matters as the Seller reasonably requests.

	 	 	Upon the effectiveness of any such Reorganization Transaction, the
Successor, if other than the Buyer, shall succeed to, shall be
substituted for, and may exercise every right and power of the Buyer
under the Agreement, with the same effect as if the Successor had been
named as the Buyer herein. No such sale, conveyance, transfer or lease
shall have the effect of releasing the Buyer (or any Successor who has
become such under this Clause 20.1.3) from any liability or obligation
under the Agreement, or the Buyer’s guarantor from its guarantee of the
Buyer’s obligations under the Agreement, save to the extent of actual
performance of the Buyer’s obligations under the Agreement by any such
Successor.
	 
	20.1.4	 	Designations by Seller
	 
	 	 	The Seller may at any time by notice to the Buyer designate facilities or
personnel of the Manufacturer, ANACS, any of the Associated Contractors
or any Affiliate of the Manufacturer at which or by whom the services to
be performed under the Agreement will be performed. The Seller may also
designate the Manufacturer, ANACS, any Associated Contractor or any
Affiliate of the Manufacturer as the party responsible on behalf of the
Seller for providing to the Buyer all or any of the services described in
or receiving money due the Seller under the Agreement. Notwithstanding
such designation,

282

 

	 	 	the Seller will remain ultimately responsible for fulfillment of all
obligations undertaken by the Seller in the Agreement.
	 
	20.1.5	 	Transfer of Rights and Obligations by Seller
	 
	 	 	If at any time until the date upon which all the obligations and
liabilities of the Seller under this Agreement have been discharged, the
legal structure or legal form of the Seller is changed and as a
consequence thereof the Seller wishes the Buyer to accept the
substitution of the Seller by another entity within the restructured
Airbus group (or the Seller in its new legal form) (“Newco”) as
contemplated below, the Seller will promptly notify the Buyer.
	 
	 	 	In such event, the Seller may request the Buyer to consent to an
agreement between the Seller and Newco whereby the Seller’s rights and
obligations under the Agreement are transferred to Newco. No such
transaction shall have the effect of releasing Seller from its
obligations under the Agreement if the Seller continues to exist as a
legal entity. The Buyer agrees that its consent to such agreement will
not be unreasonably withheld or delayed.
	 
	 	 	UNQUOTE
	 
	2.	 	ASSIGNMENT
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the Agreement,
this Letter Agreement and the rights and obligations of the Buyer
hereunder will not be assigned or transferred in any manner without the
prior written consent of the Seller, and any attempted assignment or
transfer in contravention of the provisions of this Paragraph 2 will be
void and of no force or effect.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return a copy
to the Seller.

	 	 	 	 	 
	 	 	Very truly yours,
	 	 	AVSA, S.A.R.L.
	 	 	By:	 	 

	 	 	Its:	 	 

	 	 	Date:
	 	 

Accepted and Agreed

ATLANTIC COAST AIRLINES

	 	 	 	 	 
	By:	 	
 

	 	 
	Its:	 	
 

	 	 

283

 

LETTER AGREEMENT NO. 11

As of April 1, 2004

Atlantic Coast Airlines

45200 Business Court

Dulles, VA 20166

	Re: 	 	PREDELIVERY PAYMENTS

Dear Ladies and Gentlemen:

Atlantic Coast Airlines (the “Buyer”), and AVSA, S.A.R.L. (the “Seller”), have
entered into an Airbus A319/A320/A321 Purchase Agreement dated as of even date
herewith (the “Agreement”), which covers, among other things, the sale by the
Seller and the purchase by the Buyer of certain Aircraft, under the terms and
conditions set forth in said Agreement. The Buyer and the Seller have agreed
to set forth in this Letter Agreement No. 11 (the “Letter Agreement”) certain
additional terms and conditions regarding the sale of the Aircraft.
Capitalized terms used herein and not otherwise defined in this Letter
Agreement will have the meanings assigned thereto in the Agreement. The terms
“herein,” “hereof” and “hereunder” and words of similar import refer to this
Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral,
nonseverable part of said Agreement, that the provisions of said Agreement are
hereby incorporated herein by reference, and that this Letter Agreement will be
governed by the provisions of said Agreement, except that if the Agreement and
this Letter Agreement have specific provisions which are inconsistent, the
specific provisions contained in this Letter Agreement will govern.

	1.	 	SCHEDULE
	 
	 	 	Clauses 5.2.1, 5.2.2 and 5.2.3 of the Agreement are cancelled and
replaced with the following quoted text:

     QUOTE

	 	5.2.1	 	Predelivery Payments will be paid by the Buyer to the Seller for
each Aircraft. Predelivery Payments are nonrefundable (although
amounts equal to Predelivery Payments paid by the Buyer to the Seller
with respect to an Aircraft may be paid

284

 

	 	 	to the Buyer pursuant to Clause 5.2.4 of the Agreement).
	 
	5.2.2	 	[Intentionally left blank.]
	 
	5.2.3	 	Predelivery Payments for the Aircraft will be paid according to
the schedules in Paragraphs 5.2.3.1, 5.2.3.2.1 and 5.2.3.3 [***]
indicated.
	 
	5.2.3.1	 	A319 Aircraft
	 
	 	 	Predelivery Payments for the A319 Aircraft will be paid according
to the following schedule [***] indicated:

A319 Predelivery Payment Schedule

	 	 	 	 	 	 	 	 	 
	PAYMENT NUMBER
	 	PAYMENT DATE
	 	PREDELIVERY PAYMENT

	

	 	 	 	[***]	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	

	 	[***]
	 	[***]
	 	[***]
	 	[***]

	5.2.3.2	 	A320 Aircraft
	 
	5.2.3.2.1	 	Predelivery Payments for the A320 Aircraft will be paid according
to the following schedule in the fixed amounts indicated:

285

 

A320 Predelivery Payment Schedule

	 	 	 	 	 	 	 	 	 
	PAYMENT NUMBER
	 	PAYMENT DATE
	 	PREDELIVERY PAYMENT

	

	 	 	 	[***]	 	[***]	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	

	 	[***]
	 	[***]
	 	[***]
	 	[***]

	5.2.3.2.2	 	Notwithstanding Paragraph [***], the amount of each Predelivery
Payment for each of the [***] the Predelivery Payment due [***] under
the schedule set forth in Paragraph [***]. Upon [***] set forth in
Paragraph 2.3.1 of Letter Agreement No. 3 to the Agreement, [***]
Predelivery Payment due [***] under the schedule set forth in Paragraph
5.2.3.2.1 [***]. Upon [***] the Predelivery Payments [***] under the
Predelivery Payment schedule [***] set forth in Paragraph 5.2.3.2.1,
and the Predelivery Payments [***] (listed under the column heading of
such name) pursuant to the terms of Paragraph 5.2.3.5 below [***]
(listed under the column heading of such name) under the Predelivery
Payment schedule [***] set forth in Paragraph 5.2.3.2.1.
	 
	5.2.3.3	 	A321 Aircraft
	 
	 	 	Predelivery Payments for the A321 Aircraft will be paid according
to the following schedule in the fixed amounts indicated:

286

 

A321 Predelivery Payment Schedule

	 	 	 	 	 	 	 	 	 
	PAYMENT NUMBER
	 	PAYMENT DATE
	 	PREDELIVERY PAYMENT

	

	 	 	 	[***]	 	[***]	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 	[***]
	 	[***]
	

	 	[***]
	 	[***]
	 	[***]
	 	[***]

	5.2.3.4	 	For [***], any Predelivery Payment for which the “Payment Date” [***].
For [***], any Predelivery Payment for which the “Payment Date” [***].
	 
	5.2.3.5	 	Payment of [***]
	 
	5.2.3.5.1	 	Predelivery Payments [***] according to the schedules provided in
Paragraphs 5.2.3.1, 5.2.3.2.1 and 5.2.3.3. However, [***] of the
applicable Predelivery Payment in accordance with the schedules in
Paragraphs 5.2.3.1, 5.2.3.2.1 and 5.2.3.3, [***] pursuant to Paragraph
5.2.3.5.3. All [***]. It is understood and agreed that [***].
	 
	5.2.3.5.2	 	Each such [***] pursuant to Paragraph 5.2.3.5.1 [***] “Payment Date”
(listed under the column heading of such name in the applicable table in
Paragraph 5.2.3.1, 5.2.3.2.1 or 5.2.3.3) of the corresponding Predelivery
Payment [***] at payment of the [***] payment of such [***].
	 
	5.2.3.5.3	 	In respect of each [***] “Payment Date” (listed under the column
heading of such name in the applicable table in Paragraph 5.2.3.1,
5.2.3.2.1 or 5.2.3.3), [***] applicable Payment Date.
	 
	 	 	UNQUOTE
	 
	6.	 	ASSIGNMENT
	 
	 	 	Except as otherwise provided in Letter Agreement No. 10 to the
Agreement, this Letter Agreement and the rights and obligations of
the Buyer hereunder will not be assigned or transferred in any
manner without the prior written consent of the

287

 

	 	 	Seller, and any attempted assignment or transfer in contravention
of the provisions of this Paragraph 6 will be void and of no force
or effect.

If the foregoing correctly sets forth our understanding, please execute the
original and one (1) copy hereof in the space provided below and return both
copies to AVSA.

	 	 	 	 	 
	 	 	Very truly yours,
	 	 	AVSA, S.A.R.L.
	 	 	By:	 	 

	 	 	Its:	 	 

Accepted and Agreed

ATLANTIC COAST AIRLINES

	 	 	 	 	 
	By:	 	
 

	 	 
	Its:	 	
 

	 	 

288

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