Document:

Letter Agreement No. 13 to the Airbus A350-900XWB

 Exhibit 10.40 

LETTER AGREEMENT NO. 13 

As of March 5, 2010 
 United
Air Lines, Inc. 
 77 West Wacker Drive 

Chicago, Illinois 60601 
 Re: WARRANTIES AND
SERVICE LIFE POLICY 
 Dear Ladies and Gentlemen, 

United Air Lines, Inc. (the “Buyer”), and AIRBUS S.A.S. (the “Seller”), have entered into an Airbus A350-900XWB
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. 13 (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.	WARRANTIES AND SERVICE LIFE POLICY 

Clause 12 of the Agreement is deleted in its entirety and replaced with the following quoted text: 

QUOTE 
 12 -
WARRANTIES AND SERVICE LIFE POLICY 
 12.1 Warranty 

12.1.1 Nature of Warranty 

Subject to the limitations and conditions hereinafter provided, and except as provided in Clause 12.1.2, the Seller warrants to the Buyer
that the Aircraft and each Warranted Part will at the time of Delivery to the Buyer be free from defects: 
 (i)
in material, 
 (ii) in workmanship, including, without limitation, processes of manufacture, 

(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 Specification, except as to those portions of
the Specification that are expressly stated in the Specification to be estimates or approximations or design aims. 
 For the
purpose of this Agreement, the term “Warranted Part” will mean any Seller proprietary component, equipment, software, or part, 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 Seller’s part number at the time of Delivery. 
 12.1.2
Exclusions 
 The warranties set forth in Clause 12.1.1 will not apply to Buyer Furnished Equipment, 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
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). 

12.1.3 Warranty Periods 

The warranties described in Clauses 12.1.1 and 12.1.2 will be limited to those defects that become apparent within [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. 
 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 ARE LIMITED TO, AT THE SELLER’S EXPENSE AND OPTION, THE REPAIR, REPLACEMENT OR CORRECTION (TO INCLUDE, IN THE CASE OF SOFTWARE, SUPPLY OF A COMPARABLE PRODUCT WITH EQUIVALENT FUNCTION) OF ANY DEFECTIVE WARRANTED PART. THE
SELLER MAY ELECT TO EFFECT SUCH REPAIR, REPLACEMENT OR CORRECTION BY SUPPLYING MODIFICATION KITS DESIGNED TO RECTIFY THE DEFECT OR BY FURNISHING 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. 
 12.1.4.2 IF THE
SELLER CORRECTS A DEFECT COVERED BY CLAUSE 12.1.1(III) THAT BECOMES APPARENT WITHIN THE WARRANTY PERIOD, ON THE BUYER’S WRITTEN REQUEST THE SELLER WILL CORRECT ANY SUCH DEFECT OF THE SAME TYPE IN ANY AIRCRAFT THAT HAS NOT ALREADY BEEN DELIVERED
TO THE BUYER. THE SELLER WILL NOT BE RESPONSIBLE FOR, NOR DEEMED TO BE IN DEFAULT ON ACCOUNT OF ANY DELAY IN DELIVERY OF ANY AIRCRAFT OR OTHERWISE, IN RESPECT OF PERFORMANCE OF THIS AGREEMENT, DUE TO THE SELLER’S UNDERTAKING TO MAKE SUCH
CORRECTION. ALTERNATIVELY, 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  

In addition to the remedies set forth in Clauses 12.1.4.1 and 12.1.4.2, the Seller will reimburse the direct labor costs incurred by the
Buyer in performing inspections of the Aircraft that are conducted to determine whether or not a defect exists in any Warranted Part within the Warranty Period subject to the following conditions: 

(i) Such inspections are recommended in a Seller Service Bulletin to be performed within the Warranty Period; 

(ii) Such inspections are not performed in lieu of corrective action that has been provided by the Seller prior to the
dates of such inspection; 
 (iii) the labor rate for the reimbursements will be the In-house Warranty Labor
Rate, and 
 (iv) the manhours used to determine such reimbursement will not exceed the Seller’s
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] estimate of the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] manhours 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: 
 (I) THE DEFECT HAS BECOMES APPARENT WITHIN THE WARRANTY PERIOD,

 (II) THE BUYER HAS FILED A WARRANTY CLAIM [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] OF A DEFECT BECOMING APPARENT, EXCEPT WHERE THE SELLER HAS ISSUED A SERVICE BULLETIN INTENDED TO PROVIDE A REMEDY FOR SUCH A DEFECT, IN WHICH CASE THE WARRANTY CLAIM MUST BE FILED NO LATER THAN
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] FOLLOWING EMBODIMENT OF THE SELLER SERVICE BULLETIN IN THE AIRCRAFT; 

(III) THE BUYER HAS SUBMITTED TO THE SELLER EVIDENCE REASONABLY SATISFACTORY TO THE SELLER THAT (I) THE CLAIMED
DEFECT IS DUE TO A MATTER COVERED UNDER THE PROVISIONS OF THIS CLAUSE 12, AND (II) THAT SUCH DEFECT DID NOT RESULT FROM ANY ACT OR OMISSION OF THE BUYER (EXCEPT WHEN SUCH ACT OR OMISSION IS IN ACCORDANCE WITH THE SELLER’S INSTRUCTIONS),

 
INCLUDING BUT NOT LIMITED TO, ANY FAILURE TO OPERATE AND MAINTAIN THE AFFECTED AIRCRAFT OR PART THEREOF IN ACCORDANCE WITH THE STANDARDS SET FORTH IN CLAUSE 12.1.11 OR FROM ANY ACT OR OMISSION OF
ANY THIRD PARTY; 
 (IV) THE BUYER RETURNS THE WARRANTED PART CLAIMED TO BE DEFECTIVE TO THE REPAIR FACILITIES
DESIGNATED BY THE SELLER AS SOON AS PRACTICABLE, UNLESS THE BUYER ELECTS TO REPAIR A DEFECTIVE WARRANTED PART IN ACCORDANCE WITH THE PROVISIONS OF CLAUSE 12.1.8; AND 

(V) THE SELLER’S RECEIVES A WARRANTY CLAIM COMPLYING WITH THE PROVISIONS OF CLAUSE 12.1.7(V). 

12.1.7 Warranty Administration 

The warranties set forth in this Clause 12.1 will be administered as hereinafter provided: 

(i) Claim Determination 

DETERMINATION BY THE SELLER AS TO WHETHER ANY CLAIMED DEFECT IN ANY WARRANTED PART IS A VALID WARRANTY CLAIM WILL BE MADE BY THE SELLER,
ACTING REASONABLY, AND WILL BE 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. THE SELLER
WILL MAKE REASONABLE EFFORTS TO MAKE SUCH DETERMINATION WITHIN THIRTY (30) BUSINESS DAYS OF THE SUBMISSION OF ALL INFORMATION REQUIRED BY CLAUSE 12.1.7(V). 

(ii) Transportation Costs 

The cost of transporting a Warranted Part claimed to be defective to the facilities designated by the Seller will be borne by the Seller,
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. 

(iii) On-Aircraft Work by the Seller 

IF EITHER (A) THE SELLER DETERMINES THAT A DEFECT SUBJECT TO THIS CLAUSE 12.1 REQUIRES THE DISPATCH BY THE SELLER OF A SELLER’S
WORKING TEAM TO THE BUYER’S FACILITIES, TO REPAIR OR CORRECT SUCH DEFECT THROUGH IMPLEMENTATION OF ONE OR MORE SELLER’S SERVICE BULLETINS, OR (B) THE SELLER ACCEPTS THE RETURN OF AN AIRCRAFT TO PERFORM OR HAVE PERFORMED A REPAIR

 
OR CORRECTION, THEN, THE LABOR COSTS FOR SUCH ON-AIRCRAFT WORK WILL BE BORNE BY THE SELLER AT THE IN-HOUSE WARRANTY LABOR RATE. 

ON-AIRCRAFT WORK BY THE SELLER WILL BE UNDERTAKEN ONLY 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. 
 (iv)
Return of an Aircraft 
 If the Buyer desires to return an Aircraft to the Seller for consideration of a Warranty Claim,
the Buyer will notify the Seller of its intention to do so, and the Seller will, prior to such return, have the right to inspect such Aircraft, and without prejudice to the Seller’s rights hereunder, to repair such Aircraft either at the
Buyer’s facilities or at another place acceptable to the Seller. [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] Aircraft by the Buyer to the Seller and return of such
Aircraft to the Buyer’s facilities will be at the Buyer’s expense. 
 (v) Warranty Claim Substantiation

 For each claim under this Clause 12.1 the Buyer will give written notice (a “Warranty Claim”) to the Seller
that contains at least the data listed below with respect to an Aircraft or Warranted Part, as applicable. The Buyer will deliver the Warranty Claim [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] of discovering each defect giving rise to a claim by the Buyer under this Clause 12. 
 The minimum
data to be supplied are as follows: 
 (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 of the Illustrated Parts Catalog, Component Maintenance
Manual or Structural Repair Manual as applicable, 

 (g) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], total flying hours or dates operated, as applicable, at the date of appearance of a defect, 

(h) Time since last shop visit before appearance of the defect, 

(i) Manufacturer’s serial number or “MSN” of the Aircraft and/or its registration number, 

(j) [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT], Aircraft total flying hours and/or number of landings at the date of appearance of defect, 
 (k)
Claim number, 
 (l) Date of claim and 

(m) Date of Delivery of an Aircraft 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 

Or electronically through Airbus World, using the contracts and warranty administration tool. 

(vi) Replacements 

REPLACED COMPONENTS, EQUIPMENT, ACCESSORIES OR PARTS WILL BECOME THE SELLER’S PROPERTY. 

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 THEREFOR AS IS CHARGEABLE BY LAW TO A
BAILEE FOR HIRE, 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 THEREFOR. UPON THE SELLER’S SHIPMENT TO THE BUYER 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 REPLACEMENT COMPONENT, ACCESSORY, EQUIPMENT OR PART WILL PASS TO THE BUYER. 

(vii) Rejection 

The Seller will provide reasonable written substantiation in case of rejection of a Warranty Claim. The Buyer will pay to the Seller
reasonable inspection and test charges incurred by the Seller in connection with the investigation and processing of a rejected Warranty Claim. 

(viii) Inspection 

THE SELLER WILL HAVE THE RIGHT TO 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
Repair”). [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], when the estimated cost of an In-house Warranty Repair [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], the Buyer will notify the Resident Customer Support Representative, of its decision to perform any in-house repairs before such repairs are commenced. [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] 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 use reasonable efforts to ensure a prompt response 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 THE BUYER COMPLIES WITH THE TERMS OF CLAUSE 12.1.8(I); 

 (B) IF ADEQUATE FACILITIES AND QUALIFIED PERSONNEL ARE AVAILABLE TO THE
BUYER. 
 (C) PROVIDED THAT REPAIRS ARE TO BE PERFORMED IN ACCORDANCE WITH THE SELLER’S WRITTEN INSTRUCTIONS
SET FORTH IN APPLICABLE TECHNICAL DATA AND 
 (D) ONLY TO THE EXTENT SPECIFIED BY THE SELLER, OR, IN THE ABSENCE
OF THE SELLER’S SPECIFYING, TO THE EXTENT REASONABLY NECESSARY TO CORRECT THE DEFECT, IN ACCORDANCE WITH THE STANDARDS SET FORTH IN CLAUSE 12.1.10. 

(iii) Seller’s Rights 

The Seller will have the right to require the return to Seller of any Warranted Part, or any part removed therefrom, that is claimed to be
defective, if, in the Seller’s judgment, the nature of the claimed defect requires technical investigation. Such delivery will be subject to the provisions of Clause 12.1.7(ii). 

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. 
 (iv) In-house Warranty Claim Substantiation 

CLAIMS FOR IN-HOUSE WARRANTY REPAIR CREDIT MUST BE SUBMITTED TO THE SELLER NO LATER THAN [CONFIDENTIAL MATERIAL OMITTED AND FILED
SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] AFTER COMPLETION OF SUCH IN-HOUSE WARRANTY REPAIR, AND WILL COMPLY WITH THE REQUIREMENTS FOR WARRANTY CLAIMS UNDER CLAUSE 12.1.6(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: 

(C) PART NUMBERS, SERIAL NUMBERS (IF APPLICABLE), DESCRIPTION OF THE PARTS, QUANTITY OF PARTS, UNIT PRICE OF PARTS, COPIES
OF RELATED SELLER’S OR THIRD PARTY’S INVOICES (IF APPLICABLE), TOTAL PRICE OF PARTS 
 (D) DETAILED
NUMBER OF LABOR HOURS, 
 (E) IN-HOUSE WARRANTY LABOR RATE, AND 

 (F) TOTAL CLAIM VALUE. 

(v) Credit 

The Buyer’s sole remedy, and the Seller’s sole obligation and liability, in respect of In-house Warranty Repair claims, will be
a credit to the Buyer’s account. Such credit will be equal to the sum of the direct labor cost expended in performing such repair, plus the direct cost of materials incorporated in the repair. Such costs will be determined as set forth below.

 (a) To determine direct labor costs, only the man-hours spent on removal from the Aircraft disassembly,
inspection, repair, reassembly, and final inspection and test of the Warranted Part, and reinstallation thereof on the Aircraft will be counted. The hours required for maintenance work concurrently being carried out on the Aircraft or other
Warranted Part will not be included. 
 (b) The hours counted as set forth in Clause 12.1.8 (v)(a) above will be
[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], 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 [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] (the “In-house Warranty Labor Rate”). 

The In-house Warranty Labor Rate is subject to adjustment [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO
A REQUEST FOR CONFIDENTIAL TREATMENT] Labor Index defined in the Seller Price Revision Formula. 
 (c) Direct
material costs are determined by the prices at which the Buyer acquired such material, excluding any parts and materials used for overhaul furnished free of charge by the Seller. 

(vi) Limitation on Credit 

THE BUYER WILL IN NO EVENT BE CREDITED FOR REPAIR COSTS (LABOR OR MATERIAL) FOR ANY WARRANTED PART TO THE EXTENT SUCH REPAIR COSTS EXCEED
IN THE [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] FOR A REPLACEMENT OF SUCH DEFECTIVE WARRANTED PART PROVIDED SUCH REPLACEMENT PART IS AVAILABLE FOR PURCHASE. 

 THE SELLER WILL SUBSTANTIATE SUCH SELLER 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 defective Warranted 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 immediately, the Buyer will retain such Warranted Part and any defective part removed from a Warranted Part during repair for a period of either [CONFIDENTIAL
MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] after the date of completion of repair or [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT] after submission of a claim for In-house Warranty Repair credit relating thereto, whichever is longer. Such parts will be returned to the Seller [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT] of receipt of the Seller’s request therefor, made within such retention periods. 

A record of scrapped Warranted Parts, certified by an authorized representative of the Buyer, will be kept in the Buyer’s file for at
least the duration of the Warranty Period. 
 (viii) DISCLAIMER OF SELLER LIABILITY FOR BUYER’S REPAIR 

THE SELLER WILL NOT BE LIABLE FOR, AND THE BUYER WILL INDEMNIFY THE SELLER AGAINST, THE CLAIMS OF ANY THIRD PARTIES FOR LOSSES DUE TO ANY
DEFECT, NONCONFORMANCE OR PROBLEM 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, [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT]. 
 12.1.9 Warranty Transferability 

NOTWITHSTANDING THE PROVISIONS OF CLAUSE 21.1, 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. 

12.1.9.1 Warranty for Corrected, Replacement or Repaired Warranted Parts  

Whenever any Warranted Part that contains a defect for which the Seller is liable under this Clause 12.1 has been corrected, repaired or
replaced pursuant to the terms hereof, the period of the Seller’s warranty with respect to such corrected, repaired or replacement Warranted Part, will be the remaining portion of the original warranty in respect of such corrected, repaired or
replaced Warranted Part or twelve (12) months, whichever is longer. 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, and will immediately terminate the remaining warranties under this Clause 12.1 in respect of the affected Warranted Part. 

12.1.10 Good Airline Operation - Normal Wear and Tear 

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 good commercial airline practice, all technical documentation and any other instructions issued by the Seller, the Suppliers or the Propulsion Systems Manufacturer and all applicable
rules, regulations and directives of the relevant Aviation Authorities. 
 The Seller’s liability under this Clause 12.1
will not extend to normal wear and tear or to 
 (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 approved by the Seller; 

(ii) any Aircraft or component, equipment, accessory or part thereof that has been operated in a damaged state; or

 (iii) any component, equipment, accessory or part from which the trademark, trade name, part or serial number
or other identification marks have been removed, 
 [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. 
 12.2 Service Life Policy 

12.2.1 Scope and Definitions 

 In addition to the warranties set forth in Clause 12.1, the Seller 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, the provisions of this Clause 12.2 will apply. 

For the purposes of this Clause 12.2: 

(i) “Item” means any of the Seller components, equipment, accessories or parts listed in Exhibit F that are
installed on an Aircraft at any time during the period of effectiveness of the Service Life Policy specified 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, such Item did not result from any breakage or 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 or fleetwide basis. 
 The Seller’s obligations under this Clause 12.1.2 are referred to as the
“Service Life Policy.” 
 12.2.2 Periods and Seller’s Undertaking 

SUBJECT TO THE GENERAL CONDITIONS AND LIMITATIONS SET FORTH IN CLAUSE 12.2.4, THE SELLER AGREES THAT IF A FAILURE OCCURS IN AN ITEM WITHIN
FIFTEEN (15) YEARS AFTER THE DELIVERY OF THE AIRCRAFT IN WHICH SUCH ITEM IS INSTALLED, 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), OR 

(II) REPLACE SUCH ITEM. 

12.2.3 [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

 Any part or Item or part that the Seller is required to furnish to the Buyer under this Service Life Policy will be furnished
to the Buyer at the [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT], which will be determined in accordance with the following formula: 

[CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]

 12.2.4 General Conditions and Limitations 

12.2.4.1 NOTWITHSTANDING ANY PROVISION OF THIS CLAUSE 12.2, DURING THE WARRANTY PERIOD, ALL ITEMS WILL BE COVERED BY THE PROVISIONS OF
CLAUSE 12.1 OF THIS AGREEMENT AND NOT BY THE PROVISIONS OF THIS 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 THE FOLLOWING CONDITIONS: 
 (I) THE
BUYER MAINTAINS LOG BOOKS AND OTHER HISTORICAL RECORDS WITH RESPECT TO EACH ITEM ADEQUATE TO ENABLE THE SELLER TO DETERMINE WHETHER THE ALLEGED FAILURE IS COVERED BY THIS SERVICE LIFE POLICY AND, IF SO, TO DEFINE THE PORTION OF THE COST TO BE BORNE
BY THE SELLER IN ACCORDANCE WITH CLAUSE 12.2.3. 
 (II) THE BUYER COMPLIES WITH THE CONDITIONS OF CLAUSE 12.1.11. 

(III) THE BUYER IMPLEMENTS SPECIFIC STRUCTURAL INSPECTION PROGRAMS FOR MONITORING PURPOSES AS MAY BE ESTABLISHED FROM TIME TO TIME BY THE
SELLER. SUCH PROGRAMS WILL BE, TO THE EXTENT POSSIBLE, COMPATIBLE WITH THE BUYER’S OPERATIONAL REQUIREMENTS AND WILL BE CARRIED OUT AT THE BUYER’S EXPENSE, REPORTS RELATING THERETO TO BE REGULARLY FURNISHED TO THE SELLER. 

(IV) THE BUYER REPORTS IN WRITING ANY BREAKAGE OR DEFECT TO THE SELLER WITHIN [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT] 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, AND THE BUYER PROVIDES 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. ALL CLAIMS UNDER THIS SERVICE LIFE POLICY WILL INCLUDE ALL INFORMATION REASONABLY AVAILABLE TO THE BUYER REGARDING SIGNIFICANT INCIDENTS RELATING TO THE RELEVANT AIRCRAFT.

 12.2.4.4 IF THE SELLER HAS ISSUED A SERVICE BULLETIN 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 FORMULA ESTABLISHED BY THE SELLER. 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, 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 THEREFOR 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 A CREDIT FOR GOODS
AND SERVICES, 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.

 12.3 Supplier Warranties and Service Life Policies 

12.3.1 Seller’s Support 

 BEFORE DELIVERY OF THE FIRST AIRCRAFT, THE SELLER WILL PROVIDE THE BUYER WITH THE WARRANTIES
AND SERVICE LIFE POLICIES THAT THE SELLER HAS OBTAINED PURSUANT TO THE SUPPLIER PRODUCT SUPPORT AGREEMENTS. 
 12.3.2
Supplier’s Default 
 12.3.2.1 [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT]. 
 12.3.2.2 If any Supplier under any Supplier service life policy referred to in to
Clause 12.3.1 defaults in the performance of any material obligation under such service life policy, and (i) the Buyer has used its [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT] efforts to enforce its rights under such service life policy, and (ii) the Buyer submits within reasonable time to the Seller reasonable evidence 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 listed in Exhibit F hereto, to the extent that the Seller can reasonably perform said Supplier’s service life policy. 

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, such default and the Buyer will provide reasonable assistance to enable the Seller to enforce the rights so assigned. 

12.4 Interface Commitment 

12.4.1 Interface Problem 

If the Buyer experiences any technical problem 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, and without additional charge to the Buyer, except for [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]
transportation of the Seller’s or its designee’s personnel to the Buyer’s facilities, promptly conduct or have conducted an investigation and analysis of such problem to determine, if possible, the cause or causes of the problem
and to recommend such corrective action as may be feasible. The Buyer will furnish to the Seller all data and information in the Buyer’s possession relevant to the Interface Problem and will 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 Seller determines that 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 SELLER DETERMINES THAT THE INTERFACE PROBLEM IS PRIMARILY ATTRIBUTABLE TO THE
DESIGN OF ANY SUPPLIER PART, THE SELLER WILL AT THE BUYER’S REQUEST, ASSUME THE MANAGEMENT OF THE RESOLUTION OF THE INTERFACE PROBLEM AND MAKE REASONABLE EFFORTS TO FIND A SOLUTION SATISFACTORY TO THE BUYER. 

12.4.4 Joint Responsibility 

If the Seller determines that 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, [CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SEC PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT]. 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 TO 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 THIS AGREEMENT AND WILL BE SUBJECT TO THE TERMS, COVENANTS AND CONDITIONS SET FORTH IN THIS CLAUSE 12 AND IN CLAUSE 22.10. 

 12.5 Exclusivity of Warranties  

THIS CLAUSE 12 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 OR PROBLEM 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 OR PROBLEM OF ANY KIND IN THE GOODS AND SERVICES SUPPLIED UNDER THIS AGREEMENT. THE BUYER HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, OBLIGATIONS 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 OR PROBLEM 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: 

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

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

ANY RIGHT, CLAIM OR REMEDY FOR BREACH OF CONTRACT; 

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, GROSS NEGLIGENCE, INTENTIONAL ACTS, WILLFUL DISREGARD, IMPLIED WARRANTY, PRODUCT LIABILITY, STRICT LIABILITY OR FAILURE TO WARN; 

ANY RIGHT, CLAIM OR REMEDY ARISING UNDER THE UNIFORM COMMERCIAL CODE OR ANY OTHER STATE OR FEDERAL STATUTE; 

ANY RIGHT, CLAIM OR REMEDY ARISING UNDER ANY REGULATIONS OR STANDARDS IMPOSED BY ANY INTERNATIONAL, NATIONAL, STATE OR LOCAL STATUTE OR
AGENCY; 
 ANY RIGHT, CLAIM OR REMEDY TO RECOVER OR BE COMPENSATED FOR: 

 LOSS OF USE OR REPLACEMENT OF ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED
UNDER THIS AGREEMENT; 
 (I) LOSS OF, OR DAMAGE OF ANY KIND TO, ANY AIRCRAFT, COMPONENT, EQUIPMENT, ACCESSORY OR PART PROVIDED
UNDER THIS AGREEMENT; 
 (II) LOSS OF PROFITS AND/OR REVENUES; 

(III) 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. 

CLAIMS BY THE BUYER AGAINST THE SELLER FOR CONTRIBUTION TO THIRD PARTY CLAIMS BROUGHT AGAINST THE BUYER FOR PERSONAL INJURY OR PROPERTY
DAMAGE ARE EXCLUDED FROM THIS CLAUSE 12.5 IF, AND ONLY TO THE EXTENT THAT, SUCH CONTRIBUTION CLAIMS ARISE OUT OF THE SELLER’S ACTIVITIES AS DESIGNER OR MANUFACTURER OF THE AIRCRAFT. 

FOR THE PURPOSE OF THIS CLAUSE 12.5, “SELLER” WILL BE UNDERSTOOD TO INCLUDE THE SELLER, SELLER AFFILIATES AND SUPPLIERS.

 12.6 Duplicate Remedies 

The remedies provided to the Buyer under Clause 12.1 and Clause 12.2 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 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 both Clause 12.1 and Clause 12.2 for the same defect. The Buyer’s rights and remedies herein for the nonperformance of any obligations
or liabilities of the Seller arising under these warranties will be in monetary damages limited to the amount the Buyer expends in procuring a correction or replacement for any covered part subject to a defect or nonperformance covered by this
Clause 12, and the Buyer will not have any right to require specific performance by the Seller. 

 12.8 Negotiated Agreement 

THE PARTIES EACH ACKNOWLEDGE THAT: 

(I) THE SPECIFICATION HAS BEEN AGREED UPON AFTER CAREFUL CONSIDERATION BY THE BUYER USING ITS JUDGMENT AS A PROFESSIONAL OPERATOR OF, AND
MAINTENANCE PROVIDER WITH RESPECT TO, AIRCRAFT USED IN PUBLIC TRANSPORTATION AND AS SUCH IS A PROFESSIONAL WITHIN THE SAME INDUSTRY AS THE SELLER; 

(II) THIS AGREEMENT, AND IN PARTICULAR THIS CLAUSE 12, HAS BEEN THE SUBJECT OF DISCUSSION AND NEGOTIATION AND IS FULLY UNDERSTOOD BY THE
BUYER; AND 
 (III) 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. 

UNQUOTE 
  

	2	ASSIGNMENT 

 This Letter
Agreement and the rights and obligations of the parties will be subject to the provisions of Clause 21 of the Agreement. 
  

	3	CONFIDENTIALITY 

 This
Letter Agreement is subject to the terms and conditions of Clause 22.10 of the Agreement. 
  

	4	COUNTERPARTS 

 This Letter
Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. 

 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,
	
	AIRBUS S.A.S.
		
	By:	 	 /s/ John J. Leahy

		
	Its:	 	 Chief Operating Officer

		 	 Customers

  

					
		
		 	Accepted and Agreed
		
		 	UNITED AIR LINES, INC.
			
		 	By:	 	 /s/ Kathryn A. Mikells

			
		 	Its:	 	Executive Vice President and
		 		 	Chief Financial OfficerSeverance Benefits Agreement

 Exhibit 10.2 

SEVERANCE BENEFITS AGREEMENT 

THIS SEVERANCE BENEFITS AGREEMENT (the “Agreement”) is made as of the 14th day of April, 2010 between Active Power,
Inc., (the “Company”), and James Clishem, an individual resident of the State of Texas (“Employee”). Employee and the Company are collectively referred to herein as the “Parties.” This Agreement
amends, restates and supersedes the Severance Benefits Agreement dated October 29, 2008 between Employee and the Company (the “Prior Agreement”). 

1. At-Will Employment Status. Employee is currently employed by the Company. Employee is employed on an “at will” basis,
which means that either the Company or Employee may terminate Employee’s employment with the Company at any time and for any or no reason. 

2. Severance Benefits upon Involuntary Termination Without Cause or Resignation for Good Reason. Although Employee’s
employment is at-will, if Employee is terminated by the Company without Cause (as defined below) or resigns with Good Reason (as defined below), then Employee shall be entitled to receive: 

(a) continuing severance pay at a rate equal to 100% of Employee’s base salary, as then in effect (less applicable withholding
taxes), for a period of twelve (12) months from the date of such termination, to be paid periodically in accordance with the Company’s normal payroll practices; and 

(b) all stock options and restricted stock held by Employee in which Employee would have vested if Employee had remained employed with
the Company for a period of twelve (12) months following the date of termination shall immediately vest and, if applicable, become exercisable as of the date of termination; and 

(c) if Employee elects continuation coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) for Employee, within the time period prescribed pursuant to COBRA, the Company will reimburse Employee for the COBRA premiums for such coverage (at the coverage levels in effect immediately prior to Employee’s
termination) until the earlier of (i) a period of twelve (12) months from the last date of employment of the Employee with the Company, (ii) until Employee has secured other employment, or (iii) the date Employee is no longer
eligible to receive continuation coverage pursuant to COBRA. COBRA reimbursements shall be made by the Company to Employee consistent with the Company’s normal expense reimbursement policy, provided that Employee submits documentation to the
Company substantiating Employee’s payments for such COBRA coverage; and 

 (d) all or a portion of Employee’s bonus under the Company’s management incentive
program for the year in which Employee’s termination without Cause or resignation for Good Reason occurs, determined as follows: (i) with respect to corporate or individual objectives that are measured over a period of time (such as
revenue for a fiscal year), the amount of such bonus with respect to such objective shall be determined based on a comparison of the amount of such objective actually achieved through the date of such termination against a pro rated portion (based
on a number of days, weeks or months, as applicable, during the applicable measurement period for which Employee remained a service provider of the Company) of the target objective, and shall be payable on a pro rata basis (based on the number of
days during the applicable measurement period for which Employee remained a service provider of the Company), and (ii) with respect to corporate or individual objectives that are measured based on the occurrence of a specific event at a point
in time, the full amount of such bonus with respect to such objective shall be payable if such objective is achieved prior to the date of such termination. All determinations of the amount of the achievement of such objectives and the amounts of
such bonuses shall be made by the Board of Directors of the Company, in its sole discretion. 
 3. Acceleration Upon
Termination After a Change in Control. Although Employee’s employment is at-will, in the event that Employee is terminated by the Company without Cause or resigns with Good Reason within twelve (12) months after a Change in Control (as
defined below), in addition to the benefits set forth in Sections 2(a), 2(c) and 2(d), but in lieu of the benefits set forth in Section 2(b) above, one hundred percent (100%) of the stock options and restricted stock held by Employee prior
to the date of the Change of Control shall immediately vest and, if applicable, become exercisable as of the date of termination. 

4. Confidential Information/ Non-Competition Agreement. 

(a) Employee is employed hereunder by the Company in a confidential relationship wherein Employee, in the course of his employment with
the Company, has and will continue to become familiar with and aware of Confidential Information (as defined in the Confidentiality Agreement), including but not limited to confidential information regarding the Company’s customers and specific
manner of doing business, including the processes, techniques and trade secrets utilized by the Company, and future plans with respect thereto. In consideration for Employee’s promises herein, the Company agrees to provide Employee with such
Confidential Information; in return, Employee recognizes and acknowledges that such information must be maintained in confidence, and to further such protection agrees to the restrictive covenants set forth in this Section 4. 

(b) Employee acknowledges that Employee’s fulfillment of the obligations contained in this Agreement, including, but not limited to,
Employee’s obligation neither to use, except for the benefit of the Company, or to disclose the Company’s Confidential Information and Employee’s obligation not to compete contained in this Section 4 is necessary to protect the
Company’s Confidential Information and to preserve the Company’s value and goodwill. Employee further acknowledges the time, geographic and scope limitations of Employee’s obligations under this Section 4 are reasonable,
especially in light of the Company’s desire to protect its Confidential Information, and that Employee will not be precluded from gainful employment if Employee is obligated not to compete with the Company during the period and within the
Territory as described in this Section 4. 
  

 -2- 

 (c) Employee will not, during the period of his employment by or with the Company, and for a
period of twelve (12) months immediately following the termination of his employment with the Company, for any reason whatsoever, directly or indirectly, for himself or on behalf of or in conjunction with any other person, company, partnership,
corporation, business or entity of whatever nature: 
 (i) engage, as an officer, director, shareholder, owner, partner, joint
venturer, or in a managerial capacity, whether as an employee, independent contractor, consultant or advisor, or as a sales representative, in any business selling any products or services in direct competition with the Company, within 100 miles of
(i) the principal executive offices of the Company or (ii) any place where the Company conducts business, provides products or services, or in which the Company (including the subsidiaries thereof) is in the process of initiating business
operations as of the date on which Employee’s employment by the Company hereunder is terminated (the “Territory”); 

(ii) call upon any person who is, at that time, within the Territory, an employee of the Company (including the subsidiaries thereof) in
a managerial capacity for the purpose or with the intent of enticing such employee away from or out of the employ of the Company (including the subsidiaries thereof); 

(iii) call upon any person or entity which is, at that time, or which has been, within one (1) year prior to that time, a customer
of the Company (including the subsidiaries thereof’) within the Territory for the purpose of soliciting or selling products or services in direct competition with the Company within the Territory; 

(iv) call upon any prospective acquisition candidate, on Employee’s own behalf or on behalf of any competitor, which candidate was
either called upon by the Company (including the subsidiaries thereof) or for which the Company made an acquisition analysis, for the purpose of acquiring such entity, provided however, that this section (iv) will not apply if the Company
affirmatively declined to proceed with the acquisition; or 
 (v) disclose customers of the Company (or the subsidiaries
thereof) to any person, firm, partnership, corporation or business for any competitive reason. 
 As used in Section 4(c),
references to the business, customers, Territory, etc. of the Company refer to the status of the Company prior to any Change in Control (i.e., such breadth of business, customers, Territory, etc. shall not automatically be expanded to include
those of a successor to the Company resulting from a Change in Control). Notwithstanding the above, the foregoing covenant shall not be deemed to prohibit Employee from acquiring as an investment not more than three percent (3%) of the capital
stock of a competing business, whose stock is traded on a national securities exchange or over-the-counter. 
 (d) Because of
the difficulty of measuring economic losses to the Company as a result of a breach of the foregoing covenant, and because of the immediate and irreparable damage that could be caused to the Company for which it would have no other adequate remedy,
Employee agrees that the foregoing covenant may be enforced by the Company in the event of breach by him by injunctions and restraining orders without the necessity of posting any bond therefor. 

 

 -3- 

 (e) In the course of Employee’s employment with the Company, Employee will become
exposed to certain of the Company’s confidential information and business relationships, which the above covenants are designed to protect and Employee agrees to keep such confidential information in the strictest confidence. It is agreed by
the parties that the foregoing covenants in this Section 4 impose a reasonable restraint on Employee in light of the activities and business of the Company (including the Company’s subsidiaries) on the date of the execution of this
Agreement and the current plans of the Company (including the Company’s subsidiaries); but it is also the intent of the Company and Employee that such covenants be construed and enforced in accordance with the changing activities, business and
locations of the Company (including the Company’s subsidiaries) throughout the term of this covenant, subject to the following paragraph. For example, if, during Employee’s term of employment, the Company (including the Company’s
subsidiaries) engages in new and different activities, enters a new business or established new locations for its current activities or business in addition to or other than the activities or business of the Company (including the Company’s
subsidiaries) as of the date of this Agreement or the locations currently established therefor, then, to the extent described in Section 4(c), Employee will be precluded from soliciting the customers or employees of such new activities or
business or from such new location and from directly competing with such new business within 100 miles of its then-established operating locations through the term of this covenant. 

It is further agreed by the parties hereto that, in the event that Employee shall cease to be employed by the Company, and shall later
enter into a business or pursue other activities not in competition with the Company (including the Company’s subsidiaries) as of Employee’s last date of employment with the Company, or similar activities or business in locations the
operation of which, under such circumstances, does not violate clause (i) of this Section 4, and in any event such new business, activities or location are not in violation of this Section 4 or of Employee’s obligations under
this Section 4, if any, Employee shall not be chargeable with a violation of this Section 4 if the Company (including the Company’s subsidiaries) shall thereafter enter the same, similar or a competitive (i) business,
(ii) course of activities or (iii) location, as applicable. 
 (f) The covenants in this Section 4 are severable
and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant. Moreover, in the event any court of competent jurisdiction shall determine that the scope, time or territorial restrictions set
forth herein are unreasonable, then it is the intention of the Parties that such restrictions be enforced to the fullest extent which the court deems reasonable, and the Agreement shall thereby be reformed to such extent. 

(g) All of the covenants in this Section 4 shall be construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of Employee against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants. 

 

 -4- 

 (h) It is specifically agreed that the period of twelve (12) months following
Employee’s employment set forth at the beginning of this Section 4, during which the agreements and covenants of Employee made in this Section 4 shall be effective, shall be computed by excluding from such computation any time during
which Employee is in violation of any provision of this Section 4. 
 5. Conditions Precedent. Any severance
payments and/or benefits contemplated by Sections 2 and 3 above are conditional on Employee: 
 (a) continuing to comply
with the terms of this Agreement and the Proprietary Information and Nondisclosure Agreement between Employee and the Company (the “Confidentiality Agreement”); 

(b) signing and not revoking a separation agreement and release of claims, the key terms of which are included in the attached Exhibit
A (the “Release”), which becomes effective and irrevocable no later than sixty (60) days following the termination date (such deadline, the “Release Deadline”). If the Release does not become effective and
irrevocable by the Release Deadline, Employee will forfeit any rights to severance payments and benefits under this Agreement. In no event will severance payments or benefits be paid or provided until the Release becomes effective and irrevocable.

 (i) In the event the termination occurs at a time during the calendar year where the Release could become effective in the
calendar year following the calendar year in which Employee’s termination occurs (whether or not it actually becomes effective in the following year), then any severance payments and benefits under this Agreement that would be considered
Deferred Payments (as defined in below) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or, if later, (A) the date the Release actually becomes effective,
(B) such time as required by the payment schedule applicable to each payment or benefit as set forth in Section 2 above or (C) such time as required by Section 8 below. 

(ii) No severance payments and benefits under this Agreement will be paid or provided until the Release becomes effective and
irrevocable, and any such severance payments and benefits otherwise payable between Employee’s termination date and the date the Release becomes effective and irrevocable will be paid on the date the Release becomes effective and irrevocable.
In the event of Employee’s death before all of the severance payments and benefits under this Agreement have been paid, such unpaid amounts will be paid in a lump sum payment promptly following such event to Employee’s designated
beneficiary, if living, or otherwise to the personal representative of Employee’s estate; and 
  

 -5- 

 (c) in the event of a resignation for Good Reason, providing the Company with written notice
of the acts or omissions constituting the grounds for Good Reason within ninety (90) days of the initial existence of the grounds for Good Reason and a reasonable opportunity for the Company to cure the conditions giving rise to such Good
Reason, which shall not be less than thirty (30) days following the date of notice from Employee. If the Company cures the conditions giving rise to such Good Reason within thirty (30) days of the date of such notice, Employee will not be
entitled to severance payments and/or benefits contemplated by Sections 2 or 3 above if Employee thereafter resigns from the Company based on such grounds. Unless otherwise required by law, no severance payments and/or benefits under
Sections 2 or 3 will be paid and/or provided until after the expiration of any relevant revocation period. 
 6.
Definitions. For purposes of this Agreement, 
 (a) Cause. For purposes of this Agreement, “Cause”
shall mean (i) Employee’s continued failure to substantially perform the duties and obligations of Employee’s position (for reasons other than death or Disability (as defined below)), which failure, if curable within the discretion of
the Company, is not cured to the reasonable satisfaction of the Company within thirty (30) days after receipt of written notice from the Company of such failure; (ii) Employee’s failure or refusal to comply with reasonable written
policies, standards and regulations established by the Company from time to time which failure, if curable in the discretion of the Company, is not cured to the reasonable satisfaction of the Company within thirty (30) days after receipt of
written notice of such failure from the Company; (iii) any act of personal dishonesty, fraud, embezzlement, misrepresentation, or other unlawful act committed by Employee that results in a substantial gain or personal enrichment of Employee at
the expense of the Company; (iv) Employee’s violation of a federal or state law or regulation applicable to the Company’s business, which violation was or is reasonably likely to be materially injurious to the Company;
(v) Employee’s violation of, or a plea of nolo contendere or guilty to, a felony under the laws of the United States or any state; or (vi) the Employee’s material breach of the terms of Section 4 of this Agreement or of the
Confidentiality Agreement. 
 (b) Change in Control. For purposes of this Agreement, “Change in Control”
shall mean the occurrence of any of the following events: 
 (i) Change in Ownership of the Company. A change in the
ownership of the Company which occurs on the date that any one person, or more than one person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person,
constitutes more than 50% of the total voting power of the stock of the Company, except that any change in the ownership of the stock of the Company as a result of a private financing of the Company that is approved by the Board will not be
considered a Change in Control; or 
 (ii) Change in Effective Control of the Company. If the Company has a class of
securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during any twelve (12) month period by
directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to be in effective control of the
Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or 
  

 -6- 

 (iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A
change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of the most recent acquisition by such
person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For
purposes of this subsection (iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. 

For these purposes, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger,
consolidation, purchase or acquisition of stock, or similar business transaction with the Company. 
 Notwithstanding the
foregoing provisions of this definition, a transaction will not be deemed a Change in Control unless the transaction qualifies as a change in control event within the meaning of Section 409A. 

Further and for the avoidance of doubt, a transaction will not constitute a Change in Control if: (i) its sole purpose is to change
the state of the Company’s incorporation, or (ii) its sole purpose is to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such
transaction. 
 (c) Disability. For purposes of this Agreement, “Disability” shall mean the inability of
Employee to engage in substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than
twelve (12) months. 
 (d) Good Reason. For purposes of this Agreement, “Good Reason” shall mean,
without Employee’s written consent: (i) there is a material reduction of the level of Employee’s base compensation (except where there is a general reduction applicable to the management team generally); (ii) there is a material
reduction in Employee’s overall responsibilities or authority, or scope of duties, provided, however, that a reduction in responsibilities, authority or duties solely by virtue of the Company being acquired and made part of a larger entity (as,
for example, when the Chief Executive Officer of the Company remains as such following a Change of Control but is not made the Chief Executive Officer of the acquiring corporation) will not constitute “Good Reason”; or (iii) a
material change in the geographic location at which Employee must perform his services; provided, that in no instance will the relocation of Employee to a facility or a location of fifty (50) miles or less from Employee’s then current
office location be deemed material for purposes of this Agreement. In no instance will a resignation by Employee be deemed to be for Good Reason if it is made more than twenty four (24) months following the initial occurrence of any of the
events that otherwise would constitute Good Reason hereunder. 
 (e) The Board shall make all determinations relating to
termination, including without limitation any determination regarding Cause. 
  

 -7- 

 7. Tax Treatment. The Company makes no representations or warranties with respect to
the tax consequences of the payment of any sums to Employee under the terms of this Agreement. Employee agrees and understands that, with the exception of the withholdings from the severance payments, Employee is responsible for payment of any
local, state and/or federal taxes on the sums paid hereunder by the Company and any penalties or assessments thereon. Employee further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, assessments,
executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of Employee’s failure to pay federal or state taxes or damages sustained by the Company by reason of any such claims,
including reasonable attorney fees. 
 8. Section 409A. 

(a) Notwithstanding anything to the contrary in this Agreement, no severance payments or benefits payable to Employee, if any, pursuant to
this Agreement that, when considered together with any other severance payments or separation benefits, is considered deferred compensation under Internal Revenue Code Section 409A (together, the “Deferred Payments”) will be
payable until Employee has a “separation from service” within the meaning of Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”). Similarly, no severance
payable to Employee, if any, pursuant to this Agreement that otherwise would be exempt from Section 409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be payable until Employee has a “separation from service” within
the meaning of Section 409A. 
 (b) Further, if Employee is a “specified employee” within the meaning of
Section 409A at the time of Employee’s separation from service (other than due to death), any Deferred Payments that otherwise are payable within the first six (6) months following Employee’s separation from service will become
payable on the first payroll date that occurs on or after the date six (6) months and one (1) day following the date of Employee’s separation from service. All subsequent Deferred Payments, if any, will be payable in accordance with
the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, in the event of Employee’s death following Employee’s separation from service but prior to the six (6) month anniversary of
Employee’s separation from service (or any later delay date), then any payments delayed in accordance with this paragraph will be payable in a lump sum as soon as administratively practicable after the date of Employee’s death and all
other Deferred Payments will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under the Agreement is intended to constitute a separate payment for purposes of
Section 1.409A-2(b)(2) of the Treasury Regulations. 
  

 -8- 

 (c) Any severance payment that satisfies the requirements of the “short-term
deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury Regulations shall not constitute Deferred Payments for purposes of the Agreement. Any severance payment that qualifies as a payment made as a result of an involuntary
separation from service pursuant to Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not exceed the Section 409A Limit shall not constitute Deferred Payments for purposes of the Agreement. For purposes of this subsection
(c), “Section 409A Limit” will mean the lesser of two (2) times: (i) Employee’s annualized compensation based upon the annual rate of pay paid to Employee during Employee’s taxable year preceding Employee’s
taxable year of Employee’s separation from service as determined under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue Service guidance issued with respect thereto; or (ii) the maximum amount that may be
taken into account under a qualified plan pursuant to Section 401(a)(17) of the Code for the year in which Employee’s employment is terminated. 

(d) The foregoing provisions are intended to comply with the requirements of Section 409A so that none of the severance payments and
benefits to be provided under the Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Employee and the Company agree to work together in good faith to consider
amendments to the Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition prior to actual payment to Employee under Section 409A. 

9. Limitation on Payments. In the event that the severance and other benefits provided for in this Agreement or otherwise payable
to Employee (i) constitute “parachute payments” within the meaning of Section 280G of the Code, and (ii) would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then
Employee’s benefits under this Agreement shall be either 
 (a) delivered in full, or 

(b) delivered as to such lesser extent which would result in no portion of such benefits being subject to the Excise Tax, whichever of
the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Employee on an after-tax basis, of the greatest amount of benefits, notwithstanding that all or some
portion of such benefits may be taxable under Section 4999 of the Code. If a reduction in severance and other benefits constituting “parachute payments” is necessary so that benefits are delivered to a lesser extent, reduction will
occur in the following order: reduction of cash payments, cancellation of equity awards granted within the twelve (12) month period prior to a “change in control” (as determined under Code Section 280G) that are deemed to have
been granted contingent upon the change in control (as determined under Code Section 280G), cancellation of accelerated vesting of equity awards, reduction of employee benefits. 

 

 -9- 

 Unless the Company and Employee otherwise agree in writing, any determination required under
this Section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon Employee and the Company for all purposes. For purposes of
making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Section 280G
and 4999 of the Code. The Company and Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations contemplated by this Section. 
 10. Confidential
Information. Employee shall continue to comply with the terms and conditions of the Confidentiality Agreement, and maintain the confidentiality of all of the Company’s confidential and proprietary information. Such information includes, but
is not limited to, all customer lists, equipment, records, data, notes, reports, proposals, correspondence, specifications, drawings, blueprints, sketches, materials, or other documents or property belonging to the Company. 

11. Miscellaneous. 

(a) Withholding Taxes. The Company may withhold from all benefits payable under this Agreement all federal, state, city or other
taxes as shall be required pursuant to any law or governmental regulation or ruling. 
 (b) Entire Agreement; Binding
Effect. This Agreement and the Confidentiality Agreement set forth the entire understanding between the Parties as to the subject matter of this Agreement and supersede all prior agreements, commitments, representations, writings and discussions
between them, including the Prior Agreement; and neither of the Parties shall be bound by any obligations, conditions, warranties or representations with respect to the subject matter of this Agreement, except as expressly provided herein or therein
or as duly set forth on or subsequent to the date hereof in a written instrument signed by the proper and fully authorized representative of the party to be bound hereby. This Agreement is binding on Employee and on the Company and his/her and its
successors and assigns (whether by assignment, by operation of law or otherwise). 
 (c) Arbitration. The Parties agree
that, unless otherwise agreed to in a writing signed by the Employee and the Chairman of the Board of Directors of the Company, any and all disputes arising out of, or relating to, the terms of this Agreement, their interpretation, and any of the
matters herein released, shall be subject to binding arbitration in Travis County, Texas before the American Arbitration Association under its National Rules for the Resolution of Employment Disputes. The Parties agree that the prevailing party in
any arbitration shall be entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The Parties agree that the prevailing party in any arbitration shall be awarded its reasonable attorney fees and costs.
The Parties hereby agree to waive their right to have any dispute between them resolved in a court of law by a judge or jury. This section will not prevent either party from seeking injunctive relief (or any other provisional remedy) from any
court having jurisdiction over the Parties and the subject matter of their dispute relating to Employee’s obligations under this Agreement and the agreements incorporated herein by reference. 

 

 -10- 

 (d) Governing Law; Jurisdiction. This Agreement shall be governed by, and construed
and enforced in accordance with, the employment laws of Texas and the other laws of the State of Texas as they apply to contracts entered into and wholly to be performed therein by residents thereof. In addition, each party hereto irrevocably and
unconditionally agrees that any suit, action or other legal proceeding arising out of this Agreement may be brought only in a state or federal court within Texas. 

(e) Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 
 (f) Effect
of Headings. The Section and subsection headings contained herein are for convenience only and shall not affect the construction hereof. 

(g) Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute but one instrument. 
 [Remainder of page intentionally left blank. Signature page
follows.] 
  

 -11- 

 IN WITNESS WHEREOF, the Parties have executed this Agreement on the dates set forth below.

  

									
	Employee	 		  	Active Power, Inc.
			
	 /s/ James Clishem
	 		  	 /s/ Benjamin Scott

	Signature	 		  	By:	  	Benjamin Scott, Chairman
				
	 James Clishem
	 		  	Dated:	  	 April 14, 2010

	(Print Name)	 		  		  	
					
	Dated:	 	 April 14, 2010
	 		  		  	

 SIGNATURE PAGE TO SEVERANCE
BENEFITS AGREEMENT 
 ACTIVE POWER, INC. 

 Exhibit A 

ACTIVE POWER, INC. 

RELEASE OF CLAIMS 

This Release of Claims (“Agreement”) is made by and between Active Power, Inc. (the “Company”), and
                                        
(“Employee”). 
 WHEREAS, Employee has agreed to enter into a release of claims in favor of the Company upon
certain events specified in the Severance Benefits Agreement by and between Company and Employee, as amended (the “Severance Agreement”). 

NOW THEREFORE, in consideration of the mutual promises made herein, the Parties hereby agree as follows: 

1. Termination. Employee’s employment from the Company terminated on
                    . 
 2.
Confidential Information. Employee shall continue to maintain the confidentiality of all confidential and proprietary information of the Company and shall continue to comply with the terms and conditions of the Proprietary Information and
Nondisclosure Agreement between Employee and the Company (the “Confidentiality Agreement”), as well as Section 4 of the Severance Agreement. Employee shall return all the Company property and confidential and proprietary
information in his possession to the Company on the Effective Date of this Agreement. 
 3. Payment of Salary. Employee
acknowledges and represents that the Company has paid all salary, wages, bonuses, accrued vacation, commissions and any and all other benefits due to Employee. 

4. Release of Claims. Except as set forth in the last paragraph of this Section 4, Employee agrees that the foregoing
consideration represents settlement in full of all outstanding obligations owed to Employee by the Company. Employee, on behalf of himself, and his respective heirs, family members, executors and assigns, hereby fully and forever releases the
Company and its past, present and future officers, agents, directors, employees, investors, shareholders, administrators, affiliates, divisions, subsidiaries, parents, predecessor and successor corporations, and assigns, from, and agrees not to sue
or otherwise institute or cause to be instituted any legal or administrative proceedings concerning any claim, duty, obligation or cause of action relating to any matters of any kind, whether presently known or unknown, suspected or unsuspected,
that he may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of this Agreement including, without limitation, 

(h) any and all claims relating to or arising from Employee’s employment relationship with the Company and the termination of that
relationship; 
  

 A-1- 

 (i) any and all claims relating to, or arising from, Employee’s right to purchase, or
actual purchase of shares of stock of the Company, including, without limitation, any claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty under applicable state corporate law, and securities fraud under any state or federal
law; 
 (j) any and all claims for wrongful discharge of employment; termination in violation of public policy; discrimination;
breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both express and implied; promissory estoppel; negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation;
negligent or intentional interference with contract or prospective economic advantage; unfair business practices; defamation; libel; slander; negligence; personal injury; assault; battery; invasion of privacy; false imprisonment; and conversion;

 (k) any and all claims for violation of any federal, state or municipal statute, including, but not limited to, Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974, The Worker
Adjustment and Retraining Notification Act, any provisions of the Texas Labor Code, and any other law of the State of Texas; 

(l) any and all claims for violation of the federal, or any state, constitution; 

(m) any and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and 

(n) any and all claims for attorneys’ fees and costs. 

Employee agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters
released. Nothing in this Agreement waives Employee’s rights to indemnification or any payments under any fiduciary insurance policy, if any, provided by any act or agreement of the Company, state or federal law or policy of insurance.

 5. Acknowledgment of Waiver of Claims under ADEA. Employee acknowledges that he is waiving and releasing any rights he
may have under the Age Discrimination in Employment Act of 1967 (“ADEA”) and that this waiver and release is knowing and voluntary. Employee and the Company agree that this waiver and release does not apply to any rights or claims
that may arise under the ADEA after the Effective Date of this Agreement. Employee acknowledges that the consideration given for this waiver and release Agreement is in addition to anything of value to which Employee was already entitled. Employee
further acknowledges that he has been advised by this writing that (a) he should consult with an attorney prior to executing this Agreement; (b) he has at least twenty-one (21) days within which to consider this Agreement;
(c) he has seven (7) days following the execution of this Agreement by the parties to revoke the Agreement; (d) this Agreement shall not be effective until the revocation period has expired; and (e) nothing in this Agreement
prevents or precludes Employee from challenging or seeking a determination in good faith of the validity of this waiver under the ADEA, nor does it impose any condition precedent, penalties or costs for doing so, unless specifically authorized by
federal law. Any revocation should be in writing and delivered to
                                        
at the Company by close of business on the seventh day from the date that Employee signs this Agreement. 
  

 A-2- 

 6. No Pending or Future Lawsuits. Employee represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or entity, against the Company or any other person or entity referred to herein. Employee also represents that he does not intend to bring any claims on his own behalf or on
behalf of any other person or entity against the Company or any other person or entity referred to herein. 
 7. Application
for Employment. Employee understands and agrees that, as a condition of this Agreement, he shall not be entitled to any employment with the Company, its subsidiaries, or any successor, and he hereby waives any right, or alleged right, of
employment or re-employment with the Company. 
 8. No Cooperation. Employee agrees that he will not counsel or assist
any attorneys or their clients in the presentation or prosecution of any disputes, differences, grievances, claims, charges, or complaints by any third party against the Company and/or any officer, director, employee, agent, representative,
shareholder or attorney of the Company, unless under a subpoena or other court order to do so. 
 9. Cooperation with
Company. Employee agrees to cooperate, at the request of the Company, in the defense and/or prosecution of any charges, claims, investigations (internal or external), administrative proceedings and/or lawsuits relating to matters occurring
during or relating to Employee’s period of employment about which Employee may have relevant information. Employee shall further reasonably cooperate with regard to the transition of Employee’s job duties and business relationships.
Employee agrees to respond to reasonable requests for information from the Company in a timely manner. 
 10. No Admission of
Liability. No action taken by the Company, either previously or in connection with this Agreement shall be deemed or construed to be (a) an admission of the truth or falsity of any claims heretofore made or (b) an acknowledgment or
admission by the Company of any fault or liability whatsoever to the Employee or to any third party. 
 11. Costs. The
Parties shall each bear their own costs, expert fees, attorneys’ fees and other fees incurred in connection with this Agreement. 

12. Authority. Employee represents and warrants that he has the capacity to act on his own behalf and on behalf of all who might
claim through him to bind them to the terms and conditions of this Agreement. 
 13. No Representations. Employee
represents that he has had the opportunity to consult with an attorney, and has carefully read and understands the scope and effect of the provisions of this Agreement. Neither party has relied upon any representations or statements made by the
other party hereto which are not specifically set forth in this Agreement. 
  

 A-3- 

 14. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 

15. Entire Agreement. This Agreement, along with the Confidentiality Agreement, and Employee’s written equity compensation
agreements with the Company, represents the entire agreement and understanding between the Company and Employee concerning Employee’s separation from the Company. 

16. No Oral Modification. This Agreement may only be amended in writing signed by Employee and a duly authorized officer of the
Company (other than Employee). 
 17. Governing Law. This Agreement shall be governed by the internal substantive laws,
but not the choice of law rules, of the State of Texas. 
 18. Effective Date. Each Party has seven (7) days after
that Party signs this Agreement to revoke it. This Agreement will become effective on the eighth (8th) day after Employee signed this Agreement, so long as it has been signed by both Parties. 

19. Counterparts. This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an
original and shall constitute an effective, binding agreement on the part of each of the undersigned. 
 20. Voluntary
Execution of Agreement. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that: 

(o) They have read this Agreement; 

(p) They have had the opportunity of being represented in the preparation, negotiation, and execution of this Agreement by legal counsel
of their own choice or that they have voluntarily declined to seek such counsel; 
 (q) They understand the terms and
consequences of this Agreement and of the releases it contains; 
 (r) They are fully aware of the legal and binding effect of
this Agreement. 
  

 A-4- 

 IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set
forth below. 
  

							
		 		 	Active Power, Inc.
				
	Dated:	 	                    , 20    	 	By	 	  

			
		 		 	                           
                                 , an individual
			
	Dated:	 	                    , 20    	 	  

 

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