Document:

Exhibit
10.39(f)

 

CERTAIN PORTIONS OF
THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
UNDER RULE 406 OF THE SECURITIES ACT OF 1933. 
THE OMITTED MATERIALS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

CONFIDENTIAL

 

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

 

This Amendment No. 6 to Purchase Agreement DCT-014/2004, dated as of November 9,
2004 (“Amendment No. 6”) relates to the Purchase Agreement DCT-014/2004 (the “Purchase
Agreement”) between Embraer - Empresa Brasileira de Aeronáutica S.A. (“Embraer”)
and Republic Airline, Inc. (“Buyer”) dated March 19, 2004 as amended from
time to time (collectively referred to herein as “Agreement”). This Amendment
No. 6 is between Embraer and Buyer, collectively referred to herein as the “Parties”.

 

This Amendment No. 6 sets forth additional agreements between Embraer
and Buyer relative to new confirmation date for the remaining two (2)
Conditional Aircraft and changes the address of Buyer.

 

Except as otherwise provided for herein all terms of the Purchase
Agreement shall remain in full force and effect. All capitalized terms used in
this Amendment No. 6, which are not defined herein shall have the meaning given
in the Purchase Agreement. In the event of any conflict between this Amendment
No. 6 and the Purchase Agreement the terms, conditions and provisions of this
Amendment No. 6 shall control.

 

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

 

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

 

1.              Conditional
Aircraft:  The first paragraph of Article 22.1  of the Purchase Agreement shall be
deleted and replaced by the following:

 

“22.1                               Buyer’s
right to purchase [*] shall be subject to Buyer giving notice to Embraer of its
election to purchase [*] on or before [*]. 
Buyer shall be allowed to confirm the acquisition of all or part of [*].”

 

The second
paragraph of Article 22.1 shall remain unchanged.

 

2.              Buyer’s address: Article 24.2
of the Purchase Agreement shall be deleted and replaced by the following:

 

“24.2         BUYER:

 

* Confidential

 

 

Republic Airline, Inc.

8909 Purdue Road, Suite 300

Indianapolis, IN  46268

Attention:  President

Tel:  317-484-6047

Fax:  317-484-6060

 

With a Copy to:

 

Wexford Capital LLC

411 West Putnam Avenue

Greenwich, Connecticut  06830

Attention:  Jay Maymudes

Tel:  203-862-7050

Fax:  203-862-7350

 

and

 

Republic Airways Holdings Inc.

8909 Purdue Road, Suite 300
Indianapolis,
IN  46268

Attention:  President

Tel:  317-484-6000

Fax:  317-484-6040

 

3.              Miscellaneous: All
other provisions of the Agreement which have not been specifically amended or
modified by this Amendment No. 6 shall remain valid in full force and effect
without any change.

 

[Remainder of page
intentionally left in blank]

 

2

 

IN WITNESS WHEREOF, EMBRAER and
BUYER, by their duly authorized officers, have entered into and executed this
Amendment No. 6 to Purchase Agreement to be effective as of the date first
written above.

 

 

	
  EMBRAER –
  Empresa Brasileira de

  Aeronáutica S.A.

  	
   

  	
  Republic Airline, Inc. 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
  Name

  	
   

  	
  Name:

  
	
  Title:

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
  Date:

  
	
  Name

  	
   

  	
  Place:

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  
	
  Place:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witnesses:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
   

  	
   

  	
   

  	
  Witness:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
											

 

3

 

ATTACHMENT
“D-A”

 

AIRCRAFT

ESCALATION FORMULA

 

[*]

 

* Confidential

 

 

ATTACHMENT
“D-1A”

AIRCRAFT
ESCALATION FORMULA

 

[*]

	
  [

  	
  ]

  

 

* Confidential

 

 

ATTACHMENT
“D-2A”

 

AIRCRAFT

ESCALATION FORMULA

 

[*]

 

* ConfidentialExhibit
10.39(g)

 

CERTAIN PORTIONS OF
THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT
UNDER RULE 406 OF THE SECURITIES ACT OF 1933. 
THE OMITTED MATERIALS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

Execution version

 

CONFIDENTIAL

 

AMENDMENT
No. 7 TO PURCHASE AGREEMENT DCT-014/2004

 

This Amendment No. 7 to Purchase Agreement DCT-014/2004, dated as of December 23
, 2004 (“Amendment No. 7”) relates to the Purchase Agreement DCT-014/2004 (the “Purchase
Agreement”) between Embraer - Empresa Brasileira de Aeronáutica S.A. (“Embraer”)
and Republic Airline Inc. (“Buyer”) dated March 19, 2004 as amended from
time to time (collectively referred to herein as “Agreement”). This Amendment
No. 7 is between Embraer and Buyer, collectively referred to herein as the “Parties”.

 

This Amendment No. 7 sets forth additional agreements between Embraer
and Buyer relative to, among others things, (i) increase the purchase order to
thirty-nine (39) firm Aircraft, twenty-one (21) Conditional Aircraft and 40
Option Aircraft; (ii) update the delivery schedule of all Aircraft; and
(iii) include the fourteen (14) Aircraft to be delivered under the colors of
Delta Air Lines, Inc. (the “Delta Aircraft”).

 

Except as otherwise provided for herein all terms of the Purchase
Agreement shall remain in full force and effect. All capitalized terms used in
this Amendment No. 7, which are not defined herein shall have the meaning given
in the Purchase Agreement. In the event of any conflict between this Amendment
No. 7 and the Purchase Agreement the terms, conditions and provisions of this
Amendment No. 7 shall control.

 

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

 

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

 

1.              Definitions: Article 1.7
of the Purchase Agreement shall be deleted and replaced as follows:

 

“1.7  “Buyer”: shall mean Republic Airline Inc., an
Indiana corporation with its principal place of business at 8909 Purdue Road,
Suite 300, Indianapolis, Indiana 46268, United States, or its assignee pursuant
to Article 14.”

 

2.              Subject:  Article 2 of the Purchase Agreement
shall be deleted and replaced as follows:

 

“Subject to
the terms and conditions of this Agreement:

 

2.1             Embraer shall sell and deliver and Buyer shall
purchase and take delivery of thirty-nine (39) Aircraft;

 

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

 

 

2.3             Buyer shall have the right to purchase up to
twenty-one (21) Conditional Aircraft, in accordance with Article 22; and

 

2.4             Buyer shall have the option to purchase up to forty
(40) Option Aircraft, in accordance with Article 23.”

 

3.              Payment:

 

3.1                                The
third and fourth sentences of the first paragraph of Article 4.1 shall be
deleted and replaced as follows:

 

“Buyer has already paid to Embraer prior to
the execution of this Agreement a [*]
deposit (the “Initial Deposit”) per Firm Aircraft on order prior to execution
of Amendment No. 7 to this Agreement, and Buyer will pay to Embraer an Initial
Deposit for each Firm Aircraft added by such Amendment No. 7 within two (2)
Business Days after the date of execution by Buyer and Embraer of such
Amendment No. 7.   Each Initial Deposit
shall be [*] and shall be
considered part of the progress payment for each relevant Firm Aircraft.”

 

3.2                                The
penultimate sentence of the last paragraph of Article 4.1 shall be deleted
and replaced as follows:

 

“Any progress payment [*] shall be [*].”

 

4.  Delivery: The table
containing the delivery schedule in Article 5.1 of the Purchase
Agreement shall be deleted in its entirely and replaced with the following:

 

	
  “Firm

  A/C

  	
   

  	
  Delivery Month

  	
   

  	
  [*]

  	
   

  	
  Firm

  A/C

  	
   

  	
  Delivery Month

  	
   

  	
  [*]

  	
   

  
	
  1

  	
   

  	
   

  	
  Sep 2004

  	
   

  	
   

  	
   

  	
  21

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  2

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  22

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  3

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  23

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  4

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  24

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  5

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  25

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  6

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  26

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  7

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  27

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  8

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  28

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  9

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  29

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  30

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  31

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  12

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  32

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  13

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  33

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  14

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  34

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  15

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  35

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  16

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  36

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  17

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  37

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  18

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  38

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  19

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  39

  	
   

  	
  Feb 2006

  	
   

  	
   

  	
   

  
	
  20

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

5.              Conditional
Aircraft:

 

5.1             The opening paragraph of Article 22, the
delivery schedule table and the first

 

* Confidential

 

 

paragraph of Article 22.1 of
the Purchase Agreement shall be deleted and replaced by the following:

 

“Subject to confirmation by Buyer as described below,
Buyer shall have the right to purchase up to twenty (20) additional Aircraft
(the “Conditional Aircraft”), to be delivered on the last day of the applicable
month set forth below or such earlier date in such month specified pursuant to Article 7.1:

 

	
  Conditional

  A/C

  	
   

  	
  Delivery Month

  	
   

  	
  Conditional

  A/C

  	
   

  	
  Delivery Month

  	
   

  
	
  1

  	
   

  	
   

  	
  Mar 2006

  	
   

  	
  12

  	
   

  	
  [*]

  	
   

  
	
  2

  	
   

  	
   

  	
  [*]

  	
   

  	
  13

  	
   

  	
  [*]

  	
   

  
	
  3

  	
   

  	
   

  	
  [*]

  	
   

  	
  14

  	
   

  	
  [*]

  	
   

  
	
  4

  	
   

  	
   

  	
  [*]

  	
   

  	
  15

  	
   

  	
  [*]

  	
   

  
	
  5

  	
   

  	
   

  	
  [*]

  	
   

  	
  16

  	
   

  	
  [*]

  	
   

  
	
  6

  	
   

  	
   

  	
  [*]

  	
   

  	
  17

  	
   

  	
  [*]

  	
   

  
	
  7

  	
   

  	
   

  	
  [*]

  	
   

  	
  18

  	
   

  	
  [*]

  	
   

  
	
  8

  	
   

  	
   

  	
  [*]

  	
   

  	
  19

  	
   

  	
  [*]

  	
   

  
	
  9

  	
   

  	
   

  	
  [*]

  	
   

  	
  20

  	
   

  	
  [*]

  	
   

  
	
  10

  	
   

  	
   

  	
  [*]

  	
   

  	
  21

  	
   

  	
  Dec 2006

  	
   

  
	
  11

  	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

22.1                 Buyer’s right to purchase [*] shall be subject to Buyer giving notice
to Embraer of its election to purchase [*]
on or before [*]. Buyer shall be
allowed to confirm the acquisition of all or part of [*].”

 

5.2.            The second paragraph
of Article 22.1 shall remain unchanged.

 

5.3               The third sentence
of Article 22.2 shall be deleted and replaced as follows:

 

“Buyer has paid to Embraer a [*] deposit per Conditional Aircraft (the “Conditional
Aircraft Deposit”) [*].”

 

6.              Option Aircraft:

 

6.1 The opening paragraph of Article 23 and delivery schedule table
of the Purchase Agreement shall be deleted and replaced by the following:

 

“Buyer shall
have the option to purchase [*],
to be delivered on the last day of the applicable month set forth below or such
earlier date in such month specified pursuant to Article 7.1:

 

	
  “Option

  Aircraft

  	
   

  	
  Delivery Month

  	
   

  	
  Option

  Aircraft

  	
   

  	
  Delivery Month

  	
   

  
	
  01

  	
   

  	
  Jan 2007

  	
   

  	
  21

  	
   

  	
  [*]

  	
   

  
	
  02

  	
   

  	
  [*]

  	
   

  	
  22

  	
   

  	
  [*]

  	
   

  
	
  03

  	
   

  	
  [*]

  	
   

  	
  23

  	
   

  	
  [*]

  	
   

  
	
  04

  	
   

  	
  [*]

  	
   

  	
  24

  	
   

  	
  [*]

  	
   

  
	
  05

  	
   

  	
  [*]

  	
   

  	
  25

  	
   

  	
  [*]

  	
   

  

 

Amendment No. 7 to Purchase Agreement DCT-014/2004

 

* Confidential

 

 

	
  06

  	
   

  	
  [*]

  	
   

  	
  26

  	
   

  	
  [*]

  	
   

  
	
  07

  	
   

  	
  [*]

  	
   

  	
  27

  	
   

  	
  [*]

  	
   

  
	
  08

  	
   

  	
  [*]

  	
   

  	
  28

  	
   

  	
  [*]

  	
   

  
	
  09

  	
   

  	
  [*]

  	
   

  	
  29

  	
   

  	
  [*]

  	
   

  
	
  10

  	
   

  	
  [*]

  	
   

  	
  30

  	
   

  	
  [*]

  	
   

  
	
  11

  	
   

  	
  [*]

  	
   

  	
  31

  	
   

  	
  [*]

  	
   

  
	
  12

  	
   

  	
  [*]

  	
   

  	
  32

  	
   

  	
  [*]

  	
   

  
	
  13

  	
   

  	
  [*]

  	
   

  	
  33

  	
   

  	
  [*]

  	
   

  
	
  14

  	
   

  	
  [*]

  	
   

  	
  34

  	
   

  	
  [*]

  	
   

  
	
  15

  	
   

  	
  [*]

  	
   

  	
  35

  	
   

  	
  [*]

  	
   

  
	
  16

  	
   

  	
  [*]

  	
   

  	
  36

  	
   

  	
  [*]

  	
   

  
	
  17

  	
   

  	
  [*]

  	
   

  	
  37

  	
   

  	
  [*]

  	
   

  
	
  18

  	
   

  	
  [*]

  	
   

  	
  38

  	
   

  	
  [*]

  	
   

  
	
  19

  	
   

  	
  [*]

  	
   

  	
  39

  	
   

  	
  [*]

  	
   

  
	
  20

  	
   

  	
  [*]

  	
   

  	
  40

  	
   

  	
  Mar 2009”

  	
   

  

 

6.2 Article 23.1
of the Purchase Agreement shall be deleted and replaced by the following:

 

“23.1           To secure the Option
Aircraft, Buyer has [*] per Option
Aircraft available under this Agreement [*],
and Buyer will [*] for each Option
Aircraft added by such Amendment No. 7 [*].”

 

6.3 Article 23.5
of the Purchase Agreement shall be deleted and replaced by the following:

 

“23.5           CONFIRMATION OF OPTION AIRCRAFT: The option to purchase [*] shall be exercised in [*] of [*]
per group (the “Option Groups”) no later than [*]
prior to the delivery of the first Option Aircraft in each group. Each Option
Group may be partially or completely exercised by Buyer. Exercise of the option
to purchase the Option Aircraft shall be accomplished by means of a written
notice from Buyer delivered to Embraer by mail, express delivery or facsimile,
return receipt requested.”

 

7.              Delta Aircraft

 

7.1               The Delta Aircraft
shall [*], except for following:

 

a)              [*];

b)             [*]

 

7.2               The Aircraft [*] will not [*].

 

7.3               . Buyer may [*]. 
In both cases, [*].

 

8.  [*]

 

8.1                   Buyer shall [*].

 

* Confidential

 

 

8.2                   If Buyer [*].

 

8.3                   If Buyer [*].

 

8.4                   Buyer shall [*]:

 

(a) if Buyer [*]; and

 

(b) if Buyer [*].

 

(c) [*].

 

9.              Attachment E:  Attachment E to the Purchase Agreement shall
be deleted and replaced with Attachment E to this Amendment No. 7.

 

10.       Miscellaneous: All
other provisions of the Agreement which have not been specifically amended or
modified by this Amendment No. 7 shall remain valid in full force and effect
without any change.

 

[Remainder of page
intentionally left in blank]

 

* Confidential

 

 

IN WITNESS WHEREOF, EMBRAER and
BUYER, by their duly authorized officers, have entered into and executed this
Amendment No. 7 to Purchase Agreement to be effective as of the date first
written above.

 

 

	
  EMBRAER –
  Empresa Brasileira de

  Aeronáutica S.A.

  	
   

  	
  Republic Airline Inc.

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Antonio
  Luiz Pizano Manso

  	
   

  	
   

  	
  By

  	
  /s/ Bryan Bedford

  	
   

  
	
  Name:               Antonio Luiz Pizano Manso

  	
   

  	
  Name:

  	
  Bryan Bedford

  	
   

  
	
  Title:                     Executive Vice-President
  Corporate & CFO

  	
   

  	
  Title:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
  /s/ Flavio Rimoli

  	
   

  	
   

  	
  Date:

  
	
  Name:               Flavio Rimoli

  	
   

  	
  Place:

  
	
  Title:                     Sr. Vice President Airline
  Market

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:                    December 23, 2004

  	
   

  	
   

  
	
  Place:                 Sao Jose dos Campos SP, Brazil

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Witness:

  	
  /s/ Carlos Martins Dutpa

  	
   

  	
   

  	
  Witness:

  	
  /s/ Lars-Erik Arnell

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: Carlos Martins Dutpa

  	
   

  	
  Name: Lars-Erik Arnell

  
													

 

 

Acknowledged and agreed by Republic Airways Holdings Inc., with respect
to its obligations under [*], and
with respect to all terms of this Amendment No. 7, Amendment No. 2 to the
Letter Agreement and all previous amendments in its capacity as “Guarantor”
pursuant to the Guaranty by it to Embraer dated March 19, 2004.

 

	
  Republic Airways Holdings Inc.

  
	
   

  
	
  By

  	
  /s/ Bryan Bedford

  	
   

  
	
  Name:

  	
  Bryan Bedford

  
	
  Title:

  	
  President

  
	
   

  	
   

  
	
  Date:

  	
   

  
	
  Place:

  	
   

  

 

	
  Witness:

  	
  /s/ Lars-Erik Arnell

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Lars-Erik Arnell

  

 

 

[*]

 

 

[*]

 

 

[*]

* Confidential

 

 

ATTACHMENT “E” - DIRECT MAINTENANCE COST GUARANTEE

 

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

 

a.                  The Maintenance
Guarantee for the Aircraft shall be for the period that begins at [*] (“Guarantee Term”). [*]

 

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

 

	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

c.                  For the first [*] period commencing with the first
Aircraft Actual Delivery Date, the Achieved cumulative Maintenance Cost - AMC
for replacement, repair, overhauls and inspections of Buyer’s Aircraft, shall
not exceed a Maintenance Cost Guarantee (“MCG2”) rate of: 

 

	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

d.                 The [*] shall be [*] in accordance with [*].

 

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

 

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

 

[*]

 

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

 

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

 

Attachment
E to Purchase Agreement DCT-014/2004

 

* Confidential

 

 

Buyer [*] after the agreement regarding the
annual period. Such credit may be used by Buyer only toward [*].

 

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

 

Fleet Size 01: A
minimum fleet size of [*] Aircraft
delivered in accordance with Article 5 of the Purchase Agreement.

 

Fleet Size 02: A
minimum fleet size of [*] Aircraft
delivered in accordance with Article 22 of the Purchase Agreement.

 

Assumptions [*]

 

•                  Economic
condition: [*].

 

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

 

•                  Labor
rate: [*] per man-hour [*].

 

•                  Maintenance
Review Board Report: MRB 170.

 

•                  [*]

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3.          General administrative
and overhead expenses.

 

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

 

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

 

* Confidential

 

 

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

 

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

 

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

 

9.                   Service
bulletins and or airworthiness directives.

 

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

 

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

 

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

 

13.             Aircraft downtime
costs.

 

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

 

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

 

16.             Spare parts prices
that exceed the prices obtainable from Embraer, provided, in the event that [*] may [*]
and [*] will reasonably agree on [*].

 

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

 

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

 

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

 

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

 

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

 

22.             Engines, related
parts and related LRU costs.

 

23.             Nacelle and Thrust
Reverser.

 

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

 

25.             Maintenance reserves.

 

26.             GSE (Ground Support
Equipment) costs.

 

* Confidential

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

h.                 Spare Parts
Limitation: Spare parts price shall not exceed the prices obtainable from
Embraer. In the event that Embraer cannot supply a part to Buyer in a

 

* Confidential

 

 

reasonable
time frame, Embraer may authorize the purchase of such part by Buyer from a
third party at a price in excess of Embraer’s price, Embraer and Buyer will
mutually agree on the portion of such price to be included in this guarantee
provided Buyer maintained the minimum stock level recommended by Embraer.

 

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

 

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

 

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

 

l.                  Accounting
System:

 

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

 

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

 

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

 

m.                 Duplicated
Guarantee: If Buyer negotiates directly with any of Embraer’s suppliers/vendors
a particular maintenance cost guarantee or equivalent program (including fleet
hour agreements), or an alternative support program with Embraer, the Parties
shall negotiate in good faith and agree on the portion of cost related to this
equipment/system that shall be excluded from the MCG rate, specified in Article I.b
and I.c, and shall result in an appropriate recalculation of the MCG.

 

*
Confidential

 

 

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

 

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

 

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

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