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V2500 General Terms of Sale Agreement [Side Letter No. 2] - IAE International Aero Engines AG and New Air Corp.
INTERNATIONAL
AERO ENGINES
[LETTERHEAD]
May 4, 1999
Mr. David G. Neeleman
New Air Corporation
6322 South 3000 East
Suite L201
Salt Lake City, Utah 84121
Subject: Side Letter No. 2 to the V2500 General Terms of Sale between IAE
International Aero Engines AG ("IAE") and New Air Corporation
("New Air") dated May 4, 1999
Gentlemen:
We refer to the V2500 General Terms of Sale bearing reference marks
P:\NewAir\airgta.doc dated May 4, 1999 between IAE and New Air, as amended by
Side Letter No. 1 thereto, such contract being hereinafter referred to as the
"Contract." Capitalized terms used herein and not otherwise defined in this Side
Letter No. 2 shall have the meanings assigned thereto in the Contract.
This Side Letter No. 2 provides for certain product support as part of the
Contract.
1. V2500 ENGINE AND PARTS SERVICE POLICY
1.1 In respect of Engines originally installed on the Aircraft
(other than on Leased Aircraft) and in respect of the spare
Engines, IAE hereby amends the duration of coverage provided
in the V2500 Engine and Parts Service Policy set forth in
Exhibit D1, Section I, Paragraphs A and B to the Contract, as
follows:
New Air shall be entitled to first run coverage for
[****] hours or [****] cycles of engine operation,
whichever comes first. Extended first run coverage
will be provided from [****] hours or [****] cycles of
engine operation (whichever comes first) to [****]
hours or [****] cycles of engine operation (whichever
comes first) on a pro-rata basis.
Therefore, all references to "[****] hours" in Exhibit D-1 are
hereby changed to "[****] hours (or [****] cycles, whichever
comes first)." Also, all references to "[****] hours" in
Exhibit D-1 are hereby changed to "[****] hours (or [****]
cycles, whichever comes first)."
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[****] Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
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1.2 IAE agrees that with respect to Damaged First Run or
Extended First Run Engines under the V2500 Engine and
Parts Service Policy set forth in Exhibit D-1 that
IAE shall pay the transportation charges from the
Maintenance Center and New Air shall pay the
transportation charges for sending such part to the
Maintenance Center.
2. EMERGENCY ENGINE LEASE POOL SUPPORT
IAE has established a worldwide pool of V2500 emergency spare
engines for lease to operators of V2500 powered aircraft
experiencing unforeseen operational emergencies. This
emergency spare engine pool will be available to New Air, if
required, under IAE's standard terms of business for lease of
V2500 engines, provided that New Air commits to acquire and
continues to operate and maintain with respect to its Aircraft
a minimum of eight percent (8%) ratio of spare Engines to
installed Engines in each thrust category. IAE will make
reasonable efforts to place an emergency spare engine for
lease at New Air's base at John F. Kennedy International
Airport in New York.
3. CUSTOMER SUPPORT
3.1 CUSTOMER SUPPORT REPRESENTATIVE
To assist New Air in its V2500 Engine operation, a
customer support representative will be stationed on
site at New Air's main base at New York City's JFK
Airport for a minimum period of twelve (12) months
commencing three (3) months prior to Aircraft entry
into service at no charge to New Air. A customer
support representatives will be primarily assigned to
New Air, at no charge, for as long as New Air
operates a minimum of ten (10) Aircraft.
New Air will provide reasonable office facilities for
the Customer Support Representative, free of charge.
3.1.1. ADDITIONAL CUSTOMER SUPPORT REPRESENTATIVE
NETWORK
The network of Pratt & Whitney, Rolls-Royce
and other IAE customer support
representatives located at New Air'
destinations will be fully trained on all
facets of V2500 Engine line maintenance and
will be available to assist New Air as
required.
3.1.2. CUSTOMER TRAINING
IAE will make instructors available to
conduct tuition cost-free formal training
programs covering engine operation, line
maintenance and troubleshooting for
reasonable numbers of New
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Air personnel at the IAE Customer Training
Center in Derby, England for so long as New
Air operates one or more Aircraft in
frequent, commercial service.
Alternatively, IAE can make reasonable
quantities of training available at New
Air's base at New York City's JFK airport.
In such case, New Air would provide the
classroom and equipment and pay for the
trainer's business class airfare, first
class hotel accommodation and reasonable
expenses and subsistence for the period
where he is away from his normal place of
business.
4. TECHNICAL PUBLICATIONS
Engine maintenance support publications including the Engine manual,
illustrated parts catalog and service bulletins will be available to
the latest AT 2100 digital data standards including CD-ROM. IAE will
provide New Air free of charge with two (2) hard copies of each
applicable V2500 manual and as many CD-ROM copies as may be reasonably
necessary; hard copies of V2500 manuals not available on CD-ROM will be
provided to New Air free of charge as may be reasonably required and
IAE shall undertake to make reasonable efforts to provide such hard
copy manuals to New Air in a CD-ROM format. Customized service is
restricted to delivered Engine definition and updates and will not
include customer originated changes, which would be subject to
separate contractual arrangements.
5. AD STATUS
IAE agrees to provide to New Air with its Engine turnover documents a
complete listing of FAA issued Airworthiness Directives (ADs) relevant
to V2500 engines. If requested by New Air, IAE will additionally
provide a compliance statement with such listing. (e.g., "As a
condition of data - plating the engine, IAE ensures that all applicable
FAA issued ADs have been complied with").
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Except as expressly amended by this Side Letter No. 2 and Side Letter No. 1,
all provisions of the Contract remain in full force and effect.
Very truly yours, Agreed to and Accepted on behalf of
IAE International Aero Engines AG New Air Corporation
/s/ [Illegible] /s/ [Illegible]
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Name Name
VP. SALES CEO
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Title Title
5-3-99 5-5-99
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Date Date
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