Mobile: <image003.jpg><image006.jpg> From: Nelson, Michael Sent: Thursday, October 20, 2016 10:42 PM To: Darren Indyke Cc: Larry; Rob DiCastri; Claire Brugirard; Ashok Kumar; Husham Osman Subject: RE: BBJ SN 30884 (CC-MERO.FID15004341 Dear Darren, Thank you for your email below. Please find attached a revised draft of the Aircraft Purchase Agreement (in clean and red-line). Please note the following comments: 1. Section 2(a)(v): Royal Jet can't agree to rectify prior to delivery ADs and SBs with a compliance date far in the future. As a compromise, they can agree to rectify prior to delivery those ADs and SBs with a compliance date on or before 31 December 2016. 2. Section 2(a)(viii): Royal Jet proposes "major damage history outside manufacturer's tolerances". 3. Section 2(a)(xi): The determination by the DAR of the aircraft being able to obtain a US certificate of airworthiness is still under consideration by Royal Jet. Notwithstanding the US$500,000 threshold on rectifications, Royal Jet is not keen to proceed where the extent of those rectifications will be subject to a DAR whose guidelines are unknown to Royal Jet. I understand that Claire from Royal Jet has been liaising with Larry on seeing the aircraft when it is in New York on 26 October. Would it be possible for a DAR to see the aircraft then to narrow the issues on this point? It may be helpful for the DAR to do this in order that the parties know if there is, in fact, any issue here and can then proceed accordingly. EFTA00437754

4. Section 3(d): Royal Jet are unable to permit the Purchaser's representatives to "participate in" and "assist with" the pre-purchase inspection (but they are, of course, welcome to "observe"). This would not be appropriate for third parties to do, but there are also legal certification issues to consider. 5. Section 3(e): We propose that we compromise on a flight test duration of 2 hours. In addition, further flight tests should only be undertaken to check the rectification of discrepancies if that is necessary to evidence such rectification pursuant to the manufacturer's maintenance manual. 6. Section 3(g) and (h): We have followed the acceptance process set out in the LOI. The Purchaser should not have discretion to accept the aircraft regardless of its compliance with the Delivery Condition. Further, if the Purchase fails to participate in the acceptance process, it should be deemed to have technically accepted the aircraft (subject to rectification of discrepancies). 7. Section 3(i): Royal Jet can't agree to its failure "to agree to" a discrepancy being grounds for termination. Classification of discrepancies should be objective. 8. Section 5(e)(i): The provision in relation to the Escrow Agent receiving "notice of any lien, claim or encumbrance asserted by any third party as preventing closing is not acceptable. Liens, claims or encumbrances registered with the International Registry is different, but if the Escrow Agent receives an unsubstantiated claim from an unknown third party, that should not delay closing and it is unusual to include a provision like this. The Purchaser is, of course, receiving warranties as to title free from liens claims and encumbrances from Royal Jet pursuant to the Warranty Bill of Sale. 9. Section 8(a) (now deleted): The Purchaser will have an opportunity to inspect the records during the pre- purchase inspection. Any issues and discrepancies can be raised then, but Royal Jet can't give warranties as to condition which survive closing (generally, the only warranties that survive closing in relation to the aircraft should relate to title). 10. Section 14: We have now included a mirroring indemnity from Royal Jet to Purchaser for issues prior to delivery to coincide with the indemnity from the Purchaser to Royal Jet for issues after delivery. That is not unusual. In relation to the post-delivery insurances, I= request that you check with your insurance broker that they can comply with this (normally, there is no issue adding another party as an additional insured at no cost). From Royal Jet's perspective, it is not uncommon in the aviation industry for a purchaser to arrange for a seller to be named as an additional insured as, from a seller's perspective, whilst they usually have the benefit of an indemnity, the strength of that indemnity may be limited and, as liabilities arising from aircraft accidents to passengers and persons on the ground may be extremely high, a seller will invariably insist on insurance protection. A period of two years is the industry norm (the underlying theory being that during this period the aircraft will undergo a major overhaul and the possibility of a third party being able to sustain a claim against a seller for a post-sale accident is considerably reduced). Please note that the revised draft remains subject to the further review and comment of Royal Jet. We look forward to hearing from you (particularly in relation to point 3 above as this may help progress in relation to the DAR / US certificate of airworthiness issue). EFTA00437755