CONTRACT AGREEMENT(CONTRACT NO.67-63)

Created: 9/27/1967

OCR scan of the original document, errors are possible

THIS AGREEMENT, madeh day ofy and bet veer.

China Airompany organized under the laws of the

Republic of China (hereinafter referred to asnd Air

America,elaware corporation vith offices

Connecticuthereinafter

referred to as

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Airamontract with the United States Government

provide flying services and desires in the Fulfillment ofto secure flying services from an additional source; and

WHEREAS, CAL is villing to provide such flying services under

subcontract to Airam; 16

NOW, THEREFORE, in consideration of the stated premises, the

mutual covenants, and the conditions herein contained the parties

hereto agree as follows:

I. SERVICES TOERFORMED

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CAL shall, during the period set forth in Article III. hereof,

the

1. Flying services with one basically6

and two basicallyircraft,

and when requested by Airam the services of one

6 type aircraft subject to call orders

as provided in paragraph c. of this Article I.

including all necessary aircraft fuel, engine lubri-

eating oil and aircraft lubricantsupplies,

services, personnel, and ground support equipment

for the operation thereof, unless otherwise provided

hereinafter, subject only to necessary absence of

such aircraft for proper maintenance. CAL shall base

such aircraftlace or places agreed to betweenand Airam, hereinafter referred to as the "Base

. Such Base Point(s) may be changed from

time to time by agreement between CAL and Airam

expressed ir. writing. Daily maintenance inspections

are to be performed at the Base Point of such aircraft.

Aircraft repairs, maintenance, and services beyond

CAL's capability to perform at the Base Point may be

performed at other locations. The aircraft shall be

operated between points agreed to between CAL and

Airam. For the foregoing services, CAL shall be

paid pursuant to the rates set forth in Appendix

attached hereto and herebyart hereof, and

the provisions of Article IV. hereof. 6

2. Modifications to its aircraft, requested by Airam

approved by CAL, to suit then for use by Airam;

provided, that if requested by CAL, CAL shall be

reimbursed for such modification, and for restoringaircraft to prior configuration upon release of

the aircraft. However, such modified aircraft shall

not be withdrawn during the period of assignment or

call by CAL without prior approval of Airam. For

the foregoing services, CAL shall be reimbursed

pursuant to paragraph "g" of Article IV. hereof. 17

3. Parts and materials to the extent required in the

performance off this Article I. CAL shall

be reimbursed for such parts and materials as

provided in paragraph "g" of Article IV. hereof. 22

4. Upon request of Airam, CAL may, if available, provide

additional flight crew personnel for which CAL shall

be paid pursuant to the normal rates set forth in

Appendix "D* and the provisions of Article IV. hereof.

Requests by Airam for additional flight crew personnel

shall be ir. writing, requesting personnel by classifi-

cation and category, desired location of services and

period for which services are being requested. 31

CAL shall have complete authority and discretion to decide all

matters of maintenance, the adequacy of clearances, permissions

obtained, and operations insofar as the safety of the aircraft

and its personnel are concerned, in accordance with establishedand industry standards.

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In calling for aircraft which may be furnished "on call"

pursuant to Itemf Article I. hereof, Airam, which term

shall include its authorized representative, shall issue a

call order in accordance with Appendixttached hereto

andart hereof, which shall notify CAL of the place

at which the aircraft is required and the period of time for

which such aircraft is desired. CAL shall respond by agreeing

to furnish the aircraft in accordance with the terms requested,

or will advise of non-availability of the aircraft, or advise the portions of the requested period during which the aircraft can be made available. Except in the event of non-availability CAL's response shall state the place at which the aircraft shall be made available, and such response shall be deemed an offer which offer may be accepted by Airam at any time before it is withdrawn. Acceptance in writing of such offer by Airam shall beall order for CAL to furnish the aircraft at the place of availability as stated by CAL, and for the agreed period whereupon the aircraft shall be deemed to be called hereunder; such place of availability shall be the "Point of Origin" for such aircraft.

Airam and/or its duly authorized representative, usav issue Fljght Service Operational_Qr_de.rs.in accordance with App.end.ix "C" attached, hereto and herebyart hereof, for all flights, except maintenance flights to and from Taiwan, and may issue changes Thereto at any time and from "time to tine during the life of this contract. Such orders and changes thereto, shall be in writing and signed by the authorized representative; provided that such orders may be issued orally or by other means when the exigency of any situation precludes written operational orders or changes in which event such oral orders may be confirmed in writingeasonable time after performance of the services ordered. Such orders shall authorize CAL to perform flights specified therein and may designate the routes to be flown and the points from which and to which the flight shall be made.

Upon request ofember of the aircraft crew shall sign, when requested, for all specified cargo listed oh the manifest andeceipt therefor at destination; provided, that CAL's personnel shall not be responsible for cargo content or identification.

Airam shall be responsible for the management, supervision and the provision of peculiar parts, components, equipment and supplies for onlyircraft. This shall be done at no additional cost to CAL. Airam shall furnish all such items, upon request from CAL, to the extent that such are available. It is understood the source of such items is United States Government Stores.

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g. CAL shall have no obligation to replace any aircraft furnished

hereunder vhich are lost or destroyed or undergoing repairs

while engaged ir. performance of this contract. 4

II. PERSONNEL TO BE FURSISHED

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CAL shall provide, within the rates per flying hour provided

forecessary maintenance and operations personnel

ormal complement of flight crew members for the

aircraft furnished

Airam shall arrange for all personnel required to load, handle

and unload cargo. CAL shall be responsible, within the rates

per flying hour provided herein, for providing qualified

personnel to supervise the placement and securing of cargo

as well as the seating of passengers. Except as otherwise

provided for herein, CAL shall determine its own requirements

for personnel to be assigned to the performance of this

contract commensurate with operational and maintenance

requirements hereunder. 21

CAL shall engage such of its facilities and equipment as

shall be necessary for the performance of this contract

except as otherwise specifically provided for in this

contract; provided, however, that Airam may loan or furnish

CAL such supplies or equipment as, in the opinion of Airam,

are required by CAL for the performance of the contract and

which are not reasonably available to CAL from other sources. 29

III. PERIOD OF PERFORMANCE

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The services called for under this contract shall commence on

the day first above written and continue until midnight,

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Airam shall have the right to renew this contract for two

additional one year periods and such renewal shall be automatic

unless CAL is notified in writing) days prior to

the effective date of such renewal. However, Airam shall

have tho right to terminate this contract at any time it

shall determine the services provided for therein are no

longer required by giving notice in writing)

days prior to the effective date of such termination. 44

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IV. CONSIDERATION AND PAYMENT

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a. Airam shall pay CAL in accordance vith the provisions of

this Article IV. at the appropriate rates set forth in

Appendix "A" hereof for the services performed by CAL

hereunder. 7

1. As pertains to Itemf Article I. hereof, CAL shall

paid, upon submission of proper invoices orapplicable rates stipulated in Appendix "A" for

rendered and accepted, less deductions, ifprovided.

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As pertains to Itemf Articleereof, CAL shall

be paid, upon submission of proper invoices or vouchers,

the normal rates stipulated in Appendix "D" for services

rendered and accepted, less deductions, if any, herein

provided. CAL shall be paid the appropriate hourly rates

for each of such personnel and pro rata amounts thereof for

fractional parts of an hour flown provided that CAL shall

be paid at the rate for each such personnelinimum

ours per day. The minimumlying hours

per day shall apply to all days that each such personnel

are called for hereunder including days required in

positioning the personnel to the point of use and return

of such personnel to their regular assigned CAL station

upon release from services hereunder by Airam. In addition,

CAL shall be reimbursed for all expenses of positioning

and depositioning such personnel including, but not limited

to, transportation costs, incidental expenses, and dead

head pay. 32

Flight time, actual flying time, and flying hour is the logged

of each flight and shall be calculated as follows:

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lock to Block" Time: From the moment the aircraft first

moves under its own power for the purpose of flight until

the moment it comes to rest at the next point of landing. 39

Airborne Time: Airborne time is the logged tine of each

flight to the nearest minute calculated from the moment

of take-off to the moment of landing. 43

In addition to the flying hour rates provided in Appendix "A"

CAL shall be paid for these personnel covered by

Appendix "D" at the hourly rates for hazardous area flying set forth inor each hour or pro rataortion of an hour of hazardous area flying. Airam shall designate in writing those personnel authorized on its behalf to execute certificates for hazardous area flight time. The hazardous flight hour rates prescribed in Appendix "D" hereto shall apply to all flight time hereunder which isazardous nature, herein defined as flight time over areas in which active combat operations are in progress or over areas controlled or occupied by unfriendly forces; provided, that the determination of whether flights or portions of flights are performed over such hazardous areas shall be by agreement between the local senior representatives cf the parties hereto based upon known conditions priorlight or pilot experienced and reported conditions subsequent to orlight; provided, further, that such determination shall be made in advance of each flight when known or subsequent thereto when unknown. The hazardous area flight time shall be certified by the aircraft commander and Airam, or its authorized representative therefor. The Flight Service Operational Order shall be used as the basis for billing for the hourly rate(s) payable for such hazardous flying.

to subparagraphelow, CAL shall be paid for

all hours flown hereunder by all aircraft furnished pursuant to Itemfxcept for maintenance flight hours, but including return of the aircraft to point of origin during the period(s) of their assignment or calland shall be paid for the minimum flight hours per calendar quarter for each fleet of basically assigned aircraft, whether or not actually flown. Such minimum flight hours shall include all hours flown hereunder except maintenance flight hours and shall be determined in accordance with theof Appendix Minimum hours shall apply from the moment the aircraft is ready to fly and is committed to use under this contract. Minimum hours shall cease to apply upon release of an aircraft from the contract or upon destruction or loss of the aircraft. Minimum hours shall not apply to6 aircraft subject to call.

to payment of minimums specified in paragraphCAL shall be paid for all hours flown asaccordance with the "Block-to-Block" definitionin Article. hereof; provided, however,total hours of "Block-to-Block" time for which CAL shall

be paid shall be linitedaximum of fifteen percent

n excess of airborne time as defined in Article.

hereof.

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CAL shall be paid in accordance with the provisions of this

contract upon CAL presenting to Airam an original plus four copies

of CAL's invoices certified by an appropriate officer of CAL as

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certify that the above bill is just and correct and

therefor has not been received."

Reimbursement pursuant to the provisions of Itemsndf

I. shall be subject to the

As pertains to Itemndf Article I. hereof, and

subject to paragraphf this ArticleAL shall,

upon submission of proper invoices and vouchers, be reimbursed

at cost excepting for direct skilled labor utilized tomodification and repairs to CAL aircraft for which CAL

shall beor each hour of direct skilled labor

required and expended by CAL personnel. This rate includes

reimbursement for unskilled labor, overhead and profit. 24

As pertains to Itemf Article I. hereof, CAL shall be

reimbursed for direct materials used in accordance with

the following: 28

The amounts to be reimbursed by Airam under this

paragraphhallax levy by the

Government of the Republic of China on sales (known

in TaiwanBusinesshich is composed of

a businessefense taxtamp tax). In

the absence of agreements providing exemption to the

Government therefrom, such taxes shall be considered

allowable cost and may be included in the fixed

prices for labor utilized in Taiwan and the cost

of direct materials furnished by the Contractor

hereunder. The prices for direct materials furnished

by the Contractor may also include customs duties

paid to the Government of the Republic of China and

such shall be considered as allowable cost.

For those parts and materials furnished by CAL for

in accordance with CAL's established practices,

the costs cannot be determined either by reference to paid vendor's Invoices or other means, the method of pricing shall be by utilisation of the current market price or the price set forth in the most recent available USAF Parts Catalog, whichever price is most advantageous to Airam. CAL shall segregate all ite-ns falling in the above category and so identify in the invoiceeparate line item.

iii. All of CAL's claims for reimbursement of the costs of items purchased directly for this contract must be supported by invoices which shall be subject to approval by Airam. This applies to all authorized cost reimbursable items including direct parts and materials furnished pursuant to Item 2. Claims for reimbursement of costs of items withdrawn from CAL's stock must be supported by CAL's invoices which shall be subject to approval by Airam.

iv. Procurement, delivery, and material handling expense (current landed costs) incurred by CAL to point of use shall be considered as allowable elements of cost for purpose of reimbursement under this contract. As pertains to landed costs, materials, and supplies which are used hereunder, which are transported to or enroute to the point of use on commercial fliqhts, CAL shall be reimbursed at the commercial rates for such transportation in effect at the time theis utilized.

"Direct Skilled Labor" as used herein includes that labor which can be performed only by individuals possessing the professional, specialized and/or technical skills, knowledge, and capability to accomplish inspection, adjustments, repairs, tests, and similar operations; machine shop work, welding, electroplating, and similar operations on or incident tooverhaul, and repair of aircraft or related components, accessories, or parts. "Direct Skilled Labor" includes only those skilled laborers, artisans, craftsmen, and operators together with their leadmer. and foremen, actually and directly employed in the performance of work and services as required under this contract. It does not include that labor which is performed in cleaning and polishing of aircraft, aircraft components and equipment, paint removal, assisting in heavy work, such as moving equipment or heavy components;

this paraqrapht also does not include worn anaperformed by administrative personnel, corporate officers, supply personnel, all supervisory personnel above the foreman

supply pcrauiuici an j

level, office personnel, time-keepers, watenmen, guards and

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"Direct Materials" as used herein are defined as all items purchased, supplied, manufactured or fabricated with the intention of entering them into, or makingart of

aircraft. For the purposes of this contract, cleaning,

polishing components, packing and packaging

. (petroleum, oil and lubricants) andused or consumed directly on the aircraft orparts thereof, shall be considered directother materials such as office and stationery supplies,

ior?nrnpl washroom SUPPl i

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compounds and equipment, personnel washroom supplies.

lighting supplies,hich are not (and would not be)

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generally, performing menial tasks and/or miscellaneous work

ature which requires none of the technical skills,

knowledge or professions referred to in the first portion ofoaraaraoh It also does not include work and labor

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actually used directly on the aircraft or its components, shall be considered indirect materials.

ARTICLE V. SPECIAL PROVISIONS

and/or its duly authorized representative, shallsurveillance, supervision, and operationalto assure that CAL performs the services inthe provisions of the contract, provided thatshall be commensurate with the ratedthe aircraft, reasonable professional standards, andof CAL's personnel. CAL shall haveto decide all matters in connection withinvolving safety of operation.

shall not be responsible for non-completion orany flight from original point or destination due tothe control of CAL. The flying time for flightsnot completed or are diverted due to causes beyondof CAL shall be considered as authorized flyingpayment under the terms of the contract. The Captain

Airam shall make payment hereof in United States dollarsdraft or other instrument and payable as directedin writing.

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of the aircraft shall be the deciding authority on flight completion or diversion, or any other action deemed necessary in the interest of flight safety.

CAL's employees and officers of CAL, or other persons or organizations employed by CAL in the performance of work or rendition of services under this contract, shall at all times be identified as the employees, officers, or agents of CAL and shall not be considered as the employees, officers or agents of Airam.

Airam may, if it finds it to be in the best interest of the United States Government, direct CAL to remove, and CAL shall remove, any employee from assignment to perform services under this contract.

It is the understanding of Airam that CAL shall be relieved of the necessity to pay landing fees, airways communications and parking charges for operations performed under this contract. In the event Airam is unable to obtain such relief, it is agreed that Airam shall pay such charges incurred under this contract.

Except as expressly provided in this contract, Airam shall have no responsibility to or for CAL personnel engaged in the performance of services hereunder.

CAL shall furnish in writing to Airam the name, personal history data, and any other pertinent information available to CAL, if requested by Airam, of all CAL personnel assigned to this contract.

To the extent that Airam is relieved by the United States Government of liability for the loss of, damage to or destruction. Government property made available to CAL. Government cargo, which term shall be deemed to include passengers' baggage and personal belongings, transported in the performance of this contract, Airam does hereby relieve CAL of liability for loss of, damage to or destruction. Government property and cargo transported by CAL in the performance of this contract.

CAL is authorized to transport CAL personnel, parts, equipment and supplies during performance of services hereunder,pace available basis on the aircraft furnished hereunder.

j- Examination of Records: CAL agrees that the Comptroller

General of tne United States or any of his duly authorized

representatives shall, until the expiration of three years

after final payment under this contract, have access to and

the right to examine any directly pertinent books, documents,

papers and records of CAL, involving transactions related to

this contract. 8

Soviet-Controlled Areas: CAL shall not acquire for use in

performance of this contract any supplies orfrom sources within Soviet-controlled areas,

as listed in Article VII. of this contract, or transported

from or through Hong Xong or Macao, without the written

approval of Airam. 15

Price Reduction for Defective Cost or Pricing Data:

1. If Airam determines that any price, including profit or

fee, negotiated in connection with this contract was

increased by any significant sums because CAL, or any

subcontractor in connectionubcontract covered

byelow, furnished incomplete or inaccurate cost or

pricing data or data not current as certified in CAL's

Certificate of Current Cost or Pricing Data, then such

price shall be reduced accordingly and the contract shall

be modified in writing to reflect such adjustment.

CAL agrees to insert the substance of paragraphsnd 2.

of this clause in each of his cost-reimbursement type,

price redeterminable, or incentive subcontracts hereunder,

and in any other subcontract hereunder in excess of

nless the price is based or. adequate price

competition, established catalog or market prices ofitems sold in substantial quantities to the

general public, or prices set by law or regulation. In

each such excepted subcontract hereunder which exceeds

he Contractor shall insert the substance of

the following clause: 39

REDUCTION FOR DEFECTIVE COS" OR PRICING DATA -

This clause shall become operative only with

respect to any change or other modification made pursuant

to one or more provisions of this contract which involves

a price adjustment in excessxceptprice is based on adequate pricecatalog or market prices ofsold in substantial quantities to theor prices set by law or regulation. Theprice reduction under this clause shall be limited

to such price adjustments-

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2. If CAL determines that any price,or fee, negotiated in connection with anywithin the purview of paragraphboveby any significant sura because theany of his subcontractors in connection with acovered by paragraphelow,or inaccurate cost or pricing data, orcurrent as of the date of execution of thecertificate of current cost orthan such price shall be reduced accordinglysubcontract shall be modified in writing toadjustment.

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The subcontractor agrees to insert the substance

of this clause in each subcontract hereunder which exceeds

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For purposes of verifying that cost or pricing data submitted, in conjunction with the negotiation of this contract or any contract change or other modification involving an amount in excess0 are accurate, complete, and current, Airam, or its authorizedthe expiration of three years from the date of final payment under thisthe right to examine those books, records, documents and other supporting data which will permit adequate evaluation of the cost or pricing data submitted, along with the computations and projections used therein, which were available to CAL as of the date of execution of CAL's Certificate of Current Cost or Pricing Data.

CAL agrees to insert the substance of this clause including this paragraphn all subcontracts hereunder in excesso as to apply until three years after final payment under the subcontract, unless the price is based

Audit

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on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, cr prices set by lav or regulation. In each such excepted subcontract hereunder in excessAL shall insert the substance of the following clause to apply until three years after final payment under the subcontract:

RICE ADJUSTMENTS

clause shall become operative onlyto any change or other modification madeone or more provisions of this contract whichprice adjustment in excess0 unless theis based on adequate pricecatalog or market prices of commercialin substantial quantities to the general public,

or prices set by law or regulation and further provided that such change or other modification to this contract must resulthange or other modification to Airam prime contract.

purposes of verifying that cost orsubmitted in conjunctionontract changeinvolving an amount in excess0

are accurate, complete and current, Airam or its authorized representativethe expiration of three years from the date of final payment under thisthe right to examine those books, records, documents, and other supporting data which will permit adequate evaluation of the cost or pricing data submitted, along with the computations and projections used therein, which were available to CAL as of the date of execution of CAL's Certificate of Current Cost or Pricing Data.

agrees to insert the substance ofincluding this paragraphn allin excess0 so as to applyyears after final payment of the subcontract."

Subcontractor Cost and Pricing Data

1. CAL shall require subcontractors hereunder to submit cost or pricing data under the following circumstances: (i) prior to award of any cost-reimbursement type, incentive,

or price redeterminable subcontract; (ii) prior to the award of any subcontract the price of which is expected toiii) prior to the pricing of any subcontract change or other modification for which the price adjustment is expected toxcept in the case of (ii) and (iii) where the price is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation.

CAL shall require subcontractors to certify, inthe same form as that used in the certificate by Airam to the U. S. Government, that to the best of their knowledge and belief, the cost and pricing data submitted underbove is accurate, complete, and current as of the agreement or. the negotiated price of the subcontract.

CAL shall insert the substance of this clause including this paragraphn each of his cost-reimbursement type, price redeterminable, or incentive subcontracts hereunder, and in any other subcontract hereunder which0 except where the price thereof is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation. In each such excepted subcontract hereunder in excessAL shall insert the substance of the following clause:

COST AND PRICINGRICE ADJUSTMENTS

ndf this clause shallonly with respect to any change ormade pursuant to one or more provisions

of this contract whichrice adjustment in excess The requirements of this clause shall be limited to such price adjustments.

shall require subcontractorssubmit cost or pricing data under the(i) prior to award of anytype, incentive or price(ii) prior to award of any subcontract,

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the price of vhich is expected toiii) prior to the pricing of any subcontract change or other modification for which the price adjustment is expected toxcept in the case of (ii) andhere the price is based on adequate price competition, established catalog or market prices of commercial items sold in substantial quantities to the general public, or prices set by law or regulation.

3. CAL shall require subcontractors to certify, in substantially the same form as that used in the certificate by Airam to the U. S. Government, that to the best of their knowledge and belief the cost and pricing data submitted underbove is accurate, complete, and current as of the date of execution, which date shall be as close as possible to the date of agreement on the negotiated price of the contract

4. CAL shall insert the substance of this clause

including this paragraphn each subcontract hereunder

which" 23

CAL shall not enter into any subcontract, oral or written,

for the performance of any of the work or services provided

for under the terms of this contract without the written

approval of Airam. 23

VI. INDEMNITY AND INSURANCE

for loss, damage or destruction of Airam property and injury to or death of Airam personnel not caused by directly attributable to CAL or its agents, servants,

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any risk for any loss, damage, or destruction of any property or for any injury to or death of any person resulting from or arisina out of this contract regardless of how caused or when occurring and CAL hereby agrees to indemnify and save and hold Airam, including its associated companies and affiliates, and its agents, servants and employees, harmless with regard to any and all claims of any nature, including

or

employees, and except for loss, damage or destruction

to property and injury to or death of persons caused by

or directly attributable to the wilful misconduct of Airan

or its associated or affiliated companies or their employees,

servants and agents, Airam shall not be responsible or accept

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related to any or all such loss, damage, destruction, injury

and death. 5

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covereu uy

o Airam

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CAL aqrees to maintain in full force and effect during thi contract insurance covering CAL's liability and undertakin set forth in paragraphereinabove in connection with its operations through and its activities in and about the locations covered by this contract, such insurance to be -such amounts and with such insurers as are acceptable to

such amounts ana witn sucns and shall cause Airam to be named as co-insured in connection with such insurance. 14

CAL agrees to furnish to Airam the insurers' certificate(s)

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of insurance which shallhe names of the insuredhe aircraft covered by thehe effective period of suchhe amount and coverage afforded by such the geographical limitations applicable to the aircraft covered by such insuranceertifying that such insurance is in full force andcknowledging acceptance of the indemnification agreement assumed by CAL under thisaiving any and all rights of subrogation against the United States Government

and Airam, its officers, agents, and employees and (g) providing

that the insurers will give Airam at least) dayswritten notice before such insurance or waiver of

subrogation is cancelled or materially changed. In addition,

CAL shall furnishertified copy or duplicate original

of such policy or policies and endorsements thereto and thereonsoon as conveniently possible.

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In the event CAL shall fail to procure and maintain such

insurance, Airam shall have the right to do so and charge

CAL with the cost thereof, such cost being subject to

deduction from any amounts owed by Airam to CAL under

this contract. 33

VII. IET-CCMT3CLLED AREAS:

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For the purpose of this contract, Soviet-controlled areas are

China, excluding Taiwanut including Manchurai,

Inner Mongolia, the provinces of Tsinghai and Sikang,

Sinkiang, Tibet, the former Kwangtung Leased Territory,

the present Port Arthur Naval Base Area, and Liaoning

Province. 6

Communist-controlled area of Vietnam and Communist-controlled

of Laos.

Cuba

Czechoslovakia

East Germany (Soviet Zone of Germany and the Soviet Sector of

Estonia

Hungary

Latvia

Lithuania North Korea

Mongolia

Poland and Danzig

Rumania

Union of Soviet Socialist Republics

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VIII. AIRAM FURNISHED

Airam shall furnish to CALura to be deductible from amounts

to be paid to CAL as provided in Article IV.b. such equipment and

facilities or their approximate equivalent at such prices as shall

be agreed to in writing between the parties hereto from time to

time. 30

IX. YPE

Notwithstanding any other provisions of this contract, it is

understood thatndertakings herein with regard to making

ype aircraft available upon an initial or continuing

basis and the operation thereof shall be subject to the terms

and conditions or other arrangement upon which such aircraft

are so furnished to CAL. 39

X. COHTRACTUAL

This contract consists of Articles I. through X. on pages 1

n Appendix "A" of two pages; andf

one page; an Appendix "C" of two pages and an Appendix "D"

of one page.

Contract

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WITNESS WHEREOF, the parties hereto have, by their respective officials or representatives thereunto duly authorized, executed this agreement.

CHINA AIR LINES

By

Typed Name: RobertPresident

AIR AMERICA, INC.

By

Typed Name: J. W. Walker, Jr.

viceContract Affairs

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AIRCRAFT FLYING HOUR RATES

Part I, The rates set forth in this Part I. are effective7 through

Basic Aircraft

Per Flying Hour Per Calendar Quarter Wine

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2

1 and over

1 and over

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Aircraft

lying Hour Per Calendar Quarter

Part II. TY, 1

e rates se October 19

minimums

t forth in this Parthroughune 19

II. are effective

Aircraft

Per Flying Hour Vet Per calendar Quarter wine

2

1 and over

1 and over

0

Aircraft

Per Flying Hour Per Calendar Quarter

minimums

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Note 1, The term "fleet" as used herein is defined as one or moreype of aircraft which are assigned to the contract as basic aircraft pursuant to the terms of. Item I.

Note 2. The total number of aircraft makingleetalendar quarter shall be determined by considering each basic aircraft performing services under the contract during the entire calendar quarternit of one and each basic aircraft performing services under theortion of the calendar quarterercentagenit one obtained by dividing the number of days the aircraft was assigned by the number of days in the calendar quarter. The total sum of units will be the fleet for that calendar quarter.

Notehe minimuras applicable to each fleet of aircraft shall be determined by multiplying applicable minimums set forth onf this Appendix "A" by the fleet as determined in accordance with the procedures set forth in Notebove.

Note 4. If the total hours flown by the entire fleet equals or exceeds the calendar quarter minimums as determined in accordance with Notebove, there will be no unflown minimums.

Note 5. If the total hours flown by the entire fleet is less than the calendar quarter minimums as determined in accordance with Notebove, the billable unflown minimums shall be the difference between the total hours flown by the fleet and said minimums.

CALL ORDER FOR ADDITIONAL AIRCRAFT

APPENDIX "D" Contract

China Air Lines

Order No. Date

to Article I. paragraph c. of subject contract, you are hereby requested to provide, if available, additional aircraft as specified below:

of Aircraft Place Aircraft Required

TJ5aTe)

Through >ate.

return the original and four copies to the undersigned indicating in sp.ace provided belov your agreement to this request and aircraftnumber assigned.

Air America, Ir.c. Authorized Representative

OFFER

Air America, Inc.

China Air Lines hereby agrees to furnish aircraft as indicated:

Identification will be available at of

(Date)

China Air Lines Representative

ACCEPTANCE AND CALL ORDER

China Air Lines

This constitutes acceptance of the Contractor's Offer as stated above and shall, pursuant to Article I. Paragraph c. of the contract, be deemed the Operational Order for CAL to furnish the aircraft described at the place of origin as indicated. The aircraft shall proceed from

date abcve)

Air America, Inc. Authorized Representative

To: Fron:

FLIGHT SERVICE OPERATIONAL ORDER

f 2

) Aircraft

Services to be rendered under Contract

Actual Time

assengers

Cargo

RenarTs

CONTRACT NO.

f 2

INSTRUCTIONS FOR COMPLETION

Form tc be issued to CAL prior to each flight by Airam authorized representative.

Authorized representative vill complete items 1 nd submit the original and two copies to AIR AMERICA Operations.

CAL flight captain or crew members will completehroughndto be same as aircrafts applicable, and signatures by CAL personnel will be affixed as indicated.

If change in original routing occurs while in flight or on mission, such change will be entered by the Captain in itemith notation of source authority of change..

All copies to be completed after flight returned to the Airam reDresen-tative for completion ofertification. Subsequent distribution as follows:

forwarded to CAL attached to Flight Log.

copy to be submitted by CAL when invoicing Airam.

copy to be retained by Airam representative.

vill forward one completed copy to appropriate

Any special instructions or additional remarks to be entered under itemf additional space required, use additional sheets.

Operational Orders are to be assigned numbers showing month and numerical designator and numbered consecutively.

Fl?67

f 1

ADDITIONAL PERSONNEL RATES AND

HAZARDOUS RATES FOR ALL PERSONNEL

Normal Rate Hazardous Rate

Radio

Extra Crew Member

Plight

Parachute Dropping

Original document.

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