US Airways 2007 Annual Report Download - page 256

(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 and 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 labor hours spent on **, disassembly, inspection, repair, reassembly, and final inspection and test
**of the Warranted Part alone will be counted. The hours required for maintenance work concurrently being carried out on the Aircraft or
Warranted Part will not be included.
(b) The labor hours counted as set forth above will be multiplied by the In-house Warranty Labor Rate. Such rate is deemed to represent the
Buyer's composite average hourly labor rate 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 US$** (US dollars **) at economic
conditions prevailing in ** (the "In-house Warranty Labor Rate").
The In-house Warranty Labor Rate is subject to adjustment annually by multiplying the same by the ratio ECIn/ECIb. For the purposes of this
Clause 12.1.8(v) only, ECIn is equal to the Labor Index defined in the Seller Price Revision Formula for January of the year in which the
hours are spent and ECIb is equal to such Labor Index for **.
(c) Direct material costs are determined by the prices at which the Buyer acquired such replacement material, excluding any parts and materials
used for overhaul or repair furnished free of charge by the Seller.
(vi) Limitation on Credit. The Buyer will in no event be credited for repair costs (including labor and material) for any Warranted Part to the extent that
such repair costs exceed, the lower of, (x) ** of the Seller's then current catalog price for a replacement of such Warranted Part **
The Seller will substantiate the costs referred to in Clause 12.1.8(vi)(y) in writing on reasonable request by the Buyer.
** Confidential Treatment Requested.
USA — Amended and Restated Airbus A320 Family Purchase Agreement PA — 61 of 123
EXECUTION PRIVILEGED AND CONFIDENTIAL