US Airways 2007 Annual Report Download - page 630

(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 ** (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.
(vii) Scrapped Material. The Buyer may, with the agreement of the Resident Customer Support Representative, scrap any defective Warranted Parts
that are beyond economic repair and not required for technical evaluation. If the Buyer does not obtain the written agreement of the Resident
Customer Support Representative to scrap a Warranted Part, then the
USA — Airbus A330 Purchase Agreement
EXECUTION
PA — 40 of 95
PRIVILEGED AND CONFIDENTIAL
**Confidential Treatment Requested.