AMTRAN INC
AMTRAN, INC., 2000 10-K, EXHIBIT 10.5
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>20
<FILENAME>0020.txt
<DESCRIPTION>AMTRAN, INC., 2000 10-K, EXHIBIT 10.5
<TEXT>

                                    EXHIBIT C

                                       to

                        AIRCRAFT GENERAL TERMS AGREEMENT

                                    AGTA-AAT

                                     between

                               THE BOEING COMPANY

                                       and

                            American Trans Air, Inc.



                           PRODUCT ASSURANCE DOCUMENT


                             This document contains:

       Part 1:     Exhibit C Definitions

       Part 2:     Boeing Warranty

       Part 3:     Boeing Service Life Policy

       Part 4:     Supplier Warranty Commitment

       Part 5:     Boeing Interface Commitment

       Part 6:     Boeing Indemnities against Patent and Copyright Infringement



<PAGE>



                           PRODUCT ASSURANCE DOCUMENT

                          PART 1: EXHIBIT C DEFINITIONS

         Authorized  Agent - Agent appointed by Customer to perform  corrections
and to administer  warranties (see Appendix VI to the AGTA for a form acceptable
to Boeing).

         Average Direct Hourly Labor Rate - the average  hourly rate  (excluding
all fringe benefits, premium-time allowances, social charges, business taxes and
the like) paid by Customer to its Direct Labor employees.

         Boeing  Product - any system,  accessory,  equipment,  part or Aircraft
Software that is manufactured  by Boeing or  manufactured  to Boeing's  detailed
design with Boeing's authorization.

         Correct - to repair,  modify, provide modification kits or replace with
a new product.

         Correction  -  a  repair,   a  modification,   a  modification  kit  or
replacement with a new product.

         Corrected  Boeing Product - a Boeing Product which is free of defect as
a result of a Correction.

         Direct  Labor - Labor spent by  Customer's  direct  labor  employees to
remove,  disassemble,  modify, repair, inspect and bench test a defective Boeing
Product,  and to  reassemble,  reinstall a Corrected  Boeing Product and perform
final inspection.

         Direct Materials - Items such as parts,  gaskets,  grease,  sealant and
adhesives,   installed  or  consumed  in  performing  a  Correction,   excluding
allowances for administration, overhead, taxes, customs duties and the like.

         Source   Control   Drawing   (SCD)  -  a   Boeing   document   defining
specifications for certain Supplier Products.

         Supplier - the manufacturer of a Supplier Product.

         Supplier Product - any system,  accessory,  equipment, part or Aircraft
Software that is not manufactured to Boeing's detailed design. This includes but
is not limited to parts  manufactured  to a SCD, all standards,  and other parts
obtained from non-Boeing sources.



<PAGE>


                           PRODUCT ASSURANCE DOCUMENT

                             PART 2: BOEING WARRANTY

1.       Applicability.
         -------------

         This warranty applies to all Boeing Products.  Warranties applicable to
Supplier  Products  are in Part 4.  Warranties  applicable  to  engines  will be
provided by Supplemental Exhibits to individual purchase agreements.

2.       Warranty.
         --------

     2.1 Coverage. Boeing warrants that at the time of delivery:

     (i) the  aircraft  will  conform  to the  Detail  Specification  except for
portions stated to be estimates, approximations or design objectives;

     (ii) all Boeing Products will be free from defects in material,  process of
manufacture  and  workmanship,  including  the  workmanship  utilized to install
Supplier Products, engines and BFE, and;

     (iii) all Boeing  Products  will be free from defects in design,  including
selection of materials and the process of  manufacture,  in view of the state of
the art at the time of design

     2.2 Exceptions.  The following  conditions do not constitute a defect under
this warranty:

     (i) conditions resulting from normal wear and tear;

     (ii) conditions resulting from acts or omissions of Customer; and

     (iii) conditions  resulting from failure to properly service and maintain a
Boeing Product .

     3. Warranty Periods.

         3.1  Warranty.  The warranty  period  begins on the date of aircraft or
Boeing Product delivery and ends: (i) after 48 months for Boeing aircraft models
777-200,  -300 or 737-600,  -700,  -800,  or new  aircraft  models  designed and
manufactured  with  similar,  new  technology;  or, (ii) after 36 months for any
other Boeing aircraft model.

         3.2  Warranty  on  Corrected  Boeing  Products.   The  warranty  period
applicable to a Corrected  Boeing Product,  including the workmanship to Correct
and install, resulting from a defect in material or workmanship is the remainder
of the initial warranty period for the defective Boeing Product it replaced. The
warranty period for a Corrected Boeing Product resulting from a defect in design
is 18 months or the  remainder  of the initial  warranty  period,  whichever  is
longer.  The 18 month  period  begins on the date of delivery  of the  Corrected
Boeing  Product or date of delivery of the kit or kits  furnished to Correct the
Boeing Product.

     3.3 Survival of  Warranties.  All warranty  periods are stated  above.  The
Performance Guarantees will  not survive delivery of the
aircraft.

4.       Remedies.
         --------

     4.1  Correction  Options.  Customer  may, at its option,  either  perform a
Correction  of a  defective Boeing  Product or return the
Boeing Product to Boeing for Correction.

     4.2 Warranty  Labor Rate. If Customer or its  Authorized  Agent  Corrects a
defective Boeing Product,  Boeing will reimburse Customer for Direct Labor Hours
at Customer's  established Warranty Labor Rate. Customer's  established Warranty
Labor Rate will be the greater of the standard  labor rate or 150% of Customer's
Average  Direct Hourly Labor Rate. The standard labor rate paid by Boeing to its
customers is established and published  annually.  Prior to or concurrently with
submittal of Customer's first claim for Direct Labor reimbursement, Customer may
notify Boeing of Customer's  then-current  Average Direct Hourly Labor Rate, and
thereafter  notify  Boeing of any  material  change in such  rate.  Boeing  will
require information from Customer to substantiate such rates.

         4.3  Warranty  Inspections.  In  addition  to the  remedies  to Correct
defects in Boeing  Products,  Boeing  will  reimburse  Customer  for the cost of
Direct Labor to perform  certain  inspections  of the aircraft to determine  the
occurrence of a condition Boeing has identified as a covered defect, provided:

     4.3.1 the  inspections  are  recommended  by a service  bulletin or service
letter issued by Boeing during the warranty period; and

     4.3.2 such reimbursement will not apply to any inspections  performed after
a Correction is available to Customer.

     4.4 Credit Memorandum Reimbursement. Boeing will make all reimbursements by
credit  memoranda which  may be applied toward
the purchase of Boeing goods and services.

     4.5  Maximum   Reimbursement.   Unless  previously   agreed,   the  maximum
reimbursement  for Direct Labor and Direct Materials used to Correct a defective
Boeing  Product will not exceed 65% of Boeing's  then-current  sales price for a
new replacement Boeing Product.

5.       Discovery and Notice.
         --------------------

         5.1      For a claim to be valid:

     (i) the defect must be discovered during the warranty period; and

     (ii) Boeing  Warranty must receive written notice of the discovery no later
than 90 days after  expiration of the warranty  period.  The notice must include
sufficient information to substantiate the claim.

     5.2 Receipt of Customer's or its Authorized Agent's notice of the discovery
of a defect  secures  Customer's  rights to remedies  under this Exhibit C, even
though a Correction is performed after the expiration of the warranty period.

     5.3 Once  Customer has given valid notice of the  discovery of a defect,  a
claim  should be  submitted  as soon as  practicable  after  performance  of the
Correction.

     5.4 Boeing may  release  service  bulletins  or  service  letters  advising
Customer of the availability of certain warranty  remedies.  When such advice is
provided,  Customer  will be  deemed  to have  fulfilled  the  requirements  for
discovery  of the defect and  submittal of notice under this Exhibit C as of the
date specified in the service bulletin or service letter.

6.       Filing a Claim.
         --------------

     6.1  Authority to File.  Claims may be filed by Customer or its  Authorized
Agent.  Appointment of an Authorized  Agent will only be effective upon Boeing's
receipt  of  the  Authorized  Agent's  express  written  agreement,  in  a  form
satisfactory to Boeing,  to be bound by and to comply with all applicable  terms
and conditions of this Aircraft General Terms Agreement.

         6.2      Claim Information.
                  -----------------

     6.2.1  Claimant is  responsible  for providing  sufficient  information  to
substantiate  Customer's  rights to  remedies  under this  Exhibit C. Boeing may
reject  a  claim  for  lack  of  sufficient  information.  At  a  minimum,  such
information must include:

     (i) identity of claimant;

     (ii) serial or block number of the aircraft on which the  defective  Boeing
Product was delivered;

     (iii) part number and nomenclature of the defective Boeing Product;

     (iv) purchase order number and date of delivery of the defective spare part

     (v) description and substantiation of the defect;

     (vi) date the defect was discovered;

     (vii) date the Correction was completed;

     (viii) the total flight hours or cycles accrued;

     (ix) an itemized  account of direct labor hours  expended in performing the
Correction;  and (x) an itemized account of any direct materials incorporated in
the Correction.

     6.2.2  Additional  information  may be required  based on the nature of the
defect and the remedies requested.

         6.3      Boeing Claim Processing.
                  -----------------------

                  6.3.1 Any claim for a Boeing  Product  returned by Customer or
its Authorized Agent to Boeing for Correction must accompany the Boeing Product.
Any claim not associated  with the return of a Boeing Product must be signed and
submitted  in writing  directly by Customer  or its  Authorized  Agent to Boeing
Warranty.

                  6.3.2  Boeing  will  promptly  review  the claim and will give
notification  of claim approval or rejection.  If the claim is rejected,  Boeing
will provide a written explanation.

7.       Corrections Performed by Customer or Its Authorized Agent.
         ---------------------------------------------------------

         7.1 Facilities Requirements. Provided Customer, its Authorized Agent or
its third party  contractor,  as  appropriate,  are certified by the appropriate
Civil  Aviation  Authority  or  Federal  Aviation  Authority,  Customer  or  its
Authorized  Agent may, at its option,  Correct  defective Boeing Products at its
facilities, or may subcontract Corrections to a third party contractor.

         7.2  Technical  Requirements.  All  Corrections  done by Customer,  its
Authorized  Agent or a third party  contractor  must be performed in  accordance
with  Boeing's   applicable   service   manuals,   bulletins  or  other  written
instructions, using parts and materials furnished or approved by Boeing.

         7.3      Reimbursement.
                  -------------

                  7.3.1 Boeing will  reimburse  Customer's  reasonable  costs of
Direct  Materials  and Direct Labor  (excluding  time  expended for overhaul) at
Customer's Warranty Labor Rate to Correct a defective Boeing Product. Claims for
reimbursement must contain sufficient  information to substantiate  Direct Labor
hours expended and Direct Materials  consumed.  Customer or its Authorized Agent
may be required to produce invoices for materials.

                  7.3.2   Reimbursement   for  Direct  Labor  hours  to  perform
Corrections stated in a service bulletin will be based on the labor estimates in
the service bulletin.

                  7.3.3  Boeing  will  reimburse   Customer's   freight  charges
associated  with a Correction of a defect on a Boeing  Product  performed by its
Authorized Agent or a third party contractor.

     7.4  Disposition of Defective  Boeing Products  Beyond  Economical  Repair.

                  7.4.1 A defective Boeing Product found to be beyond economical
repair (see Para. 4.5 Maximum Reimbursement) will be retained for a period of 60
days from the date Boeing receives  Customer's claim.  During the 60 day period,
Boeing  may  request   return  of  such  Boeing   Products  for  inspection  and
confirmation of a defect.

                  7.4.2 After the 60 day period, a defective Boeing Product with
a value of U.S. $2000 or less may be scrapped without notification to Boeing. If
such Boeing  Product has a value greater than U.S.  $2000,  Customer must obtain
confirmation  of   unrepairability   by  Boeing's  on-site   Customer   Services
Representative  prior  to  scrapping.  Confirmation  may be in the  form  of the
Representative's  signature on Customer's claim or through direct  communication
between the Representative and Boeing Warranty.

8.       Corrections Performed by Boeing.
         -------------------------------

         8.1 Freight Charges. Customer or its Authorized Agent will pay shipping
charges to return a Boeing Product to Boeing.  Boeing will reimburse Customer or
its  Authorized  Agent for the charge for any item  determined  to be  defective
under this Aircraft General Terms Agreement. Boeing will pay shipping charges to
return the Corrected Boeing Product.

         8.2 Customer Instructions.  The documentation shipped with the returned
defective  Boeing  Product  may  include  specific  technical  instructions  for
additional  work to be  performed  on the Boeing  Product.  The  absence of such
instructions  will evidence  Customer's  authorization for Boeing to perform all
necessary  Corrections  and work  required  to return  the  Boeing  Product to a
serviceable condition.

         8.3      Correction Time Objectives.
                  --------------------------

                  8.3.1 Boeing's  objective for making Corrections is 10 working
days  for  avionics  and  electronic  Boeing  Products,   30  working  days  for
Corrections of other Boeing Products  performed at Boeing's  facilities,  and 40
working  days for  Corrections  of other Boeing  Products  performed at a Boeing
subcontractor's  facilities.  The  objectives  are measured from the date Boeing
receives the defective Boeing Product and a valid claim to the date Boeing ships
the Correction.

                  8.3.2 If Customer has a critical parts shortage because Boeing
has exceeded a Correction  time objective and Customer has procured spare Boeing
Products  for the  defective  Boeing  Product in  quantities  shown in  Boeing's
Recommended  Spare  Parts  List  (RSPL)  or  Spares  Planning  and  Requirements
Evaluation Model  (M-SPARE),  then Boeing will either expedite the Correction or
provide an  interchangeable  Boeing  Product on a no charge  loan or lease basis
until the Corrected Boeing Product is returned.

         8.4      Title Transfer and Risk of Loss.
                  -------------------------------

     8.4.1  Title to and risk of loss of any Boeing  Product  returned to Boeing
will at all times remain with  Customer or any other title holder of such Boeing
Product. While Boeing has possession of the returned Boeing Product, Boeing will
have only such  liabilities  as a bailee for mutual benefit would have, but will
not be liable for loss of use.

     8.4.2 If a Correction  requires  shipment of a new Boeing Product,  then at
the time Boeing ships the new Boeing Product,  title to and risk of loss for the
returned  Boeing Product will pass to Boeing,  and title to and risk of loss for
the new Boeing Product will pass to Customer.

9.       Returning an Aircraft.
         ---------------------

     9.1  Conditions.  An aircraft  may be returned to Boeing's  facilities  for
Correction only if:

     (i) Boeing and Customer agree a covered defect exists;

     (ii) Customer lacks access to adequate  facilities,  equipment or qualified
personnel to perform the Correction; and

     (iii) it is not  practical,  in Boeing's  estimation,  to  dispatch  Boeing
personnel to perform the Correction at a remote site.

     9.2  Correction  Costs.  Boeing will perform the Correction at no charge to
Customer.  Subject to the  conditions  of Article  9.1,  Boeing  will  reimburse
Customer for the costs of fuel,  oil and landing  fees  incurred in ferrying the
aircraft to Boeing and back to Customer's facilities. Customer will minimize the
length of both flights.

     9.3  Separate  Agreement.  Boeing and  Customer  will enter into a separate
agreement  covering  return of the aircraft and  performance of the  Correction.
Authorization by Customer for Boeing to perform additional work that is not part
of the Correction must be received within 24 hours of Boeing's request.  If such
authorization  is not received  within 24 hours,  Customer  will be invoiced for
work performed by Boeing that is not part of the Correction.

10.      Insurance.
         ---------

         The provisions of Article 8.2 "Insurance",  of this AGTA, will apply to
any work performed by Boeing in accordance  with Customer's  specific  technical
instructions,  to the  extent  any legal  liability  of Boeing is based upon the
content of such instructions.

11.      Disclaimer and Release; Exclusion of Liabilities.
         ------------------------------------------------

         11.1   DISCLAIMER  AND  RELEASE.   THE   WARRANTIES,   OBLIGATIONS  AND
LIABILITIES  OF  BOEING  AND THE  REMEDIES  OF  CUSTOMER  IN THIS  EXHIBIT C ARE
EXCLUSIVE AND IN  SUBSTITUTION  FOR, AND CUSTOMER  HEREBY  WAIVES,  RELEASES AND
RENOUNCES,  ALL OTHER WARRANTIES,  OBLIGATIONS AND LIABILITIES OF BOEING AND ALL
OTHER  RIGHTS,  CLAIMS AND  REMEDIES  OF  CUSTOMER  AGAINST  BOEING,  EXPRESS OR
IMPLIED,  ARISING BY LAW OR  OTHERWISE,  WITH RESPECT TO ANY  NONCONFORMANCE  OR
DEFECT IN ANY AIRCRAFT,  MATERIALS,  TRAINING,  SERVICES OR OTHER THING PROVIDED
UNDER  THIS  AGTA AND THE  APPLICABLE  PURCHASE  AGREEMENT,  INCLUDING,  BUT NOT
LIMITED TO:

     (A) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS;

     (B) ANY IMPLIED  WARRANTY  ARISING  FROM COURSE OF  PERFORMANCE,  COURSE OF
DEALING OR USAGE OF TRADE;

     (C) ANY OBLIGATION,  LIABILITY,  RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR
NOT ARISING FROM THE NEGLIGENCE OF BOEING; AND

     (D) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE
TO ANY AIRCRAFT.

         11.2 EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES.  BOEING WILL HAVE NO
OBLIGATION OR LIABILITY, WHETHER ARISING IN CONTRACT (INCLUDING WARRANTY), TORT,
WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF BOEING, OR OTHERWISE,  FOR LOSS OF
USE, REVENUE OR PROFIT,  OR FOR ANY OTHER  INCIDENTAL OR  CONSEQUENTIAL  DAMAGES
WITH  RESPECT  TO ANY  NONCONFORMANCE  OR  DEFECT  IN ANY  AIRCRAFT,  MATERIALS,
TRAINING,  SERVICES OR OTHER THING  PROVIDED  UNDER THIS AGTA AND THE APPLICABLE
PURCHASE AGREEMENT.

         11.3 Definitions. For the purpose of this Article, "BOEING" or "Boeing"
is defined as The Boeing Company, its divisions,  subsidiaries,  affiliates, the
assignees of each,  and their  respective  directors,  officers,  employees  and
agents.


<PAGE>



                           PRODUCT ASSURANCE DOCUMENT

                       PART 3: BOEING SERVICE LIFE POLICY


1.       Definitions.
         -----------

         SLP  Component  - any of the  primary  structural  elements  (excluding
industry  standard  parts) of the  landing  gear,  wing,  fuselage,  vertical or
horizontal stabilizer listed in the applicable purchase agreement for a specific
model of aircraft  that is  installed  in the aircraft at time of delivery or is
purchased  from Boeing by Customer as a spare part.  The detailed SLP  Component
listing will be in Supplemental Exhibit SLP1 to each Purchase Agreement.

2.       Service Life Policy.
         -------------------

         2.1 SLP  Commitment.  If a failure  or defect  is  discovered  in a SLP
Component within the time periods  specified in Article 2.2 below,  Boeing will,
at a price calculated pursuant to Article 3 below, Correct the SLP Component.

         2.2      SLP Policy Periods.
                  ------------------

                  2.2.1 The policy period for SLP Components initially installed
on an aircraft is 12 years after the date of delivery of the aircraft.

                  2.2.2 The policy  period  for SLP  Components  purchased  from
Boeing  by  Customer  as  spare  parts  is 12 years  from  delivery  of such SLP
Component or 12 years from the date of delivery of the last aircraft produced by
Boeing of a specific model, whichever first expires.

3.       Price.
         -----

         The price that Customer  will pay for the  Correction of a defective or
failed SLP Component will be calculated pursuant to the following formula:

                  P =      CT
                           ---
                           144

         where:

                  P =      price to Customer for the replacement part
                  C =      SLP Component sales price at time of Correction
                  T        = total age in months of the  defective or failed SLP
                           Component  from the date of  delivery  to Customer to
                           the date of discovery of such condition.

4.       Conditions.
         ----------

         Boeing's  obligations  under  this  Policy  are  conditioned  upon  the
following:

         4.1  Customer  must  notify  Boeing in writing of the defect or failure
within three months after it is discovered.

         4.2 Customer must provide  reasonable  evidence that the claimed defect
or  failure is covered by this  Policy  and if  requested  by Boeing,  that such
defect or failure  was not the result of (i) a defect or failure in a  component
not covered by this Policy, (ii) an extrinsic force, (iii) an act or omission of
Customer,  or (iv) operation or maintenance contrary to applicable  governmental
regulations or Boeing's instructions.

         4.3 If return of a defective or failed SLP Component is practicable and
requested  by Boeing,  Customer  will  return  such SLP  Component  to Boeing at
Boeing's expense.

         4.4 Customer's rights and remedies under this Policy are limited to the
receipt of a Correction at prices calculated pursuant to Article 3 above.

5.       Disclaimer and Release; Exclusion of Liabilities.
         ------------------------------------------------

         This Part 3 and the rights and remedies of Customer and the obligations
of  Boeing  are  subject  to  the   DISCLAIMER  AND  RELEASE  and  EXCLUSION  OF
CONSEQUENTIAL  AND OTHER  DAMAGES  provisions  of  Article  11 of Part 2 of this
Exhibit C.


<PAGE>



                           PRODUCT ASSURANCE DOCUMENT

                      PART 4: SUPPLIER WARRANTY COMMITMENT


1.       Supplier Warranties and Supplier Patent and Copyright Indemnities.
         -----------------------------------------------------------------

         Boeing will use diligent  efforts to obtain  warranties and indemnities
against patent and copyright infringement enforceable by Customer from Suppliers
of Supplier  Products (except for BFE and engines)  installed on the aircraft at
the time of  delivery  that were  selected  and  purchased  by  Boeing,  but not
manufactured  to Boeing's  detailed  design.  Boeing will furnish  copies of the
warranties  and  patent and  copyright  indemnities  to  Customer  contained  in
Supplier  Product  Support  and  Product  Assurance  Agreements,  prior  to  the
scheduled  delivery  month of the  first  aircraft  under the  initial  purchase
agreement to the AGTA.

2.       Boeing Assistance in Administration of Supplier Warranties.
         ----------------------------------------------------------

         Customer will be responsible for submitting warranty claims directly to
Suppliers;  however,  if Customer  experiences  problems  enforcing any Supplier
warranty  obtained by Boeing for Customer,  Boeing will conduct an investigation
of the problem and assist Customer in the resolution of those claims.

3.       Boeing Support in Event of Supplier Default.
         -------------------------------------------

         3.1  If  the  Supplier  defaults  in  the  performance  of  a  material
obligation under its warranty,  and Customer  provides evidence to Boeing that a
default has occurred,  then Boeing will furnish the equivalent warranty terms as
provided by the defaulting Supplier.

         3.2 At Boeing's  request,  Customer  will assign to Boeing,  and Boeing
will be subrogated to, its rights against the Supplier  provided by the Supplier
warranty.




<PAGE>



                           PRODUCT ASSURANCE DOCUMENT

                       PART 5: BOEING INTERFACE COMMITMENT


1.       Interface Problems.
         ------------------

         An Interface Problem is defined as a technical problem in the operation
of an aircraft or its systems experienced by Customer, the cause of which is not
readily  identifiable by Customer but which Customer believes to be attributable
to either the  design  characteristics  of the  aircraft  or its  systems or the
workmanship used in the installation of Supplier Products. In the event Customer
experiences an Interface  Problem,  Boeing will,  without  additional  charge to
Customer,  promptly conduct an investigation and analysis to determine the cause
or causes of the Interface Problem.  Boeing will promptly advise Customer at the
conclusion  of its  investigation  of  Boeing's  opinion as to the causes of the
Interface Problem and Boeing's recommendation as to corrective action.

2.       Boeing Responsibility.
         ---------------------

         If  Boeing   determines   that  the  Interface   Problem  is  primarily
attributable to the design or  installation  of any Boeing Product,  Boeing will
Correct the design or workmanship to the extent of any then-existing obligations
of Boeing  under the  provisions  of the  applicable  Boeing  Warranty or Boeing
Service Life Policy.

3.       Supplier Responsibility.
         -----------------------

         If  Boeing   determines   that  the  Interface   Problem  is  primarily
attributable to the design or installation  of a Supplier  Product,  Boeing will
assist Customer in processing a warranty claim against the Supplier.

4.       Joint Responsibility.
         --------------------

         If  Boeing   determines   that  the  Interface   Problem  is  partially
attributable  to the design or installation of a Boeing Product and partially to
the design or installation of a Supplier Product, Boeing will seek a solution to
the Interface Problem through the cooperative efforts of Boeing and the Supplier
and will  promptly  advise  Customer  of the  resulting  corrective  actions and
recommendations.

5.       General.
         -------

         Customer  will,  if  requested  by Boeing,  assign to Boeing any of its
rights  against any  supplier  as Boeing may require to fulfill its  obligations
hereunder.



<PAGE>


6.       Disclaimer and Release; Exclusion of Liabilities.
         ------------------------------------------------

         This Part 5 and the rights and remedies of Customer and the obligations
of Boeing  herein are subject to the  DISCLAIMER  AND RELEASE and  EXCLUSION  OF
CONSEQUENTIAL  AND OTHER  DAMAGES  provisions  of  Article  11 of Part 2 of this
Exhibit C.



<PAGE>



                           PRODUCT ASSURANCE DOCUMENT

                    PART 6: BOEING INDEMNITIES AGAINST PATENT
                                     AND COPYRIGHT INFRINGEMENT


1.       Indemnity Against Patent Infringement.
         -------------------------------------

         Boeing will defend and  indemnify  Customer with respect to all claims,
suits and liabilities  arising out of any actual or alleged patent  infringement
through  Customer's  use,  lease or resale of any aircraft or any Boeing Product
installed on an aircraft at delivery.

2.       Indemnity Against Copyright Infringement.
         ----------------------------------------

         Boeing will defend and  indemnify  Customer with respect to all claims,
suits  and  liabilities   arising  out  of  any  actual  or  alleged   copyright
infringement  through  Customer's  use,  lease or resale of any  Boeing  created
Materials and Aircraft Software installed on an aircraft at delivery.

3.       Exceptions, Limitations and Conditions.
         --------------------------------------

         3.1 Boeing's  obligation to indemnify Customer for patent  infringement
will  extend  only to  infringements  in  countries  which,  at the  time of the
infringement,  were  party to and fully  bound by either  (a)  Article 27 of the
Chicago  Convention on International  Civil Aviation of December 7, 1944, or (b)
the  International  Convention for the Protection of Industrial  Property (Paris
Convention).

         3.2   Boeing's   obligation   to  indemnify   Customer  for   copyright
infringement is limited to  infringements in countries which, at the time of the
infringement,  are members of The Berne Union and recognize computer software as
a "work" under The Berne Convention.

         3.3 The  indemnities  provided  under this Part 6 will not apply to any
(i) BFE, (ii) engines,  (iii)  Supplier  Product (iv) Boeing  Product used other
than for its intended purpose, or (v) Aircraft Software not created by Boeing.

         3.4 Customer must deliver  written  notice to Boeing (i) within 10 days
after Customer first receives  notice of any suit or other formal action against
Customer  and (ii)  within  20 days  after  Customer  first  receives  any other
allegation or written claim of infringement covered by this Part 6.



<PAGE>


         3.5 At any time,  Boeing  will have the right at its option and expense
to: (i) negotiate with any party claiming  infringement,  (ii) assume or control
the defense of any infringement allegation,  claim, suit or formal action, (iii)
intervene  in any  infringement  suit or formal  action , and/or (iv) attempt to
resolve any claim of  infringement by replacing an allegedly  infringing  Boeing
Product or Aircraft Software with a noninfringing equivalent.

         3.6 Customer will promptly furnish to Boeing all  information,  records
and assistance  within  Customer's  possession or control which Boeing considers
relevant or material to any alleged infringement covered by this Part 6.

         3.7 Except as required by a final judgment  entered against Customer by
a court of  competent  jurisdiction  from which no  appeals  can be or have been
filed,   Customer  will  obtain  Boeing's  written  approval  prior  to  paying,
committing to pay,  assuming any  obligation  or making any material  concession
relative to any infringement covered by these indemnities.

         3.8 Boeing will have no obligation  or liability  under this Part 6 for
loss of use,  revenue or profit,  or for any other  incidental or  consequential
damages.  The  obligations of Boeing and remedies of Customer in this Part 6 are
exclusive and in  substitution  for, and Customer  hereby  waives,  releases and
renounces all other  indemnities,  obligations and liabilities of Boeing and all
other  rights,  claims and  remedies  of  Customer  against  Boeing,  express or
implied,  arising  by law or  otherwise,  with  respect to any actual or alleged
patent, copyright OR OTHER INTELLECTUAL PROPERTY infringement or the like by any
aircraft,  AIRCRAFT  SOFTWARE,  MATERIALS,  TRAINING,  SERVICES  or other  thing
provided under this AGTA and the applicaBLE PURCHASE AGREEMENT.

         3.9 For the  purposes of this Part 6,  "BOEING or Boeing" is defined as
The Boeing Company, its divisions,  subsidiaries,  affiliates,  the assignees of
each and their respective directors, officers, employees and agents.


</TEXT>
</DOCUMENT>
