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Export-Import Bank of the United States
811 Vermont Avenue, N.W.
Washington, D.C. 20571
United States of America

July 31, 2003

NINTH INSURANCE NOTICE

To:  All airlines operating (and all operating lessors leasing) aircraft supported by the Export-Import Bank of the United States (each an "Airline")

From: Alice McNutt Miller
 Vice President - Asset Management Division
 Export-Import Bank of the United States ("Ex-Im Bank")

Introduction

By notices dated September 24, 2001 (the "1st Notice"), October 1, 2001 (the "2nd Notice"), October 11, 2001 (the "3rd Notice"), November 30, 2001 (the "4th Notice"), March 28, 2002 (the "5th Notice"), June 27, 2002 (the "6th Notice"), September 26, 2002 (the "7th Notice"), and January 30, 2003 (the "8th Notice"), Ex-Im Bank informed each Airline that, subject to the terms and conditions set forth therein, Ex-Im Bank would not require compliance with specified terms of the documentation governing Ex-Im Bank supported aircraft transactions (the "Governing Documents").  These terms were with respect to certain minimum amounts of liability insurance for third party claims of people and property on the ground for personal injury and property damage arising from war and allied perils ("Third Party Liability War Risk Insurance").  Ex-Im Bank further advised that it would not exercise its rights under the Governing Documents with respect thereto.  These notices were effective through October 1, 2001, October 11, 2001, November 30, 2001, March 31, 2002, June 30, 2002, September 30, 2002, January 31, 2003, and July 31, 2003, respectively.

During the periods the various notices were in effect Ex-Im Bank:

(a) requested each Airline to respond to a detailed questionnaire; 
(b) analyzed the information provided and monitored developments in the international aviation insurance market and foreign government actions in response thereto;
(c) conferred with other interested parties (including representatives of other export credit agencies, commercial banks, aircraft operating lessors, insurance brokers, airlines and aircraft manufacturers); 
(d) closely followed the progress of the International Civil Aviation Organization ("ICAO") Special War Risk Group toward formulating a proposed international solution to the war risk insurance problems confronting the international airline industry;
(e) requested each Airline to respond to a questionnaire concerning the status of its insurance with respect to coverage against the risk set forth in Section 1(e) of LSW 555B ("Confiscation by Government of Registry") and analyzed the information provided by each airline;
(f) continued to monitor developments regarding the supplemental coverage for third party liability war risk provided by some governments for amounts in excess of the limit of coverage for such risk available under AVN 52D; and
(g) continued to monitor market developments with respect to cost or availability of coverage against Confiscation by Government of Registry and the "fleet aggregate" limits for hull war risk and allied perils insurance under LSW 555B ("Hull War Risk and Allied Perils Insurance").

As a result of the above, Ex-Im Bank believes that a more long-term position can now be taken.  Accordingly, subject to the terms and conditions described below, Ex-Im Bank will consider compliance with the covenants under the Governing Documents with respect to Third Party Liability War Risk Insurance to be satisfied if the levels described in the Governing Documents are met with either (a) commercial insurance satisfactory in form and substance to Ex-Im Bank; (b) governmental indemnity or insurance satisfactory to Ex-Im Bank in its sole discretion; or (c) both.  This decision, together with the determination set forth in the 8th Notice that Ex-Im Bank will no longer require Airlines to maintain coverage for Confiscation by Government of Registry, will remain in effect until further notice.

Each recipient of this notice (the "9th Notice") is requested to review it carefully and comply with the provisions set forth below. 

Notice

1. To the extent an Airline maintains, or causes to be maintained, Third Party Liability War Risk Insurance in the amounts required by the Governing Documents through: (a) commercial insurance in form and substance satisfactory to Ex-Im Bank; (b) governmental indemnity or insurance satisfactory to Ex-Im Bank in its sole discretion; or (c) both, Ex-Im Bank will consider the covenants relating thereto to have been satisfied.  This decision by Ex-Im Bank is further subject to the terms and conditions stated herein and may be revoked for any reason or no reason upon 24 hours' prior written notice to the Airline from Ex-Im Bank. The provisions of this Notice do not apply to insurance coverage against the risks covered in Sections 1(a), 1(b), 1(c), 1(d) and 1(f) of LSW 555B, Hull War Risk and Allied Perils Insurance.

2.  As stated in the 8th Notice, effective February 1, 2003, Ex-Im Bank will no longer require an Airline to maintain coverage for Confiscation by Government of Registry (Section 1(e) of LSW 555B, Hull War Risk and Allied Perils Insurance).  In those cases where an Airline has obtained this coverage, Ex-Im Bank will require that it or its Security Trustee be named as sole loss payee (or equivalent).  Ex-Im Bank expressly reserves the right to require each Airline to obtain this coverage in the future. This decision by Ex-Im Bank not to require coverage for Confiscation by Government of Registry is further subject to the terms and conditions stated herein and may be revoked for any reason or no reason upon 24 hours' prior written notice to the Airline from Ex-Im Bank.
 
3.  Each Airline is required to advise Ex-Im Bank in writing per the instructions set forth below of any changes occurring subsequent to the submission of such Airline's responses to the questionnaires included with the 2nd, 6th and 7th Notices with respect to: (a) the availability or amounts of commercial Third Party Liability War Risk Insurance carried, (b) the availability or amounts of Hull War Risk and Allied Perils Insurance carried (including, without limitation, the "fleet aggregate" limit for Hull War Risk and Allied Perils Insurance and the basis for such limit), and (c) with respect to clauses (a) and (b), (i) any contingent or stand-by coverage offered to the Airline by any governmental authority and (ii) what specific actions the Airline is taking in response to any changes.

4.  Each Airline is further required to instruct its insurance broker to: (a) advise Ex-Im Bank in writing, upon the request of Ex-Im Bank, of the identity of and percentages covered by each reinsurer providing hull, hull war risk and third party liability reinsurance coverage and (b) certify that the reinsurance policies are not, directly or indirectly, being provided by or on behalf of persons or entities that are (i) nationals of, (ii) located in or (iii) owned by governmental authorities of any country which has a notation of "Footnote 7" on Ex-Im Bank's Country Limitation Schedule.  This information is available on Ex-Im Bank's website (www.exim.gov) and changes from time to time.  The countries currently bearing Footnote 7 are: Cambodia, Cuba, Iran, Laos, Libya, Myanmar, North Korea, Sudan and Syria.  The broker is to be further instructed to advise Ex-Im Bank on an ongoing basis of any changes in the identity of or percentages covered.  Ex-Im Bank reserves the right to require such Airline to obtain additional or different commercial insurance coverage as the specific circumstances may require.

5.  In the event that an Airline gives notice of any change pursuant to paragraph 3 above, Ex-Im Bank reserves the right to require such Airline to obtain additional commercial insurance coverage as the specific circumstances may require.

6.  Except as expressly set forth herein, this 9th Notice does not modify or waive any
provision of any Governing Document, all of which remain in full force and effect, and does not modify or waive any right or remedy Ex-Im Bank may have under the Governing Documents, all of which are hereby expressly reserved.

7.  This 9th Notice affects only Ex-Im Bank's rights under the Governing Documents.  Ex-Im Bank notes that other parties to the Governing Documents may have independent rights with respect to the Airline under the Governing Documents or other agreements and this 9th Notice is not intended, and does not, affect any such rights.  Ex-Im Bank also notes that the Airline must continue to comply with all applicable laws and regulations, including any minimum insurance coverage required by relevant jurisdictions.

8.  This 9th Notice is not intended, nor shall it be construed, as advice or comment on any aspect of the Airline's business or operations, including any decision to operate or not operate any aircraft at any time or on any route.

Questions regarding this 9th Notice and the information required under paragraphs 3 and 4 above should be addressed: (a) by e-mail, to Louis E. Emery, Esq. (louis.emery@exim.gov), Douglas O. Adler, Esq. (douglas.adler@exim.gov) and Mr. Robert Lewandowski (robert.lewandowski@exim.gov), and (b) by fax to the attention of Messrs. Emery and Adler (202-565-3462) and Mr. Lewandowski at (202-565-3625).