AMENDMENT NO. 2 TO FORM F-1

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, please check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting offers to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

We and the selling shareholders are offering shares of our non-voting preferred stock, or the preferred shares, in an international offering in the form of American depositary shares, or ADSs. Each ADS represents two preferred shares. We are selling ADSs and the selling shareholders are selling ADSs in the United States and other countries outside Brazil through the international underwriters named in this prospectus. In addition, we are concurrently offering preferred shares and the selling shareholders are concurrently offering preferred shares in Brazil through Brazilian underwriters under a Portuguese-language prospectus. The closings of the international and Brazilian offerings will be conditioned upon each other.

This is our initial public offering and no public market currently exists for our preferred shares or the ADSs. We have applied to list the ADSs for trading on the New York Stock Exchange, known as the NYSE, under the symbol “GOL.” We anticipate that the initial public offering price of the ADSs will be between $15.00 and $17.00 per ADS. We have also applied to list our preferred shares for trading on the São Paulo Stock Exchange, known as the BOVESPA, under the symbol “GOLL4.”

This offering will be registered with the Brazilian Securities Commission (the Comissão de Valores Mobiliários, or CVM). The CVM has not approved or disapproved these securities or determined if this prospectus (or the Portuguese-language prospectus referred to above) is truthful or complete.

Investing in the ADSs and our preferred shares involves risks. See “Risk Factors” beginning on page 11.

We and Comporte Participações S.A. have granted the international underwriters the right for a period of 30 days to purchase up to an additional 4,957,500 Preferred Shares, in the form of ADSs, to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any state securities regulators have approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

You should rely only on the information contained in this prospectus. Neither we nor the selling shareholders have authorized anyone to provide you with information that is different from the information contained in this prospectus. This document may only be used where it is legal to sell these securities. The information in this prospectus is accurate only as of the date of this prospectus, regardless of when this prospectus is delivered or when any sale of the ADSs or our preferred shares occurs.

In this prospectus, we use the terms “the Registrant” to refer to Gol Linhas Aéreas Inteligentes S.A., “Gol” to refer to Gol Transportes Aéreos S.A. and “we,” “us” and “our” to refer to the Registrant and Gol, together, except where the context requires otherwise. References to “preferred shares” and “ADSs” refer to non-voting preferred shares of the Registrant and American depositary shares representing those preferred shares, respectively, except where the context requires otherwise.

The phrase “Brazilian government” refers to the federal government of the Federative Republic of Brazil and the term “Central Bank” refers to the Banco Central do Brasil, or the Central Bank of Brazil. The term “Brazil” refers to the Federative Republic of Brazil. The terms “U.S. dollar” and “U.S. dollars” and the symbol “US$” refer to the legal currency of the United States. The terms “real” and “reais” and the symbol “R$” refer to the legal currency of Brazil. “U.S. GAAP” refers to generally accepted accounting principles in the United States and “Brazilian GAAP” refers to generally accepted accounting principles in Brazil, which are accounting principles derived from Law No. 6,404 of December 15, 1976, as amended and supplemented, or the Brazilian corporation law and the rules of the CVM.

This prospectus contains terms relating to operating performance within the airline industry that are defined as follows:


	•	“Revenue passengers” represents the total number of paying passengers flown on all flight segments.

	•	“Revenue passenger kilometers” represents the numbers of kilometers flown by revenue passengers.

	•	“Available seat kilometers” represents the aircraft seating capacity multiplied by the number of kilometers the seats are flown.

	•	“Load factor” represents the percentage of aircraft seating capacity that is actually utilized (calculated by dividing revenue passenger kilometers by available seat kilometers).


	•	“Breakeven load factor” is the passenger load factor that will result in passenger revenues being equal to operating expenses.

	•	“Aircraft utilization” represents the average number of block hours operated per day per aircraft for the total aircraft fleet.

	•	“Block hours” refers to the elapsed time between an aircraft leaving an airport gate and arriving at an airport gate.

	•	“Yield per passenger kilometer” represents the average amount one passenger pays to fly one kilometer.

	•	“Passenger revenue per available seat kilometer” represents passenger revenue divided by available seat kilometers.

	•	“Operating revenue per available seat kilometer” represents operating revenues divided by available seat kilometers.

	•	“Average stage length” represents the average number of kilometers flown per flight.

	•	“Operating expense per available seat kilometer” represents operating expenses divided by available seat kilometers.

We make statements in this prospectus about our competitive position and market share in, and the market size of, the Brazilian airline industry. We have made these statements on the basis of statistics and other information from third-party sources that we believe are reliable. Although we have no reason to believe any of this information or these reports are inaccurate in any material respect, we have not independently verified the competitive position, market share and market size or market growth data provided by third parties or by industry or general publications.

Certain figures included in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

The Registrant became the parent company of Gol on March 29, 2004, when all of the common shares, Class A preferred shares and Class B preferred shares of Gol (except for five common shares and three Class B preferred shares of Gol that are held by members of Gol’s board of directors for eligibility purposes) were contributed to the Registrant by the shareholders of Gol in exchange for the applicable number of either common shares or preferred shares of the Registrant. As a result of this reorganization, 41,499,995 common shares of Gol were exchanged for 109,448,267 common shares and 6,751,719 preferred shares of the Registrant, 10,375,000 Class A preferred shares of Gol were exchanged for 29,049,994 preferred shares and 6 common shares of the Registrant and 8,408,206 Class B preferred shares of Gol were exchanged for 23,542,977 preferred shares of the Registrant. The reorganization did not affect our operations in any respect. The aggregate number of our common and preferred shares outstanding was increased to 168,793,243 as the result of a 2.80-for-one stock split on May 25, 2004 (which includes 224 common shares and 56 preferred shares of the Registrant that were issued in connection with its formation on March 12, 2004). All share numbers and per share calculations in this prospectus reflect the stock split. See “Description of Capital Stock.” The consolidated financial statements included in this prospectus have been prepared in accordance with U.S. GAAP and reflect our financial condition and results of operations as if the Registrant had been incorporated and held all of the capital stock of Gol, with the exception of five common shares and three Class B preferred shares of Gol held by members of Gol’s board of directors for eligibility purposes, since January 1, 2001. We publish our consolidated financial statements in Brazil in accordance with Brazilian GAAP, which differ in certain significant respects from U.S. GAAP.

We have translated some of the real amounts contained in this prospectus into U.S. dollars. The rate used to translate such amounts in respect of the year ended December 31, 2003 and the three months ended March 31, 2004 was R$2.9086 to US$1.00, which was the commercial rate for the purchase of U.S. dollars in effect as of March 31, 2004 as reported by the Central Bank. The U.S. dollar equivalent information presented in this prospectus is provided solely for convenience of investors and should not be construed as implying that

All amounts contained in this prospectus that have been adjusted to reflect the receipt by us of the estimated net proceeds of this offering are based upon the sale of ADSs in the international offering at an assumed initial public offering price of US$16.00 per ADS, the midpoint of the range on the cover of this prospectus, and the sale of preferred shares in the Brazilian offering at an assumed initial public offering price per preferred share that is the midpoint of the range identified on the cover of the Brazilian preliminary prospectus.

Unless otherwise indicated, all information contained in this prospectus assumes no exercise of the international underwriters’ option to purchase up to additional ADSs to cover over-allotments, if any.

This offering is being made in Brazil by a prospectus in Portuguese that has been filed with the CVM and that has the same date as this prospectus but has a different format. This offering is made in the United States and elsewhere outside Brazil solely on the basis of the information contained in this prospectus. Investors should take this into account when making investment decisions.

The Registrant was formed on March 12, 2004 as a sociedade por ações, a stock corporation duly incorporated under the laws of Brazil with unlimited duration. The Registrant is registered with the São Paulo Commercial Registry (Junta Comercial do Estado de São Paulo) under number NIRE 35.300.314.441. Gol was formed on August 1, 2001 as a Brazilian sociedade limitada, and on May 2, 2002 Gol was converted into a sociedade por ações.

This prospectus includes forward-looking statements, principally under the captions “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” We have based these forward-looking statements largely on our current beliefs, expectations and projections about future events and financial trends affecting our business. Many important factors, in addition to those discussed elsewhere in this prospectus, could cause our actual results to differ substantially from those anticipated in our forward-looking statements, including, among other things:


	•	general economic, political and business conditions in Brazil and particularly in the geographic markets we serve;

	•	management’s expectations and estimates concerning our future financial performance and financing plans and programs;

	•	our limited operating history;

	•	our level of debt and other fixed obligations;

	•	our capital expenditure plans;

	•	inflation, depreciation and devaluation of the real;

	•	existing and future governmental regulations;

	•	increases in maintenance costs, fuel costs and insurance premiums;

	•	changes in market prices, customer demand and preferences and competitive conditions;

	•	cyclical and seasonal fluctuations in our operating results;

	•	defects or mechanical problems with our aircraft;

	•	our ability to successfully implement our growth strategy; and

	•	the risk factors discussed under “Risk Factors” beginning on page 11.

The words “believe,” “may,” “will,” “aim,” “estimate,” “continue,” “anticipate,” “intend,” “expect” and similar words are intended to identify forward-looking statements. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, financing plans, competitive position, industry environment, potential growth opportunities, the effects of future regulation and the effects of competition. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to update publicly or to revise any forward-looking statements after we distribute this prospectus because of new information, future events or other factors. In light of the risks and uncertainties described above, the forward-looking events and circumstances discussed in this prospectus might not occur and are not guarantees of future performance.

This summary highlights selected information about us and the ADSs and preferred shares that we and the selling shareholders are offering. It may not contain all of the information that may be important to you. Before investing in the ADSs, you should read this entire prospectus carefully for a more complete understanding of our business and this offering, including our consolidated financial statements and the notes to those consolidated financial statements and the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We are the only low-fare, low-cost airline operating in Brazil providing frequent service on routes between all of Brazil’s major cities. We focus on increasing the growth and profitability of our business by stimulating and meeting demand for simple, safe and affordable air travel in Brazil for both business and leisure passengers, while having among the lowest operating costs in the airline industry worldwide.

We have flown over 16 million passengers since beginning operations in January 2001 and, according to Brazil’s civil aviation authority, the Departamento de Aviação Civil, or DAC, our share of the domestic market based on revenue passenger kilometers grew from 4.7% in 2001 to 11.8% in 2002, 19.2% in 2003 and 22.5% during the first quarter of 2004.

Currently, we operate 22 single-class Boeing 737-700/800 Next Generation aircraft serving 29 cities throughout Brazil. We expect to operate approximately 69 aircraft by the end of 2010. To help meet our 2004 to 2006 capacity requirements, we plan to accept delivery, under two-year operating leases, of up to five Boeing 737-300 aircraft in 2004. We have firm orders and purchase options for up to 43 737-800 Next Generation aircraft. The firm order aircraft are scheduled to be delivered between 2007 and 2009, and the purchase options are exerciseable for deliveries between 2005 and 2010.

We offer travelers in Brazil a low-fare transportation alternative that we believe is an attractive value relative to conventional airline and bus transportation. We have a diversified passenger base, with customers ranging from business passengers traveling within densely populated centers in southeastern Brazil, such as São Paulo, Rio de Janeiro and Belo Horizonte, to leisure passengers traveling to destinations throughout Brazil. We carefully evaluate opportunities to continue the growth of our business through increasing the frequency of flights to our existing high-demand markets and adding new routes to underserved regions in Brazil. We are also pursuing opportunities to offer services on routes to high-traffic centers in other South American countries.

Our emphasis on controlling costs and yield management has given us flexibility in setting our fares to achieve a balance between our load factors and yields that we believe will generate the highest profitability for us. Despite decreasing passenger traffic in Brazil because of a slowdown in overall domestic economic growth, we generated net operating revenues of R$1,400.6 million and net income of R$175.5 million in 2003, due largely to a cost per available seat kilometer that was approximately 25% lower than that of our competitors, according to information from the DAC. During the three months ended March 31, 2004, we generated net operating revenues of R$433.1 million and net income of R$90.7 million.

Our operating model is based on a variation of the point-to-point approach used by other successful low-cost carriers worldwide. In high-density competitive markets, such as São Paulo to Rio de Janeiro, we operate direct point-to-point service at low fares. When providing service to our other markets, our aircraft make multiple stops on our route network linking multiple destination points, which attracts customers who prefer to pay lower fares even if this means making one or more stops before their final destination.

By offering low fares and providing reliable service, we achieved a load factor of 72% for the first quarter of 2004. We had an average load factor of 64% during 2003, as compared to an average domestic load factor of 59% for our three largest Brazilian competitors in the same period, according to the DAC. During this period, we maintained high standards of operating efficiency and customer satisfaction, completing 97% of our

We Keep Our Operating Costs Low. Our cost per available seat kilometer for the year ended December 31, 2003 was R$0.141, or US$0.048. We believe that our cost per available seat kilometer for the year ended December 31, 2003, as adjusted for the average number of kilometers flown per flight, was lower than that of many of the world’s most profitable low-cost carriers, and was on average approximately 25% lower than that of the Brazilian legacy airlines, according to data collected from the DAC. Our cost per available seat kilometer for the three months ended March 31, 2004 was R$0.142, or US$0.049. Our low operating costs are the result of a number of different measures that we have taken to improve our operating efficiency, including:


	•	Efficient use of aircraft. During the three months ended March 31, 2004, our aircraft flew an average of 13.5 block hours per day. During 2003, our aircraft flew an average of 12.8 block hours per day, the highest aircraft utilization rate in the Brazilian domestic airline industry according to the DAC and among the highest worldwide according to airline company public filings. Our efficient use of our fleet has allowed us to spread our fixed costs over a greater number of flights and available seat kilometers. We also offer air cargo services to generate incremental revenues.

	•	Operation of a simplified fleet. Currently, we operate a simplified fleet type consisting of 22 Boeing 737-700/800 Next Generation aircraft. We plan to add up to five Boeing 737-300 aircraft in 2004 under two-year operating leases to meet short-term capacity needs. We have firm orders and purchase options for up to 43 additional Boeing 737-800 Next Generation aircraft. Delivery of the firm order aircraft is scheduled to occur between 2007 and 2009 and the purchase options are exercisable for deliveries between 2005 and 2010.

	•	Ability to take advantage of competitive outsourcing opportunities. We have entered into arrangements on competitive terms with third-party contractors at certain airports for passenger, aircraft and baggage handling. We also outsource our call center customer services and other services that we believe can be more efficiently provided by third parties.

	•	High proportion of internet sales. We actively encourage our customers and travel agents to purchase seats on our flights via our website to keep our distribution costs low. In 2003, approximately 58% of our sales were made through our website directly to our customers and to travel agents. During the three months ended March 31, 2004, 71% of our sales were made through our website directly to our customers and to travel agents. We believe this represents one of the highest internet booking rates in the airline industry worldwide.

	•	Adoption of the best practices of other low-cost airlines to keep our costs low. Our booking system is the same cost-efficient system as that used by other successful low-cost airlines worldwide. Consistent with the approach taken by other successful low-cost carriers, we keep our product offering simple to keep our costs low. We do not have a frequent flier program or airport lounges, and offer only light snacks and beverages on our flights. We provide ticketless travel and on-line check-in and seat assignment options.

We Offer Our Customers Low Fares. We believe that through our low fares and high-quality service, we provide the best value in our markets. Our average fares are lower than the average fares of the Brazilian legacy airlines. By combining low fares with simple and reliable service that treats passengers equally in a single-class environment, we have successfully increased our market share, strengthened customer loyalty and are attracting a new group of air travelers in our service areas.

one of the newest in the industry worldwide. We believe that the firm orders and options we have for the delivery of up to 43 new Boeing 737-800 Next Generation aircraft will help us to retain the competitive advantage of a young fleet. Our new fleet has enabled us to enjoy a high degree of performance reliability and to develop a reputation among customers for being an airline that delivers a safe, on-time, modern and comfortable travel experience.

We Have a Strong Brand that Is Widely Recognized Among Consumers. We believe that the Gol brand has become synonymous with positive innovation and value in the Brazilian domestic airline industry. Our customers identify us as being accessible, friendly, fair and reliable and distinguish us in Brazil’s domestic airline industry on the basis of our updated and simplified approach to providing air travel services. Customer satisfaction surveys conducted in September 2003 by Omni Marketing, an independent third-party market research firm, indicated that more than nine out of every ten passengers on Gol would recommend us to others, would fly with us again and consider our approach to air travel to be innovative.

We Have a Strong Financial Position. We have focused on maintaining a strong financial position with significant cash balances and a low debt to capitalization ratio. At March 31, 2004, we had R$191.6 million of cash and cash equivalents, R$216.9 million of accounts receivable and R$206.7 million of U.S. dollar-denominated deposits for aircraft leasing and aircraft engine maintenance contracts, representing a total of R$615.2 million. At March 31, 2004, we had a debt to capitalization ratio of 11.9%.

To continue the growth of our business and increase its profitability, we will continue to focus our strategy on offering a simple and safe air travel service at low fares, while maintaining high-quality standards, keeping our operating costs low and relentlessly pursuing ways to make our operations more efficient. We will continue to evaluate opportunities to expand our operations by adding additional flights to existing domestic routes, adding new domestic routes where sufficient market demand exists and expanding into other high traffic routes in other South American countries. The following are the key elements of our strategy:

To Expand Our Customer Base by Offering Services to High-Demand and Underserved Routes. When planning the growth of our business, we will continue to select our routes and establish the frequency of our service based upon the extent and type of demand in the regions we serve. We expect to increase our focus on business travelers from medium-sized companies, a growing customer base that tends to be more price sensitive, by closely monitoring the routes and flight frequencies that best serve their travel needs and increasing our marketing efforts directed at this segment of our customer base. We are also very focused on stimulating demand and capturing market share in both the leisure and “visiting friends and relatives” market segments.

To Continue to Reduce Our Operating Costs. Continuing to reduce our operating costs per available seat kilometer is a key to increasing profitability. We aim to remain one of the lowest cost airlines in the world. To date, we have worked toward achieving this goal by assembling a new fleet of single-class aircraft that is capable of safely and reliably accommodating a high utilization rate, incurs low maintenance costs and is fuel-efficient. We are also working to achieve this goal by using our aircraft efficiently, concentrating on minimizing our turnaround times at airports and increasing our number of daily flights per aircraft. We believe that the incorporation of new purchased aircraft into our fleet will allow us to further reduce our operating costs per available seat kilometer.

To Keep Our Customer Service Offering Simple and Convenient. We believe that we are perceived by our customers as providing excellent value at affordable fares and acting as a catalyst for changing the way the Brazilian airline industry works. In addition to offering low fares, our strategy is to make flying a simpler, more convenient experience. We have achieved this objective largely through the elimination of unnecessary extras and common-sense applications of technology, including an emphasis on internet bookings. We offer our customers single class, pre-assigned seating and we do not overbook our flights. We will continue to seek ways to make the Gol brand signify safety, simplicity and convenience in the minds of air travelers.

To Stimulate Demand with Low Fares. Our widely available low fares and superior product offering are designed to stimulate demand, particularly from fare-conscious leisure travelers and small- to mid-size businesses that might otherwise have used alternative forms of transportation or would not have traveled at all. We will also continue to provide our customers with a variety of flexible payment mechanisms, such as monthly installment payments.

Most long-distance public travel services within Brazil are provided by interstate bus companies. In 2002, Brazil’s domestic airline industry transported over 30 million passengers, as compared to the over 130 million passengers transported by interstate bus companies in 2000 (the last publicly-available data) according to the Brazilian Department of Highways (Departamento de Transportes Rodoviários). Brazil has no meaningful interstate passenger rail services.

The business travel sector is the largest component of Brazilian air transportation demand and the most profitable in the market. According to the DAC, business travel represents approximately 70% of the total demand for domestic air travel, which we believe is significantly higher than the proportion of domestic air travel in the global aviation sector that is comprised of business travel.

According to data collected from the DAC, flights between Rio de Janeiro and São Paulo, and Brasília and São Paulo, accounted for 6.8% of all domestic passengers in both 2001 and 2002. The ten busiest city pair routes accounted for 15.9% and 16.5% of all domestic air passengers in 2001 and 2002, respectively, while the ten busiest airports accounted for 72.8% and 73.8% of all domestic passenger traffic in terms of arrivals and departures in 2001 and 2002, respectively.

The domestic passenger airline industry in Brazil is primarily served by three legacy airlines—Varig S.A.—Viação Aérea Riograndense, or Varig, TAM Linhas Aéreas S.A., or TAM, and VASP—Viação Aérea São Paulo S.A., or VASP—and us. In 2003, the three Brazilian legacy airlines and us accounted for over 98% of the market share of domestic regular routes, measured by revenue passenger kilometers. In 2003, Varig and TAM initiated discussions to merge their operations and began operating under a temporary code-sharing arrangement. See “Industry Overview.”

Since air transportation has historically been affordable only to the higher income segment of Brazil’s population, we believe that the low-cost, low-fare business model has the potential to significantly increase the use of air transportation in Brazil. According to the DAC, there were over 30 million enplanements in Brazil in 2002, out of a total population of approximately 175 million, according to the Brazilian Geographical and Statistical Institute (Instituto Brasileiro de Geografia e Estatística—IBGE). In contrast, the United States, with a total population of approximately 293 million according to the latest U.S. census figures, had more than 700 million enplanements in 2002, according to the U.S. Department of Transportation.

From 1997 to 2003, the compound annual growth rate in industry passenger traffic, in terms of revenue passenger kilometers, was 5.9% versus a compound annual growth rate in available industry capacity, in terms of available seat kilometers, of 5.0%. Industry load factors, calculated as revenue passenger kilometers divided by available seat kilometers, have remained relatively stable over the same period, with an average load factor

Historically, domestic airline industry revenue growth has generally surpassed Brazilian gross domestic product growth. From 1997 to 2002, domestic airline industry revenue grew at a real compound annual growth rate of 7.1% while Brazilian gross domestic product grew at a real compound annual growth rate of 1.7% over the same period, according to data collected from the DAC and the Central Bank.

The current Brazilian government has largely continued the macroeconomic policies of the previous administration, focusing on fiscal responsibility. The real appreciated by 18.2% against the U.S. dollar during 2003, closing at R$2.8892 per US$1.00 at December 31, 2003, and inflation for the year, as measured by the IGP-M, decreased to 8.7%. While Brazil’s real GDP decreased by 0.2% during 2003, the Brazilian economy showed signs of improvement in the fourth quarter of 2003 and the first quarter of 2004, with real GDP growing by approximately 1.5% in the fourth quarter of 2003, as compared to the third quarter of 2003, and 1.6% in the first quarter of 2004 as compared to the fourth quarter of 2003. Brazil achieved a public sector budget primary surplus (before debt service) of 4.37% in 2003, which exceeded the target of 4.25% of GDP established by the International Monetary Fund as part of its current loan accord with the country.

Inflation during the first quarter of 2004, as measured by the IGP-M, was 2.7%. The Brazilian Central Bank’s year-end inflation target for 2004 and 2005 is 5.5% and 4.5%, respectively, within a band of 2.5 percentage points. The real depreciated by 0.7% against the U.S. dollar during the three months ended March 31, 2004. On May 28, 2004, the U.S. dollar/real exchange rate was R$3.0961 per US$1.00.

The Registrant was formed on March 12, 2004 as a sociedade por ações, a stock corporation duly incorporated under the laws of Brazil with unlimited duration. The Registrant’s only assets consist of common and preferred shares of Gol and cash. The Registrant owns all of Gol’s common and preferred shares, except for five common shares and three Class B preferred shares of Gol that are held by members of Gol’s board of directors for eligibility purposes.

Our principal executive offices are located at Rua Tamoios 246, Jardim Aeroporto, 04630-000 São Paulo, SP, Brazil, and our general telephone number is +55 11 5033-4200. The telephone number of our investor relations department is +55 11 5033-4393. The telephone number of our ticket sales center in Brazil is 0300 789-2121. Our website address is www.voegol.com.br. Information contained on our website is not incorporated by reference in, and shall not be considered part of, this prospectus.

The Registrant became the parent company of Gol on March 29, 2004, when all of the common shares, Class A preferred shares and Class B preferred shares of Gol (except for five common shares and three Class B preferred shares of Gol that are held by members of Gol’s board of directors for eligibility purposes) were contributed to the Registrant by the shareholders of Gol in exchange for the applicable number of either common shares or preferred shares of the Registrant. As a result of this reorganization, 41,499,995 common shares of Gol were exchanged for 109,448,267 common shares and 6,751,719 preferred shares of the Registrant, 10,375,000 Class A preferred shares of Gol were exchanged for 29,049,994 preferred shares and 6 common shares of the Registrant and 8,408,206 Class B preferred shares of Gol were exchanged for 23,542,977 preferred shares of the Registrant. The reorganization did not affect our operations in any respect. The aggregate number of the Registrant’s common and preferred shares currently outstanding was increased to 168,793,243 as the result of a 2.80-for-one stock split on May 25, 2004 (which includes 224 common shares and 56 preferred shares of the Registrant that were issued in connection with its formation on March 12, 2004). All share amounts and per share calculations in this prospectus reflect the stock split. See “Description of Capital Stock.” The following table presents summary historical consolidated financial and operating data for us for each of the periods indicated. You should read this information in conjunction with our consolidated financial statements and related notes, and the information under “Selected Financial and Operating Data” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” included elsewhere in this prospectus.

The Registrant is a holding company that was incorporated on March 12, 2004 and the shares of Gol and cash are currently the Registrant’s only assets.

Gol was incorporated in August 2000 but did not begin operations until January 2001. During the period between August 2000 and December 31, 2000, our activities consisted solely of organizational activities relating to the commencement of our operations and we did not have any significant income or expenses. The consolidated financial statements and related notes included elsewhere in this prospectus have been prepared in accordance with U.S. GAAP and reflect our financial condition and results of operations as if the Registrant had been incorporated and held all of the capital stock of Gol since January 1, 2001, except for five common shares and three Class B preferred shares of Gol held by members of Gol’s board of directors for eligibility purposes.

The as adjusted balance sheet data gives effect to the receipt of approximately US$142.4 million in estimated net proceeds from the issuance and sale of 33,050,000 preferred shares, including preferred shares in the form of ADSs, in the global offering.

Solely for the convenience of the reader, real amounts as of and for the year ended December 31, 2003 and the three months ended March 31, 2004 have been translated into U.S. dollars at the commercial market rate as reported by the Central Bank on March 31, 2004 of R$2.9086 to US$1.00. The commercial market rate as reported by the Central Bank on May 28, 2004 was R$3.0961 to US$1.00.


(1)	Our preferred shares are not entitled to any fixed dividend preferences, but are instead entitled to receive dividends per share in the same amount of dividends per share paid to holders of our common shares. Consequently, our earnings (loss) per share are computed by dividing income by the weighted average number of all classes of shares outstanding during the year. We have no dilutive securities.
(2)	In managing our liquidity, we take into account our cash and cash equivalents and our accounts receivable balances. Accounts receivable consist primarily of credit card receivables for purchased passenger tickets. As we provide our customers with the option to pay in installments over several months, we currently have an approximate one-month lag between the time that we pay our suppliers and the time that we receive payment for our services.
(3)	Operating margin represents operating income divided by net operating revenues.
(4)	EBITDA represents net income (loss) plus the sum of other income (expense), income taxes and depreciation. EBITDA is presented as supplemental information because we believe it is a useful indicator of our operating performance and is useful in comparing our operating performance with other companies in the airline industry. However, EBITDA should not be considered in isolation, as a substitute for net income prepared in accordance with U.S. GAAP or as a measure of a company’s profitability. In addition, our calculation of EBITDA may not be comparable to other similarly titled measures of other companies. The following table presents a reconciliation of our net income to EBITDA for the specified periods.

Aircraft rent represents a significant operating expense of our business. Because we leased all of our aircraft during the periods presented, we believe that when assessing our EBITDA you should also consider the impact of our aircraft rent expense, which was R$58,816 in 2001, R$130,755 in 2002, R$188,841 in 2003, R$50,799 during the first three months of 2003 and R$47,330 during the first three months of 2004.

An investment in the ADSs or our preferred shares involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Our business, financial condition and results of operations could be materially and adversely affected by any of these risks. The trading price of the ADSs could decline due to any of these risks or other factors, and you may lose all or part of your investment. The risks described below are those that we currently believe may materially affect us.

The Brazilian government frequently intervenes in the Brazilian economy and occasionally makes significant changes in policy and regulations. The Brazilian government’s actions to control inflation and other policies and regulations have often involved, among other measures, price controls, currency devaluations, capital controls and limits on imports. Our business, financial condition and results of operations may be adversely affected by changes in policy or regulations involving or affecting exchange controls, as well as factors such as:


	•	currency fluctuations;

	•	inflation;

	•	interest rates;

	•	liquidity of domestic capital and lending markets;

	•	tax policy; and

	•	other political, social and economic developments in or affecting Brazil.

At the end of 2002, Brazil elected a new president from the Labor Party, Luiz Inácio Lula da Silva. In the period leading up to his election and for a period of time thereafter, there was substantial uncertainty relating to the policies that the new government would pursue, including the potential implementation of macroeconomic policies that differed significantly from those of the prior administration. This uncertainty resulted in a lower level of confidence in the Brazilian currency and capital markets, contributing to the rapid depreciation of the real against the U.S. dollar during that period. Although the new government has not departed significantly from policies of the previous administration, and the real appreciated 18.2% against the U.S. dollar during 2003, before depreciating by 0.7% during the first three months of 2004, there remains concern about the policies of the current Brazilian government. Uncertainty over whether current policies will be continued or whether the Brazilian government will adopt different policies in the future may contribute to economic uncertainty in Brazil and to heightened volatility in the Brazilian securities markets and securities issued abroad that are supported by Brazilian issuers.

These and other future developments in the Brazilian economy and governmental policies may adversely affect us and our business and results of operations and may adversely affect the trading price of the ADSs and our preferred shares.

As a result of inflationary pressures, the Brazilian currency has been devalued periodically during the last four decades. Throughout this period, the Brazilian government has implemented various economic plans and utilized a number of exchange rate policies, including sudden devaluations, periodic mini-devaluations during which the frequency of adjustments has ranged from daily to monthly, floating exchange rate systems, exchange controls and dual exchange rate markets. Although over long periods depreciation of the Brazilian currency generally has correlated with the rate of inflation in Brazil, devaluation over shorter periods has

The real depreciated against the U.S. dollar by 9.3% in 2000 and by 18.7% in 2001. In 2002, the real depreciated 52.3% against the U.S. dollar, due in part to political uncertainty surrounding the Brazilian presidential elections and the global economic slowdown. Although the real appreciated 18.2% against the U.S. dollar in 2003, before depreciating 0.7% during the three months ended March 31, 2004, no assurance can be given that the real will not depreciate or be devalued against the U.S. dollar again. On May 28, 2004, the U.S. dollar/real exchange rate was R$3.0961 per US$1.00. See “Exchange Rates.”

Our revenues are denominated in reais and a significant part of our operating expenses, such as fuel, aircraft and engine maintenance services, aircraft rent payments and aircraft insurance, are denominated in, or linked to, U.S. dollars. We maintain U.S. dollar-denominated deposits and maintenance reserve accounts under the terms of our aircraft operating leases. For the year ended December 31, 2003 and the three months ended March 31, 2004, 49% of our operating expenses were either denominated in, or linked to, the U.S. dollar. While in the past we have generally adjusted our fares in response to, and to alleviate the effect of, depreciations of the real and increases in the price of jet fuel and have entered into hedging arrangements to protect us against the effects of depreciations of the real and increases in the price of jet fuel, there can be no assurance we will be able to continue to do so. Any depreciation of the real or increases in the price of jet fuel for which we are unable to adjust our fares or effectively hedge against may lead to a decrease in our profit margins or to operating losses caused by increases in U.S. dollar-denominated costs, increases in interest expense or exchange losses on unhedged fixed obligations and indebtedness denominated in foreign currency. We had total U.S. dollar-denominated future operating lease payment obligations of R$975.9 million (including long-term vendor payables) and no other U.S. dollar-denominated indebtedness at December 31, 2003. Our U.S. dollar-denominated deposits and maintenance reserve accounts totaled R$206.7 million at March 31, 2004. We may incur substantial amounts of U.S. dollar-denominated operating lease or financial obligations, fuel costs linked to the U.S. dollar and U.S. dollar-denominated indebtedness in the future. We currently have a hedging program in place for our U.S. dollar-denominated operating lease obligations, our U.S. dollar-linked jet fuel expenses and our interest rate exposure.

Depreciations of the real relative to the U.S. dollar also create additional inflationary pressures in Brazil that may negatively affect us. Depreciations generally curtail access to foreign financial markets and may prompt government intervention, including recessionary governmental policies. Depreciations also reduce the U.S. dollar value of distributions and dividends on the ADSs and the U.S. dollar equivalent of the market price of our preferred shares and, as a result, the ADSs.

Brazil has in the past experienced extremely high rates of inflation. More recently, Brazil’s annual rate of inflation was 20.1% in 1999, 10.0% in 2000, 10.4% in 2001, 25.3% in 2002, 8.7% in 2003 and 2.7% during the three months ended March 31, 2004 (as measured by Índice Geral de Preços–Mercado, or the IGP-M). Inflation, and certain government actions taken to combat inflation, have in the past had significant negative effects on the Brazilian economy. Actions taken to curb inflation, coupled with public speculation about possible future governmental actions, have contributed to economic uncertainty in Brazil and heightened volatility in the Brazilian securities market. Future Brazilian government actions, including interest rate increases, intervention in the foreign exchange market and actions to adjust or fix the value of the real may trigger increases in inflation. If Brazil experiences high inflation in the future, we may not be able to adjust the fares we charge our customers to offset the effects of inflation on our cost structure. Inflationary pressures may also hinder our ability to access foreign financial markets or lead to government policies to combat inflation that could harm our business or adversely affect the market value of our preferred shares and, as a result, the ADSs.

The market value of securities of Brazilian companies is affected to varying degrees by economic and market conditions in other countries, including other Latin American and emerging market countries. Although economic conditions in such countries may differ significantly from economic conditions in Brazil, investors’ reactions to developments in these other countries may have an adverse effect on the market value of securities of Brazilian issuers. Crises in other emerging market countries may diminish investor interest in securities of Brazilian issuers, including ours. This could adversely affect the trading price of the ADSs or our preferred shares, and could also make it more difficult for us to access the capital markets and finance our operations in the future on acceptable terms or at all.

Consistent with the global airline industry trend, many companies operating in Brazil’s airline industry have been experiencing financial difficulties. The Brazilian aviation regulatory framework is undergoing changes that are designed to help restore stability to the industry. In connection with this strategy, the regulatory authorities have assumed a more pro-active approach to monitoring developments in Brazil’s airline market by, for example, addressing overcapacity by establishing stricter criteria that must be met before new routes or additional flight frequencies are awarded. Several legislative initiatives have been taken, including the preparation of a draft bill of law that would replace Law No. 7,565 of December 19, 1986, the current Brazilian Aeronautical Code (Código Brasileiro de Aeronáutica), the submission of proposed new civil aviation public policy guidelines to the Ministry of Defense for approval and a bill of law providing for the creation of a national civil aviation agency that would replace the DAC as the primary regulator of the Brazilian airline industry. We cannot yet assess how the evolving regulatory framework will affect our business and results of operations. No assurance can be given that these or other changes in the Brazilian airline industry regulations will not have a material adverse effect on our business and results of operations.

The DAC is in charge of approving all new flight routes, as well as modifications to existing flight routes and increases in flight frequencies. In addition, the importation of any new aircraft is subject to approval of the Commission for Coordination of Civil Air Transportation (Comissão de Coordenação de Transporte Aéreo Civil, or COTAC), a sub-department of the DAC. Our growth plans contemplate expanding into new markets, increasing flight frequencies and operating considerably more than our existing 22 aircraft. As such, our ability to grow generally depends on receiving the required authorizations from the DAC and the COTAC. In May 2004, we were authorized to operate three additional aircraft, increasing our current authorized number of aircraft to 25, and we were authorized to provide regularly scheduled service to four additional cities in Brazil. We cannot assure you that future authorizations will be granted to us.

We face intense competition on our domestic routes in Brazil. The Brazilian aviation authorities have the flexibility to allow or deny new entrants in our market. We may face increased competition from new entrants in the Brazilian airline business in the future. In 2003, the Civil Aviation National Council (Conselho de Aviação Civil, or CONAC) issued guidelines regarding the need to increase barriers to the entry of new concessionaires and to limit the acquisition of new aircraft and the granting of new routes to existing concessionaires in order to protect the financial performance of the Brazilian airline industry as a whole. We cannot predict what impact the implementation of these restrictions might have on our competitive environment or our business.

Our existing competitors or new entrants into the market may undercut our fares in the future, increase capacity on their routes in an effort to increase their market share or attempt to conduct low-fare or low-cost

Varig and TAM, two of our main competitors, are currently operating under a temporary code-sharing agreement and have publicly announced their intention to merge in the future. If Varig and TAM merge, the resulting airline may be able to operate more efficiently, reduce costs and offer lower prices on routes that we serve.

Some of our competitors have significant levels of indebtedness, and the financial condition and prospects of some of our competitors are uncertain. In the past, the Brazilian government has allowed certain airline companies to restructure their government-related debt. If the Brazilian government provides substantial financial support to any of our competitors in the future, those competitors may be better able to compete with us.

In addition to competition among airline companies, the Brazilian airline industry faces strong competition from ground transportation alternatives, such as interstate buses. Such competition may have an adverse impact on our business and results of operations.

Because we have a limited operating history, having commenced operations in January 2001, it may be difficult to evaluate our future prospects and an investment in the ADSs and our preferred shares. Our prospects are uncertain and must be considered in light of the risks, uncertainties and difficulties frequently encountered by companies with a limited operating history. Our future performance will depend upon a number of factors, including our ability to:


	•	implement our growth strategy;

	•	provide high quality, reliable customer service at low fares;

	•	choose new markets successfully;

	•	hedge against fuel price, foreign exchange and interest rate fluctuations;

	•	order and obtain aircraft that best suit our growth strategy;

	•	maintain adequate control of our expenses;

	•	attract, train, retain and motivate qualified personnel;

	•	react to customer and market demands; and

	•	maintain the safety of our operations.

We cannot assure you that we will successfully address any of these factors, and our failure to do so could adversely affect our financial condition and results of operations.

Our growth strategy involves expanding the number of markets we serve and increasing the frequency of flights to the markets we currently serve. Achieving these goals is essential in order for our business to benefit from cost efficiencies resulting from economies of scale and increase our operating revenues and profits. Increasing the number of markets we serve and our flight frequencies depend on our ability to identify the appropriate geographic markets upon which to focus and to gain suitable airport access and route approval in these markets. There can be no assurance that the new markets we enter will provide passenger traffic that is sufficient to make our operations in those new markets profitable. Three of the airport facilities from which we operate, Santos Dumont, in Rio de Janeiro, Congonhas, in São Paulo, and Pampulha, in Belo Horizonte, are highly congested and passenger processing is at or near maximum capacity. Five of the airports from which we

operate, Juscelino Kubitschek, in Brasília, Santos Dumont, Congonhas, Guarulhos International Airport, in Guarulhos and Pampulha, are subject to slot restrictions limiting the number of landings and take-offs at these airports and when they can be made. Any condition that would prevent or delay our access to airports or routes that will be vital to our growth strategy, including the ability to process more passengers or the imposition of flight capacity restrictions, or our inability to maintain our existing slots, and obtain additional slots, in the Juscelino Kubitschek, Santos Dumont, Congonhas, Guarulhos and Pampulha airports, could constrain the expansion of our operations.

The expansion of our business will also require additional skilled personnel, equipment and facilities. An inability to hire and retain skilled personnel or secure the required equipment and facilities efficiently and cost-effectively may adversely affect our ability to execute our growth strategy. Expansion of our markets and flight frequencies may also strain our existing management resources and operational, financial and management information systems to the point that they may no longer be adequate to support our operations, requiring us to make significant expenditures in these areas. In light of these factors, we cannot assure you that we will be able to successfully establish new markets or expand our existing markets, and our failure to do so would harm our business and the value of the ADSs and our preferred shares.

We have significant fixed costs, relating primarily to operating leases for our aircraft and engines, of which approximately 20% have floating-rate rent payments based on LIBOR or U.S. interest rates. We expect that we will incur additional fixed obligations and debt as we take delivery of new aircraft and other equipment to implement our growth strategy.


	•	limit our ability to obtain additional financing for working capital and other purposes;

	•	divert substantial cash flow from our operations to service our fixed obligations under aircraft operating leases;

	•	if LIBOR or U.S. interest rates increase, require us to incur significantly more lease or interest expense than we currently do; and

	•	limit our ability to plan for or react to changes in our business and the airline industry and to general economic conditions.

In addition, our ability to raise our fares to compensate for an increase in our fixed costs may be adversely affected by any imposition of fare control mechanisms by the Brazilian civil aviation authorities.

We currently finance our aircraft through operating leases. In the future, we intend to own a portion of our fleet as well as continue to lease aircraft through long-term operating leases. We may not be able to continue to obtain lease or debt financing on terms attractive to us, or at all. To the extent that we cannot obtain such financing on acceptable terms or at all, we may be required to modify our aircraft acquisition plans or to incur higher than anticipated financing costs, which would have an adverse impact on the execution of our growth strategy and business.

Fuel costs constitute a significant portion of our total operating expenses, accounting for approximately 29% and 31% of our operating expenses for the year ended December 31, 2003 and the three months ended March 31, 2004, respectively. Historically, international and local fuel prices have been subject to wide price fluctuations based on geopolitical issues and supply and demand. Fuel availability is also subject to periods of

In addition, substantially all of our fuel is supplied by one source, Petrobras Distribuidora S.A. If Petrobras Distribuidora is unable or unwilling to continue to supply fuel to us at the times and in the quantities that we require, or if Petrobras Distribuidora were to raise significantly the price it charges us for its fuel, our business and results of operations would be adversely affected. Some of our competitors may be able to obtain fuel on better terms than us, both with respect to quantity and price. Although we enter into hedging arrangements to reduce our exposure to fuel price fluctuations and have historically passed on the majority of fuel price increases by adjusting our fare structure, the price and future availability of fuel cannot be predicted with any degree of certainty. Our hedging activities or the extent of our ability to adjust our fares may not be sufficient to protect us from fuel price increases.

Following the September 11, 2001 terrorist attacks in the United States, insurance companies dramatically increased airline insurance premiums and significantly reduced the maximum amount of insurance coverage available to airlines for liability to persons (other than passengers) for claims resulting from acts of terrorism, war or similar events to US$150 million per aircraft.

Law No. 10,309 of November 22, 2001 authorized the Brazilian government to assume civil liability to third parties for any damages to persons and assets on the ground caused by terrorist attacks or acts of war against aircraft of Brazilian airlines in Brazil or abroad. This law was enacted in response to the substantial increases in insurance premiums attributable to concerns about potential terrorist attacks on aircraft operated by Brazilian airlines in Brazil and abroad after the September 11, 2001 attacks in the United States. Law No. 10,744 of October 9, 2003 confirmed coverage by the Brazilian government up to an overall limit of the reais equivalent of US$1 billion for an indeterminate period of time. However, Decree No. 5,035 of April 5, 2004, which regulates the provisions of Law No. 10,744, provides that the Brazilian government may, at its sole discretion, suspend this coverage at any time, effective within seven days after the announcement by the Brazilian government of its decision to do so.

Airline insurers could reduce their coverage or increase their premiums even further in the event of additional terrorist attacks, hijackings, airline crashes, the end of the government-sponsored coverage or other events adversely affecting the airline industry abroad or in Brazil. Significant reductions in coverage or increases in insurance premiums would harm our financial condition and results of operations.

One of the key elements of our current business strategy is to save costs by operating a simplified aircraft fleet equipped with one type of engine. After extensive research and analysis, we chose the Boeing 737-700/800 Next Generation aircraft and CFM 56-7B engines from CFM International. We currently intend to continue to rely on the Boeing 737-700/800 Next Generation aircraft and the CFM 56-7B engines. If either of Boeing or CFM International were unable to perform their contractual obligations or if we are unable to acquire or lease new aircraft or engines from aircraft or engine manufacturers or lessors on acceptable terms, we would have to find another supplier for a similar type of aircraft or engines.

If we had to lease or purchase aircraft from another supplier, we could lose the benefits we derive from our current fleet composition. We cannot assure you that any replacement aircraft would have the same operating advantages as the Boeing 737-700/800 Next Generation aircraft or that we could lease or purchase engines that would be as reliable and efficient as the CFM 56-7B. We may also incur substantial transition costs, including costs associated with retraining our employees, replacing our manuals and adapting our facilities, to the extent that such costs would not be covered by the alternate supplier. Our operations could also be harmed by the failure or inability of Boeing or CFM International to provide sufficient parts or related support services on a timely basis.

Our business would be significantly harmed if a design defect or mechanical problem with the Boeing 737-700/800 Next Generation aircraft or the CFM 56-7B engine used on our aircraft were discovered causing our aircraft to be grounded while any such defect or problem is being corrected, assuming it could be corrected at all. The use of our aircraft could be suspended or restricted by the DAC in the event of any actual or perceived mechanical or design problems while the DAC conducts its own investigation. Our business would also be significantly harmed if the public avoids flying our aircraft due to an adverse perception of the Boeing 737-700/800 Next Generation aircraft or the CFM 56-7B engine because of safety concerns or other problems, whether real or perceived, or in the event of an accident involving a Boeing 737-700/800 Next Generation aircraft or the CFM 56-7B engine.

We believe that our growth potential and the maintenance of our results-oriented corporate culture are directly linked to our capacity to attract and maintain the best professionals available in the Brazilian airline industry. We are dedicated to providing professional, high-quality service in a positive work environment and being innovative at finding ways to improve our business. We place great emphasis on the selection and training of enthusiastic employees with potential to add value to our business and who we believe fit in with and contribute to our company culture. As we grow, we may be unable to identify, hire or retain enough people who meet the above criteria, or we may have trouble maintaining this company culture as we become a larger business. Our company culture is crucial to our business plan, and failure to maintain that culture could adversely affect our business and results of operations.

Our business also depends upon the efforts of our chief executive officer, who has played an important role in shaping our company culture and, through his interest in Aeropar Participações S.A., owns a significant number of our shares, as well as other key executives. In the event that our chief executive officer or a number of our key executives leave our company, we may have difficulty finding suitable replacements, which could harm our business and results of operations.

We have entered into agreements with third-party contractors to provide certain facilities and services required for our operations, such as aircraft and engine maintenance, ground handling, baggage handling and call center services. All of these agreements are subject to termination on short notice. The loss or expiration of these agreements or our inability to renew these agreements or to negotiate new agreements with other providers at comparable rates could harm our business and results of operations. Further, our reliance on third parties to provide essential services on our behalf gives us less control over the costs, efficiency, timeliness and quality of those services.

We depend on automated systems to operate our business, including our computerized airline reservation system, our telecommunication systems and our website. Unlike our competitors, which issue traditional paper tickets to some or all of their passengers, we issue only paperless tickets. Our website and reservation system must be able to accommodate a high volume of traffic and deliver important flight information. Substantial or repeated website, reservations system or telecommunication systems failures could reduce the attractiveness of our services and could cause our customers to purchase tickets from another airline. Any disruption in these systems could result in the loss of important data, increase our expenses and generally harm our business.

One of the key elements of our business strategy is to maintain a high daily aircraft utilization rate. High daily aircraft utilization allows us to generate more revenue from our aircraft and is achieved in part by

operating with quick turnaround times at airports so we can fly more hours on average in a day. Our rate of aircraft utilization could be adversely affected by a number of different factors that are beyond our control, including, among others, air traffic and airport congestion, adverse weather conditions and delays by third-party service providers relating to matters such as fueling and ground handling.

Furthermore, high aircraft utilization increases the risk that if an aircraft falls behind schedule during the day, it could remain behind schedule during the remainder of that day and potentially into the next day, which can result in disruption in operating performance, leading to passenger dissatisfaction related to delayed or cancelled flights and missed connections.

An accident or incident involving one of our aircraft could involve significant claims by injured passengers and others, as well as significant costs related to the repair or replacement of a damaged aircraft and its temporary or permanent loss from service. We are required by the DAC and lessors of our aircraft under our operating lease agreements to carry liability insurance. Although we believe we currently maintain liability insurance in amounts and of the type generally consistent with industry practice, the amount of such coverage may not be adequate and we may be forced to bear substantial losses in the event of an accident. Substantial claims resulting from an accident in excess of our related insurance coverage would harm our business and financial results. Moreover, any aircraft accident or incident, even if fully insured, could cause a public perception that we are less safe or reliable than other airlines, which would harm our business and results of operations.

Many airlines, including some of our competitors, have marketing alliances with other airlines under which they market and advertise on a cooperative basis. Among other things, they share the use of two-letter flight designator codes to identify their flights and fares in the computerized reservation systems, which is known as code-sharing, and permit reciprocity in their frequent flyer programs. We are not a member of a marketing alliance, and we do not currently anticipate becoming a member of any such alliance. In addition, we do not have a customer loyalty or frequent flyer program, although some of our Brazilian competitors have, and we currently do not anticipate implementing any such program. Some airline customers, including business passengers, prefer to fly with carriers that have marketing alliances so that they may earn and use mileage rewards that may be redeemed for flights on a selection of carriers. For the same reason, some customers are influenced in their choice of airlines by the presence of customer loyalty programs. Our lack of these features may adversely affect our business and competitive ability.

Our controlling shareholder has the power to, among other things (i) elect a majority of our directors and (ii) determine the outcome of any action requiring shareholder approval, including transactions with related parties, corporate reorganizations, dispositions, and the timing and payment of any future dividends, subject to minimum dividend payment requirements imposed under the Brazilian corporation law. Although you are entitled to tag-along rights in connection with a change of control of our company and you will have specific protections in connection with transactions between our controlling shareholder and related parties, our controlling shareholder may have an interest in pursuing acquisitions, dispositions, financings or similar transactions that could conflict with your interests as a holder of the ADSs or our preferred shares.

Our results of operations have at times varied significantly from quarter to quarter, and we expect variations to continue in the future. Among the factors causing these variations are the seasonal nature of air travel and the airline industry’s sensitivity to general economic conditions. Generally, the revenues from and profitability of our flights reach their highest levels during the January and July summer and winter vacation periods and in the final two weeks of December during the Christmas holiday season. The week during which the annual Carnival celebrations take place in Brazil is generally accompanied by a notable decrease in load factors. In addition, because a substantial portion of both business and leisure airline travel is discretionary, the industry tends to experience adverse financial results during general economic downturns. Any prolonged general reduction in airline passenger traffic may adversely affect our business and results of operations.

Prior to this offering, there has not been a public market for either the ADSs or our preferred shares. We have applied to list the ADSs on the NYSE and the preferred shares on the BOVESPA. We cannot predict, however, whether an active liquid public trading market for the ADSs or our preferred shares will develop or be sustained. Active, liquid trading markets generally result in lower price volatility and more efficient execution of buy and sell orders for investors. Liquidity of a securities market is often a function of the volume of the shares that are publicly held by unrelated parties.

Investing in securities that trade in emerging markets, such as Brazil, often involves greater risk than investing in securities of issuers in the United States, and such investments are generally considered to be more speculative in nature. The Brazilian securities market is substantially smaller, less liquid, more concentrated and can be more volatile than major securities markets in the United States. Accordingly, although you are entitled to withdraw the preferred shares underlying the ADSs from the depositary at any time, your ability to sell the preferred shares underlying the ADSs at a price and time at which you wish to do so may be substantially limited. There is also significantly greater concentration in the Brazilian securities market than in major securities markets in the United States. The ten largest companies in terms of market capitalization represented approximately 56.3% of the aggregate market capitalization of the BOVESPA as of December 31, 2003. The top ten stocks in terms of trading volume accounted for approximately 56%, 53% and 51% of all shares traded on the BOVESPA in 2002, 2003 and in the three months ended March 31, 2004, respectively.

According to our by-laws, we must generally pay our shareholders at least 25% of our annual net income as dividends, as determined and adjusted under Brazilian GAAP. This adjusted income may be capitalized, used to absorb losses or otherwise appropriated as allowed under the Brazilian corporation law and may not be available to be paid as dividends. We may not pay dividends to our shareholders in any particular fiscal year if our board of directors determines that such distributions would be inadvisable in view of our financial condition.

As an ADS holder, you will benefit from the electronic certificate of foreign capital registration to be obtained by the custodian for our preferred shares underlying the ADSs in Brazil, which permits the custodian to convert dividends and other distributions with respect to the preferred shares into non-Brazilian currency

and remit the proceeds abroad. If you surrender your ADSs and withdraw preferred shares, you will be entitled to continue to rely on the custodian’s electronic certificate of foreign capital registration for only five business days from the date of withdrawal. Thereafter, upon the disposition of or distributions relating to the preferred shares, you will not be able to remit abroad non-Brazilian currency unless you obtain your own electronic certificate of foreign capital registration or you qualify under Brazilian foreign investment regulations that entitle some foreign investors to buy and sell shares on Brazilian stock exchanges without obtaining separate electronic certificates of foreign capital registration. If you do not qualify under the foreign investment regulations you will generally be subject to less favorable tax treatment of dividends and distributions on, and the proceeds from any sale of, the preferred shares.

If you attempt to obtain your own electronic certificate of foreign capital registration, you may incur expenses or suffer delays in the application process, which could delay your ability to receive dividends or distributions relating to our preferred shares or the return of your capital in a timely manner. The depositary’s electronic certificate of foreign capital registration may also be adversely affected by future legislative changes.

The initial public offering price per ADS is expected to exceed the net tangible book value of the equivalent number of our preferred shares after this offering. Accordingly, investors purchasing the ADSs or our preferred shares in this offering will likely suffer immediate and substantial book value dilution. In addition, to the extent that outstanding and future options to purchase the ADSs or our preferred shares are exercised, there may be additional dilution.

Under Brazilian law, the protections afforded to minority shareholders are different from those in the United States. In particular, the case law with respect to shareholder disputes is less developed under Brazilian law than U.S. law and there are different procedural requirements for bringing shareholder lawsuits, such as shareholder derivative suits. As a result, in practice it may be more difficult for our minority shareholders to enforce their rights against us or our directors or controlling shareholder than it would be for shareholders of a U.S. company.

According to Law No. 10,833, enacted on December 29, 2003, the disposition of assets located in Brazil by a non-resident to either a Brazilian resident or a non-resident is subject to taxation in Brazil, regardless of whether the disposition occurs outside or within Brazil. In the event that the disposition of assets is interpreted to include a disposition of the ADSs or our preferred shares, this tax law could result in the imposition of withholding taxes on a disposition of the ADSs or our preferred shares by a non-resident of Brazil to another non-resident of Brazil. Due to the fact that Law No. 10,833 has been recently enacted and no judicial guidance as to its application yet exists, we are unable to predict whether an interpretation applying such tax laws to dispositions of the ADSs or our preferred shares between non-residents could ultimately prevail in the courts of Brazil.

We, the selling shareholders, our directors and executive officers (other than those directors and executive officers who are also shareholders of Aeropar Participações S.A. and Comporte Participações S.A.) and certain of our other shareholders have agreed that, subject to certain exceptions, we and they will not issue or transfer, until 180 days (and, in the case of Aeropar Participações S.A. and Comporte Participações S.A., including their respective shareholders, 365 days) after the date of this prospectus any ADSs or our preferred shares or any options or warrants to purchase the ADSs or our preferred shares, or any securities convertible

into, or exchangeable for, or that represent the right to receive, ADSs or our preferred shares. In addition, BSSF Air Holdings LLC has agreed with us that, subject to certain exceptions, it will not issue or transfer any ADSs or preferred shares or any options or warrants to purchase ADSs or preferred shares or securities convertible into, or exchangeable for, or represent rights to receive, ADSs or preferred shares after the expiration of the 180-day lock-up, unless in an organized sales process. After these lock-up agreements expire, their ADSs and preferred shares will be eligible for sale in the public market. The market price of the ADSs and our preferred shares could drop significantly if the holders of the ADSs or our preferred shares sell them or the market perceives that they intend to sell them.

We may not be able to offer our preferred shares to U.S. holders of ADSs pursuant to preemptive rights granted to holders of our preferred shares in connection with any future issuance of our preferred shares unless a registration statement under the Securities Act is effective with respect to such preferred shares and preemptive rights, or an exemption from the registration requirements of the Securities Act is available. We are not obligated to file a registration statement relating to preemptive rights with respect to our preferred shares, and we cannot assure you that we will file any such registration statement. If such a registration statement is not filed and an exemption from registration does not exist, The Bank of New York, as depositary, will attempt to sell the preemptive rights, and you will be entitled to receive the proceeds of such sale. However, these preemptive rights will expire if the depositary does not sell them, and U.S. holders of ADSs will not realize any value from the granting of such preemptive rights.

We will receive estimated net proceeds of approximately US$142.4 million from the sale of our preferred shares and the ADSs in this global offering, and net proceeds of approximately US$154.7 million if the international underwriters exercise their over-allotment option in full, in each case after deducting estimated underwriting discounts and commissions and offering expenses payable by us. We intend to use the majority of the net proceeds from this offering for the purchase and lease of additional Boeing 737 aircraft. We intend to use the remainder of the net proceeds for working capital purposes and general capital expenditures. To make pre-delivery deposits and finance the balance of the purchase price of additional Boeing 737-800 Next Generation aircraft, in addition to the proceeds of this offering, we will also require funds from other resources, such as cash from operations, borrowings under short-term credit facilities and/or vendor financing, low-interest bank financing or credit agreements guaranteed by the U.S. Ex-Im Bank, sale and leaseback transactions, and additional equity or debt offerings.

We will not receive any proceeds from the sale of preferred shares (including preferred shares in the form of ADSs) by the selling shareholders.


	•	the commercial rate exchange market; and

	•	the floating rate exchange market.

Most trade and financial foreign-exchange transactions are carried out on the commercial rate exchange market. These transactions include the purchase or sale of shares or payment of dividends or interest with respect to shares. Foreign currencies may only be purchased in the commercial exchange market through a Brazilian bank authorized to operate in these markets. In both markets, rates are freely negotiated but may be influenced by Central Bank intervention. In 1999, the Central Bank placed the commercial exchange rate and the floating rate exchange market under identical operational limits, which led to a convergence in the pricing and liquidity of both markets. Since February 1, 1999, the floating market rate has been substantially the same as the commercial market rate, and the system relying on the foreign exchange rate band has been eliminated. However, there is no guarantee that these rates will continue to be substantially the same in the future. Despite the convergence in pricing and liquidity of both markets, each market continues to be regulated separately.

Since 1999, the Central Bank has allowed the real/ U.S. dollar exchange rate to float freely, and during that period, the real/ U.S. dollar exchange rate has fluctuated considerably. In the past, the Central Bank has intervened occasionally to control unstable movements in foreign exchange rates. We cannot predict whether the Central Bank or the Brazilian government will continue to let the real float freely or will intervene in the exchange rate market through a currency band system or otherwise. The real may depreciate or appreciate against the U.S. dollar substantially in the future. For more information on these risks, see “Risk Factors— Risks Relating to Brazil.”

The following tables set forth the commercial selling rate, expressed in reais per U.S. dollar (R$/US$), for the periods indicated.


Source:	Central Bank


(1)	Represents the average of the exchange rates on the last day of each month during the period.
(2)	Average of the lowest and highest rates in the month.

Prior to this offering, there has been no public market for the ADSs or our preferred shares. We cannot assure you that an active trading market will develop for the ADSs or our preferred shares, or that the ADSs or our preferred shares will trade in the public market subsequent to the offering at or above the initial public offering price. Each ADS will represent two preferred shares. We have applied to list the ADSs for trading on the NYSE and our preferred shares for trading on the BOVESPA. Trading of the ADSs on the NYSE is expected to commence on the day following the date of this prospectus; trading of the preferred shares is expected to commence on the second day following the date of this prospectus.

In 2000, the BOVESPA was reorganized through the execution of memoranda of understanding by the Brazilian stock exchanges. Under the memoranda, all securities are now traded only on the BOVESPA, with the exception of electronically traded public debt securities and privatization auctions, which are traded on the Rio de Janeiro Stock Exchange.

When shareholders trade in common and preferred shares on the BOVESPA, the trade is settled in three business days after the trade date without adjustment of the purchase price for inflation. The seller is ordinarily required to deliver the shares to the exchange on the second business day following the trade date. Delivery of and payment for shares are made through the facilities of the clearinghouse, Companhia Brasileira de Liquidação e Custódia, or CBLC.

The BOVESPA is a nonprofit entity owned by its member brokerage firms. Trading on the BOVESPA is limited to member brokerage firms and a limited number of authorized nonmembers. The BOVESPA has two open outcry trading sessions each day from 11:00 a.m. to 1:30 p.m. and from 2:30 p.m. to 5:45 p.m., São Paulo time, except during daylight savings time in the United States. During daylight savings time in the United States, the sessions are from 10:00 a.m. to 1:00 p.m. and from 2:00 p.m. to 4:45 p.m., São Paulo time, to closely mirror the NYSE trading hours. Trading is also conducted between 11:00 a.m. and 6:00 p.m., or between 10:00 a.m. and 5:00 p.m. during daylight savings time in the United States on an automated system known as the Computer Assisted Trading System (Sistema de Negociação Assistida por Computador) on the BOVESPA and on the National Electronic Trading System (Sistema Eletrônico de Negociação Nacional). This system is a computerized system that links electronically with the seven smaller regional exchanges. The BOVESPA also permits trading from 6:45 p.m. to 7:30 p.m. on an online system connected to traditional and internet brokers called the “after market.” Trading on the after market is subject to regulatory limits on price volatility and on the volume of shares transacted through internet brokers. Currently, there are no specialists or officially recognized market makers for our shares in Brazil. Upon the completion of this offering, we may contract specialists and/or market makers for the preferred shares.

In order to better control volatility, the BOVESPA adopted a “circuit breaker” system pursuant to which trading sessions may be suspended for a period of 30 minutes or one hour whenever the indices of the BOVESPA falls below the limits of 10% or 15%, respectively, in relation to the index registered in the previous trading session.

The BOVESPA is significantly less liquid than the NYSE or other major exchanges in the world. As of December 31, 2003, the aggregate market capitalization of the 366 companies listed on the BOVESPA was equivalent to approximately R$582.2 billion (US$201.8 billion) and the 10 largest companies listed on the BOVESPA represented approximately 56.3% of the total market capitalization of all listed companies. By comparison, as of December 31, 2003, the aggregate market capitalization of the 2,755 companies listed on the NYSE was approximately US$12.3 trillion and the 10 largest companies listed on the NYSE represented approximately 19.0% of the total market capitalization of all listed companies. Although any of the outstanding shares of a listed company may trade on the BOVESPA, in most cases fewer than half of the listed shares are actually available for trading by the public, the remainder being held by small groups of controlling persons, by government entities or by one principal shareholder. See “Risk Factors—Risks

Trading on the BOVESPA by a holder not deemed to be domiciled in Brazil for Brazilian tax and regulatory purposes, a non-Brazilian holder, is subject to certain limitations under Brazilian foreign investment legislation. With limited exceptions, non-Brazilian holders may only trade on Brazilian stock exchanges in accordance with the requirements of Resolution No. 2,689, of January 26, 2000, of the National Monetary Council (Conselho Monetário Nacional, or CMN) or Resolution No. 2,689. Resolution No. 2,689 requires that securities held by non-Brazilian holders be maintained in the custody of, or in deposit accounts with, financial institutions and be registered with a clearinghouse. Such financial institutions and clearinghouse must be duly authorized to act as such by the Central Bank and the CVM. In addition, Resolution No. 2,689 requires non-Brazilian holders to restrict their securities trading to transactions on Brazilian stock exchanges or qualified over-the-counter markets. With limited exceptions, non-Brazilian holders may not transfer the ownership of investments made under Resolution No. 2,689 to other non-Brazilian holders through a private transaction. See “Taxation— Brazilian Tax Considerations— Taxation on Gains” for a description of certain tax benefits extended to non-Brazilian holders who qualify under Resolution No. 2,689.

In 2000, the BOVESPA introduced three special listing segments, known as Level 1 and 2 of Differentiated Corporate Governance Practices and New Market (Novo Mercado), aiming at fostering a secondary market for securities issued by Brazilian companies with securities listed on the BOVESPA, by prompting such companies to follow good practices of corporate governance. The listing segments were designed for the trading of shares issued by companies voluntarily undertaking to abide by corporate governance practices and disclosure requirements in addition to those already imposed by Brazilian law. These rules generally increase shareholders’ rights and enhance the quality of information provided to shareholders.

To become a Level 1 (Nível 1) company, in addition to the obligations imposed by current Brazilian law, an issuer must agree to (a) ensure that shares of the issuer representing 25% of its total capital are effectively available for trading; (b) adopt offering procedures that favor widespread ownership of shares whenever making a public offering; (c) comply with minimum quarterly disclosure standards; (d) follow stricter disclosure policies with respect to transactions made by controlling shareholders, directors and officers involving securities issued by the issuer; (e) submit any existing shareholders’ agreements and stock option plans to the BOVESPA; and (f) make a schedule of corporate events available to shareholders.

To become a Level 2 (Nível 2) company, in addition to the obligations imposed by current Brazilian law, an issuer must agree to (a) comply with all of the listing requirements for Level 1 companies, (b) grant tag-along rights for all shareholders in connection with a transfer of control of the company, offering the same price paid per share for controlling block common shares and 70% of the price paid per share of controlling block preferred shares; (c) grant voting rights to holders of preferred shares in connection with certain corporate restructurings and related party transactions, such as (i) any transformation of the company into another corporate form; (ii) any merger, consolidation or spin-off of the company; (iii) approval of any transactions between the company and its controlling shareholder, including parties related to the controlling shareholder; (iv) approval of any valuation of assets to be delivered to the company in payment for shares issued in a capital increase; (v) appointment of an expert firm to ascertain the fair value of the company in connection with any deregistration and delisting tender offer; and (vi) any changes to these voting rights; (d) have a board of directors comprised of at least five members with a term limited to one year; (e) prepare annual financial statements in English, including cash flow statements, in accordance with international accounting standards, such as U.S. GAAP or International Financial Reporting Standards; (f) if it elects to delist from the Level 2 segment, hold a tender offer by the company’s controlling shareholder (the minimum price of the shares to be offered will be determined by an appraisal process); and (g) adhere exclusively to the rules of the BOVESPA Arbitration Chamber for resolution of disputes between the company and its investors.

To be listed in the Novo Mercado, an issuer must meet all of the requirements described above, in addition to (a) issuing only voting shares and (b) granting tag-along rights for all shareholders in connection with a transfer of control of the company, offering the same price paid per share for controlling block common shares.

We will enter into an agreement with the BOVESPA to comply with the requirements to become a Level 2 company. Following the completion of this offering, we must have a free float of at least 10% of our preferred shares, and we will be granted a three-year period within which to comply with the requirement to increase this free float to 25%. In addition to complying with Level 2 requirements, we will also grant tag-along rights to holders of our preferred shares in connection with a transfer of control of our company, offering preferred shareholders 100% of the price paid per common share of controlling block shareholders, our controlling shareholders will agree to a 365-day lock-up period and we will prepare quarterly financial statements in accordance with U.S. GAAP.

The Brazilian securities markets are regulated by the CVM, which has regulatory authority over the stock exchanges and securities markets, as well as by the Central Bank, which has, among other powers, licensing authority over brokerage firms and regulates foreign investment and foreign exchange transactions. The Brazilian securities markets are governed by Law No. 10,198 dated February 14, 2001, Law No. 10,303 dated October 31, 2001, known as Law No. 10,303, and Law No. 10,411 dated February 26, 2002, which introduced new concepts and several changes to Law No. 6,385 dated December 7, 1976, as amended and supplemented, the principal law governing the Brazilian securities markets, and in Brazilian corporation law, and by regulations issued by the CVM, the CMN and the Central Bank. These laws and regulations, among others, provide for disclosure requirements applicable to issuers of traded securities, criminal sanctions for insider trading and price manipulation, and protection of minority shareholders. They also provide for licensing and oversight of brokerage firms and governance of Brazilian stock exchanges. However, the Brazilian securities markets are not as highly regulated and supervised as U.S. securities markets.

Under the Brazilian corporation law, a company is either publicly held and listed, a companhia aberta, or privately held and unlisted, a companhia fechada. All listed companies are registered with the CVM and are subject to reporting and regulatory requirements. A company registered with the CVM may trade its securities either on the BOVESPA or in the Brazilian over-the-counter market. Shares of companies listed on the BOVESPA may not simultaneously trade on the Brazilian over-the-counter market. The shares of a listed company may also be traded privately, subject to several limitations. To be listed on the BOVESPA, a company must apply for registration with the BOVESPA and the CVM.

The trading of securities on the BOVESPA may be halted at the request of a company in anticipation of a material announcement. Trading may also be suspended on the initiative of the BOVESPA or the CVM, among other reasons, based on or due to a belief that a company has provided inadequate information regarding a significant event or has provided inadequate responses to inquiries by the CVM or the BOVESPA.

Trading on the BOVESPA by non-residents of Brazil is subject to limitations under Brazilian foreign investment and tax legislation. The Brazilian custodian for the preferred shares underlying the ADSs must, on behalf of the depositary for the ADSs, obtain registration from the Central Bank to remit U.S. dollars abroad for payments of dividends, any other cash distributions, or upon the disposition of the shares and sales proceeds therefrom. If you exchange your ADSs for preferred shares, you will be entitled to continue to rely on the custodian’s electronic certificate of foreign capital registration for five business days after the exchange. Thereafter, you may not be able to obtain and remit abroad non-Brazilian currency upon the disposition of or distributions relating to the preferred shares, and will be subject to a less favorable tax treatment on gains with respect to the preferred shares, unless you obtain a new electronic certificate of foreign capital registration or qualify under Brazilian foreign investment regulations that entitle some foreign investors to buy and sell shares on the BOVESPA without obtaining separate electronic certificates of foreign capital registration. See “Description of Capital Stock— Regulation of Foreign Investment.”

Pursuant to CVM Rule No. 358, of January 3, 2002, the CVM revised and consolidated the requirements regarding the disclosure and use of information related to material facts and acts of publicly held companies, including the disclosure of information in the trading and acquisition of securities issued by publicly held companies.


	•	establish the concept of a material fact that gives rise to reporting requirements. Material facts include decisions made by the controlling shareholders, resolutions of the general meeting of shareholders and of management of the company, or any other facts related to the company’s business (whether occurring within the company or otherwise somehow related thereto) that may influence the price of its publicly traded securities, or the decision of investors to trade such securities or to exercise any of such securities’ underlying rights;

	•	specify examples of facts that are considered to be material, which include, among others, the execution of shareholders’ agreements providing for the transfer of control, the entry or withdrawal of shareholders that maintain any managing, financial, technological or administrative function with or contribution to the company, and any corporate restructuring undertaken among related companies;

	•	oblige the officer of investor relations, controlling shareholders, other officers, directors, members of the audit committee and other advisory boards to disclose material facts;

	•	require simultaneous disclosure of material facts to all markets in which the corporation’s securities are admitted for trading;

	•	require the acquiror of a controlling stake in a corporation to publish material facts, including its intentions as to whether or not to de-list the corporation’s shares, within one year;

	•	establish rules regarding disclosure requirements in the acquisition and disposal of a material stockholding stake; and

	•	restrict the use of insider information.

On October 31, 2001, Law No. 10,303, amending the Brazilian corporation law, was enacted. The main goal of Law No. 10,303 is to broaden the rights of minority shareholders. Law No. 10,303:


	•	obligates our controlling shareholders to make a tender offer for our shares if it increases its interest in our share capital to a level that materially and negatively affects the liquidity of our shares, as defined by the CVM;

	•	requires any acquiror of control to make a tender offer for our common shares at a price equal to 80% of the per share price paid for the controlling block of shares;

	•	authorizes us to redeem minority shareholders’ shares if, after a tender offer, our controlling shareholders increase their participation in our total share capital to more than 95%;

	•	entitles dissenting or, in certain cases, non-voting shareholders to obtain redemption upon a decision to conduct a spin-off that results in (a) a change of our corporate purpose, (b) a reduction in the mandatory dividend or (c) any participation in a group of companies (as defined by the Brazilian corporation law);

	•	requires that the preferred shares have one of the following advantages in order to be listed and to trade on a stock exchange: (a) priority in receipt of dividends corresponding to at least 3% of the book value per share (after this priority condition is met, equal conditions apply to common shares); or (b) dividends 10% higher than those paid for common shares; or (c) tag-along right at 80% of the


		price paid to the controlling shareholder in case of a transfer control. No withdrawal rights arise from such amendments made before December 31, 2002;

	•	entitles shareholders that are not a controlling shareholder but that together hold (a) preferred shares representing at least 10% of our total share capital or (b) common shares representing at least 15% of our voting capital, the right to appoint one member and an alternate to our board of directors. If no group of common or preferred shareholders meets the thresholds described above, shareholders holding preferred or common shares representing at least 10% of our total share capital are entitled to combine their holdings to appoint one member and an alternate to our board of directors. Until 2005, the board members that may be elected pursuant to (a) above or by the combined holdings of holders of preferred and common shares are to be chosen from a list of three names drawn up by the controlling shareholder. Any such members elected by the minority shareholders will have veto powers on the selection of our independent auditors;

	•	requires controlling shareholders, shareholders that appoint members of our board of directors or fiscal council and members of our board of directors, board of executive officers or fiscal council to file immediately with the CVM and the stock exchanges (or the over-the-counter markets on which our securities are traded) a statement of any change in their shareholdings; and

	•	requires us to send copies of the documentation we submit to our shareholders in connection with shareholders meetings to the stock exchanges on which our shares are most actively traded.

The following table sets forth our capitalization as of March 31, 2004 on an actual basis and as adjusted to reflect the receipt of approximately US$142.4 million in estimated net proceeds from the issuance and sale of the preferred shares and ADSs in this global offering. The number of our common shares and preferred shares excludes 937,412 preferred shares underlying stock options that were granted on May 25, 2004 with an exercise price of R$3.04. You should read this table in conjunction with “Selected Financial Information and Operating Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the related notes included elsewhere in this prospectus.

(1)

The Registrant became the parent company of Gol on March 29, 2004, when all of the common shares, Class A preferred shares and Class B preferred shares of Gol (except for 14 common shares and 8 Class B preferred shares of Gol that are held by members of Gol’s board of directors for eligibility purposes) were contributed to the Registrant by the shareholders of Gol in exchange for the applicable number of either common shares or preferred shares of the Registrant. As a result of this reorganization, 116,199,986 common shares of Gol were exchanged for 109,448,267 common shares and 6,751,719 preferred shares of the Registrant, 29,050,000 Class A preferred shares of Gol were exchanged for 29,049,994 preferred shares and 6 common shares of the Registrant and 23,542,977 Class B preferred shares of Gol were exchanged for 23,542,977 preferred shares of the Registrant. The reorganization did not affect our operations in any respect.

At March 31, 2004, we had a net tangible book value of R$2.57 per equity share (which refers to our common shares and preferred shares), or US$1.77 per ADS. Net tangible book value represents the amount of our total tangible assets less total liabilities, divided by the total number of equity shares outstanding at March 31, 2004, after giving effect to the 2.80-for-one stock split on May 25, 2004. After giving effect to the sale of the ADSs offered by us in the international offering and the preferred shares offered by us in the Brazilian offering, and, assuming the international underwriters’ over-allotment option is not exercised, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our net tangible book value estimated at March 31, 2004 would have been approximately R$848.9 million, representing R$4.53 per equity share, or US$3.11 per ADS. At an assumed initial public offering price of US$16.00 per ADS, this represents an immediate increase in net tangible book value of R$1.96 per equity share, or US$1.34 per ADS, to existing shareholders and an immediate dilution in net tangible book value of US$12.89 per ADS to new investors purchasing ADSs in this offering. Dilution for this purpose represents the difference between the price per preferred share or ADS paid by these purchasers and net tangible book value per share or ADS immediately after the completion of the offerings.

The following table illustrates this dilution of US$12.89 per ADS to new investors purchasing the ADSs in this global offering:

The number of our common shares and preferred shares excludes 937,412 preferred shares underlying stock options that were granted on May 25, 2004 with an exercise price of R$3.04.

The Registrant became the parent company of Gol on March 29, 2004, when all of the common shares, Class A preferred shares and Class B preferred shares of Gol (except for five common shares and three Class B preferred shares of Gol that are held by members of Gol’s board of directors for eligibility purposes) were contributed to the Registrant by the shareholders of Gol in exchange for the applicable number of either common shares or preferred shares of the Registrant. As a result of this reorganization, 41,499,995 common shares of Gol were exchanged for 109,448,267 common shares and 6,751,719 preferred shares of the Registrant, 10,375,000 Class A preferred shares of Gol were exchanged for 29,049,994 preferred shares and 6 common shares of the Registrant and 8,408,206 Class B preferred shares of Gol were exchanged for 23,542,977 preferred shares of the Registrant. The reorganization did not affect our operations in any respect. As the result of a 2.80-for-one stock split on May 25, 2004, the aggregate number of the Registrant’s common shares outstanding increased to 109,448,497 and the aggregate number of its preferred shares outstanding increased to 59,344,746 (which includes 224 common shares and 56 preferred shares of the Registrant that were issued in connection with its formation on March 12, 2004). All share amounts and per share calculations in this prospectus reflect the stock split.

The Registrant is a holding company that was incorporated on March 12, 2004 and the shares of Gol and cash are currently the Registrant’s only asset.

Gol was incorporated in August 2000 but did not begin transporting passengers until January 2001. During the period between August 2000 and December 31, 2000, our activities consisted solely of organizational activities relating to the commencement of our operations and we did not have any significant income or expenses. The consolidated financial data as and for the years ended December 31, 2001, 2002 and 2003 are derived from the audited consolidated financial statements included elsewhere in this prospectus. The financial information included in this prospectus has been presented in accordance with U.S. GAAP and reflects our financial condition and results of operations as if the Registrant had been incorporated and held all of the capital stock of Gol since January 1, 2001, except for five common shares and three Class B preferred shares of Gol held by members of Gol’s board of directors for eligibility purposes.

You should read the following selected consolidated financial and operating data in conjunction with our consolidated financial statements and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

The selected consolidated financial data at and for the three months ended March 31, 2003 and 2004 have been derived from our unaudited consolidated interim financial statements included elsewhere in this prospectus. The results of operations for the three months ended March 31, 2004 are not necessarily indicative of the operating results to be expected for the entire year ended December 31, 2004.

Solely for the convenience of the reader, real amounts as of and for the year ended December 31, 2003 and for the three months ended March 31, 2004 have been translated into U.S. dollars at the commercial market rate as reported by the Central Bank on March 31, 2004 of R$2.9086 to US$1.00. The commercial market rate as reported by the Central Bank on May 28, 2004 was R$3.0961 to US$1.00.


(1)	Our preferred shares are not entitled to any fixed dividend preferences, but are instead entitled to receive dividends per share in the same amount of dividends per share paid to holders of our common shares. Consequently, our earnings (loss) per share are computed by dividing income by the weighted average number of all classes of shares outstanding during the year. We have no dilutive securities.
(2)	In managing our liquidity, we take into account our cash and cash equivalents and our accounts receivable balances. Accounts receivable consist primarily of credit card receivables for purchased passenger tickets. As we provide our customers with the option to pay in installments over several months, we currently have an approximate one-month lag between the time that we pay our suppliers and the time that we receive payment for our services.
(3)	Operating margin represents operating income divided by net operating revenues.
(4)	EBITDA represents net income (loss) plus the sum of other income (expense), income taxes and depreciation. EBITDA is presented as supplemental information because we believe it is a useful indicator of our operating performance and is useful in comparing our operating performance with other companies in the airline industry. However, EBITDA should not be considered in isolation, as a substitute for net income prepared in accordance with U.S. GAAP or as a measure of a company’s profitability. In


	addition, our calculation of EBITDA may not be comparable to other similarly titled measures of other companies. The following table presents a reconciliation of our net income to EBITDA for the specified periods.

You should read this discussion in conjunction with our consolidated financial statements and the related notes and the other financial information included elsewhere in this prospectus.

We are the only low-fare, low-cost passenger airline currently operating in Brazil providing frequent service on routes between Brazil’s major cities. We focus on increasing the growth and profitability of our business by stimulating and meeting demand for affordable, convenient air travel in Brazil for both business and leisure passengers. We do this by offering simple, safe and efficient services while having among the lowest operating costs in the airline industry worldwide.

The Registrant is a holding company that was incorporated in March 12, 2004. Shares of Gol and cash are currently the Registrant’s only assets.

Gol was incorporated in August 2000 and began transporting passengers in January 2001 with six single-class Boeing 737-700 Next Generation aircraft serving five cities in Brazil. By the end of the first quarter of 2004, we were operating 22 single-class Boeing 737-700/800 Next Generation aircraft serving 28 cities throughout Brazil. We have flown over 16 million passengers since commencing operations and, according to the DAC, Brazil’s civil aviation authority, our share of the domestic market based on revenue passenger kilometers grew from 4.7% in 2001 to 11.8% in 2002, 19.2% in 2003 and 22.5% for the three months ended March 31, 2004. The increase in our fleet size and flight frequencies, entry into new markets and new customer segments have been primarily accountable for yearly increases in our revenues (194.1% between 2001 and 2002 and 106.6% between 2002 and 2003) and costs (169.2% between 2001 and 2002 and 72.0% between 2002 and 2003).

We offer travelers in Brazil a low-fare, high-quality transportation alternative that we believe is an attractive value compared to conventional airline and bus transportation. We have a diversified passenger base, with customers ranging from business passengers traveling within densely populated centers in Brazil, such as São Paulo, Rio de Janeiro and Belo Horizonte, to leisure passengers traveling to destinations around Brazil.

The following table demonstrates the growth of our operations, on a quarterly basis, since we commenced our operations:

We carefully evaluate opportunities to grow, and expect to continue the growth of our business by purchasing or leasing aircraft and increasing the frequency of flights to our existing high-demand markets and adding new routes to underserved regions in Brazil. We are also pursuing opportunities to offer services on

routes to high-traffic centers in other South American countries. We have applied for regulatory approval of a route between São Paulo (Guarulhos International Airport) and Buenos Aires, Argentina (Ezeiza International Airport). We expect to receive a decision in respect of the application during the second half of 2004.

We expect to take delivery, under two-year operating leases, of three Boeing 737-300 aircraft in the third quarter of 2004 and up to two additional Boeing 737-300 aircraft later in 2004, which we will use to help meet short-term capacity needs. We have signed an agreement with The Boeing Company for firm orders for 15 737-800 Next Generation aircraft and options to purchase an additional 28 737-800 Next Generation aircraft. The firm order aircraft are scheduled to be delivered between 2007 and 2009, and the purchase options are exerciseable for deliveries between 2005 and 2010.

We derive our revenues primarily from transporting passengers on our aircraft. Approximately 96% of our revenues are derived from passenger fares, and the remaining 4% of our revenues are derived principally from our cargo business, which utilizes available cargo space on our passenger flights. Passenger revenue is recognized either when transportation is provided or when the ticket expires unused. Cargo revenue is recognized when transportation is provided. Other revenue consists primarily of charter services, ticket change fees and excess baggage charges. Passenger revenues are based upon our capacity, load factor and yield. Our capacity is measured in terms of available seat kilometers, which represents the number of seats we make available on our aircraft multiplied by the number of kilometers the seats are flown. Load factor, or the percentage of our capacity that is actually used by paying customers, is calculated by dividing revenue passenger kilometers by available seat kilometers. Yield is the average amount that one passenger pays to fly one kilometer.

The following table sets forth our capacity, load factor and yield for the periods indicated.

We have increased our revenues by increasing our capacity (in terms of fleet size and departures), load factor and yield. We believe that our careful focus on serving specific segments of the domestic air travel market, the value that we offer our customers and our low fares distinguish us from other airlines and respond to a strong, untapped demand for low-cost, low-fare services that has enabled us to continue increasing our capacity in spite of the overall industry trend towards contraction during the last three years.

The strong demand for our services, our efficient route network, quick aircraft turnaround times and our modern fleet have enabled us to maintain a high aircraft utilization rate, which, together with our effective revenue management strategies that balance our fares and load factors, have improved our yields and passenger revenue per available seat kilometer.

The DAC may influence our capacity to generate revenues. The DAC approves the concession of slots, entry of new companies, launch of new routes, increases in route frequencies and lease or acquisition of new aircraft. As an element of government measures designed to improve the financial health of the Brazilian legacy carriers operating in the Brazilian civil aviation industry, since March 2003 airlines have been required to demonstrate satisfactory levels of demand and profitability before the DAC will approve requests for new routes, increases in flight frequencies or the lease or acquisition of additional aircraft. As a result of the DAC’s close monitoring of the capacity-demand balance, yield increased in the overall market. Our ability to grow and to increase our revenues is dependent on the receipt of approvals for new routes, increased frequencies and additional aircraft from the DAC.

Our revenues are net of certain taxes, including state-value added taxes, Imposto sobre Circulação de Mercadorias e Serviços, or ICMS; federal social contribution taxes, including Programa de Integração Social, or PIS, and the Contribuição Social para o Financiamento da Seguridade Social, or COFINS. ICMS does not apply to passenger revenues. The average rate of ICMS on cargo revenues varies by state from 4% to 12%. PIS and COFINS are imposed at rates of 1.65% and 3.0%, respectively, of gross operating revenues.

Generally, the revenues from and profitability of our flights reach their highest levels during the January and July summer and winter vacation periods and in the final two weeks of December during the Christmas holiday season. The week during which the annual Carnival celebrations take place in Brazil is generally accompanied by a decrease in load factors. Given our high proportion of fixed costs, this seasonality is likely to cause our results of operations to vary from quarter to quarter.

We have low operating expenses because we operate a simplified fleet with a single-class of service, have one of the newest fleets in the industry, utilize our aircraft efficiently, use and encourage low-cost booking and distribution processes, and employ other cost-saving practices not widely applied across the industry. We also had low operating expenses per available seat kilometer because of our high aircraft utilization rate. The main components of operating expenses include those related to aircraft fuel, aircraft rent, aircraft maintenance, sales and marketing, and salaries, wages and benefits provided to employees, including provisions for our profit sharing plan.

Our aircraft fuel expenses are higher than those of low cost airlines in the United States and Europe because there is only one significant supplier of jet fuel in Brazil and taxes applicable to the sale of jet fuel are very high and are passed along to us. Our aircraft fuel expenses are variable and fluctuate based on global oil prices. From January 1, 2001 to March 31, 2004, the price of West Texas Intermediate crude oil, a benchmark widely used for crude oil prices that is measured in barrels and quoted in U.S. dollars, increased by 31.4% from US$27.21 per barrel to US$35.76 per barrel. Since global oil prices are U.S. dollar-based, our aircraft fuel costs are also affected by fluctuations in the value of the real. As we can generally adjust our fares to offset fuel price increases and real exchange rate declines over a period of several months, we currently enter into short-term arrangements to hedge against short-term trends in oil prices and foreign exchange fluctuations. We believe that since 1970 companies operating in Brazil’s domestic airline industry generally have been able to minimize the impact of Brazilian currency depreciations and devaluations by making changes to their fare structures.

Our aircraft rent expenses are in U.S. dollars and have increased in line with the expansion of our operations. We also use short-term arrangements to hedge against the foreign exchange exposure related to our lease payment obligations. In addition, approximately 20% of our aircraft operating leases have floating-rate payment obligations that are based on fluctuations in international interest rates. We currently have a hedging program in place to manage our interest rate exposure.

Our maintenance and repair expenses consist of light and scheduled heavy maintenance of our aircraft. Maintenance and repair expenses, including overhaul of aircraft components, are charged to operating expenses as incurred. Our aircraft require a low level of maintenance because the average age of the aircraft in our fleet is currently 2.8 years. We also currently incur lower maintenance expenses because most of the parts on our aircraft are under multi-year warranties. If the age of our fleet increases and our warranties expire, our maintenance expenses under U.S. GAAP will increase. For an explanation of the treatment of maintenance and repair expenses under U.S. GAAP, see Note 2 to our consolidated financial statements. We maintain maintenance reserve accounts denominated in U.S. dollars to cover a portion of our future maintenance costs.

Our sales and marketing expenses include commissions paid to travel agents, fees paid for our own and third-party reservations systems and agents, fees paid to credit card companies, and advertising. Our distribution costs are lower than those of other airlines in Brazil on a per available seat kilometer basis because a higher proportion of our customers purchase tickets with us directly through our website instead of through traditional distribution channels, such as ticket offices, and we have comparatively fewer bookings made through higher cost global distribution systems. We booked 58%, 49% and 71% of our passenger revenues

Salaries, wages and benefits paid to our employees increase as the number of our employees grows and include annual cost of living adjustments and provisions made for our profit sharing plan. We have no seniority-related increases in these costs due to our salary structure.

Aircraft and traffic servicing expenses include ground handling and the cost of airport facilities.

Other operating expenses consist of general and administrative expenses, purchased services, equipment rentals, passenger refreshments, communication costs, supplies and professional fees.

During the period between the beginning of 2001 and March 31, 2004, we reduced our break-even load factor, which is the passenger load factor that will result in operating revenues being equal to operating expenses, from 61.5% to 51.6%. This decrease has been primarily due to increases in yield combined with the spreading of fixed costs over a greater number of available seat kilometers.

Our operating margin, which measures operating income as a percentage of operating revenues, has consistently improved during the first three years of our operations and was among the highest in the airline industry worldwide in 2003, according to publicly filed company reports.

As a company with all of its operations currently in Brazil, we are affected by general economic conditions in the country. While our growth since 2001 has been primarily driven by our expansion into new markets and increased flight frequencies, we have also been affected by macroeconomic conditions in Brazil. We grew substantially despite small increases in Brazil’s gross domestic product, or GDP, because of strong demand for our lower fare service. However, the GDP growth rate will become increasingly important in determining our future growth capacity and our results of operations. From 1970 until December 2003, Brazilian air traffic demand grew at a rate of approximately 2.0 times Brazil’s GDP growth.

Our results of operations are affected by currency fluctuations. All of our revenues are denominated in reais, but a significant part of our operating expenses are either payable in or affected by the U.S. dollar, such as our aircraft operating lease payments, related maintenance reserves and deposits, and jet fuel expenses. Based on a statistical analysis of our first three years of operations, we believe that our revenues are over 70% correlated with the real/ U.S. dollar exchange rate and jet fuel prices because real depreciations and increases in jet fuel prices are generally incorporated into the fare structures of Brazilian airlines. Approximately 49% of our operating expenses (including aircraft fuel) are denominated in, or linked to, U.S. dollars and therefore vary with the real/ U.S. dollar exchange rate. We believe that our foreign exchange and fuel hedging programs protect us against short-term swings in the real/ U.S. dollar exchange rate and jet fuel prices. Overall, we believe that the combination of our revenue stream, with its correlation to movements in the real/ U.S. dollar exchange rate, and short-term hedges on the U.S. dollar-linked portion of our expenses will mitigate the adverse effect on our operating expenses of abrupt movements in the real/ U.S. dollar exchange rate.

Inflation has also had, and may continue to have, effects on our financial condition and results of operations. Approximately 51% of our operating expenses (excluding aircraft fuel) are denominated in reais and the suppliers and service providers of these expense items generally attempt to increase their prices to reflect Brazilian inflation.

Since the beginning of our operations, the economic environment has been volatile with respect to inflation as well as exchange rate variations, and characterized by low real GDP growth rates. The growth of the Brazilian economy slowed in our first year of operations in 2001 (when real GDP grew by only 1.3%, as compared to 4.4% in 2000). The real depreciated by 18.7% against the U.S. dollar during 2001 and inflation was 10.4% as measured by the IGP-M.

Presidential elections were held in Brazil in 2002. The country went through a period of market turmoil in the second half of the year as investors feared that, if elected, the Labor Party led by Luiz Inácio Lula da Silva would change the economic policies of the previous administration. The real fluctuated significantly as a

In 2003, the new government administration largely continued the macroeconomic policies of the previous administration, focusing on fiscal responsibility. Investor confidence rebounded as a result and the real appreciated by 18.2% against the U.S. dollar to R$2.8892 per US$1.00 at December 31, 2003. The benchmark BOVESPA index rose 97% in 2003. Inflation for the year, as measured by the IGP-M, decreased to 8.7%. However, Brazil’s real GDP decreased by 0.2% during 2003 largely because the very high interest rates that prevailed at the beginning of 2003 to combat inflationary pressures acted to also constrain economic growth. The Brazilian economy showed signs of improvement in the fourth quarter of 2003 and the first quarter of 2004, with real GDP growing by approximately 1.5% in the fourth quarter of 2003 as compared to the third quarter of 2003 and 1.6% in the first quarter of 2004 as compared to the fourth quarter of 2003. The Brazilian Central Bank reduced interest rates seven times during 2003 and twice since the beginning of 2004. As of March 31, 2004, the interest rate was 16.25%.

While Brazil’s total public debt remained relatively high at 57.4% of GDP as of March 31, 2004, Brazil achieved a public sector budget primary surplus (before debt service) of 4.37% in 2003, which was above the target of 4.25% of GDP established by the International Monetary Fund as part of its current loan accord with the country. During 2003, Brazil achieved a trade surplus of US$25 billion, its highest trade surplus ever. Inflation during the first quarter of 2004, as measured by the IGP-M, was 2.7%. The Brazilian Central Bank’s year-end inflation target for 2004 and 2005 is 5.5% and 4.5%, respectively, based on the IPCA index, within a band of 2.5 percentage points. The real depreciated by 0.7% against the U.S. dollar during the three months ended March 31, 2004. On May 28, 2004, the U.S. dollar/real exchange rate was R$3.0961 per US$1.00.

The following table shows data for real GDP growth, inflation, interest rates, the U.S. dollar exchange rate and crude oil prices for and as at the periods indicated.

Sources: Fundação Getúlio Vargas, the Central Bank and Bloomberg


(1)	Inflation (IGP-M) is the general market price index measured by the Fundação Getúlio Vargas.
(2)	Inflation (IPCA) is a broad consumer price index measured by the Instituto Brasileiro de Geografia e Estatística.
(3)	The CDI rate is average of inter-bank overnight rates in Brazil (accumulated for period-end month, annualized).
(4)	Three-month U.S. dollar LIBOR rate as of the last date of the period. The LIBOR rate is the London inter-bank offer rate, which is the rate applicable to the short-term international inter-bank market.
(5)	Represents the average of the exchange rates on the last day of each month during the period, except for periods ended March 31, which represents the average of the highest and lowest exchange rates during the period.

Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003

Our net income for the three months ended March 31, 2004 increased to R$90.7 million from a net loss of R$7.9 million for the three months ended March 31, 2003, an increase of R$98.5 million. We had operating income of R$135.6 million for the three months ended March 31, 2004, an increase of R$126.8 million, and our operating margin was 31.3%, an increase of 27.9 points from the first quarter of 2003. Income and social contribution taxes increased to R$46.7 million for the three months ended March 31, 2004 from R$1.9 million in the three months ended March 31, 2003, reflecting our income before income taxes of R$137.4 million in the three months ended March 31, 2004 as compared to a loss before income taxes of R$5.9 million during the first three months of 2003. Our effective tax rate 34% for the three months ended March 31, 2004.

Net Operating Revenues. Net operating revenues increased 66.2%, or R$ 172.5 million, due primarily to increased passenger revenues. Increased passenger revenues resulted primarily from a 19.6% increase in departures, a 11.5 point increase in our load factor from 60.4% to 71.9% and a 17.9% increase in our yield. The increase in departures is primarily attributable to the addition of four new airport destinations during the first three months of 2004, as compared to the same period in 2003. The increase in our load factor during the first three months of 2004 was largely due to our first full quarter of operating nightflights at competitive fares, which also helped to increase our daily aircraft utilization rate from 12.7 block hours to 13.5 block hours. Other revenue increased by R$6.9 million due primarily to increases in revenues from our cargo service operations. Revenue growth was facilitated by the average number of aircraft in service increasing from 20.3 to 21.7.

Operating Expenses. Operating expenses increased 18.1%, or R$45.6 million, due primarily to operating an average of 1.4 additional aircraft, increased flight departures during the period and an increase in our sales and marketing expenses. Operating capacity increased 18.8% to 2.09 billion available seat kilometers due to scheduled capacity increases and an increase in aircraft utilization by 6.3%. Operating expenses per available seat kilometer decreased 0.5% to R$14.21 cents, primarily as a result of the effect that the 13.3% appreciation of the real against the U.S. dollar during the period had on our U.S. dollar-denominated or –indexed costs, partially offset by a 38.7% increase in sales and marketing expenses. The breakdown of our operating expenses for the three months ended March 31, 2004 compared to the three months ended March 31, 2003 is as follows (percent changes are based on unrounded numbers):

Salaries, wages and benefits increased 42.4%, or R$11.5 million, due to a 15.1% increase in full-time equivalent employees at period end from 2,235 to 2,572 and increases in wage rates of 12.8% due to cost of living increases. Cost per available seat kilometer increased 19.9% due to the salary increases and the increase in average full-time equivalent employees, offset by increased productivity and higher capacity.

Aircraft fuel expense increased 11.0%, or R$9.3 million, due primarily to 14.6 million more liters of fuel being consumed, a 23.9% increase from the amount consumed during the three months ended March 31, 2003, partially offset by a 10.1% decrease in the average fuel cost per liter. Cost per available seat kilometer decreased 6.5% due primarily to the decrease in the average fuel cost per liter.

Aircraft rent decreased 6.8%, or R$3.5 million, due to the 13.3% appreciation of the real against the U.S. dollar during the period, offset by an increase in the average size of our operating fleet to 21.7 from 20.3. Cost per available seat kilometer decreased 21.6% due to higher aircraft utilization and the appreciation of the real against the U.S. dollar.

Aircraft insurance expense decreased 1.5%, or R$0.1 million, due to the 13.3% appreciation of the real against the U.S. dollar during the period and a decrease in average insurance premium rates. Cost per available seat kilometer decreased 17.1% due to higher aircraft utilization, the appreciation of the real against the U.S. dollar and the decrease in average insurance premium rates.

Sales and marketing expense increased 38.7%, or R$15.1 million, primarily due to a higher amount of bookings through travel agents, increased advertising expenses and higher credit card fees resulting from increased passenger revenues. We booked a majority of our ticket sales through a combination of our website (70.8% during the first three months of 2004) and our call center (10.6% during the first three months of 2004). Travel agents accounted for 72.6% of our internet bookings during the first three months of 2004. Cost per available seat kilometer increased 16.8% as a result of these factors.

Landing fees increased 21.9%, or R$2.5 million, due to a 19.6% increase in departures and a 1.9% increase in average landing tariffs. Cost per available seat kilometer increased 2.6%.

Aircraft and traffic servicing expense increased 27.0%, or R$2.9 million, primarily due to an increase in our operations from 24 to 28 airports served and a 19.6% increase in departures. Cost per available seat kilometer increased 7.0%.

Maintenance, materials and repairs increased 32.3%, or R$4.0 million, due to 1.4 average additional aircraft in service as well as one scheduled airframe check and engine repair in the first three months of 2004, partially offset by the 13.3% appreciation of the real against the U.S. dollar during the period. Cost per available seat kilometer increased 11.4% due to the airframe check and engine repair.

Depreciation increased 102.9%, or R$2.3 million, due primarily to a 113.9% increase in our inventory of aircraft spare parts and, to a lesser extent, a 53.4% increase in computer equipment resulting from the expansion of our operations. Cost per available seat kilometer increased 70.9% due to increased depreciable assets.

Other operating expense increased 21.2%, or R$1.8 million, due to an increase in general and administrative expenses related to the expansion of our operations. Cost per available seat kilometer increased 2.0% due to the expansion of our operations.

Other Income (Expense). Interest expense and financial income (expense), net decreased 112.1%, or R$16.5 million, primarily due to increased financial income on higher cash balances and R$2.3 million in non-cash foreign exchange gains on U.S. dollar-denominated maintenance reserves, partially offset by increased working capital financing.

Our net income for the year 2003 increased to R$175.5 million from R$35.4 million for 2002, an increase of R$140.1 million. We had operating income of R$341.7 million, an increase of R$279.6 million over 2002, and our operating margin was 24.4%, an increase of 15.2 points from 2002. Income and social contribution

Net Operating Revenues. Net operating revenues increased 106.6%, or R$722.7 million, due primarily to increased passenger revenues. Increased passenger revenues resulted primarily from a 43.2% increase in departures, a 1.7 point increase in our load factor from 62.5% to 64.2% and a 35.8% increase in our yield. Other revenue increased by R$27.1 million due primarily to increases in revenues from our cargo service operations. Revenue growth was facilitated by the average number of aircraft in service increasing from 15.3 to 21.6.

Operating Expenses. Operating expenses increased 72.0%, or R$443.1 million, due primarily to operating an average of 6.3 additional aircraft during 2003, increased flight departures during the period, an increase in the average cost of jet fuel and an increase in our sales and marketing expenses. Operating capacity increased by 49.1% to 7.53 billion available seat kilometers due to scheduled capacity increases and an increase in aircraft utilization by 4.1%. Operating expenses per available seat kilometer increased 15.3% to R$14.07 cents, primarily as a result of a 19.4% increase in the average cost of jet fuel and a 98.0% increase in sales and marketing expense, partially offset by spreading our fixed costs over a larger fleet and a decrease in our average insurance premium rates. The breakdown of our operating expenses for 2003 compared to 2002 is as follows (percent changes are based on unrounded numbers):

Salaries, wages and benefits increased 76.8%, or R$59.8 million, due to an 18.4% increase in full-time equivalent employees at period end from 2,072 to 2,453, increases in wage rates of 7.8% due to cost of living increases and R$19.1 million in provisions for our profit sharing plan. Cost per available seat kilometer increased 18.6% due to the salary increases and the provision for profit sharing, offset by increased productivity and higher capacity.

Aircraft fuel expense increased 92.0%, or R$147.7 million, primarily due to 100.4 million more liters of fuel being consumed (a 61.2% increase from 2002) and an increase in average fuel cost per liter. Cost per available seat kilometer increased 28.8% due primarily to the increase in the average fuel cost per liter.

Aircraft rent increased 44.4%, or R$58.1 million, due to an increase in the average size of our fleet to 21.6 from 15.3, partially offset by the 18.2% appreciation of the real against the U.S. dollar during the year. Cost

Aircraft insurance expense increased 11.5%, or R$2.7 million, due to higher aggregate premiums paid on a larger fleet size, partially offset by the 18.2% appreciation of the real against the U.S. dollar during the year and a decrease in average insurance premium rates. Cost per available seat kilometer decreased 25.2% due to the appreciation of the real against the U.S. dollar and the decrease in average insurance premium rates.

Sales and marketing expense increased 98.0%, or R$94.7 million, primarily due to a higher amount of bookings through travel agents, increased advertising expenses and higher credit card fees resulting from increased passenger revenues. We booked a majority of our ticket sales through a combination of our website (57.9% in 2003) and our call center (18.5% in 2003). Travel agents accounted for 75.9% of our internet bookings in 2003. Cost per available seat kilometer increased 32.8% as a result of these factors.

Landing fees increased 46.3%, or R$15.2 million, due to a 43.2% increase in departures and a 1.1% increase in average landing tariffs. Cost per available seat kilometer decreased 1.9%.

Aircraft and traffic servicing expense increased 23.9%, or R$11.3 million, primarily due to an increase in our operations from 21 to 28 airports served and a 43.2% increase in departures. Cost per available seat kilometer decreased 16.9% as a result of fixed costs being spread over a higher number of available seat kilometers.

Maintenance, materials and repairs increased 160.1%, or R$25.9 million, due to 6.3 average additional aircraft in operation as well as six scheduled airframe checks and engine repairs in 2003. Cost per available seat kilometer increased 74.5% due to the airframe checks and engine repairs.

Depreciation increased 75.6%, or R$6.0 million, due primarily to a 102.9% increase in our inventory of aircraft spare parts and, to a lesser extent, a 95.4% increase in computer equipment resulting from the expansion of our operations. Cost per available seat kilometer increased 17.8% due to increased depreciable assets.

Other operating expenses increased 96.4%, or R$21.8 million, due to an increase in general and administrative expenses related to the expansion of our operations. Cost per available seat kilometer increased 31.8% due to the expansion of our operations.

Other Income (Expense). Interest expense and financial income (expense), net increased 754.2%, or R$68.5 million, due to increased working capital financing and R$29.9 million in foreign exchange losses recorded on U.S. dollar forward contracts purchased in March 2003 against future lease payments, partially offset by R$16.9 million in non-cash foreign exchange gains on U.S. dollar-denominated maintenance reserves.

Our net income for the year 2002 increased to R$35.4 million from a loss of R$3.7 million for 2001, an increase of R$38.9 million. We had operating income of R$62.1 million in 2002, an increase of R$60.4 million from 2001 and our operating margin was 9.2%, an increase of 8.4 points from 2001. Income and social contribution taxes increased to R$17.6 million in 2002 as compared to no income and social contribution taxes in 2001 due to our R$52.9 million of income before income taxes in 2002 as compared to a loss of R$3.7 million in 2001. Our effective tax rate was 33% in 2002 and we had no tax expense in 2001 due to the loss before income tax.

Net Operating Revenues. Net operating revenues increased 194.1%, or R$447.4 million, primarily due to increased passenger revenues. Increased passenger revenues resulted primarily from a 113.0% increase in departures, a 2.4 point increase in our load factor from 60.1% to 62.5% and a 14.7% increase in our yield. Other revenue increased by R$27.2 million due to increases in revenues from our cargo service operations. Revenue growth was facilitated by the increase in average number of aircraft in service from 7.7 to 15.3.

Operating Expenses. Operating expenses increased by 169.2%, or R$387.0 million, due primarily to operating an average of 7.6 additional aircraft, which provided us with higher capacity. Operating capacity increased by 141.5% to approximately 5.05 billion available seat kilometers due to scheduled capacity increases and an increase in aircraft utilization by 15.0%. Operating expenses per available seat kilometer increased by 11.5% to R$12.20 cents due primarily to a 55.6% increase in the average cost per liter of jet fuel and a 173.7% increase in our sales and marketing expenses. The breakdown of our operating costs for 2002 compared to 2001 is as follows (percentage changes are based on unrounded numbers):

Salaries, wages and benefits increased 134.1%, or R$44.6 million, due to an 84.8% increase in the number of full-time equivalent employees at period end from 1,121 to 2,072 and higher wage rates of 8.9% due to cost of living increases. Cost per available seat kilometer decreased by 3.1% as a result of improved productivity and higher capacity.

Aircraft fuel expense increased 250.8%, or R$114.8 million, primarily due to 86.2 million more liters of fuel consumed (a 110.7% increase from 2001) and also to a 55.6% increase in the average fuel cost per liter. Cost per available seat kilometer increased 45.2% primarily due to the increase in the average fuel cost per liter.

Aircraft rent expense increased 122.3%, or R$71.9 million, due to an increase in the average size of our fleet from 7.7 to 15.3 (including the introduction of three Boeing 737-800 Next Generation aircraft, which have 177 seats) and a 52.3% depreciation of the real against the U.S. dollar during the year. Cost per available seat kilometer decreased 7.9% due to higher aircraft utilization in 2002 and a higher percentage of Boeing 737-800 Next Generation aircraft in our fleet.

Aircraft insurance expense increased 206.9%, or R$15.6 million, due to higher aggregate premiums paid on the larger average fleet size and a 52.3% depreciation of the real against the U.S. dollar during the year. Cost per available seat kilometer increased 27.1% due primarily to the depreciation of the real.

Sales and marketing expense increased 173.7%, or R$61.3 million, due to a higher amount of bookings through travel agents, increased advertising expenses and higher credit card fees resulting from increased passenger revenues. We booked a majority of our flight reservations through a combination of our website

Landing fees increased 124.3%, or R$18.2 million, due to a 113.0% increase in departures and a 5.3% increase in average landing tariffs. Cost per available seat kilometer decreased 7.1%.

Aircraft and traffic servicing expense increased 155.2%, or R$28.8 million, primarily due to an increase in the number of airports served from 16 to 21 and a 113.0% increase in departures. Cost per available seat kilometer increased 5.7% due to the expansion of our operations.

Maintenance materials and repairs increased 238.6%, or R$11.4 million, due to 7.7 average additional aircraft in operation as well as the repair of two aircraft engines during 2002. Cost per available seat kilometer increased by 40.2% due to the engine repairs.

Depreciation increased 230.9%, or R$5.5 million, due to an 82.5% increase in aircraft spare parts inventory and a 137.3% increase in computer equipment resulting from the expansion of our operations. Cost per available seat kilometer increased 37.0% due to the increased depreciable assets.

Other operating expenses increased 192.6%, or R$14.9 million, due to an increase in general and administrative expenses related to the expansion of our operations. Cost per available seat kilometer increased by 21.2% due to the expansion of our operations.

Other Income (Expense). Interest expense and financial income (expense) increased 69.9%, or R$3.7 million, due to increased working capital financing and a R$8.9 million non-cash foreign exchange loss on U.S. dollar-denominated maintenance reserves, partially offset by a R$5.6 million foreign exchange gain recorded on U.S. dollar forward contracts purchased against future lease payments.

In managing our liquidity, we take into account our cash and cash equivalents as well as our accounts receivable balances. Our accounts receivable balance is affected by the payment terms of our credit card receivables. Our customers can purchase seats on our flights using a credit card and pay in installments, typically creating a one-or two-month lag between the time that we pay our suppliers and expenses and the time that we receive payment for our services. When necessary, we obtain working capital loans, which can be secured by our receivables, to finance the sale-to-cash collection cycle. At March 31, 2004, we had cash and cash equivalents of R$191.6 million and accounts receivable of R$216.9 million, as compared to cash and cash equivalents of R$146.3 million and accounts receivable of R$240.6 million at December 31, 2003.

At March 31, 2004, we had four revolving lines of credit, which allow for total borrowings of up to R$150.0 million. Two of our revolving lines of credit are secured by our credit card receivables and allow for borrowings of up to R$123.0 million. As of March 31, 2004, R$49.5 million was outstanding under these facilities. Another revolving credit facility is secured by our travel agency receivables and allows for borrowings of up to R$7.0 million. As of March 31, 2004, R$4.0 million was outstanding under this facility. The other line of credit is secured by promissory notes and allows for total borrowings of up to R$20.0 million. As of March 31, 2004, R$5.0 million was outstanding under this facility.

Operating Activities. We rely primarily on cash flows from operations to provide working capital for current and future operations. Cash flows from operating activities totaled R$85.2 million in 2003, R$17.0 million in 2002 and R$(19.2) million in 2001. Cash flows from operating activities totaled R$32.9 million for the three months ended March 31, 2004 as compared to R$(23.6) million for the three months ended March 31, 2003. The increase in operating cash flows over these periods was primarily due to the growth of our business. Net cash provided by investing and financing activities was R$51.6 million in 2003 and R$23.6 million in 2001. Net cash used in investing and financing activities was R$12.7 million in 2002. Net cash provided by investing and financing activities was R$12.5 million for the three months ended March 31, 2004 and R$36.5 million for the three months ended March 31, 2003.

Our operating cash flows are affected by the requirement under the terms of our aircraft operating leasing agreements that we establish maintenance reserve accounts for our aircraft that must be funded at specified

levels. At March 31, 2004, we had R$206.7 million of deposits under our aircraft operating leases for aircraft and engine maintenance. We believe the amounts deposited in these reserve accounts currently exceed the amounts actually required to maintain our aircraft, given the young age of our fleet. As our fleet ages and maintenance costs increase, funds will be drawn from the maintenance reserve accounts to pay for structural maintenance. Over the next three years, we expect that we will be required to continue to make deposits in maintenance reserve accounts. The amount we will be required to deposit in the maintenance reserve accounts will be affected by a number of factors in addition to our fleet size and number of hours flown, including changes in maintenance rates and the ability to substitute other instruments for cash deposits. We believe the amounts to be deposited will be sufficient to service our future aircraft and maintenance costs for the duration of the applicable operating leases.

Investing Activities. During the three months ended March 31, 2004, capital expenditures were R$6.8 million, which included expenditures of R$4.2 million related to our purchase of aircraft spare parts. Aircraft security deposits were reduced by R$0.1 million during the three months ended March 31, 2004.

During 2003, capital expenditures were R$42.7 million, which included expenditures of R$38.2 million related to our purchase of aircraft spare parts. Capital expenditures for facilities improvements and hardware purchases was R$4.0 million. We reduced our aircraft lease security deposits by R$3.5 million during 2003.

During 2002, capital expenditures were R$22.4 million, which included expenditures of R$16.9 million related to our purchase of aircraft spare parts. Capital expenditures for other property and equipment, including ground equipment purchases and facilities improvements, was R$5.5 million. Aircraft lease security deposits increased by R$12.1 million during 2002.

Financing Activities. Financing activities during the three months ended March 31, 2004 consisted primarily of short-term borrowings of R$19.6 million. Financing activities during 2003 consisted primarily of short-term borrowings of R$16.1 million and the issuance of R$94.2 million of preferred shares of Gol. Financing activities during 2002 consisted primarily of a reduction of short-term debt by R$14.2 million and the issuance of R$16.5 million of common shares. We did not pay any dividends in respect of the fiscal year 2002. We declared R$26.5 million of dividends in respect of the fiscal year 2003, which were accrued on our balance sheet as “Other Current Liabilities” and paid in March 2004. Under our by-laws, at least 25% of our adjusted net income, as calculated under Brazilian GAAP and adjusted under the Brazilian corporation law (which differs significantly from net income as calculated under U.S. GAAP), for the preceding fiscal year must be distributed as a mandatory annual dividend. See “Dividends and Dividend Policy— Mandatory Distributions.” The most significant adjustment to U.S. GAAP net income in arriving at adjusted net income under Brazilian GAAP relates to the accounting for additions to our maintenance deposits. Under U.S. GAAP, additions to our maintenance deposits are capitalized and such deposits are amortized to operating expense as maintenance is incurred. Under Brazilian GAAP, additions to our maintenance deposits are charged to operating expenses when made.

Capital Resources. We typically finance our aircraft through operating lease financings. Although we believe that debt and/or operating lease financings should be available for our future aircraft deliveries, we cannot assure you that we will be able to secure financings on terms attractive to us, if at all. To the extent we cannot secure financing, we may be required to modify our aircraft acquisition plans or incur higher than anticipated financing costs. We expect to continue to require working capital investment due to the use of credit card installment payments by our customers. We have two lines of credit that are secured by our accounts receivable. We expect to meet our operating obligations as they become due through available cash and internally generated funds, supplemented as necessary by short-term credit lines.

We currently have DAC approval to operate 25 aircraft. Our growth plans contemplate operating approximately 69 aircraft by the end of 2010.

We have signed an agreement with The Boeing Company for the firm purchase of 15 737-800 Next Generation aircraft and options to purchase an additional 28 737-800 Next Generation aircraft. The delivery schedule is between 2007 and 2009, in the case of the firm order aircraft, and the purchase options are exerciseable for deliveries between 2005 and 2010. Committed expenditures for these aircraft, based on

aircraft list price and including estimated amounts for contractual price escalations and pre-delivery deposits, are US$8.5 million in 2004, no committed expenditures for aircraft in 2005, US$55.1 million in 2006, US$334.6 million in 2007, US$264.7 million in 2008 and US$197.7 million in 2009. We expect to meet our pre-delivery deposits by using cash from operations or borrowings under short-term credit facilities and/or vendor financing. We expect to finance the balance of the purchase price of the Boeing 737-800 Next Generation aircraft through a combination of means, such as a portion of the proceeds of this offering, funds generated from operations, low-interest bank financing and credit agreements guaranteed by the U.S. Ex-Im Bank, sale and leaseback transactions, additional equity or debt offerings and/or vendor financing. However, we can offer no assurance that financing for the purchase of the new aircraft can be obtained on acceptable terms, if at all.

Our non-cancelable contractual obligations at December 31, 2003 included the following (in millions of reais):

None of our operating lease obligations are reflected on our balance sheet. We are responsible for all maintenance, insurance and other costs associated with operating these aircraft; however, we have not made any residual value or other guarantees to our lessors.

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires our management to adopt accounting policies and make estimates and judgments to develop amounts reported in our consolidated financial statements and related notes. We strive to maintain a process to review the application of our accounting policies and to evaluate the appropriateness of the estimates that are required to prepare our consolidated financial statements. We believe that our estimates and judgments are reasonable; however, actual results and the timing of recognition of such amounts could differ from those estimates. In addition, estimates routinely require adjustment based on changing circumstances and the receipt of new or better information.

Critical accounting policies and estimates are defined as those that are reflective of significant judgments and uncertainties, and potentially result in materially different results under different assumptions and conditions. The policies and estimates discussed below have been reviewed with our independent auditors. For a discussion of these and other accounting policies, see Note 2 to our consolidated financial statements.

Passenger Revenue. Passenger ticket sales are initially recorded as a component of air traffic liability. Revenue is recognized when transportation is provided or when a ticket expires unused.

Accounting for Long-lived Assets. In accounting for long-lived assets, we make assumptions about the expected useful lives of our assets and the potential for impairment. Our long-lived assets are evaluated for impairment when events and circumstances indicate that the assets may be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Indicators include operating or cash flow losses, significant decreases in market value or changes in technology. If impairment occurs, any loss is measured by comparing the fair value of the asset to its net book

Derivative Instruments Used for Aircraft Fuel and Foreign Exchange. We utilize financial derivative instruments to manage the price risk of changing aircraft fuel prices and the foreign exchange risk of our U.S. dollar-denominated liabilities. The contracts are recorded at current market value in the balance sheet with any gains or losses recorded in financial expense. Forward jet fuel prices are estimated through the observation of similar commodity futures prices (such as crude oil) and adjusted based on variations to those like commodities. As the majority of our contracts settle within three months, the variation between estimates and actuals are recognized in a short period of time.

Contingent Liabilities. The accrual for a contingency involves considerable judgment on the part of management. As prescribed by SFAS No. 5, “Accounting for Contingencies,” a contingency is “an existing condition, situation, or set of circumstances involving uncertainty as to possible gain or loss to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur.” We are subject to various claims, legal and labor proceedings covering a wide range of matters that arise in the ordinary course of business activities. We accrue contingency reserves for legal proceedings that we are party to when we determine the losses are probable and can be reasonably estimated. We consider the opinion of our external legal advisors in estimating a potential liability. Reserve balances are adjusted to account for changes in circumstances for ongoing issues and the establishment of additional reserves for emerging issues. While we believe that the current level of reserves is adequate, changes in the future could impact these determinations.

We expect to expand our operations by adding additional flights to existing domestic routes, adding new domestic routes where sufficient market potential exists and expanding into other high-traffic centers in other South American countries. We have applied for regulatory approval of a route between São Paulo (Guarulhos International Airport) and Buenos Aires, Argentina (Ezeiza International Airport). We expect to receive a decision in respect of the application during the second half of 2004. As in previous years, in 2004 we will also concentrate on keeping our operating costs low and pursuing ways to make our operations more efficient.

Given the demand for our services, we believe that we will continue to have significant growth opportunities. We currently have applications with the DAC to add additional routes and flight frequencies. We expect our operating capacity to increase 15% with the addition of up to five aircraft in 2004, which will increase our available seat kilometers and operating costs on an aggregate basis. We expect our costs per available seat kilometer in reais to be higher in 2004, influenced by higher jet fuel prices and the real/ U.S. dollar exchange rate movements, partially offset by our fixed costs being spread over higher projected available seat kilometers. We plan to use our fuel and foreign exchange hedging programs to help protect us against short-term movements in crude oil prices and the real/ U.S. dollar exchange rate.

At a shareholders’ meeting held on May 25, 2004, our shareholders approved an executive stock option plan for key senior executive officers. Under this plan, we have issued stock options to executive officers to purchase up to 937,412 of our preferred shares at an exercise price of R$3.04 per share. One half of the options may be exercised beginning on October 25, 2004, with the remaining 50% vesting at the end of each quarter subsequent to October 25, 2004. Each option will expire two years after its vesting date. In connection with the initial grant of stock options, we will record deferred stock compensation of R$20.1 million, representing the difference between the exercise price of the options and the deemed fair value of the preferred shares, which we have calculated assuming the midpoint of the range on the cover of this prospectus. This amount will be amortized to operations over the vesting period on a straight-line basis. The amortization of stock options is expected to be approximately R$11.1 million in 2004, R$6.7 million in 2005 and R$2.3 million in 2006. This grant did not affect previously reported earnings per share information.

We expect to reserve up to 16,000,000 preferred shares for issuance, under two separate stock option plans, over a three- to five-year period. See “Management and Corporate Governance— Executive Stock Options” and “—Stock Option Plan.”

The risk inherent in our market risk sensitive instruments and positions is the potential loss arising from adverse changes to the price of fuel, interest rates and the real/ U.S. dollar exchange rate.

Aircraft Fuel. Our results of operations are affected by changes in the price and availability of aircraft fuel. To manage the price risk, we utilize crude oil derivative contracts. All of our derivative instruments must be liquid so as to allow us to make position adjustments and have prices that are widely disclosed. We avoid concentration of credit risk. All existing contracts settle on a monthly basis. We do not purchase or hold any derivative instruments for trading purposes. At December 31, 2003 we had crude oil derivative contracts outstanding for up to 103,000 barrels of oil. The fair value of such contracts was minimal, as they were entered into near the end of 2003. Market risk is estimated on a hypothetical 10% increase in the March 31, 2004 cost per liter of fuel. Based on projected 2004 fuel usage, such an increase would result in an increase to aircraft fuel expense of approximately R$37.2 million in 2004, not considering our derivative contracts.

Foreign Currencies. A significant part of our costs and operating expenses, such as aircraft and engine maintenance services, aircraft lease payments and aircraft insurance, are denominated in U.S. dollars. To manage exchange rate risk, we enter into derivative contracts with various counterparties to protect ourselves against a possible depreciation or devaluation of the real in relation to the U.S. dollar. At December 31, 2003, we had foreign currency future contracts outstanding with a notional value of R$75.0 million, with an estimated fair value of approximately R$2.0 million. As of March 31, 2004, as a measure of our market risk with respect to our foreign currency exposure, an increase in aircraft and engine maintenance services expenses, aircraft operating lease payments and aircraft insurance from a hypothetical R$0.10 depreciation of the real against the U.S. dollar would be approximately R$25.6 million in 2004, not considering our derivative contracts.

Interest. Our earnings are affected by changes in interest rates due to the impact those changes have on interest expense from variable-rate debt instruments, variable-rate leasing contracts and on interest income generated from our cash and investment balances. At December 31, 2003, 20% of our aircraft rental expenses had floating interest rates. If interest rates average 10% more in 2004 than they did during 2003, our aircraft rental and interest expense would increase by approximately R$8.9 million. If interest rates average 10% less in 2004 than they did in 2003, our interest income from cash equivalents would decrease by approximately R$2.0 million. These amounts are determined by considering the impact of the hypothetical interest rates on our variable-rate debt, variable-rate leasing contracts and cash equivalent balances at December 31, 2003.

The majority of long-distance public travel services within Brazil is provided by interstate bus companies. In 2002, Brazil’s domestic airline industry transported over 30 million passengers, as compared to the over 130 million passengers transported by interstate bus companies in 2000 (the last publicly-available data), according to the Brazilian Department of Highways (Departamento de Transportes Rodoviários). Brazil has no meaningful interstate passenger rail services.

The Brazilian civil aviation sector is divided predominately into the following four main categories:


	•	Domestic airlines, which provide scheduled public transportation services within Brazil and primarily operate large aircraft between major cities.

	•	Regional airlines, which provide scheduled public transportation services within Brazil, generally linking smaller cities with major cities. Typically, regional carriers operate smaller aircraft such as regional jets and turbo props.

	•	Charter airlines, which provide non-scheduled transportation services.

	•	International airlines, which operate scheduled international air services to and from Brazil.

The scheduled passenger aviation market in Brazil consists of two principal types of travelers: business and leisure. Business passengers generally place an emphasis on an airline’s frequency of flights, reliability, availability of direct flights, breadth of network and service enhancements and are increasingly sensitive to price. Passengers traveling for leisure or to visit friends and relatives generally place more emphasis on prices and are more willing to be flexible when making travel arrangements.

Since air transportation has historically been affordable only to the higher income segment of Brazil’s population, we believe that the low-cost, low-fare business model has the potential to significantly increase the use of air transportation in Brazil. According to the DAC, there were over 30 million enplanements in Brazil in 2002, out of a total population of approximately 175 million, according to the Instituto Brasileiro de Geografia e Estatística— IBGE. In contrast, the United States, with a total population of approximately 293 million according to the latest U.S. census figures, had more than 700 million enplanements in 2002, according to the U.S. Department of Transportation.

The business travel sector is the largest and the most profitable segment of the Brazilian civil air transportation industry. According to the DAC, business travel represents approximately 70% of the total demand for domestic air travel, which we believe is significantly higher than the proportion of domestic air travel in the global aviation sector that is comprised of business travel. Within Brazil, small-and mid-sized businesses, which comprise a large segment of our customer base, emphasize receiving good value from their air travel service providers that balances quality and frequency of service with affordable fares.

According to data collected from the DAC, flights between Rio de Janeiro and São Paulo, and Brasília and São Paulo, accounted for 6.8% of all domestic passengers (arriving and departing) in both 2001 and 2002. The ten busiest city pair routes accounted for 15.9% and 16.5% of all domestic air passengers (arriving and departing) in 2001 and 2002, respectively, while the ten busiest airports accounted for 72.8% and 73.8% of all domestic passenger traffic in terms of arrivals and departures in 2001 and 2002, respectively.

The domestic passenger airline industry in Brazil is currently served by Gol and three legacy airlines:


	•	Varig, a full-service carrier, which offers scheduled services on both domestic and international routes;

	•	TAM, a full-service carrier, which offers scheduled services primarily on domestic and, to a lesser extent, international routes; and

	•	VASP, a full-service carrier, which offers scheduled services on domestic routes.

In 2003, Gol and the three Brazilian legacy airlines described above accounted for over 98% of the market share of domestic regular routes, measured by revenue passenger kilometers. We began transporting passengers in 2001, and by March 31, 2004, we had captured 22.5% of domestic market share. Our competitors, TAM, Varig and VASP, accounted for 33.3%, 30.4%, and 11.8% of the domestic market share as of March 31, 2004, respectively.

In February 2003, Varig and TAM began discussions to merge their operations to form an airline that, if combined, would consist of over 150 aircraft, and would have had a 64% market share as of March 31, 2004, based on revenue passenger kilometers. Since that time, Varig and TAM have been operating under a temporary code-sharing arrangement. No final decision regarding whether the parties will proceed with the proposed merger has been announced.

In 2000, VASP underwent a financial and administrative restructuring including management downsizing, rescheduling of debts and reorganization of domestic and international routes. As part of the restructuring, VASP began to cancel certain international flights and returned several aircraft to lessors. By the end of 2000, VASP had withdrawn entirely from international markets. As a result of the restructuring, VASP’s market share, measured in terms of passenger kilometers, declined from 17.2% in 1999 to 11.8% as of March 31, 2004.

In the 1990’s, Transbrasil operated as one of Brazil’s four major airlines. In 2001, Transbrasil had a series of aircraft grounded for maintenance related issues and had aircraft repossessed by leasing companies due to non-payments. In February 2002, the DAC suspended Transbrasil’s Air Carrier Recognition Certificate (Certificado Homologação de Empresa de Transporte Aéreo, or CHETA), a document certifying that an airline’s equipment is adequately maintained and without which a company cannot fly. Later that year, Transbrasil ceased operations. Transbrasil’s concession agreement lapsed on October 10, 2003 and was terminated by the High Command of Aeronautics on March 5, 2004.

The Brazilian civil aviation market follows the highest recognized safety standards in the world. Brazil is classified as a Category 1 country in flight safety standards by the International Civil Aviation Organization, which is the same classification held by the United States and Canada.

Since 1970, Brazil has for the most part had stable growth in revenue passenger kilometers. From 1970 to 2003, revenue passenger kilometers grew at a compound annual rate of 12%. In the past 33 years, the domestic market generally experienced year over year growth in revenue passenger kilometers except in times of significant economic or political distress, such as the petroleum crisis in the 1970’s, the Brazilian sovereign debt crisis in the early 1980’s and the economic and political distress in Brazil in the early 1990’s.

Over the last seven years, the compound annual growth rate in industry passenger traffic, in terms of revenue passenger kilometers, was 5.9% versus a compound annual growth rate in available industry capacity, in terms of available seat kilometers, of 5.0%. Industry load factors, calculated as revenue passenger kilometers divided by available seat kilometers, have remained relatively stable over the same period, with an average load factor of 58%. The following table shows the figures of industry domestic passenger traffic and available capacity for the periods indicated:

Historically, domestic airline industry revenue growth has generally surpassed Brazilian gross domestic product growth. From 1997 to 2002, domestic airline industry revenue grew at a real compound annual growth rate of 7.1% while Brazilian gross domestic product has grown at a real compound annual growth rate of 1.7% over the same period, according to data from the DAC and the Central Bank.

The airline industry in Brazil is regulated pursuant to Law No. 7,565, of December 19, 1986, also known as the Brazilian Aeronautical Code, as well as extensive regulations issued by the High Command of Aeronautics of the Ministry of Defense (Comando da Aeronáutica), the CONAC, and the DAC. Although the Brazilian airline sector was deregulated in the early 1990s, the DAC has imposed varying degrees of regulation since that time, and is charged with guiding, planning, stimulating and supporting the activities of public and private civil aviation as well as implementing international rules and conventions that have already been adopted by the Brazilian government. Changes in regulation often correspond to major socio-economic events, such as the Persian Gulf War and the September 11, 2001 terrorist attacks, and we believe have been designed to shelter domestic carriers from major economic shocks. Currently, the DAC imposes a series of restrictions and demands on the standards, safety, maintenance, regularity and quality of air carrier operations.

Brazilian airlines are permitted to establish their own domestic fares. Domestic fares can be reviewed by the DAC in order to prevent airlines, which are public concessionaires, from operating in a way that is detrimental to their economic viability. The DAC also monitors concession of slots, entry of new companies, launch of new routes, increases in route frequencies and lease or acquisition of new aircraft. The regulatory environment relating to the Brazilian civil aviation market is currently in the process of evolving, and a number of new laws are being discussed in Congress and within various regulatory bodies that would change the way in which the industry is regulated. See “Regulation of the Brazilian Civil Aviation Market.”

From 1986 until 1993, the Brazilian government placed a stricter control over local civil aviation activities, due to the extremely high rates of inflation that led to a severe economic crisis in Brazil during this period. The control exercised by the Brazilian government consisted mainly of monitoring air ticket prices charged by airlines and directing the use and expansion of their routes. In 1994, after a successful effort to curb inflation rates and stabilize the Brazilian economy, the Brazilian government, through the aviation authorities, began to deregulate the activities of the airline industry, which mainly consisted of a gradual reduction of the government control over the local activities of airlines. Although the airline industry in Brazil is still a regulated environment, the current rulings of the DAC are significantly more flexible than past regulations and a number of underlying regulatory acts have been frequently issued by the aviation authorities in order to harmonize the Brazilian regulatory environment with international and modern regulatory models.

In 2003, the CONAC issued guidelines to limit the entry of new concessionaires, the acquisition of new aircraft and the granting of new routes to existing concessionaires in order to protect the financial performance of the Brazilian airline industry as a whole. Based on these guidelines, in order to obtain authorizations for existing concessionaires to operate new routes and to change existing ones, the applicant must file with the DAC studies to justify the technical and economic viability of the requested route and the DAC will also consider the capacity of the airport infrastructure support, the increase in demand and competition among airlines.

The current regulatory environment was developed following an economic slowdown in Brazil and a significant decline in passenger air traffic in late 2001. According to the DAC, accumulated losses for the airline sector grew to R$6.75 billion in 2002 from R$1.47 billion in 2001. We believe the current regulatory regime has benefited the financial performance of the Brazilian airline sector. Brazilian airline industry yields improved from R$0.29 in 2002 to R$0.32 in 2003 with load factors of 57% in 2002 and 59% in 2003.

We are the only low-fare, low-cost airline operating in Brazil providing frequent service on routes between all of Brazil’s major cities. We focus on increasing the growth and profitability of our business by stimulating and meeting demand for affordable, convenient air travel in Brazil for both business and leisure passengers. We do this by offering simple, safe and efficient services while having among the lowest operating costs in the airline industry worldwide.

We have flown over 16 million passengers since beginning operations and, according to the DAC, Brazil’s civil aviation authority, our share of the domestic market based on revenue passenger kilometers grew from 4.7% in 2001 to 11.8% in 2002, 19.2% in 2003 and 22.5% during the first quarter of 2004.

We began our operations in January 2001 with six single-class Boeing 737-700 Next Generation aircraft serving five cities in Brazil. Currently, we operate 22 single-class Boeing 737-700/800 Next Generation aircraft serving 29 cities in Brazil. We expect to take delivery, under two-year operating leases, of three Boeing 737-300 aircraft in the third quarter of 2004 and up to two additional Boeing 737-300 aircraft later in 2004, which we will use to help meet our short-term capacity needs. We have signed an agreement with The Boeing Company for firm orders for 15 737-800 Next Generation aircraft and options to purchase an additional 28 737-800 Next Generation aircraft. The firm order aircraft are scheduled to be delivered between 2007 and 2009, and the purchase options are exerciseable for deliveries between 2005 and 2010, up to a maximum of five optioned aircraft per year.

We offer travelers in Brazil a low-fare transportation alternative that we believe is cost-competitive versus conventional airline and bus transportation. We have a diversified revenue base, with customers ranging from business passengers traveling within densely populated centers in Brazil, such as São Paulo, Rio de Janeiro and Belo Horizonte, to leisure passengers traveling to destinations around Brazil. We carefully evaluate opportunities to continue the growth of our business through increasing the frequency of flights to our existing high-demand markets and adding new routes to underserved regions in Brazil. We are also pursuing opportunities to offer services on routes to high-traffic centers in other South American countries. We have applied for regulatory approval of a route between São Paulo (Guarulhos International Airport) and Buenos Aires, Argentina (Ezeiza International Airport). We expect to receive a decision in respect of the application during the second half of 2004.

Our affordable, reliable and simple service and our focus on markets that were either underserved or did not have a lower-fare alternative has led to a strong awareness of our brand and a rapid increase in our market share. Generally, our low operating costs allow us to set our fares at levels significantly lower than the average fares of most of the competing legacy Brazilian airlines. This approach has helped us win customer loyalty and in certain markets to stimulate demand by attracting new customers who previously used other means of travel or traveled less often due to price sensitivity. We have kept our operating costs low principally by maintaining a simplified aircraft fleet that is one of the industry’s newest, which reduces maintenance and fuel costs and facilitates our high aircraft utilization. We offer a simplified product to our customers with single-class seating and a light snack and beverage service. We do not offer frequent flyer programs or airport lounges. We use the latest technology and actively encourage internet sales to reduce our distribution costs and improve our operating efficiency. We have developed an innovative company culture that is supported by a highly motivated and streamlined workforce. Members of our senior management team have an average of approximately 20 years of experience in the domestic and international passenger transportation industries, and we have been able to draw upon this extensive experience to develop our low-cost operating structure.

Our emphasis on controlling costs and yield management has given us flexibility in setting our fares to achieve a balance between our load factors and yields that we believe will generate the highest profitability for us. During a time of decreasing passenger traffic due to a leveling of overall economic growth in Brazil, we generated net income of R$175.5 million in 2003. Our profitable results in 2003 were due largely to a cost per available seat kilometer that was approximately 25% lower than that of our competitors, according to data

Through low fares and reliable service, we achieved a load factor of 72% in the first quarter of 2004. We had an average load factor of 64% during 2003, as compared to an average domestic load factor of 59% for our three largest Brazilian competitors in the same period, according to the DAC. During this period, we maintained high standards of operating efficiency and customer satisfaction, completing 97% of our scheduled flights with on-time performance of 96%. In the first quarter of 2004, we completed 99% of our scheduled flights with an on-time performance of 95%.

We are controlled by Brazil’s Áurea group. The Áurea group has more than five decades of successful operating experience in Brazil’s bus transportation industry, and brings the benefits of this expertise in the Brazilian transportation industry to our strategy and operations. In February 2003, AIG Brazil Special Situations Fund, through wholly-owned subsidiaries, ultimately acquired a 12.5% equity stake in our company.

We Keep Our Operating Costs Low. Our cost per available seat kilometer for the year ended December 31, 2003 was R$ 0.141, or US$0.048. We believe that our cost per available seat kilometer for the year ended December 31, 2003, as adjusted for the average number of kilometers flown per flight, was lower than that of many of the world’s most profitable low-cost carriers, and was on average approximately 25% lower than that of the Brazilian legacy airlines, according to data collected from the DAC. Our cost per available seat kilometer for the three months ended March 31, 2004 was R$0.142, or US$0.049. Typically, airline operating costs per kilometer decrease as flight length increases. Our low operating costs are the result of a number of different measures that we have taken to improve our operating efficiency, including:


	•	Efficient use of aircraft. During the three months ended March 31, 2004, our aircraft flew an average of 13.5 block hours per day. During 2003, our aircraft flew an average of 12.8 block hours per day, the highest aircraft utilization rate in the Brazilian domestic airline industry according to the DAC and among the highest worldwide according to airline company public filings. We achieve high aircraft utilization rates by operating a new fleet that requires less maintenance down time, accomplishing a fast turnaround on our aircraft between flights and operating more flights per day with each aircraft than our competitors. The fast turnaround time for our aircraft between flights, which averages just 25 minutes, minimizes connection times for our passengers and enables our aircraft to fly an average of 11 flight legs a day, as compared to an estimated average of 7 flight legs a day by our competitors. We increase the speed of preparing our aircraft for the next flight by loading and unloading passengers through front and rear aircraft doors when possible, minimizing catering requirements and having cabin crew assist with cleaning the aircraft. Our efficient use of our fleet has helped us to generate revenue at times when the aircraft of our competitors are grounded and has allowed us to spread our fixed costs over a greater number of flights and available seat kilometers. As a part of our aircraft utilization strategy, we introduced night flights on certain routes in December 2003 at very low fares to increase utilization, generate higher load factors and stimulate demand. Our night flights, which generated average load factors of 88% during the first quarter of 2004, have helped us to make our fleet productive throughout the 24-hour day. We also offer air cargo services to generate incremental revenue from space in the stronghold sections of our aircraft that would otherwise remain unutilized.


	•	Operation of a simplified fleet. Currently, we operate a simplified fleet type consisting of 22 Boeing 737-700/800 Next Generation aircraft. We plan to add up to five Boeing 737-300 aircraft in 2004 under two-year operating leases to help meet short-term capacity needs and we have firm orders and purchase options for up to 43 additional Boeing 737-800 Next Generation aircraft. Delivery of the firm order aircraft is scheduled to occur between 2007 and 2009 and the purchase options are exercisable for deliveries between 2005 and 2010. Having a fleet with minimal aircraft types reduces inventory costs, as fewer spare parts are required, and reduces the need to train our pilots to operate different types of aircraft. In addition, keeping the number of types of aircraft we operate to a minimum simplifies our maintenance and operations processes, as our maintenance technicians become better trained and perform maintenance procedures more efficiently. While our focus on having the lowest operating costs means that we will periodically review our fleet composition to ensure that it is achieving our low-cost goals, any decision we may make to introduce a new fleet type will be made only after carefully weighing the performance and profitability benefits of doing so against the emphasis we place on maintaining simplified operations.

	•	Ability to take advantage of competitive outsourcing opportunities. We have entered into arrangements on competitive terms with third-party contractors at certain airports for passenger, aircraft and baggage handling, call center customer services and other services that we believe can be more efficiently provided by third parties. We negotiate competitive rates for these services by negotiating multi-year contracts at prices that are fixed or subject only to periodic increases linked to inflation.

	•	High proportion of internet sales. We actively encourage our customers and travel agents to purchase seats on our flights via our website so as to keep our distribution costs low. It costs us an average of approximately R$2.11 to book a seat purchased directly by a customer using our website as compared to an average cost of approximately R$3.95 per booking by travel agents using our website, R$4.50 per booking for call center sales and approximately R$10.50 per booking for sales using the Global Distribution System, or GDS, database. In 2003, approximately 58% of our sales were made through our website directly to our customers and to travel agents. During the three months ended March 31, 2004, 71% of our sales were made through our website directly to our customers and to travel agents. We believe this represents one of the highest internet booking ratios in the airline industry worldwide. Our focus on increasing the proportion of internet sales made directly by our customers has helped to keep our third-party distribution costs low.

	•	Adoption of best practices of other low-cost airlines to keep our costs low. Our booking system is the same cost-efficient system used by other successful low-cost airlines worldwide. We estimate that our cost of distribution to customers using our booking system is approximately 62% lower than our distribution costs involving more traditional means, such as GDS. In addition, like other low-cost carriers, but unlike our competitors, all travel on our flights is ticketless. The elimination of paper tickets saves paper costs, postage, employee time and back-office processing expenses. Passengers are also able to check in over the internet, as well as being checked in by our agents using wireless hand-held devices at many of our airports. Consistent with the approach taken by other successful low-cost carriers, we keep our product offering simple to keep our costs low. We do not have a frequent flier program or airport lounges and offer only light snacks and beverages on our flights.

We Offer Our Customers Low Fares. We believe that through our low fares and high-quality service, we provide the best value in our markets. Our average fares are lower than the average fares of the Brazilian legacy carriers. We identified a demand among both business and leisure passengers for air travel that is convenient, simple and is a reasonably priced alternative to traditional air, bus and car travel. By combining low fares with simple and reliable service that treats passengers equally in a single-class environment, we have successfully increased our market share, strengthened customer loyalty and are attracting a new group of air travelers in our service areas. These new travelers did not previously consider air travel when making their plans due to the higher prices and more complicated booking procedures that preceded our entry into the market. For example our night flights, for which we offer highly competitive fares, have proven to be very successful, generating average load factors of 88% during the first quarter of 2004. We believe our night flights attract passengers who previously relied upon bus or car travel.

We Have One of the Newest Fleets in the Industry. Our current fleet of 22 Boeing 737-700/800 Next Generation aircraft has an average age of 2.8 years, making our fleet the newest in South America and one of the newest in the industry worldwide. We believe that the firm orders and purchase options we have for the delivery of up to 43 new Boeing 737-800 Next Generation aircraft, with expected delivery dates between 2005 and 2010, will help us to retain this competitive advantage. Our new fleet has enabled us to enjoy a high degree of performance reliability and to develop a reputation among customers for being an airline that delivers a safe, on-time, modern and comfortable travel experience. Our Next Generation aircraft type provides us with state-of-the-art technology and aerodynamics to increase flying speed, improved fuel efficiency, simplified maintenance procedures and a more flexible seat configuration that allows us to make adjustments to effectively manage our yield and load factor on our routes in response to market developments.

We Have a Strong Brand that Is Widely Recognized Among Consumers. We believe that the Gol brand has become synonymous with innovation and value in the Brazilian domestic airline industry. Our customers identify us as being accessible, friendly, fair and reliable and distinguish us in Brazil’s domestic airline industry on the basis of our updated and simplified approach to providing air travel services. Customer satisfaction surveys conducted in September 2003 by Omni Marketing, an independent third-party market research firm, indicated that more than nine out of every ten passengers on Gol would recommend us to others, would fly with us again and consider our approach to air travel to be innovative. Our effort at promoting our brand awareness has earned us recognition from the marketing industry in Brazil as well. Our advertising campaigns received the Top of Marketing award from Brazil’s Association of Marketing and Sales Directors in 2002 and our website won the Ibest award, a major internet-related award in Brazil, for the best transportation website in 2003.

We Have a Strong Financial Position. We have focused on maintaining a strong financial position with significant cash balances and a low debt to capitalization ratio. At March 31, 2004, we had R$191.6 million of cash and cash equivalents, R$216.9 million of accounts receivable and R$206.7 million of U.S. dollar denominated deposits for aircraft leasing and aircraft engine maintenance contracts, representing a total of R$615.2 million. At March 31, 2004, we had a debt to capitalization ratio of 11.9%.

We Have a Motivated Workforce and a Proven Management Team. We benefit from a highly motivated workforce that brings a new enthusiasm to air travel and a commitment to high standards of friendly and reliable quality service that we believe distinguishes us in our markets. We believe that the positive feedback we received from our customers in our customer satisfaction surveys is directly related to the priority our employees place on delivering top quality customer service. We invest a significant amount of time and resources into carefully developing the best training practices and selecting individuals to join our team who share our focus on ingenuity and continuous improvement. We conduct ongoing training programs that incorporate industry best practices and encourage strong and open communication channels among all of the members of our team so that we can continue to improve the quality of the services we provide. We also motivate our workforce by providing our employees with profit sharing. Our top managers have an average of 20 years of experience in the Brazilian passenger transportation industries and this experience has helped us to develop the most effective elements of our low-cost model.

To continue the growth of our business and increase its profitability, our strategy will be to continue to offer a single-class of air travel service at low fares, while maintaining high-quality standards, keeping our operating costs low and relentlessly pursuing ways to make our operations more efficient. Our objectives are to provide the best travel value in the markets we serve, to encourage people to fly by making air travel accessible in our markets and to further increase our market share. We will continue to evaluate opportunities to expand our operations by adding additional flights to existing domestic and night-flight routes, adding new domestic routes where sufficient market demand exists and expanding into other high-traffic centers in other South American countries. The following are the key elements of our strategy:

service based upon the extent and type of demand in the regions we serve. In particular, we expect to increase our focus on business travelers from medium-sized companies, a growing customer base that tends to be more price sensitive, by closely monitoring the routes and flight frequencies that best serve their travel needs and increasing our marketing efforts directed at this segment of our customer base. For example, in response to the high volume of business travelers between Brazil’s primary financial centers, São Paulo and Rio de Janeiro, we have increased our flight frequency on this route from 5 flights per day when we began transporting passengers in January 2001 to 38 flights per day at the end of the first quarter of 2004. We are also very focused on stimulating demand and capturing market share in both the leisure and “visiting friends and relatives” market segments. In addition, in response to a perceived demand for late evening flights linking São Paulo and Rio de Janeiro to avoid the need for overnight stays, we added night flight services between the two cities in December 2003. Our night flights generated average load factors of 88% during the first quarter of 2004. We will also focus upon meeting the travel needs of cost-conscious business passengers traveling between underserved secondary markets in Brazil.

We will continue to carefully evaluate opportunities to meet demand for leisure travel by expanding flight frequencies on existing routes, expanding successful night flight services and adding additional routes where we perceive a market demand, such as daytime flights to and from the Guarulhos airport in São Paulo, Brazil’s largest airport. We are also pursuing opportunities to offer services on routes to select cities in other South American countries where similar opportunities exist.

To Continue to Reduce Our Operating Costs. Continuing to reduce our operating costs per available seat kilometer is a key to increasing profitability. We aim to remain one of the lowest cost airlines in the world. To date, we have worked toward achieving this goal by assembling a new fleet of single-class aircraft that is capable of safely and reliably accommodating a high utilization rate, incurs low maintenance costs and is fuel-efficient. We are also working to achieve this goal by using our aircraft efficiently, concentrating on minimizing our turnaround times at airports and increasing our number of daily flights per aircraft. We will also continue to utilize technological innovations wherever possible to reduce our distribution costs and improve our operating efficiency. We expect to benefit from economies of scale and reduce our average cost per available seat kilometer as we add additional aircraft to an established and efficient operating infrastructure.

To Keep Our Customer Service Offering Simple and Convenient. We believe that we are perceived by our customers as providing excellent value at reasonable fares and acting as a catalyst for changing the way the Brazilian airline industry works. In addition to offering low fares, our strategy is to make flying a simpler, more convenient experience. We have achieved this objective largely through the elimination of unnecessary extras and common-sense applications of technology. We encourage our customers to use the internet not only to make reservations, but also to make many of the arrangements from the comfort of their home or office that they would otherwise have to make at crowded airports, such as checking-in and changing their seat assignments online. We provide free shuttle service between airports and drop-off zones in selected routes. We offer customers single-class, pre-assigned seating flights, do not overbook our flights and have designated female lavatories. Our strategy will be to continue to seek ways to make the Gol brand signify simplicity and convenience in the minds of air travelers.

To Stimulate Demand with Low Fares. Our widely available low fares and superior product offering are designed to stimulate demand, particularly from fare-conscious leisure travelers and small- to mid- size businesses who might otherwise have used alternative forms of transportation or would not have traveled at all. Our strategy will be to continue to stimulate demand by continuing to provide superior products and low-fare. We will also continue to provide our customers with a variety of flexible payment mechanisms, such as

As of March 31, 2004, we provided regularly scheduled services to 28 cities in Brazil. In May 2004, we received approval from the DAC to provide regularly scheduled services to four additional cities in Brazil— Joinville, Uberlândia, Porto Velho and Rio Branco— which are scheduled to commence in the second half of 2004. Our aircraft fly to various points on our route network linking our destinations. We generally offer direct flights between city pairs with high traffic volumes, such as São Paulo to Rio de Janeiro, which enables many of our business travelers to fly with us directly to their destinations. However, after directly connecting high-density cities along the primary business routes, our aircraft often make multiple stops linking other destinations in Brazil, thereby also attracting passengers who prefer to pay lower fares even if this means making one or more stops or connections before reaching their final destination. This variation on the point-to-point approach to routing means, for example, that an aircraft flying on a high-traffic route such as between São Paulo and Brasília may, instead of returning to São Paulo upon the completion of the leg, continue northward from Brasília to Belém and then westward to Manaus before returning southward. We believe this model of flight scheduling has helped us to more frequently serve a greater number of cities and to generate higher load factors, enabling us to increase aircraft utilization and providing us with greater flexibility in our scheduling options.

The following table sets forth the cities we serve in Brazil, the number flights we operate per day serving those cities and the service commencement date (fractions have been rounded):

In addition to monitoring growing market demand for increased daily flight frequency on our existing routes, we also seek to offer services in markets with previously untapped demand. For example, the highly competitive fares we offer for travel on our night flights have been set to compete with interstate bus companies for customers who may otherwise not have previously considered air travel as an option due to price sensitivity. We are also pursuing opportunities to offer services on routes to select cities in other South American countries where favorable market opportunities exist. We have applied for regulatory approval of a route between São Paulo (Guarulhos International Airport) and Buenos Aires, Argentina (Ezeiza International Airport). We expect to receive a decision in respect of the application during the second half of 2004.

We recognize that while low fares may initially encourage people to fly with us, we must move to ensure that a new customer will become a repeat customer. As a result, we pay particular attention to the details that help to make for a pleasant, hassle-free flying experience, including:


	•	ticketless travel;

	•	convenient on-line check-in and seat assignment options;

	•	airport parking discounts;

	•	designated female lavatories on flights;

	•	single-class, pre-assigned seating;

	•	friendly and efficient in-flight service;

	•	modern aircraft interiors;

	•	quick turnaround times at airport gates; and

	•	free or discounted shuttle services between airports and drop-off zones on certain routes.

We also understand that efficient and punctual operations are of primary importance to our customers. This emphasis resulted in a completion factor of 97% and an on-time performance rate of 96% in 2003. In the first quarter of 2004, we completed 99% of our scheduled flights with an on-time performance of 95%.

Based on feedback from our customers, we believe we are meeting and exceeding their service expectations, as more than 90% of those responding to a September 2003 customer satisfaction survey conducted by Omni Marketing, an independent third-party market research firm, indicated they would recommend flying with us, would fly with us again, and consider us to be an innovative airline.

Our most important priority is the safety of our passengers and employees. We maintain our aircraft in strict accordance with manufacturer specifications and all applicable safety regulations, and perform routine line maintenance every day. Our pilots have extensive experience, with flight captains having more than 10,000 hours of career flight time, and we conduct ongoing courses, extensive flight simulation training and seminars addressing the latest developments in safety and security issues. We closely follow the standards established by the Air Accident Prevention Program of the DAC and we have installed the Flight Operations Quality Assurance System, which maximizes proactive prevention of incidents through the systematic analysis of the flight data recorder system. All of our aircraft are also equipped with Maintenance Operations Quality Assurance, a troubleshooting program that monitors performance and aircraft engine trends. The Brazilian civil aviation market follows the highest recognized safety standards in the world. Brazil is classified as a Category 1 country in flight safety standards by the International Civil Aviation Organization, which is the same classification held by the United States and Canada.

We actively encourage the use of direct internet bookings by our customers because it is our most efficient distribution channel, costing an average of approximately R$2.11 for each booking made directly by a customer. By comparison, internet sales though travel agents cost an average of approximately R$3.95 per booking, call center sales cost an average of approximately R$4.50 per booking and GDS sales cost an average of approximately R$10.50 per booking. For the year ended December 31, 2003, approximately 56% of our overall sales, whether directly from the customer or through travel agents, were made via the internet, making us one of the worldwide industry leaders in this area, as compared to 19% and 12% of our overall sales being made through call centers and the GDS, respectively. The remaining 13% of our sales for the year ended December 31, 2003 were booked through our airport ticket counters and our internal systems. We estimate that we sell a seat through our website every three seconds. Our advertising campaigns highlighting the advantages of internet-based reservations have been very successful, contributing to a 324% increase in internet sales during the period from the commencement of our operations in January 2001 to the end of 2003, which in turn has helped us to keep our distribution costs low. For the three months ended March 31, 2004, approximately 71% of our overall sales, whether directly from the customer or through travel agents, were made via the internet.

We outsource work related to our call center distribution channel to independent contractors working under the supervision of Gol employees. Outsourcing our call center services is the most cost-effective option for us because our call-center service contractor is paid based only upon the amount of time call center personnel spend responding to calls from our customers. Another measure we have taken to contain distribution costs is to issue paperless tickets only, which saves paper costs, postage, employee time and back-office processing expenses.

Unlike other Brazilian airlines, we do not accept customer reservations for flights, but instead sell seats that must be paid for by our customers at the time of booking. This eliminates the possibility of overbooking, and guarantees all of our passengers a seat on our flights.

Approximately 70% of our passenger traffic consists of business customers and approximately two-thirds of our corporate client base consists of small-and medium-sized companies with less than 500 employees. To further develop our business relationship with our corporate customers, we have entered into alliances with hotel chains and rental car service providers to offer our corporate customers the convenience of packaged transportation and accommodation arrangements. We will continue to focus on expanding our base of cost-conscious, medium-sized corporate clients that serves as a source of recurring revenues.

We advertise primarily through cost-efficient media, including internet websites, radio spots, local newspaper ads and billboards. When establishing a route in a new market, approximately two weeks before we begin offering air travel services, we send representatives to high-concentration areas in the new market such as shopping malls, popular restaurants and discos to hold promotional giveaways and make people aware of their new travel option by focusing on our low fares and efficient service.

Our emphasis on keeping our operating costs low has in turn allowed us to set low fares while achieving and increasing profitability. We have designed our fare structure to balance our load factors and yields in a way that we believe will generate the most profits on our flights. Our fares are below the average fares of most of our competitors and we dedicate most of our seats to the lower fare classes. As a result, we believe that we have established a reputation among our customers for more consistently delivering seats at our lowest advertised prices than do our competitors. Our approach to more transparent and competitive pricing has forced fares down in many of the markets that we have entered. Consistent with airline industry market practice in Brazil, with the exception of our deeply discounted night flights or special offers and promotions, we do not have advance purchase restrictions, minimum stays or required Saturday night stayovers. As provided for in the DAC regulations, passengers cancelling travel plans on our flights are subject to a cancellation penalty. Passengers cancelling their travel plans on our flights are reimbursed for 80% of their fare. If the cancellation occurs less than 24 hours before the scheduled flight time, there is an additional penalty of R$25.00. This same penalty applies for changes made within 24 hours of the scheduled departure time.

In connection with our night flights, we set deeply discounted fares based upon the amounts charged by bus lines for travel to the same destinations. This approach has helped us to maximize our aircraft utilization rates to generate revenue during all times of the day. The night flights have also increased our customer base to include those who have previously used other modes of transportation. The night flight fares usually require a two to five night minimum stay.

We also adjust our pricing in accordance with changes in passenger volume stemming from imbalances in the direction of traffic, such as during the holiday season. These periods often create demand peaks that result in traffic flows that are weighted heavily in one direction, causing demand for seats in the other direction to be low. During these periods, we discount fares on the lower demand flights to stimulate traffic on those routes to help offset our fixed costs.

Yield management involves the use of historical data and statistical forecasting models to produce knowledge about our markets and guidance on how to compete in them to maximize our operating revenues. Yield management and pricing form the backbone of our revenue generation strategy and they are also strongly linked to our route and schedule planning and our sales and distribution methods. Our yield management practices enable us not only to react quickly in response market changes but also to anticipate and help shape market changes.

The number of seats we offer at each fare level in each market results from a continual process of analysis and forecasting. Past booking history, seasonality, the effects of competition and current booking trends are used to forecast demand. Current fares and knowledge of upcoming events at destinations that will affect traffic volumes are included in our forecasting model to arrive at optimal seat allocations for our fares on specific routes. We use a combination of approaches, taking into account yields and flight load factors, depending on the characteristics of the markets served, to arrive at a strategy for achieving the best possible revenue per available seat kilometer, balancing the average fare charged against the corresponding effect on our load factors. For this purpose, we use a sophisticated M.I.T.-developed forecasting, optimization and competitive analysis technology that proposes the optimal fare mix for a given flight based on the historical purchasing behavior of our customers. We do a complete cycle of analysis every working day to keep up-to-date on changes to any of the variables we consider to be factors of yield management. Our revenue

Airlines in Brazil compete primarily on the basis of routes, fare levels, frequency of flights, reliability of services, brand recognition, passenger amenities, such as frequent flyer programs, and customer service. We believe that our low-cost operating model and our low fares enable us to compete favorably in many of these areas. See “—Our Competitive Strengths.”

Our competitors and potential competitors include Brazil’s legacy airlines, regional airlines and new entrants, which mainly have regional networks. Our primary competitors are the legacy airlines, Varig, TAM and VASP, each of which is a full-service carrier offering flights on domestic routes and, in the case of Varig and TAM, international routes. In February 2003, Varig and TAM began discussions to merge their operations to form an airline that would consist of over 150 aircraft and would collectively have represented a 64% market share as of March 31, 2004, based on revenue passenger kilometers. Since that time, Varig and TAM have been operating under a code-sharing agreement. No final decision regarding whether the parties will proceed with the proposed merger has been announced.

There is currently no other low-cost airline in Brazil offering scheduled air passenger services. As the growth in the Brazilian low-cost sector evolves, we may face increased competition from new low-cost entrants and from legacy carriers that reduce their fares to attract new passengers in some of our markets.

When we enter a new market, the Brazilian legacy carriers typically reduce fares using capacity controls, such as limitations on the number of seats available in varying discount ranges, the use of minimum stay-over requirements and other restrictions to limit yield erosion. The Brazilian legacy carriers have also used their customer loyalty plans as a competitive tool to limit the loss of their higher yield market share. We believe that the majority of our passengers are price sensitive, preferring low fares to paying for extras such as mileage programs.

The following table sets forth the historical market shares on domestic routes, based on revenue passenger kilometers, of the significant airlines in Brazil for each of the periods indicated:


Source:	DAC— Annual Air Transportation Report (Anuário do Transporte Aéreo)— Statistical Data— 2001, 2002 and 2003/2000 data extracted from DAC— Economic Data— 4th Quarter 2002.


(1)	Began operations in January 2001.
(2)	Includes TAM Regionais and TAM Meridionais for the period prior to December 2000.
(3)	In 2003, Varig and TAM established a code-sharing arrangement.
(4)	Varig Group— includes Varig, Rio Sul and Nordeste.
(5)	Ceased operations in December 2001.

We also face competition from ground transportation alternatives, primarily interstate bus companies. In 2000, interstate bus companies transported over 130 million passengers, according to the Brazilian Department of Highways (Departamento de Transportes de Rodoviários), and given the absence of meaningful passenger rail services in Brazil, travel by bus has traditionally been the only low-cost option for long-distance travel for a

significant portion of Brazil’s population. We believe that our low-cost business model and strong capitalization has given us flexibility in setting our fares to stimulate demand for air travel among passengers who in the past have traveled long distances primarily by bus. In particular, the highly competitive fares we have offered for travel on our night flights, which have often been comparable to bus fares for the same destinations, have had the effect of providing direct competition for interstate bus companies on these routes. For example, at the end of the first quarter of 2004, we offered night flights between São Paulo and Porto Alegre, with a 1.5 hour flight duration, for an average fare of R$112. In comparison, interstate bus companies charged their passengers an average fare of R$119 for an 18.5 hour journey between the same city pair.

If we commence offering international services, our pool of competitors will increase and we will face competition from airlines that are already established in the international market and that participate in strategic alliances and code sharing arrangements.

We believe that the Gol brand has become synonymous with innovation and value in the Brazilian airline industry. We have filed requests for registration of the trademarks “GOL” and “GOL LINHAS AÉREAS INTELIGENTES” with trademark offices in Brazil and in other countries, such as Chile, Argentina and the United States. A challenge has been filed in Brazil against the registration by us of the “GOL” trademark. See “— Legal Matters and Administrative Proceedings— Trademark.”

We believe that our growth potential and the achievement of our results-oriented corporate goals are directly linked to our ability to attract and maintain the best professionals available in the airline business. We place great emphasis on the selection and training of enthusiastic employees with potential to add value to our business and who we believe fit in with and contribute to our business culture.

As of March 31, 2004, we had 2,572 active employees, compared to 2,453, 2,072 and 1,134 active employees as of December 31, 2003, 2002 and 2001, respectively. As of March 31, 2004, we employed only full-time employees, which consisted of 317 pilots, 567 flight attendants, 382 mechanics, 125 customer service representatives (including sales and marketing personnel and reservation agents), 55 flight operations employees, 867 airport personnel and 259 management and administrative personnel. We also subcontract certain services, such as cargo, information technology, call center personnel and runway handling operations personnel.

We provide extensive training for our pilots, flight attendants and customer service representatives. In addition to the required technical training, which follows the strictest international standards, we also provide comprehensive managerial training to our pilots and flight attendants through Crew Resource Management and Line Oriented Flight Training programs, emphasizing the importance of resource management to provide the best service to our passengers.

In order to help retain our employees, we encourage open communication channels between our employees and management and offer career development opportunities in the company and periodic evaluations. We offer in-house post-graduate business school training in conjunction with the Fundação Getúlio Vargas, a leading Brazilian business school, to provide management training to selected employees. Our compensation strategy reinforces our determination to retain talented and highly motivated employees and is designed to align the interests of our employees with our shareholders. Our compensation packages include competitive salaries and participation in our profit sharing program. We have agreements with medical and insurance companies to offer affordable health and pension plan options to our employees.

A national aviators’ union represents Brazil’s pilots and flight attendants, and five other regional aviation unions represent ground employees of air transportation companies. Approximately 7% of our employees are members of unions. Negotiations in respect of cost of living wage and salary increases are conducted annually between the workers’ unions and a national association of airline companies. There is no salary differential or seniority pay escalation among our pilots. Work conditions and maximum work hours are regulated by

To motivate our employees and align their interests with our results of operations, we provide an annual profit sharing program to all of our employees. Under Brazilian law, companies may provide profit sharing programs that define mechanisms for distributing a portion of a company’s profits based upon the achievement of pre-defined targets established by the company. Our annual profit sharing programs are negotiated with a commission formed by our employees and approved by labor unions for the benefit of all of our unionized and non-unionized employees. For the purposes of our profit sharing program, a portion of profit sharing distributions are based upon the achievement of corporate profit targets and a portion of the distributions are based on the achievement of operational targets set for each of our departments. Based on the achievement of our 2002 profit targets, we made a profit sharing payment equivalent to 17% of one month’s salary to each of our employees. Based on the achievement of our 2003 profit targets, we made a profit sharing payment equivalent to 3.7 months salary to each of our employees. We also intend to establish a stock option plan for employees.

As of March 31, 2004, we operated a fleet consisting of 22 aircraft comprised of 18 Boeing 737-700 Next Generation aircraft and four Boeing 737-800 Next Generation aircraft. We expect to operate approximately 69 aircraft by the end of 2010. The current composition of our fleet is more fully described below:

Each aircraft in our fleet is powered by two CFM International Model CFM 56-7B22 engines or two CFM International Model CFM 56-7B24 engines and operates in a comfortable single-class layout. The average age of our aircraft is 2.8 years, making ours the youngest fleet in Brazil and one of the newest fleets in the world. To help meet short-term capacity needs, we will accept delivery of three Boeing 737-300 aircraft in the third quarter of 2004 and up to two additional Boeing 737-300 aircraft later in 2004, all under two-year operating leases.

We have signed an agreement with The Boeing Company for the firm purchase of 15 737-800 Next Generation aircraft and options to purchase an additional 28 737-800 Next Generation aircraft. The firm order aircraft are scheduled to be delivered between 2007 and 2009, and the purchase options are exercisable for deliveries between 2005 and 2010, up to a maximum of five optioned aircraft per year.

The following table shows the historical and expected development of our fleet from December 31, 2003 to December 31, 2010:

Our new and simplified fleet structure allows us to maintain a cost-efficient operation by reducing maintenance and training costs, reducing spare parts inventory requirements and supporting high reliability and high aircraft utilization rates. The average daily utilization rate of our aircraft during our first three years

The Boeing 737-700 and Boeing 737-800 aircraft currently comprising our fleet are fuel-efficient and very reliable. They suit our cost efficient operations well for the following reasons:


	•	they have simplified maintenance routines;

	•	they require just one type of standardized training for our crews;

	•	their seat configuration provides flexibility to balance yield and load factor on our routes; and

	•	they have one of the lowest operating costs in their class.

Our focus on having low operating costs means that we will periodically review our fleet composition. As a result, our fleet composition may change over time if we conclude that adding other aircraft types would contribute to this goal. However, our approach to our fleet composition is based upon having a minimal number of different aircraft types to preserve the simplicity of our operations. As a result, the introduction of any new aircraft type to our fleet will only be done if, after careful consideration, we determine that such a step will reduce our operating costs. In line with this philosophy, after conducting a careful cost-benefit analysis, we have decided to add up to five Boeing 737-300 aircraft in 2004 under short-term operating leases to meet 2004 to 2006 capacity needs.

We currently lease all of our aircraft under long-term operating lease agreements that have an average remaining term of 60 months. Leasing our aircraft provides us with greater flexibility to change our fleet composition if we consider it to be in our best interests to do so. We make monthly rental payments, some of which are based on floating rates, but are not required to make termination payments at the end of the lease. Currently, we do not have purchase options. Under our operating lease agreements, we are required to maintain maintenance reserve accounts and to return the aircraft in the agreed condition at the end of the lease term. Title to the aircraft remains with the lessor. We are responsible for the maintenance, servicing, insurance, repair and overhaul of the aircraft during the term of the lease. As of March 31, 2004, our operating leases had terms of up to 96 months from the date of delivery of the relevant aircraft. Three of our aircraft leases expire in 2007, nine in 2008, eight in 2009 and two in 2010.

The maintenance performed on our aircraft can be divided into two general categories: line and heavy maintenance. Line maintenance consists of routine, scheduled maintenance checks on our aircraft, including pre-flight, daily and overnight checks and any diagnostics and routine repairs. All of our line maintenance is performed by our own highly experienced technicians at our bases in São Paulo, Rio de Janeiro, Porto Alegre, Curitiba, Florianópolis, Brasília and Salvador. Heavy maintenance consists of more complex inspections and servicing of the aircraft that cannot be accomplished during an overnight visit. Heavy maintenance checks are performed following a pre-scheduled agenda of major overhauls defined in the aircraft’s manual, which is based on the number of flights flown by the aircraft. Our continued high aircraft utilization rate will result in shorter periods of time between heavy maintenance checks for our aircraft in comparison to carriers with lower aircraft utilization rates. We do not believe that our high aircraft utilization rate will necessarily result in the need to make more frequent repairs to our aircraft, given the durability of the aircraft type in our fleet. We contract with certified outside maintenance providers for heavy maintenance and aircraft engine maintenance services with Varig Engenharia de Manutenção, or VEM, Snecma Services, Delta Air Lines Inc. and Lufthansa Technik AG at facilities in Brazil and in the United States. Currently we are relying fully on our contract with VEM for these services. In 2003, outside contractors performed airframe heavy maintenance on six of our aircraft at VEM’s facilities. We plan to construct a new maintenance facility at Viracopos International Airport in Campinas, São Paulo to be used by us for airframe heavy checks, line maintenance, aircraft painting and aircraft interior refurbishment. We expect the facility to be operational in 2005. We believe that the construction of the new maintenance facility at Viracopos International Airport will reduce the extent of our reliance on outside maintenance providers for heavy maintenance. We anticipate that performing our own heavy maintenance will provide cost savings and will better enable us to determine the

We employ 382 maintenance professionals, including engineers, supervisors, technicians and mechanics, who perform maintenance in accordance with maintenance plans that are established by Boeing and approved and certified by Brazilian and international aviation authorities. Our aircraft are covered by warranties that have an average term of seven years and that begin expiring in 2007, resulting in lower maintenance expenses during the period of coverage.

We have concessions with terms varying from one to five years from the Empresa Brasileira de Infra Estrutura Aeroportuária—INFRAERO, a state-controlled corporation, reporting to the High Command of Aeronautics, in charge of managing the use of Brazil’s federal airports, to use and operate all of our facilities at each of the major airports that we serve. Our concession agreements for our terminals’ passenger service facilities, which include check-in counters and ticket offices, operations support area and baggage service offices, contain provisions for periodic adjustments of the lease rates and the extension of the concession term.

INFRAERO has announced its intention to invest approximately R$5 billion in the Brazilian airport system within the next five years. Among the projects underway is an investment of approximately R$87 million to modernize the passenger terminal and expand parking capacity at the Congonhas airport in São Paulo, an approximately R$875 million investment in the Guarulhos airport in São Paulo to construct two new arrival terminals and an additional runway, and an approximately R$230 million investment in Santos Dumont airport in Rio de Janeiro to construct a new arrival terminal. The airport upgrade plan does not require contributions or investments by the Brazilian airlines and is not expected to be accompanied by increases in landing fees or passenger taxes on air travel.

Our primary corporate offices are located in two buildings in the city of São Paulo. We lease space at one of the facilities under a lease agreement with our parent company that expires in 2008. Our commercial, operations, technology, finance and administrative staff is based primarily at our headquarters. We have concessions to use other airport buildings and hangars throughout Brazil, including a part of a hangar at the Congonhas airport where we perform aircraft maintenance and an area at the Viracopos International Airport in the city of Campinas where we are building our maintenance facility.

Our fuel costs totaled R$308.2 million in 2003 and R$93.5 million during the three months ended March 31, 2004, representing 29% and 31% of our operating expenses in 2003 and the first three months of 2004, respectively. The price of jet fuel in Brazil is significantly higher than in many other countries. In 2003, we consumed 264.4 million liters of fuel and we consumed 75.5 million liters of fuel during the first three months of 2004. We purchase our fuel from Petrobras Distribuidora S.A., a retail subsidiary of Petrobras, principally under an into-plane contract under which the supplier supplies fuel and also fills our aircraft tanks. Fuel prices under our contracts are composed of a variable and a fixed component. The variable component is defined by the refinery and follows international fuel price variations. The fixed component is a spread charged by the supplier and is usually a fixed cost per liter during the term of a contract. We currently operate a tankering program under which we fill the fuel tanks of our aircraft in regions where the price of fuel is lower.

In July 2001, the Brazilian federal government eliminated fuel subsidies, causing a 30% increase in the price of fuel consumed domestically. Fuel costs are extremely volatile, as they are subject to many global economic and geopolitical factors that we can neither control nor accurately predict. Because international prices for jet fuel are denominated in U.S. dollars, our fuel costs, though payable in reais, are subject not only to price fluctuations but also to exchange rate fluctuations. In September 2003, we implemented a fuel and foreign exchange hedging program, based upon best practices employed by other successful low-cost carriers, under which we enter into fuel and currency hedging agreements with various counterparties providing for price protection in connection with the purchase of fuel. Our hedging practices cover short-term periods, and are adjusted weekly or more frequently as conditions require. Our hedging practices are overseen by a risk

management committee at the operating level and a hedging policy committee at the board of directors level. The risk management committee meets on a weekly basis to analyze price movements in the fuel and foreign exchange markets, review the impact of such changes on our revenues and expenses and determine our hedge ratio. We use derivative instruments that have a high correlation with the underlying assets so as to reduce our exposure. We require that all of our derivative instruments be liquid so as to allow us to make position adjustments and have prices that are widely disclosed. We also avoid concentration of credit and product risk. The hedging policy committee of our board of directors meets quarterly to assess the effectiveness of our hedging policies and recommends amendments where appropriate. We have not otherwise entered into arrangements to guarantee our supply of fuel and we cannot provide assurance that our hedging program is sufficient to protect us against significant increases in the price of fuel.

The following chart summarizes our fuel consumption and costs for the periods indicated:

We maintain passenger liability insurance in an amount consistent with industry practice and we insure our aircrafts against losses and damages on an “all risks” basis. We are required by the DAC to maintain insurance coverage for general liability against terrorist acts or acts of war with a minimum amount of US$150 million. We are in compliance with this requirement. We have obtained all insurance coverage required by the terms of our leasing agreements. We believe our insurance coverage is consistent with airline industry standards in Brazil and appropriate to protect us from material loss in light of the activities we conduct. No assurance can be given, however, that the amount of insurance we carry will be sufficient to protect us from material loss.

In response to the substantial increases of insurance premium for coverage for damages resulting from terrorist attacks to aircraft after the September 11, 2001 attacks in the United States, the Brazilian government enacted Law No. 10,309 on November 22, 2001, generally authorizing the Brazilian government to undertake liabilities for damages caused to third parties as a result of terrorist attacks or acts of war against aircraft of Brazilian airlines. According to Law No. 10,744 of October 9, 2003, this undertaking by the federal government is currently limited to cover damages caused to third parties resulting from terrorist attacks and acts of war to Brazilian aircraft up to US$1 billion. Decree No. 5,035 of April 5, 2004, which regulates the provisions of Law No. 10,744, provides that the Brazilian government may, at its sole discretion, suspend its coverage at any time, effective within seven days after the announcement by the Brazilian government of its decision to do so.

In the ordinary course of our business, we are party to various legal actions, which we believe are incidental to the operation of our business. We believe that the outcome of the proceedings to which we are currently a party will not have a material adverse effect on our financial position, results of operations and cash flows.

The German carmaker Volkswagen’s Brazilian subsidiary, Volkswagen do Brasil Ltda., has challenged certain of our trademark applications filed with the Instituto Nacional de Propriedade Industrial, the Brazilian authority responsible for the registration of trademarks and patents, on the grounds that Volkswagen has previously registered the trademark “GOL” under the automobiles and autoparts class of products and services. We believe that there are no legal grounds for the challenges by Volkswagen because we are seeking

We are currently challenging the levy of Brazil’s state value-added tax on merchandise, electricity, telecommunication and transport services (the Imposto sobre Circulação de Mercadorias e Serviços, or ICMS) on the import of our leased aircraft and engines. We believe, based on an analysis of the applicable laws and court precedents by our counsel, that the ICMS does not apply to the import of aircraft and engines under operating lease transactions, such as ours. We have received injunctive relief from Brazilian courts and we have filed defenses in administrative proceedings that had the effect of suspending the application of ICMS on the imports of our aircraft and engines under operating leases. We are not accruing and paying ICMS import taxes on our leased aircraft and engines and we have not made any provision in respect of the matter, as we believe that we are not legally liable for the payment of ICMS on imports of our aircraft and engines under operating leases.

Air transportation services rendered on a regular basis (as opposed to charter flights) are considered a public service and are subject to extensive regulation and monitoring by the High Command of Aeronautics of the Ministry of Defense (Comando da Aeronáutica), the CONAC and the DAC. Air transportation services are also regulated by the Brazilian Federal Constitution and the Brazilian Aeronautical Code.

The Brazilian Aeronautical Code provides for the main rules and regulations relating to airport infrastructure and operation, flight safety and protection, airline certification, lease structuring, burdening, disposal, registration and licensing of aircraft; crew training; concessions, inspection and control of airlines; public and private air carrier services, civil liability of airlines, and penalties in case of infringements.

The CONAC is an advisory body of the President of Brazil and its upper level advisory board is composed of the Minister of Defense, the Minister Chief of the Civil Cabinet, the Minister of Treasury, the Minister of Development, Industry and International Trade and the Commandant of the Aeronautics. The CONAC has the authority to establish national civil aviation policies that may be adopted and enforced by the High Command of Aeronautics and by DAC. The CONAC establishes guidelines relating to the proper representation of Brazil in conventions, treaties and other actions related to international air transportation, airport infrastructure, the granting of supplemental funds to be used for the benefit of airlines and airports based on strategic, economic or tourism related aspects, the coordination of civil aviation, air safety, the granting of air routes and concessions, as well as permission for the provision of commercial air transportation services.

The DAC is currently Brazil’s highest civil aviation authority and reports directly to the High Command of Aeronautics. The DAC is responsible for guiding, planning, stimulating and supporting the activities of public and private civil aviation companies in Brazil. The DAC regulates flying operations generally and economic issues affecting air transportation, including matters relating to air safety, certification and fitness, insurance, consumer protection and competitive practices.

The Brazilian government recognized and ratified, and must comply with, the Warsaw Convention of 1929, the Chicago Convention of 1944, and the Geneva Convention of 1948, the three leading international conventions relating to worldwide commercial air transportation activities.

According to the Brazilian Federal Constitution, the Brazilian government is responsible for public services related to airspace as well as airport infrastructure, and may provide these services directly or through third parties under concessions or permissions. According to the Brazilian Aeronautical Code and regulations issued by the High Command of Aeronautics the application for a concession to operate regular air transportation services is subject to the DAC having granted to the applicant a license to operate an airline, which must be then confirmed by the High Command of the Aeronautics. The applicant is required by the DAC to have met certain economic, financial, technical, operational and administrative requirements in order to be granted such license. Additionally, a concession applicant must be an entity incorporated in Brazil, duly registered with the Brazilian Aeronautical Registry (Registro Aeronáutico Brasileiro, or RAB), must have a valid CHETA and must also comply with certain ownership restrictions. See “—Restrictions to the Ownership of Shares Issued by Concessionaires of Air Transportation Services.”

The DAC has the authority to revoke a concession for failure by the airline to comply with the terms of the Brazilian Aeronautical Code, the complementary laws and regulations and the terms of the concession agreement.

Our concession was granted on January 2, 2001, for a term of 15 years, renewable for an equal 15-year term upon a six-month prior written notice.

Article 122 of Law No. 8,666 of June 21, 1993, provides that airline concessions shall be regulated by specific procedures set forth in the Brazilian Aeronautical Code. The Brazilian Aeronautical Code and the regulations issued by the High Command of Aeronautics do not expressly provide for public bidding processes and currently it is not necessary to conduct public bidding processes prior to the granting of concessions for the operation of air transportation services.

The import of civil or commercial aircraft into Brazil is subject to prior authorization by the COTAC, which is a sub-department of the DAC. Such import authorizations usually follow the general procedures for import of goods into Brazil, after which the importer must request the registration of the aircraft with the RAB.

The registration of aircraft in Brazil is governed by the Brazilian Aeronautical Code. Under the Brazilian Aeronautical Code, no aircraft is allowed to fly in Brazilian airspace, or land in or take off from the Brazilian territory, without having been properly registered. In order to be registered and continue to be registered in Brazil, an aircraft must have a certificate of registration (certificado de matrícula) and a certificate of airworthiness (certificado de aeronavegabilidade), both of which are issued by the RAB after technical inspection of the aircraft by the DAC. A certificate of registration attributes Brazilian nationality to the aircraft and is an evidence of its enrollment with the competent aviation authority. A certificate of airworthiness is generally valid for six years from the date of the DAC inspection and authorizes the aircraft to fly in the Brazilian airspace, subject to continuing compliance with certain technical requirements and conditions. The registration of any aircraft may be cancelled if it is found that the aircraft is not in compliance with the requirements for registration and, in particular, if the aircraft has failed to comply with any applicable safety requirements specified by the DAC or in the Brazilian Aeronautical Code.

All information relating to the contractual status of an aircraft, including purchase and sale agreements, operating leases and mortgages, must be filed with the RAB in order to provide the public with an updated record of any amendments made to the aircraft certificate of registration.

Domestic routes. The DAC has the authority to grant Brazilian airlines the right to operate new routes, subject to the airline having filed studies satisfactory to the DAC demonstrating the technical and financial viability of such routes and fulfilling certain conditions in respect of the concession for such routes. For the granting of routes and changes in existing ones, the DAC evaluates the actual capacity of the airport infrastructure from where such route is or would be operated, as well as the increase in demand and competition among airlines. In addition, route frequencies are granted subject to the condition that they are operated on a frequent basis. Any airline’s route frequency rights may be terminated if such airline (a) fails to begin operation of a given route for a period exceeding 15 days, (b) fails to maintain at least 75% of flights provided for in its respective Air Transportation Schedule (Horário de Transporte Aéreo, or HOTRAN) for any 90-day period or (c) suspends its operation for a period exceeding 30 days. The DAC approval of new routes or changes to existing routes is given in the course of an administrative procedure and it requires no changes to existing concession agreements.

Once routes are granted, they must be immediately reflected in the HOTRAN, which is the official schedule report of all routes that the airline can operate. The HOTRAN provides not only for the routes but also the times of arrival at and departure from certain airports, none of which may be changed without prior consent of the DAC. According to Brazilian laws and regulation, an airline cannot sell, assign or transfer its routes to another airline.

International routes. In general, requests for new international routes, or changes to existing ones, must be filed by each interested Brazilian airline that has been previously qualified by the DAC to provide international services, with the Commission for Studies on International Navigation (Comissão de Estudos

Relativos à Navegação Internacional, or CERNAI), which decides upon each request based on the provisions of the applicable bilateral agreement and general policies of the Brazilian aviation authorities. International route rights for major city pairs, as well as the corresponding landing rights, derive from bilateral air transport agreements negotiated between Brazil and foreign governments. Under such agreements, each government grants to the other the right to designate one or more of its domestic airlines to operate scheduled service between certain destinations in each country. Airlines are only entitled to apply for new international routes when they are made available under these agreements. We have applied to CERNAI for approval of a route between São Paulo (Guarulhos International Airport) and Buenos Aires, Argentina (Ezeiza International Airport). We expect a decision from CERNAI in respect of the request during the second half of 2004.

Under Brazilian law, a slot is a concession of the DAC, which is reflected in the airline’s HOTRAN. A slot, like a route, may not be transferred by one airline to another.

Each HOTRAN represents the authorization for an airline to depart from and arrive at specific airports within a predetermined timeframe. Such period of time is known as an “airport slot” and provides that an airline can operate at the specific airport at the times established in the HOTRAN.

The most congested Brazilian airports are subject to traffic restrictions through time slot policies. Each airline is entitled to a maximum 37% of the slots at any given airport. An airline must request an additional slot from the DAC upon a minimum two-month prior notice.

On October 5, 2001, the Department of Control of the Air Space (Departamento de Controle do Espaço Aéreo), or DECEA, was created with the main purpose of coordinating and inspecting the infrastructure support of airports and the safety of aircraft operations. The DECEA also performs studies in all Brazilian airports to determine the maximum capacity of operation of each airport. There are five airports in Brazil that have slot restrictions: Congonhas and Guarulhos (both of which serve São Paulo), Santos Dumont in Rio de Janeiro, Pampulha in Belo Horizonte and Juscelino Kubitschek in Brasília. Since the slots of all congested airports slots are fully utilized, the DAC is unable to grant the right to new slots to airlines to operate in these airports. Ongoing investment in the Brazilian aviation infrastructure should permit the increase of aircraft operations in these congested airports and consequently the concession of the right to new slots to airlines.

INFRAERO, a state-controlled corporation reporting to the High Command of Aeronautics, is in charge of managing, operating and controlling federal airports, including control towers and airport safety operations. Smaller, regional airports may belong to states or municipalities within Brazil and, in such cases, are often managed by local governmental entities. In most Brazilian airports, INFRAERO performs safety and security activities, including passenger and baggage screening, cargo security measures and airport security.

The use of areas within federal airports, such as hangars and check-in booths, are subject to a concession by INFRAERO. If there is more than one applicant for the use of a specific airport area, INFRAERO may conduct a public bidding process for the granting of the concession.

Brazilian airlines are permitted to establish their own domestic fares without government regulation. However, domestic fares are monitored on a regular basis by the DAC in order to prevent airlines, which are public concessionaires, from operating in a way that is detrimental to their economic viability. Airlines are free to offer price discounts or follow other promotional strategies. For certain routes, airlines must submit, with a minimum of five days’ advance notice, fares that are set at greater than a 65% discount to the per kilometer reference fares established by the DAC. Such reference fares are based on industry average operating costs.

International tariffs are set based upon bilateral arrangements. In addition, airlines operating international routes must negotiate their tariffs at the International Air Transport Association (IATA) and then submit the negotiated tariffs to the DAC for approval.

The Brazilian Aeronautical Code and the Warsaw Convention limit the liability of an aircraft operator for damages caused to third parties during its air and ground operation, or resulting from persons or things ejected out of the aircraft. Brazilian courts, however, have occasionally disregarded these limitations by awarding damages purely based on the Brazilian Civil Code and Brazilian Consumer Protection Code, both of which do not expressly provide for limitations on the amount of such awards.

In response to the substantial increases in premiums of insurance coverage for damages resulting from terrorist attacks to aircraft after the September 11, 2001 attacks in the United States, the Brazilian government enacted a law which authorizes the Brazilian government to undertake liability for damages caused to third parties as a result of terrorist attacks or acts of war against aircraft of Brazilian airlines. See “Business— Insurance.”

Brazilian airlines are subject to various federal, state and municipal laws and regulations relating to the protection of the environment, including the disposal of materials and chemical substances and aircraft noise. These laws and regulations are enforced by various governmental authorities, each of which may impose administrative sanctions in case of violation, in addition to any eventual criminal or civil liabilities. For example, according to a DAC ordinance, the operation of scheduled commercial flights to and from the Congonhas airport is subject to a noise curfew from 11:00 p.m. to 6:00 a.m. because of its proximity to residential areas in the city of São Paulo. Our scheduled flights to Congonhas airport are in full compliance with the noise curfew limits.

Restrictions on the Ownership of Shares Issued by Concessionaires of Air Transportation Services

According to the Brazilian Aeronautical Code, in order to be eligible for a concession for operation of regular services, the entity operating the concession must have at least 80% of its voting stock held directly or indirectly by Brazilian citizens and must have certain management positions entrusted to Brazilian citizens. The Brazilian Aeronautical Code also imposes certain restrictions on the transfer of capital stock of concessionaires of air transportation services, such as Gol, including the following:


	•	the voting shares have to be nominative and non-voting shares cannot be converted into voting shares;

	•	prior approval of the Brazilian aviation authorities is required for any transfer of shares, regardless of the nationality of the investor, which results in the change of the company’s corporate control, causes the assignee to hold more than 10% of the company’s capital stock or represents more than 2% of the company’s capital stock;

	•	the airline must file with the DAC, in the first month of each semester, a detailed stockholding interest chart including a list of shareholders, as well as a list of all share transfers effected in the preceding semester; and

	•	based on its review of the airline’s stock interest chart, the DAC has the authority to subject any further transfer of shares to its prior approval.

The Registrant holds substantially all of the shares of Gol, which is a public concessionaire of air transportation services in Brazil. Under the Brazilian Aeronautical Code, the restrictions on the transfer of shares described above apply only to companies that hold concessions to provide regular air transportation services. Therefore, the restrictions do not apply to the Registrant. Since the completion of this global offering will not result in a change in the voting control of Gol, either directly or indirectly, and will not reduce the percentage of voting stock of Gol held by Brazilian citizens to a level lower than 80%, no prior authorization from the DAC will be required.

The Brazilian Congress is currently discussing Bill of Law No. 3,846, of 2000, which provides for the creation of the Brazilian Civil Aviation Agency (Agência Nacional de Aviação Civil, or ANAC) that would replace the DAC as the primary civil aviation authority. According to this bill of law, the ANAC will be responsible for organizing civil aviation into a coherent system, coordinating and supervising air transportation services, aviation and ground-based infrastructure, and modernizing the Brazilian aviation regulations. The ANAC will be linked, but not subordinated, to the Ministry of Defense and will function as an independent agency administrated only by civilians and reporting directly to the President of Brazil. The ANAC will mainly have the authority to regulate, inspect and supervise services rendered by local and foreign airlines operating in Brazil, granting concessions, permissions and authorizations for operation of air transportation and airport infrastructure services, representing the Brazilian government before international civil aviation organizations, and controlling, registering and inspecting civil aircraft. Under the proposed bill of law, all concessions for air transportation services expiring before December 31, 2010, such as the ones of our major competitors, would be valid until December 31, 2010. In addition, Bill of Law No. 3846 provides that the Brazilian aviation authorities shall conduct prior public bidding procedures for the granting of new concessions.

Additionally, on March 28, 2001, the CONAC published, for public comments, a draft bill of law aimed at replacing the Brazilian Aeronautical Code and modernizing the underlying laws and regulations. This draft generally addresses issues relating to civil aviation, including airport concessions, consumers’ protection, increase of foreign stock participation in Brazilian airlines, limitation on civil liability by airlines, and mandatory insurance and fines. Also, on October 30, 2003, the CONAC submitted to the Ministry of Defense for approval a proposal for new civil aviation public policy guidelines. According to this proposal, the CONAC will issue specific policies for different segments of the international aviation market primarily directed to the granting of routes, and will further analyze differentiated tariffs in order to foster international air traffic. The Ministry of Defense has yet not approved this proposal.

Under our by-laws, we are managed by our Conselho de Administração, or board of directors, which is composed of at least five members and at most 11 members, and a Diretoria, or board of executive officers, which is composed of at least two and at most six members. Our by-laws provide for the establishment of a non-permanent Conselho Fiscal, or fiscal committee, to be comprised of three to five members. We also have corporate governance and nomination, audit, compensation, and hedging policy committees comprised of members of our board of directors, and management, executive policy, budget, investment, corporate governance and risk management committees comprised of members of our board of executive officers and senior managers.

We are committed to achieving and maintaining high standards of corporate governance. In working towards this goal, we have established a corporate governance and nomination committee to monitor and make recommendations with respect to corporate governance “best practices” to our board of directors. In addition, in connection with listing as a Level 2 company on the BOVESPA, we will enter into an agreement with the BOVESPA to grant certain additional rights not required of Level 2 companies to our shareholders, such as tag-along rights offering our preferred shareholders 100% of the price paid per common share of controlling block shareholders. In addition, we intend to continue to assess initiatives to further improve our corporate governance standards.

Our board of directors is dedicated to providing our overall strategic guidelines and, among other things, is responsible for establishing our general business policies and for electing our executive officers and supervising their management. Currently, our board of directors is comprised of eight members. Upon the completion of this global offering, Peter M. Yu and Claudio E.S. Galeazzi will resign from our board of directors. In addition, upon the completion of this global offering, we intend to add a minimum of one and up to two additional members to our board of directors, each of whom will qualify as independent based upon NYSE criteria. The board of directors meets every other month or whenever requested by the president, vice-president or three members of our board of directors.

Under the Brazilian corporation law, each director must hold at least one of our common or preferred shares, may reside outside of Brazil, and is elected by the holders of our common shares at the Assembléia Geral, or the annual general meeting of shareholders. There are no provisions in our by-laws restricting (i) a director’s power to vote on a proposal, arrangement or contract in which such director is materially interested, or (ii) the borrowing powers exercisable by our directors from us. However, under the Brazilian corporation law, a director is prohibited from voting on any matter that would result in such director having a conflict of interest with our company.

Under the Brazilian corporation law, shareholders of publicly traded companies, such as we will be, who together hold non-voting or voting-right restricted preferred shares representing at least 10% of our total share capital for at least three months, are entitled to appoint one member of our board of directors. However, until 2005, the board member to be appointed by such preferred shareholders will be chosen from a list of names provided by our controlling shareholder.

Under our by-laws, the members of the board of directors are elected by the holders of our common shares at the annual general meeting of shareholders. Members of our board of directors serve one-year terms, reelection being permitted. The terms of our current directors will expire in 2005. Our by-laws do not provide for a mandatory retirement age for our directors.

still retains the right to appoint the majority of the members of our board of directors. This right will terminate if BSSF Air Holdings LLC holds less than 5% of our total capital. Two of the board members appointed by BSSF Air Holdings LLC will resign from our board of directors upon the completion of this global offering.

The following table sets forth the name, age and position of each current member of our board of directors. A brief biographical description of each current member of our board of directors follows the table.

Constantino de Oliveira is the chairman of our board of directors and has served in this capacity since March 2004. Mr. Oliveira has also been the chairman of the board of directors of Gol since 2002. Mr. Oliveira is founder and president of the Áurea group. He founded his first company, Expresso União, a bus transportation company, in 1957 in the state of Minas Gerais. Mr. Oliveira was the principal architect in our creation.

Constantino de Oliveira Junior is a member of our board of directors and our Chief Executive Officer. He has served in both capacities since March 2004. Mr. Oliveira has also been the chief executive officer and a member of the board of directors of Gol since 2001. Mr. Oliveira introduced the “low-cost, low-fare” concept to the Brazilian airline industry and was elected the Most Valuable Executive in 2001 and 2002 by the Brazilian newspaper Valor Econômico and was also elected the Leading Executive in the logistics sector in 2003 by the readers of Gazeta Mercantil, a Brazilian financial newspaper. From 1994 to 2000, Mr. Oliveira served as an officer of the Áurea group. Mr. Oliveira studied Business Administration at the Universidade do Distrito Federal and he attended the Executive Program on Corporate Management for Brazil conducted by the Association for Overseas Technical Scholarships.

Henrique Constantino has been a member of our board of directors since March 2004. Mr. Constantino has also been a member of the board of directors of Gol since 2003. He has been the financial officer of the Áurea group since 1994. He participated in the creation of Gol and served as its financial officer from January 2001 to March 2003, when he became a member of the board. Mr. Constantino has a law degree from CEUB– Centro de Ensino Unificado de Brasília and has a Master in Business Administration degree from EASP– FGV (Fundação Getúlio Vargas– São Paulo).

Joaquim Constantino Neto has been a member of our board of directors since March 2004. Mr. Constantino has been a member of the board of directors of Gol since 2001. He has been the operations officer of the Áurea group since 1994. From 1984 to 1990 he was in charge of operations of Reunidas Paulista. Since 1990 to the present, he has been the President of Breda Turismo, a transportation company. Since 1998, Mr. Constantino has also been a member of the board of directors of Metra, a metropolitan bus company serving the cities of São Paulo, Santo André, São Bernardo do Campo and Diadema.

Ricardo Constantino has been a member of our board of directors since March 2004. Mr. Constantino has been a member of the board of directors of Gol since 2001. He has been the technical and maintenance officer of the Áurea group since 1994. Since 2000, Mr. Constantino is also a member of the board of directors of Mercabenco S.C., a consortium of Mercedes automobile dealers.

Ana Vigon Tabar has been a member of our board of directors since March 2004. Ms. Vigon has been a member of the board of directors of Gol since 2003. Ms. Vigon is a managing director of AIG Capital Partners in New York. Prior to joining AIG in 1992, Ms. Vigon served as senior portfolio manager at Assesores Bursatiles in Madrid, where she managed four mutual funds. She served as assistant treasurer for Grupo

Peter M. Yu has been a member of our board of directors since May 2004. Mr. Yu has been a member of the board of directors of Gol since 2003. Mr. Yu is president and chief executive officer of AIG Capital Partners, a leading private equity investor in emerging markets. Prior to joining AIG Capital Partners, Mr. Yu served as director to the National Economic Council, the White House office responsible for developing U.S. economic policy. A graduate of Harvard Law School, Mr. Yu served as president of the Harvard Law Review and as a law clerk on the United States Supreme Court and received his B.A. degree from Princeton University. Mr. Yu serves as chairman of the Investment Committee of eight AIG-sponsored private equity funds.

Claudio E.S. Galeazzi has been a member of our board of directors since May 2004. Mr. Galeazzi has been a member of the board of directors of Gol since 2003. Mr. Galeazzi is a founding partner of Galeazzi & Associados, a Brazilian consulting firm. Prior to founding Galeazzi & Associados, Mr. Galeazzi served as president of Cesbra, a joint venture between British Petroleum and Brascan, and vice-president of the British Petroleum mining operations in Brazil. He also served as a member of the fiscal board of Banespa (Insurance). From 1979 to 1985, Mr. Galeazzi served as chairman of the Industries’ Social Services (SESI) under a nomination by the president of Brazil. From 1986 to 1989, Mr. Galeazzi served as a director of the Federation of Industries of the State of Sáo Paulo (FIESP). Mr. Galeazzi holds a degree in Accounting from Faculdade Ramos de Azevedo, Rio de Janeiro, Brazil.

Constantino de Oliveira Junior, Henrique Constantino, Joaquim Constantino Neto and Ricardo Constantino are brothers and Constantino de Oliveira is their father. Constantino de Oliveira Junior, Henrique Constantino, Joaquim Constantino Neto and Ricardo Constantino control Aeropar Participações S.A. and Comporte Participações S.A. on an equal basis.

Our executive officers have significant experience in the domestic and international passenger transportation industries, and we have been able to draw upon this extensive experience to develop our low-cost operating structure. The executive officers are responsible for our day-to-day management. The executive officers have individual responsibilities established in our by-laws and by our board of directors. The business address of each of our executive officers is the address of our principal executive offices.

Under our by-laws, we must have at least two and at most five executive officers that are elected by the board of directors for a one-year term. Any executive officer may be removed by the board of directors before the expiration of his term. The current term of all our executive officers ends in March 2005.

The following table sets forth the name, age and position of each of our executive officers elected in March 2004. A brief biographical description of each of our executive officers follows the table.

David Barioni Neto has been an officer since May 2004. Mr. Barioni has been an officer of Gol since 2001. Mr. Barioni has been an aircraft pilot for the past 25 years and worked as an aircraft pilot for VASP from 1982 to 2000. Mr. Barioni is a civil aviation inspector, flight instructor and aeronautical accident investigator. He is also specialized in restricted and dangerous cargo.

Richard F. Lark, Jr. has been an officer since May 2004. Mr. Lark has been an officer of Gol since 2003. From 2000 to 2003, Mr. Lark was a founding director and served as Chief Financial Officer of Americanas.com, one of the leading Brazilian e-commerce companies. Prior to joining Americanas.com, Mr. Lark was a Vice President in the investment banking division of Morgan Stanley, where he was responsible for the Brazilian transportation sector. Mr. Lark holds a Master in Business Administration degree from the Anderson School at The University of California at Los Angeles (UCLA) and bachelor degrees in philosophy and finance and business economics from The University of Notre Dame. Mr. Lark is a DAC-certified private pilot.

Tarcisio Geraldo Gargioni has been an officer since May 2004. Mr. Gargioni has been an officer of Gol since 2001. From 1990 to 2000, Mr. Gargioni served as Commercial Director of VASP. Mr. Gargioni received a degree in Business Administration and a post-graduate degree in transport engineering from COOPEAD/ RJ, Brazil. Mr. Gargioni received a certificate in marketing from Fundação Getúlio Vargas– São Paulo.

Wilson Maciel Ramos has been an officer since March 2004. Mr. Ramos has been an officer of Gol since 2001. From 1999 to 2000, Mr. Ramos was an independent consultant for urban transportation companies. From 1997 to 1999, Mr. Ramos was the President of Transurb, a syndicate of urban transportation companies in São Paulo. From 1993 to 1997, Mr. Ramos served as Chief Information Officer at VASP. Mr. Ramos received a degree in mechanical engineering from the Universidade do Rio Grande do Sul and a masters degree in production engineering from the Universidade de Santa Catarina.

Under the Brazilian corporation law, the Conselho Fiscal, or fiscal committee, is a corporate body independent of the management and the company’s external auditors. The fiscal committee may be either permanent or non-permanent, in which case it is appointed by the shareholders to act during a specific fiscal year. A fiscal committee is not equivalent to, or comparable with, a U.S. audit committee. The primary responsibility of the fiscal committee is to review management’s activities and the company’s financial statements, and to report its findings to the company’s shareholders. The Brazilian corporation law requires fiscal committee members to receive as remuneration at least 10% of the average annual amount paid to the company’s executive officers. The Brazilian corporation law requires a fiscal committee to be composed of a minimum of three and a maximum of five members and their respective alternates.

Under the Brazilian corporation law, our fiscal committee may not contain members that (i) are on our board of directors, (ii) are on the board of executive officers, (iii) are employed by us or a controlled company or a company of the Áurea group, or (iv) are spouses or relatives of any member of our management, up to the third degree. Our by-laws provide for a non-permanent fiscal committee to be elected only by our shareholders’ request at the relevant general shareholders’ meeting. The fiscal committee, when elected, will be comprised of a minimum of three and a maximum of five members and an equal number of alternate members. We currently do not have an active fiscal committee and, therefore, no members have been appointed.

Our board of directors also has corporate governance and nomination, audit, compensation, and hedging policy committees. Our board of executive officers has management, executive policy, budget, investment, corporate governance and risk management committees. Members of the committees do not need to be members of our board of directors or board of executive officers. The charters of the corporate governance and nomination, audit and compensation committees specify that each committee shall include one member appointed by our minority shareholders and one independent member. The responsibilities and composition of these committees are described below.

Corporate Governance and Nomination Committee. The corporate governance and nomination committee is responsible for the coordination, implementation and periodic review of “best practices” of corporate governance and for monitoring and keeping our board of directors informed about legislation and market recommendations addressing corporate governance. The committee also proposes individuals for

Audit Committee. Our audit committee, which is not equivalent to, or comparable with, a U.S. audit committee, provides assistance to our board of directors in matters involving our accounting, internal controls, financial reporting and compliance. The audit committee recommends the appointment of our independent auditors to our board of directors and reviews the compensation of and coordinates with our independent auditors. The audit committee also evaluates the effectiveness of our internal financial and legal compliance controls. The audit committee is comprised of up to three members elected by the board of directors for a one-year term. The current members of our audit committee are Henrique Constantino and Fernando Borges, who was appointed by BSSF Air Holdings LLC. Within one year following the completion of this global offering, we intend that all members of the audit committee will satisfy the audit committee membership independence requirements of the SEC and the independence and other standards of the NYSE. At least one member of the audit committee will be an audit committee “financial expert” within the meaning of the rules adopted by the SEC relating to the disclosure of financial experts on audit committees in periodic filings pursuant to the U.S. Securities Exchange Act of 1934.

Compensation Committee. The compensation committee reviews and recommends to our board of directors the forms of compensation, including salary, bonus and stock options, to be paid to our directors and executive officers. The compensation committee also reviews and recommends revisions to the compensation policies applicable to our directors and executive officers and reviews our management’s career and succession plans. The compensation committee is comprised of up to three members elected by our board of directors for a one-year term. The compensation committee currently consists of Joaquim Constantino and Cristiano Gioia, who was appointed by BSSF Air Holdings LLC.

Hedging Policy Committee. The hedging policy committee conducts periodic reviews of the measures we take to protect the company against foreign exchange, jet fuel price and interest rate changes and analyzes the effect of such changes on our revenues and expenses. The hedging policy committee assesses the effectiveness of hedging measures taken during the previous quarter and approves recommendations for future changes. The hedging policy committee meets quarterly and is comprised of our chief financial officer and two other members of our board of directors, one of whom is appointed by the directors appointed by our minority shareholders. The hedging policy committee currently consists of Richard F. Lark, Jr., Henrique Constantino and Ana Vigon Tabar.

Under our by-laws, our shareholders are responsible for establishing the aggregate amount we pay to the members of our board of directors and our executive officers. Once our shareholders establish an aggregate amount of compensation for our board of directors and executive officers, the members of our board of directors are then responsible for setting individual compensation levels in compliance with our by-laws.

For the fiscal year ended December 31, 2003, the aggregate compensation, including cash and benefits-in-kind, that we paid to the members of our board of directors and executive officers was approximately R$1.4 million.

At a shareholders’ meeting held on May 25, 2004, our shareholders approved an executive stock option plan for key senior executive officers. Under this plan, we have issued to executive officers stock options to purchase up to 937,412 of our preferred shares at an exercise price of R$3.04 per share. One half of the options may be exercised beginning on October 25, 2004, with the remaining 50% vesting at the end of each quarter subsequent to October 25, 2004. Each option will expire two years after its vesting date. The preferred shares reserved for issuance pursuant to these options are in addition to and separate from those shares that will be reserved for issuance under the plan described in the immediately following paragraph. We expect that the number of preferred shares reserved for issuance under this executive stock option plan will be increased to

6,000,000 preferred shares and to grant these new options over a three-year period, subject to the approval of our compensation committee and our shareholders in a shareholders’ meeting. The terms under which these new options will be granted will be determined by our compensation committee and our board of directors.

Following the completion of this offering, we expect to adopt a stock option plan, which will be administered by the compensation committee. The purpose of the plan will be to promote our interests by encouraging our officers, members of our board of directors and other employees to significantly contribute to our success through the award of options to acquire our preferred shares. We expect that an aggregate maximum of 10 million preferred shares will be reserved for issuance over a five-year period under the plan.

The following table sets forth information relating to the beneficial ownership of our common shares and preferred shares as of May 21, 2004, by each person known by us to beneficially own 5% or more of our common shares or preferred shares and all our directors and officers as a group.

Each shareholder’s percentage ownership in the following table is based on the 109,448,497 common shares and 59,344,746 preferred shares outstanding as of the date of this prospectus. The table sets forth our beneficial ownership after the sale of 33,050,000 preferred shares in this offering.


*	Selling shareholder.


**	Represents ownership of less than 1%.


(1)	Aeropar Participações S.A. is a subsidiary of Áurea Administração e Participações S.A., which is controlled equally by Constantino de Oliveira Junior, Henrique Constantino, Joaquim Constantino Neto and Ricardo Constantino. Áurea Administração e Participações S.A. is a member of the Áurea group, which controls over 20 different companies in Brazil’s passenger transportation industry. The Constantino family beneficially owns 100% of our voting common shares. The address of Aeropar Participações S.A. is Avenida Dom Jaime de Barros Câmara 300, suite 08, São Bernardo do Campo, São Paulo, 09895-400, Brazil.
(2)	Includes 224 common shares of the Registrant subscribed and paid for at the time of the Registrant’s incorporation.
(3)	BSSF Air Holdings LLC is wholly-owned by BSSF Air Holdings Ltd. BSSF Air Holdings Ltd. is owned by AIG Brazil Special Situations Fund, L.P. (“BSSF”) and AIG Brazil Special Situations Parallel Fund, C.V. (“BSSF Parallel”). Each of BSSF and BSSF Parallel is managed by AIG BSSF, L.P. (“AIGBSSFGP”), an indirect wholly-owned subsidiary of American International Group, Inc. (“AIG”). Each of BSSF Air Holdings Ltd.; BSSF; BSSF Parallel; AIGBSSFGP, the sole general partner of BSSF and the managing general partner of BSSF Parallel; AIG BSSF Investments, Ltd. (“AIGBSSFI”), the sole general partner of AIGBSSFGP; AIG Capital Partners, Inc. (“AIGCP”), the sole shareholder of AIGBSSFI; AIG Global Investment Group, Inc., the sole shareholder of AIGCP; and AIG; may be deemed to beneficially own some or all of the shares held of record directly by BSSF Air Holdings LLC. Each of the foregoing entities disclaims beneficial ownership of the shares held of record directly by BSSF Air Holdings LLC. The address of BSSF Air Holdings LLC is 599 Lexington Avenue, 24^th floor, New York, New York 10022.
(4)	Comporte Participações S.A. is controlled equally by Constantino de Oliveira Junior, Henrique Constantino, Joaquim Constantino Neto and Ricardo Constantino. The address of Comporte Participações S.A. is Avenida Dom Jaime de Barros Câmara 300, suite 08, São Bernardo do Campo, São Paulo, 09895-400, Brazil.
(5)	Includes 56 preferred shares of the Registrant subscribed and paid for at the time of the Registrant’s incorporation.
(6)	Shares transferred to members of the board of directors for eligibility purposes.

Under the terms of our shareholders’ agreement, five of the members of our board of directors have been appointed by Aeropar Participações S.A. and three members of our board of directors have been appointed and elected by BSSF Air Holdings LLC. Two of the members of our board of directors appointed by BSSF Air Holdings LLC will resign upon the completion of this offering. Our shareholders’ agreement provides that BSSF Air Holdings LLC will have the right to appoint one member of our board of directors after the completion of this offering, provided that this right will only prevail to the extent that, in the case of the exercise by our minority shareholders of any minority rights set forth under the Brazilian corporation law, Aeropar Participações S.A. still retains the right to appoint the majority (excluding the director appointed by BSSF Air Holdings LLC) of the members of our board of directors. This right will terminate if BSSF Air Holdings LLC holds less than 5% of our total capital. In addition, BSSF Air Holdings LLC has agreed with us that, subject to certain exceptions, it will not issue or transfer any ADSs or preferred shares or any options or warrants to purchase ADSs or preferred shares or securities convertible into, or exchangeable for, or that represent rights to receive ADSs or preferred shares after the expiration of the 180-day lock-up, unless in an organized sales process.

On April 1, 2003 Gol entered into a five-year lease agreement with Áurea Administração e Participações S.A. for the lease of our headquarters located at Rua Tamoios, 246. The lease agreement provides for monthly payments of R$25,000, adjusted annually for inflation by the IGP-M index.

Gol has entered into exclusive bus transportation agreements with Expresso União Ltda. and Breda Serviços, which are companies controlled by Áurea Administração e Participações S.A. for the transportation of Gol’s passengers, their baggage and Gol’s employees. In 2002 and 2003, Gol made total payments of approximately R$87,000 and approximately R$148,000, respectively, under these bus transportation agreements.

In June 2002, Áurea Administração e Participações S.A. issued debentures to Gol that Gol assigned to INFRAERO in payment of landing charges for the period between June 2002 and October 2002. The interest rate on the debentures was set at the average rate for one-day interbank deposits plus 1% per annum. The debentures, which were guaranteed by the pledge of a portion of Gol’s credit card receivables, were repaid in full in January 2004.

We believe that all of the transactions with Áurea Administração e Participações S.A. were made on terms no less favorable to us than could have been otherwise obtained from unaffiliated third parties.

On January 20, 2003, Áurea Administração e Participações S.A., BSSF II Holdings Ltda., BSSF Air Holdings Ltd. and Gol entered into a Subscription and Option Agreement under which BSSF II Holdings Ltda. agreed to subscribe and pay for 7,675,748 of Gol’s Class A preferred shares and BSSF Air Holdings Ltd. agreed to subscribe and pay for 2,699,252 of Gol’s Class A preferred shares and 8,408,206 of Gol’s Class B preferred shares. Pursuant to an addendum to the subscription and option agreement, Gol and Áurea Administração e Participações have agreed to use reasonable efforts to register with all applicable governmen-

In February 2004, Áurea Administração e Participações S.A. exercised its call option pursuant to the Subscription and Option Agreement. As a result, on March 29, 2004, Áurea Administração e Participações S.A. acquired all of BSSF Air Holdings Ltd.’s share ownership in Gol and 140,350 Class A preferred shares of Gol from BSSF II Holdings Ltda.

On May 25, 2004, we approved a 2.80-for-one stock split for all of our outstanding common and preferred shares, increasing the aggregate number of our common and preferred shares outstanding to 168,793,243. As a result, our capital structure currently consists of 109,448,497 common shares and 59,344,746 undesignated preferred shares, all with no par value. In addition, our board of directors has authorized the issuance of up to 20,355,725 preferred shares for the purposes of this offering. We are a stock corporation (sociedade anônima) incorporated under the laws of Brazil.

Under our by-laws, our authorized capital is R$1 billion, and can be increased by the issuance of preferred or common shares, after approval by our board of directors. Our shareholders must approve any capital increase that exceeds our authorized capital. Under our by-laws and the Brazilian corporation law, if we issue additional shares in a private transaction, the existing shareholders have preemptive rights to subscribe for shares on a pro rata basis according to their holdings. See “—Preemptive Rights.”

There are no general restrictions on ownership of our preferred shares or common shares by individuals or legal entities domiciled outside Brazil, except for those regarding airline companies (see “—Regulation of the Brazilian Civil Aviation Market”). However, the right to convert dividend payments and proceeds from the sale of preferred shares or common shares into foreign currency and to remit such amounts outside Brazil is subject to restrictions under foreign investment legislation which generally requires, among other things, the registration of the relevant investment with the Central Bank.

Foreign investors may register their investment under Law No. 4,131 of September 3, 1962, or Law No. 4,131, or Resolution No. 2,689 of January 26, 2000 of the CMN, or Resolution No. 2,689. Registration under Law No. 4,131 or under Resolution No. 2,689 generally enables foreign investors to convert into foreign currency dividends, other distributions and sales proceeds received in connection with registered investments and to remit such amounts abroad. Resolution No. 2,689 affords favorable tax treatment to foreign investors who are not resident in a tax haven jurisdiction, which is defined under Brazilian tax laws as a country that does not impose taxes or where the maximum income tax rate is lower than 20% or that restricts the disclosure of shareholder composition or ownership of investments.

Under Resolution No. 2,689, foreign investors may invest in almost all financial assets and engage in almost all transactions available in the Brazilian financial and capital markets, provided that certain requirements are fulfilled. In accordance with Resolution No. 2,689, the definition of foreign investor includes individuals, legal entities, mutual funds and other collective investment entities that are domiciled or headquartered abroad.


	•	appoint at least one representative in Brazil with powers to perform actions relating to the foreign investment;

	•	complete the appropriate foreign investor registration form;

	•	register as a foreign investor with the CVM; and

	•	register the foreign investment with the Central Bank.

payments and proceeds from the sale of our capital stock into foreign currency and to remit these amounts outside Brazil is subject to restrictions under foreign investment legislation, which generally requires, among other things, that the relevant investment be registered with the Central Bank. Restrictions on the remittance of foreign capital abroad could hinder or prevent the custodian for the preferred shares represented by ADSs, or holders who have exchanged ADSs for preferred shares, from converting dividends, distributions or the proceeds from any sale of preferred shares, as the case may be, into U.S. dollars and remitting such U.S. dollars abroad. Delays in, or refusal to grant, any required governmental approval for conversions of reais payments and remittances abroad of amounts owed to holders of ADSs could adversely affect holders of ADSs.

Resolution No. 1,927 of the CMN, which is the restated and amended Annex V to Resolution No. 1,289 of the CMN, or the Annex V Regulations, provides for the issuance of depositary receipts in foreign markets in respect of shares of Brazilian issuers. We will file an application to have the ADSs approved under the Annex V Regulations by the Central Bank and the CVM, and we will have received final approval before the completion of this offering.

The custodian will obtain on behalf of the depositary an electronic certificate of foreign capital registration with respect to the ADSs sold in the international offering. This electronic registration is carried on through the Central Bank Information System, or SISBACEN. Pursuant to the registration, the custodian and the depositary will be able to convert dividends and other distributions with respect to the preferred shares represented by ADSs into foreign currency and remit the proceeds outside Brazil. In the event that a holder of ADSs surrenders such ADSs and withdraws preferred shares, the holder will be entitled to continue to rely on the depositary’s registration for five business days after the withdrawal, following which such holder must seek to obtain its own electronic certificate of foreign capital registration. Thereafter, unless the preferred shares are held pursuant to Resolution No. 2,689, by a duly registered investor, or, if not a registered investor under Resolution No. 2,689, a holder of preferred shares applies for and obtains a new certificate of registration, the holder may not be able to convert into foreign currency and remit outside Brazil the proceeds from the disposition of, or distributions with respect to, the preferred shares, and the holder, if not registered under Resolution No. 2,689, will be subject to less favorable Brazilian tax treatment than a holder of ADSs. In addition, if the foreign investor resides in a tax haven jurisdiction, the investor will also be subject to less favorable tax treatment. See “Risk Factors—Risks Relating to the ADSs and Our Preferred Shares—If you surrender the ADSs and withdraw our preferred shares, you risk losing the ability to remit foreign currency abroad and certain Brazilian tax advantages” and “Taxation—Brazilian Tax Consequences.”

According to our by-laws, similarly to preferred shares of companies incorporated under the laws of the State of Delaware, our preferred shares are non-voting. However, under certain limited circumstances provided for in the Brazilian corporation law and as described in this section, holders of our preferred shares may be entitled to vote. Upon liquidation, holders of preferred shares are entitled to receive distributions prior to the holders of our common shares.

Holders of our preferred shares are not entitled to voting rights, except in connection with certain specific matters. See “—Voting Rights.” Unlike holders of preferred shares of companies incorporated under the laws of the State of Delaware, which are typically entitled to a fixed dividend established pursuant to the company’s articles of incorporation, holders of our preferred shares are entitled to receive dividends per share in the same amount of the dividends per share paid to holders of our common shares.

Also unlike holders of preferred shares of companies incorporated under the laws of the State of Delaware, which typically do not have the benefit of tag-along rights, according to our by-laws, holders of our preferred shares are entitled to be included in a public tender offer in case our controlling shareholder sells its controlling stake in us, and the minimum price to be offered for each preferred share is 100% of the price paid per share of the controlling stake.

Under Brazilian law, the protections afforded to minority shareholders are different from those in the United States. In particular, judicial guidance with respect to shareholder disputes is less established under

Brazilian law than U.S. law and there are different procedural requirements for bringing shareholder lawsuits, such as shareholder derivative suits. As a result, in practice it may be more difficult for our minority shareholders to enforce their rights against us or our directors or controlling shareholder than it would be for shareholders of a U.S. company.

Similarly to dissenting shareholders of corporations incorporated under the State of Delaware, under the Brazilian corporation law, a dissenting or non-voting shareholder has the right to withdraw from a company and be reimbursed for the value of the preferred or common shares held, whenever a decision is taken at a general shareholders’ meeting by a vote of shareholders representing at least 50% of the total outstanding voting capital to:


	•	create a new class of preferred shares or increase disproportionately an existing class of preferred shares relative to the other classes of shares, unless such action is provided for or authorized by our by-laws (our by-laws allow us to do so);

	•	modify a preference, privilege or condition of redemption or amortization conferred on one or more classes of preferred shares, or create a new class with greater privileges than the existing classes of preferred shares;

	•	reduce the mandatory distribution of dividends;

	•	merge or consolidate us with another company;

	•	participate in a centralized group of companies as defined in the Brazilian corporation law and subject to the conditions set forth therein;

	•	change our corporate purpose, including a sale of the voting control of Gol to a third party;

	•	transfer all of our shares to another company or receive shares of another company in order to make the company whose shares were transferred a wholly owned subsidiary of such company, known as incorporação de ações;

	•	conduct a spin-off that results in (a) a change of our corporate purposes, except if the assets and liabilities of the spun-off company are contributed to a company that is engaged in substantially the same activities, (b) a reduction in the mandatory dividend or (c) any participation in a centralized group of companies, as defined under the Brazilian corporation law; or

	•	acquire control of another company at a price which exceeds the limits set forth in the Brazilian corporation law.

In the event that the entity resulting from a merger, consolidation, or incorporação de ações, or spin-off of a listed company fails to become a listed company within 120 days of the shareholders meeting at which such decision was taken, the dissenting or non-voting shareholders may also exercise their withdrawal right.

If there is a resolution to (i) merge or consolidate us with another company; (ii) incorporação de ações; (iii) participate in a group of companies, as defined under the Brazilian corporation law, or (iv) acquire control of another company, the withdrawal rights are exercisable only if our shares do not satisfy certain tests of liquidity and dispersal of the type or class of shares in the market at the time of the general meeting.

Only holders of shares adversely affected by the changes mentioned in the first and second items above may withdraw their shares.

The right of withdrawal lapses 30 days after publication of the minutes of the relevant general shareholders’ meeting that approved the corporate actions described above. In the case of the changes mentioned in the first and second items above, the resolution is subject to confirmation by the preferred shareholders, which must be obtained at a special meeting held within one year. In those cases, the 30-day term is counted from the date of publication of the minutes of the special meeting. We would be entitled to reconsider any action triggering appraisal rights within 10 days following the expiration of such rights if the

redemption of shares of dissenting or non-voting shareholders would jeopardize our financial stability. Shares to be purchased by us from the dissenting or non-voting shareholders exercising appraisal rights will be valued at an amount equal to the lesser of the ratable portion attributable to such shares of our shareholders’ equity as shown on the last balance sheet approved at a general shareholders’ meeting (book value) and the ratable portion attributable to such shares of the economic value of the company, pursuant to an appraisal report produced in accordance with the provisions of the Brazilian corporation law. If more than 60 days have elapsed since the date of such balance sheet, dissenting shareholders may require that the book value of their shares be calculated on the basis of a new balance sheet. As a general rule, shareholders who acquire their shares after the first notice convening the general shareholders’ meeting or after the relevant press release concerning the meeting is published will not be entitled to appraisal rights.

For purposes of the right of withdrawal, the concept of “dissenting shareholder,” under the Brazilian corporation law, includes not only those shareholders who vote against a specific resolution, but also those who abstain from voting, who fail to attend the shareholders meeting or who do not have voting rights. The concept of “dissenting shareholder” under the Brazilian corporation law differs from that of “dissenting shareholder” under Delaware law, under which a dissenting shareholder is generally a shareholder who objects to a proposed corporate action and demands payment for his or her shares before such action is voted upon.

Each of our shareholders generally has a preemptive right to subscribe for shares or convertible securities in any capital increases, in proportion to its shareholdings. A minimum period of 30 days, unless a shorter period is established by our board directors, following the publication of notice of the capital increase is allowed for the exercise of the right and the right is negotiable. In the event of a capital increase which would maintain or increase the proportion of capital represented by preferred shares, holders of ADSs or preferred shares would have preemptive rights to subscribe only to newly issued preferred shares. In the event of a capital increase which would reduce the proportion of capital represented by preferred shares, holders of ADSs or preferred shares would have preemptive rights to subscribe for preferred shares, in proportion to their shareholdings, and for common shares, only to the extent necessary to prevent dilution of their equity participation. (See “Risks Relating to the ADSs and Our Preferred Shares—Holders of ADSs may be unable to exercise preemptive rights with respect to our preferred shares”). Our by-laws provide that our board of directors may, within the limit of its authorized capital, withdraw preemptive rights to existing shareholders in connection with an increase in share capital through sale in stock exchanges, public offerings or public exchange offers. In addition, Brazilian corporation law provides that the granting or exercise of stock options pursuant to certain stock option plans is not subject to preemptive rights. Shareholders of corporations incorporated under the laws of the State of Delaware generally do not have preemptive rights unless set forth specifically in such corporations’ charters.

Each common share entitles its holder to one vote at our shareholders’ meetings. Preferred shares have no voting rights, except that each preferred share entitles its holder to one vote at our shareholders’ meeting to decide on certain specific matters, such as (a) any transformation of the company into another corporate type; (b) any merger, consolidation or spin-off of the company; (c) approval of any transactions between the company and its controlling shareholder or parties related to the controlling shareholder; (d) approval of any evaluation of assets to be delivered to the company in payment for shares issued in a capital increase; (e) appointment of an expert to ascertain the fair value of the company in connection with any deregistration and delisting tender offer; (f) any changes to these voting rights; and (g) approval of a change of our corporate purpose. Holders of preferred shares are entitled to attend shareholders’ meetings and to participate in the discussions. The Brazilian corporation law provides that non-voting shares, such as preferred shares, may acquire voting rights if the company fails to distribute fixed or minimum dividends in connection with such shares for three consecutive fiscal years and will retain such voting rights until the distribution of such fixed or minimum dividends. Because our preferred shares are not entitled to the payment of any fixed or minimum dividend, holders of our preferred shares cannot acquire voting rights as a result of our failure to distribute

According to the Brazilian corporation law, any change in the preferences or rights of our preferred shares, or the creation of a class of shares having priority over our preferred shares, unless such change is authorized by our by-laws, would require the approval of our preferred shareholders in a special shareholders’ meeting in addition to approval by a majority of the holders of our outstanding voting shares. The holders of preferred shares would vote as a class at the special meeting.

The Brazilian corporation law grants (i) holders of preferred shares without voting rights (or with restricted voting rights) representing 10% of the total issued capital stock, and (ii) holders of our common shares that are not part of the controlling group, and represent at least 15% of the voting capital stock, the right to appoint a member to the board of directors, by voting during the annual shareholders’ meeting. If none of our non-controlling holders of common or preferred shares meets the respective thresholds described above, holders of preferred or common shares representing at least 10% of the share capital would be able to combine their holdings to appoint one member and an alternate to our board of directors. Such rights may only be exercised by those shareholders who prove that they have held the required stake with no interruption during at least the three months directly preceding our annual shareholders meeting. Until 2005, the board members that may be elected by the preferred shareholders as described above must be chosen from a list of three names indicated by our controlling shareholders.

Holders of common shares are entitled to certain rights that cannot be amended by changes in the by-laws or at a general shareholders’ meeting, which include (i) the right to vote at general shareholders’ meetings; (ii) the right to participate in distributions of dividends and interest on capital and to share in the remaining assets of the company in the event of liquidation; (iii) preemptive rights in certain circumstances; and (iv) the right to withdraw from the company in certain cases. In addition to those rights, the by-laws and the majority of the voting shareholders may establish additional rights and, likewise, remove them. Currently, our by-laws do not establish any rights in addition to those already set forth by the Brazilian corporation law. The Level 2 of Differentiated Corporate Governance Practices, which we will comply with, provides for the granting of voting rights to holders of preferred shares in connection with certain matters, including corporate restructurings, mergers and related party transactions.

Controlling shareholders may nominate and elect a majority of the members of the board of directors of Brazilian companies. In a Brazilian company, management is not entitled to nominate directors for election by the shareholders. Non-controlling shareholders and holders of non-voting shares are entitled to elect representatives to the board, as described above. Holders of a threshold percentage of the voting shares may also request, up to 48 hours prior to any general shareholders’ meeting, that the election of directors be subject to cumulative voting. The threshold percentage required for cumulative voting for a corporation such as ours is currently 5% of the outstanding shares. Shareholders who vote to elect a representative of the non-controlling shareholders may not cast cumulative votes to elect other members of the board.

Our shareholders may, at any time, convert common shares into preferred shares, at the rate of one common share to one preferred share, to the extent such shares are duly paid and provided that the amount of preferred shares does not exceed 50% of the total amount of shares issued. Any request for conversion must be delivered to our board of executive officers and, once accepted by the board of executive officers, must be confirmed by our board of directors at the first meeting after the date of the request for conversion.

Unlike the laws governing corporations incorporated under the laws of the State of Delaware, the Brazilian corporation law does not allow shareholders to approve matters by written consent obtained as a response to a consent solicitation procedure. All matters subject to approval by the shareholders must be approved in a general meeting, duly convened pursuant to the provisions of Brazilian corporation law.

General and special shareholders’ meetings may be called by publication of a notice in the Diário Oficial do Estado de São Paulo and in a newspaper of general circulation in our principal place of business at least 15 days prior to the meeting. Special meetings are convened in the same manner as general shareholders’ meetings and may occur immediately before or after a general meeting.

Differently from companies incorporated under the laws of the State of Delaware, Brazilian companies generally do not employ “poison pill” provisions to prevent hostile takeovers. As most Brazilian companies have clearly identified controlling shareholders, hostile takeovers are highly unusual and no developed body of case law addresses the limits on the ability of management to prevent or deter potential hostile bidders. The Brazilian corporation law and our by-laws require any party that acquires our control to extend a tender offer for common and preferred shares held by non-controlling shareholders at the same purchase price paid to the controlling shareholder.

In connection with our listing with Level 2 of Differentiated Corporate Governance Practices, we, our controlling shareholders, directors and officers have undertaken to refer to arbitration any and all disputes arising out of the Level 2 rules or any other corporate matters. See “Market Information”. Under our by-laws, any disputes among us, our shareholders and our management with respect to the application of Level 2 rules, the Brazilian Corporate Law or the application of the rules and regulations regarding Brazilian capital markets, will be resolved by arbitration conducted pursuant to the BOVESPA Arbitration Rules. Any disputes among shareholders, including holders of ADSs, and disputes between us and shareholders, including holders of ADSs, will be submitted to arbitration in accordance with the BOVESPA Arbitration Rules.

Because our preferred shares are in registered book-entry form, Banco Itaú S.A., as registrar, must effect any transfer of shares by an entry made in its books, in which it debits the share account of the transferor and credits the share account of the transferee. When our shares are acquired or sold on a Brazilian stock exchange, the transfer is effected on the records of our registrar by a representative of a brokerage firm or the stock exchange’s clearing system. Transfers of shares by a foreign investor are executed in the same way by that investor’s local agent on the investor’s behalf except that, if the original investment were registered with the Central Bank pursuant to Resolution No. 2,689, the foreign investor should also seek amendment through its local agent, if necessary, of the electronic registration to reflect the new ownership. The BOVESPA operates a clearinghouse through CBLC. The fact that such shares are subject to custody with the relevant stock exchange will be reflected in our registry of shareholders. Each participating shareholder will, in turn, be registered in the register of our beneficial shareholders that is maintained by CBLC and will be treated in the same way as registered shareholders.

At each annual general shareholders’ meeting, our board of directors is required to propose how our earnings for the preceding fiscal year are to be allocated. For purposes of Brazilian corporation law, a company’s non-consolidated net income after federal income tax and social contribution on net income for such fiscal year, net of any accumulated losses from prior fiscal years and amounts allocated to employees’ and management’s participation in earnings, represents its “income” for such fiscal year. In accordance with the Brazilian corporation law, an amount equal to the company’s “income,” as adjusted (the “distributable amount”), will be available for distribution to shareholders in any particular year. The distributable amount will be affected by the following:


	•	reduced by amounts allocated to the legal reserve;

	•	reduced by amounts allocated to the statutory reserve, if any;

	•	reduced by amounts allocated to the contingency reserve, if any;

	•	reduced by amounts allocated to the unrealized profits reserve established by the company in compliance with applicable law (as discussed below);

	•	reduced by amounts allocated to the reserve for investment projects (as discussed below); and

	•	increased by reversals of reserves recorded in prior years.

Our by-laws do not provide for statutory or contingency reserves. Under the Brazilian corporation law and according to our by-laws, we are required to maintain a “legal reserve” to which we must allocate 5% of our “income” for each fiscal year until the amount of the reserve equals 20% of paid-in capital. We are not required to make any allocations to our legal reserve in respect of any fiscal year in which such reserve, when added to our capital reserves, exceeds 30% of our capital. Accumulated losses, if any, may be charged against the legal reserve. Other than that, the legal reserve can only be used to increase our capital. The legal reserve is subject to approval by the shareholders voting at the annual shareholders’ meeting and may be transferred to capital but is not available for the payment of dividends in subsequent years. Our calculation of net income and allocations to reserves for any fiscal year are determined on the basis of our non-consolidated financial statements prepared in accordance with the Brazilian corporation law.

Under the Brazilian corporation law, a portion of a corporation’s “income” may be allocated for discretionary appropriations for plant expansion and other fixed or working capital investment projects, the amount of which is based on a capital budget previously presented by management and approved by the shareholders in a general shareholders’ meeting. After completion of the relevant capital projects, the company may retain the appropriation until shareholders vote to transfer all or a portion of the reserve to capital or retained earnings. The Brazilian corporation law provides that, if a project to which the reserve for investment projects account is allocated has a term exceeding one year, the budget related to the project must be submitted to the shareholders’ meeting each fiscal year until the relevant investment is completed.

Under the Brazilian corporation law, the amount by which the mandatory distribution exceeds the “realized” portion of net income for any particular year may be allocated to the unrealized profits reserve and the mandatory distribution may be limited to the “realized” portion of net income. The “realized” portion of net income is the amount by which “income” exceeds the sum of (a) our net positive results, if any, from the equity method of accounting for earnings and losses of our subsidiaries and certain affiliates, and (b) the profits, gains or income obtained on transactions maturing after the end of the following fiscal year. As amounts allocated to the unrealized income reserve are realized in subsequent years, such amounts must be added to the dividend payment relating to the year of realization.

Under Brazilian tax legislation, a portion of the income taxes payable may also be transferred to a general “fiscal incentive reserve” in amounts equivalent to the reduction in the company’s income tax liability which

Under the Brazilian corporation law, any company may create a “statutory” reserve, which reserve must be described in the company’s by-laws. Those by-laws which authorize the allocation of a percentage of a company’s net income to the statutory reserve must also indicate the purpose, the criteria for allocation and the maximum amount of the reserve. The Brazilian corporation law provides that all discretionary allocations of “income,” including the unrealized profits reserve and the reserve for investment projects, are subject to approval by the shareholders voting at the general shareholders’ meeting and may be transferred to capital or used for the payment of dividends in subsequent years. The fiscal incentive reserve and the legal reserve are also subject to approval by the shareholders voting at the general shareholders’ meeting and may be transferred to capital or used to absorb losses, but are not available for the payment of dividends in subsequent years.

The amounts available for distribution may be further increased by a reversion of the contingency reserve for anticipated losses constituted in prior years but not realized. Allocations to the contingency reserve are also subject to approval by the shareholders voting at the general shareholders meeting. The amounts available for distribution are determined on the basis of our non-consolidated financial statements prepared in accordance with Brazilian GAAP.

The balance for the profit reserve accounts, except for the contingency reserve and unrealized profits reserve, may not exceed the share capital. If this happens, a shareholders’ meeting must resolve whether the excess will be applied to pay in the subscribed and unpaid capital, to increase and pay in the subscribed stock capital or to distribute dividends.

Pursuant to Law No. 10,303, net income unallocated to the accounts mentioned above must be distributed as dividends.

The Brazilian corporation law generally requires that the by-laws of each Brazilian corporation specify a minimum percentage of the amounts available for distribution by such corporation for each fiscal year that must be distributed to shareholders as dividends, also known as the mandatory distribution.

The mandatory distribution is based on a percentage of adjusted non-consolidated net income, not lower than 25%, rather than a fixed monetary amount per share. If the by-laws of a corporation are silent in this regard, the percentage is deemed to be 50%. Under our by-laws, at least 25% of our adjusted non-consolidated net income, as calculated under Brazilian GAAP and adjusted under the Brazilian corporation law (which differs significantly from net income as calculated under U.S. GAAP), for the preceding fiscal year must be distributed as a mandatory annual dividend. Adjusted net income means the distributable amount after any deductions for the legal reserve and contingency reserves and any reversals of the contingency reserves created in previous fiscal years. The Brazilian corporation law, however, permits a publicly held company, such as us, to suspend the mandatory distribution of dividends in any fiscal year in which the board of directors reports to the shareholders’ meeting that the distribution would be inadvisable in view of the company’s financial condition. The suspension is subject to the approval at the shareholders’ meeting and review by members of the fiscal committee. While the law does not establish the circumstances in which payment of the mandatory dividend would be “inadvisable” based on the company’s financial condition, it is generally agreed that a company need not pay the mandatory dividend if such payment threatens the existence of the company as a going concern or harms its normal course of operations. In the case of publicly held corporations, the board of directors must file a justification for such suspension with the CVM within five days of the relevant general meeting. If the mandatory dividend is not paid and funds are available, those funds shall be attributed to a special reserve account. If not absorbed by subsequent losses, those funds shall be paid out as dividends as soon as the financial condition of the company permits.

We are required by the Brazilian corporation law to hold an annual general shareholders’ meeting by no later than April 30 of each year, at which time, among other things, the shareholders have to decide on the

payment of an annual dividend. Additionally, interim dividends may be declared by the board of directors. Any holder of record of shares at the time of a dividend declaration is entitled to receive dividends. Dividends on shares held through depositaries are paid to the depositary for further distribution to the shareholders. Under the Brazilian corporation law, dividends are generally required to be paid to the holder of record on a dividend declaration date within 60 days following the date the dividend was declared, unless a shareholders’ resolution sets forth another date of payment, which, in either case, must occur prior to the end of the fiscal year in which such dividend was declared. Pursuant to our by-laws, unclaimed dividends do not bear interest, are not monetarily adjusted and revert to us three years after dividends were declared. See “Description of American Depositary Shares.”

In general, shareholders who are not residents of Brazil must register their equity investment with the Central Bank to have dividends, sales proceeds or other amounts with respect to their shares eligible to be remitted outside Brazil. The preferred shares underlying the ADSs are held in Brazil by Banco Itaú S.A., also known as the custodian, as agent for the depositary, that is the registered owner on the records of the registrar for our shares. The current registrar is Banco Itaú S.A. The depositary registers the preferred shares underlying the ADSs with the Central Bank and, therefore, is able to have dividends, sales proceeds or other amounts with respect to the preferred shares remitted outside Brazil.

Payments of cash dividends and distributions, if any, are made in reais to the custodian on behalf of the depositary, which then converts such proceeds into U.S. dollars and causes such U.S. dollars to be delivered to the depositary for distribution to holders of ADSs. In the event that the custodian is unable to convert immediately the Brazilian currency received as dividends into U.S. dollars, the amount of U.S. dollars payable to holders of ADSs may be adversely affected by depreciations of the Brazilian currency that occur before the dividends are converted. Under the current Brazilian corporation law, dividends paid to persons who are not Brazilian residents, including holders of ADSs, will not be subject to Brazilian withholding tax, except for dividends declared based on profits generated prior to December 31, 1995, which will be subject to Brazilian withholding income tax at varying tax rates. See “Taxation— Brazilian Tax Considerations.”

Holders of ADSs have the benefit of the electronic registration obtained from the Central Bank, which permits the depositary and the custodian to convert dividends and other distributions or sales proceeds with respect to the preferred shares represented by ADSs into foreign currency and remits the proceeds outside Brazil. In the event the holder exchanges the ADSs for preferred shares, the holder will be entitled to continue to rely on the depositary’s certificate of registration for five business days after the exchange. Thereafter, in order to convert foreign currency and remit outside Brazil the sales proceeds or distributions with respect to the preferred shares, the holder must obtain a new certificate of registration in its own name that will permit the conversion and remittance of such payments through the commercial rate exchange market. See “Description of Capital Stock— Regulation of Foreign Investment and Exchange Controls.”

If the holder is not a duly qualified investor and does not obtain an electronic certificate of foreign capital registration, a special authorization from the Central Bank must be obtained in order to remit from Brazil any payments with respect to the preferred shares through the commercial rate exchange market. Without this special authorization, the holder may currently remit payments with respect to the preferred shares through the floating rate exchange market, although no assurance can be given that the floating rate exchange market will be accessible for these purposes in the future.

In addition, a holder who is not a duly qualified investor and who has not obtained an electronic certificate of foreign capital registration or a special authorization from the Central Bank may remit these payments by international transfer of Brazilian currency pursuant to Central Bank Resolution No. 1,946, dated July 29, 1992, and Central Bank Circular No. 2,677, dated April 10, 1996. The subsequent conversion of such Brazilian currency into U.S. dollars may be made by international financial institutions under a mechanism currently available in the floating rate exchange market. However, we cannot assure you that this mechanism will exist or be available at the time payments with respect to the preferred shares are made.

Under current Brazilian legislation, the federal government may impose temporary restrictions of foreign capital abroad in the event of a serious imbalance or an anticipated serious imbalance of Brazil’s balance of payments.

Under Brazilian tax legislation effective January 1, 1996, Brazilian companies are permitted to pay “interest” to holders of equity securities and treat such payments as an expense for Brazilian income tax purposes and, beginning in 1998, for social contribution purposes. The purpose of the tax law change is to encourage the use of equity investment, as opposed to debt, to finance corporate activities. Payment of such interest may be made at the discretion of our board of directors, subject to the approval of the shareholders at a general shareholders’ meeting. The amount of any such notional “interest” payment to holders of equity securities is generally limited in respect of any particular year to the greater of:


	•	50% of net income (after the deduction of the provisions for social contribution on net profits but before taking into account the provision for income tax and the interest attributable to shareholders’ equity) for the period in respect of which the payment is made; or

	•	50% of the sum of retained earnings and profit reserves as of the beginning of the year in respect of which such payment is made.

For Brazilian GAAP accounting purposes, although the interest charge must be reflected in the statement of operations to be tax deductible, the charge is reversed before calculating net income in the statutory financial statements and deducted from shareholders’ equity in a manner similar to a dividend. Any payment of interest in respect of preferred shares (including the ADSs) is subject to Brazilian withholding tax at the rate of 15%, or 25% in the case of a shareholder domiciled in a tax haven (see “Taxation— Brazilian Tax Considerations”). If such payments are accounted for, at their net value, as part of any mandatory dividend, the tax is paid by the company on behalf of its shareholders, upon distribution of the interest. In case we distribute interest attributed to shareholders’ equity in any year, and that distribution is not accounted for as part of mandatory distribution, Brazilian income tax would be borne by the shareholders. For U.S. GAAP accounting purposes, interest attributable to shareholders’ equity is reflected as a dividend payment.

Under our by-laws, interest attributable to shareholders’ equity may be treated as a dividend for purposes of the mandatory dividend.

The following table sets forth the distributions out of net income that we made or will make to our shareholders in respect of our 2001, 2002 and 2003 net income. All these amounts distributed or to be distributed were or will be in the form of interest attributed to shareholders’ equity.


(1)	In millions of reais.
(2)	Represents distribution divided by net income, as calculated under Brazilian GAAP and adjusted under the Brazilian corporation law.

We intend to declare and pay dividends and/or interest attributed to shareholders’ equity, as required by the Brazilian corporation law and our by-laws. Our board of directors may approve the distribution of dividends and/or interest attributed to shareholders’ equity, calculated based on our non-consolidated semiannual or quarterly financial statements. The declaration of annual dividends, including dividends in excess of the mandatory distribution, requires approval by the vote of the majority of the holders of our common shares. The amount of any distributions will depend on many factors, such as our results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by our board of directors and shareholders. Within the context of our tax planning, we may in the future continue determining that it is to our benefit to distribute interest attributed to shareholders’ equity.

The Bank of New York, as depositary, will execute and deliver the ADRs. Each ADR is a certificate evidencing a specific number of American Depositary Shares, also referred to as ADSs. Each ADS will represent two preferred shares (or a right to receive two preferred shares) deposited with the principal São Paulo office of Banco Itaú S.A., as custodian for the depositary in Brazil. Each ADS will also represent any other securities, cash or other property which may be held by the depositary. The depositary’s office at which the ADRs will be administered is located at 101 Barclay Street, New York, New York 10286.

You may hold ADSs either directly (by having an ADR registered in your name) or indirectly through your broker or other financial institution. If you hold ADSs directly, you are an ADR holder. This description assumes you hold your ADSs directly. If you hold the ADSs indirectly, you must rely on the procedures of your broker or other financial institution to assert the rights of ADR holders described in this section. You should consult with your broker or financial institution to find out what those procedures are.

As an ADR holder, we will not treat you as one of our shareholders and you will not have shareholder rights. Brazilian law governs shareholder rights. The depositary will be the holder of the preferred shares underlying your ADSs. As a holder of ADRs, you will have ADR holder rights. A deposit agreement among us, the depositary and you, as an ADR holder, and the beneficial owners of ADRs sets out ADR holder rights as well as the rights and obligations of the depositary. New York law governs the deposit agreement and the ADRs.

The following is a summary of the material provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement and the form of ADR. See “Where You Can Find More Information” for directions on how to obtain copies of those documents.

The depositary has agreed to pay to you the cash dividends or other distributions it or the custodian receives on preferred shares or other deposited securities, after deducting its fees and expenses described below. You will receive these distributions in proportion to the number of preferred shares your ADSs represent.


	•	Cash. The depositary will convert any cash dividend or other cash distribution we pay on the preferred shares into U.S. dollars, if it can do so on a reasonable basis and can transfer the U.S. dollars to the United States. If that is not possible or if any government approval is needed and cannot be obtained, the deposit agreement allows the depositary to distribute the foreign currency only to those ADR holders to whom it is possible to do so. It will hold the foreign currency it cannot convert for the account of the ADR holders who have not been paid. It will not invest the foreign currency and it will not be liable for any interest.


		Before making a distribution, the depositary will deduct any withholding taxes that must be paid. See “Taxation.” It will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. If the exchange rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of the distribution.


	•	Shares. The depositary may distribute additional ADSs representing any preferred shares we distribute as a dividend or free distribution. The depositary will only distribute whole ADSs. It will sell preferred shares, which would require it to deliver a fractional ADS and distribute the net proceeds in the same way as it does with cash. If the depositary does not distribute additional ADSs, the outstanding ADSs will also represent the new preferred shares.

	•	Rights to purchase additional preferred shares. If we offer holders of our securities any rights to subscribe for additional preferred shares or any other rights, the depositary may make these rights


		available to you. If the depositary decides it is not legal and practical to make the rights available but that it is practical to sell the rights, the depositary will use reasonable efforts to sell the rights and distribute the proceeds in the same way as it does with cash. The depositary will allow rights that are not distributed or sold to lapse. In that case, you will receive no value for them.


		If the depositary makes rights to purchase preferred shares available to you, it will exercise the rights and purchase the preferred shares on your behalf. The depositary will then deposit the shares and deliver ADSs to you. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.

		U.S. securities laws may restrict transfers and cancellation of the ADSs representing preferred shares purchased upon exercise of rights. For example, you may not be able to trade these ADSs freely in the United States. In this case, the depositary may deliver restricted depositary shares that have the same terms as the ADRs described in this section except for changes needed to put the necessary restrictions in place.


	•	Other Distributions. The depositary will send to you anything else we distribute on deposited securities by any means it thinks is legal, fair and practical. If it cannot make the distribution in that way, the depositary has a choice. It may decide to sell what we distributed and distribute the net proceeds, in the same way as it does with cash. Or, it may decide to hold what we distributed, in which case ADSs will also represent the newly distributed property. However, the depositary is not required to distribute any securities (other than ADSs) to you unless it receives satisfactory evidence from us that it is legal to make that distribution.

The depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any ADR holders. We have no obligation to register ADSs, preferred shares, rights or other securities under the Securities Act. We also have no obligation to take any other action to permit the distribution of ADRs, preferred shares, rights or anything else to ADR holders. (See “Risk Factors—Risks Relating to the ADSs and Our Preferred Shares”). This means that you may not receive the distributions we make on our preferred shares or any value for them if it is illegal or impractical for us to make them available to you.

The depositary will deliver ADSs if you or your broker deposits preferred shares or evidence of rights to receive preferred shares with the custodian. Upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will register the appropriate number of ADSs in the names you request and will deliver the ADRs at its office to the persons you request.

If you surrender ADSs to the depositary, upon payment of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will deliver the preferred shares and any other deposited securities underlying the surrendered ADSs to you or a person you designate at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities at its office, if feasible.

You may instruct the depositary to vote the shares underlying your ADRs. If we ask for your instructions, the depositary will notify you of the upcoming vote and arrange to deliver our voting materials to you. The materials will describe the matters to be voted on and explain how you may instruct the depositary to vote the shares or other deposited securities underlying your ADRs as you direct by a specified date. For instructions to

be valid, the depositary must receive them on or before the date specified. The depositary will try, as far as practical, subject to Brazilian law and the provisions of our by-laws, to vote or to have its agents vote the shares or other deposited securities as you instruct. Otherwise, you will not be able to exercise your right to vote unless you withdraw the shares. However, you may not know about the meeting far enough in advance to withdraw the shares. We will use our best efforts to request that the depositary notify you of upcoming votes and ask for your instructions.

The depositary may deduct the amount of any taxes owed from any payments to you. It may also sell deposited securities, by public or private sale, to pay any taxes owed. You will remain liable if the proceeds of the sale are not enough to pay the taxes. If the depositary sells deposited securities, it will, if appropriate, reduce the number of ADSs to reflect the sale and pay to you any proceeds, or send to you any property, remaining after it has paid the taxes.

We may agree with the depositary to amend the deposit agreement and the ADRs without your consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, or prejudices a substantial right of ADR holders, it will not become effective for outstanding ADRs until 30 days after the depositary notifies ADR holders of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your ADR, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended.

The depositary will terminate the deposit agreement if we ask it to do so. The depositary may also terminate the deposit agreement if the depositary has told us that it would like to resign and we have not appointed a new depositary bank within 60 days. In either case, the depositary must notify you at least 30 days before termination.

After termination, the depositary and its agents will do the following under the deposit agreement but nothing else: (a) advise you that the deposit agreement is terminated, (b) collect distributions on the deposited securities, (c) sell rights and other property, and (d) deliver preferred shares and other deposited securities upon cancellation of ADRs. One year after termination, the depositary may sell any remaining deposited securities by public or private sale. After that, the depositary will hold the money it received on the sale, as well as any other cash it is holding under the deposit agreement for the pro rata benefit of the ADR holders that have not surrendered their ADRs. It will not invest the money and has no liability for interest. The depositary’s only obligations will be to account for the money and other cash. After termination our only obligations will be to indemnify the depositary and to pay fees and expenses of the depositary that we agreed to pay.

The deposit agreement expressly limits our obligations and the obligations of the depositary. It also limits our liability and the liability of the depositary. We and the depositary:


	•	are only obligated to take the actions specifically set forth in the deposit agreement without negligence or bad faith;

	•	are not liable if either of us is prevented or delayed by law or circumstances beyond our control from performing our obligations under the deposit agreement;

	•	are not liable if either of us exercises discretion permitted under the deposit agreement;

	•	have no obligation to become involved in a lawsuit or other proceeding related to the ADRs or the deposit agreement on your behalf or on behalf of any other party; and

	•	may rely upon any documents we believe in good faith to be genuine and to have been signed or presented by the proper party.

In the deposit agreement, we agree to indemnify the depositary for acting as depositary, except for losses caused by the depositary’s own negligence or bad faith, and the depositary agrees to indemnify us for losses resulting from its negligence or bad faith.

Before the depositary will deliver or register a transfer of an ADR, make a distribution on an ADR, or permit withdrawal of preferred shares, the depositary may require:


	•	payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any preferred shares or other deposited securities;

	•	satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and

	•	compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents.

The depositary may refuse to deliver ADSs or register transfers of ADSs generally when the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable to do so.

You have the right to surrender your ADSs and withdraw the underlying preferred shares at any time except:


	•	When temporary delays arise because: (i) the depositary has closed its transfer books or we have closed our transfer books; (ii) the transfer of preferred shares is blocked to permit voting at a shareholders’ meeting; or (iii) we are paying a dividend on our preferred shares.

	•	When you owe money to pay fees, taxes and similar charges.

	•	When it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADRs or to the withdrawal of preferred shares or other deposited securities.

This right of withdrawal may not be limited by any other provision of the deposit agreement.

The deposit agreement permits the depositary to deliver ADSs before deposit of the underlying preferred shares. This is called a pre-release of the ADSs. The depositary may also deliver preferred shares upon cancellation of pre-released ADSs (even if the ADSs are surrendered before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying preferred shares are delivered to the depositary. The depositary may receive ADRs instead of preferred shares to close out a pre-release. The depositary may pre-release ADSs only under the following conditions: (a) before or at the time of the pre-release, the person to whom the pre-release is being made represents to the depositary in writing that it or its customer owns the preferred shares or ADSs to be deposited; (b) the pre-release is fully collateralized with cash or other collateral that the depositary considers appropriate; and (c) the depositary must be able to close out the pre-release on not more than five business days’ notice. In addition, the depositary will limit the number of ADSs that may be outstanding at any time as a result of pre-release, although the depositary may disregard the limit from time to time, if it thinks it is appropriate to do so. We intend to limit pre-release at our discretion.

The following discussion addresses the material Brazilian and United States federal income tax consequences of acquiring, holding and disposing of our preferred shares or ADSs.

This discussion is not a comprehensive discussion of all the tax considerations that may be relevant to a decision to purchase our preferred shares or ADSs and is not applicable to all categories of investors, some of which may be subject to special rules, and does not specifically address all of the Brazilian and United States federal income tax considerations applicable to any particular holder. It is based upon the tax laws of Brazil and the United States as in effect on the date of this prospectus, which are subject to change, possibly with retroactive effect, and to differing interpretations. Each prospective purchaser is urged to consult its own tax advisor about the particular Brazilian and United States federal income tax consequences to it of an investment in our preferred shares or ADSs. This discussion is also based upon the representations of the depositary and on the assumption that each obligation in the deposit agreement among us, The Bank of New York, as depositary, and the registered holders and beneficial owners of our ADSs, and any related documents, will be performed in accordance with its terms.

Although there presently is no income tax treaty between Brazil and the United States, the tax authorities of the two countries have had discussions that may culminate in such a treaty. We cannot assure you, however, as to whether or when a treaty will enter into force or how it will affect holders of our preferred shares or ADSs.

The following discussion is the opinion of Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados and addresses the material Brazilian tax consequences of the acquisition, ownership and disposition of our preferred shares or ADSs by a holder that is not domiciled in Brazil for purposes of Brazilian taxation and which has registered its investment in such securities with the Central Bank as a U.S. dollar investment (in each case, a Non-Brazilian Holder). Pursuant to Brazilian law, investors may invest in the preferred shares under Resolution No. 2,689.

Resolution No. 2,689 allows foreign investors to invest in almost all financial assets and to engage in almost all transactions available in the Brazilian financial and capital markets, provided that some requirements are fulfilled. In accordance with Resolution No. 2,689, the definition of foreign investor includes individuals, legal entities, mutual funds and other collective investment entities, domiciled or headquartered abroad.

Pursuant to Resolution No. 2,689, foreign investors must: (a) appoint at least one representative in Brazil with powers to perform actions relating to the foreign investment; (b) complete the appropriate foreign investor registration form; (c) register as a foreign investor with the Brazilian securities commission; and (d) register the foreign investment with the Central Bank.

Securities and other financial assets held by foreign investors pursuant to Resolution No. 2,689 must be registered or maintained in deposit accounts or under the custody of an entity duly licensed by the Central Bank or the CVM. In addition, securities trading is restricted to transactions carried out in the stock exchanges or organized over-the-counter markets licensed by the CVM, except for transfers resulting from a corporate reorganization, occurring upon the death of an investor by operation of law or will or as a consequence of the delisting of the relevant shares from a stock exchange and the cancellation of the registration with the CVM.

Taxation of Dividends. Dividends, including dividends in kind, paid by us to the depository in respect of the preferred shares underlying the ADSs or to a Non-Brazilian Holder in respect of preferred shares generally will not be subject to Brazilian income withholding tax. Dividends relating to profits generated prior to December 31, 1995 are subject to a Brazilian withholding tax of 15% to 25% according to the tax legislation applicable to each corresponding year. As from January 1, 1996, stock dividends relating to profits are also not subject to withholding tax in Brazil.

Taxation of Gains. Gains realized outside Brazil by a non-Brazilian holder on the disposition of ADSs to another non-Brazilian holder are not subject to Brazilian tax. According to Law No. 10,833, enacted on December 29, 2003, or Law No. 10,833, the disposition of assets located in Brazil by a non-Brazilian holder, whether to other non-Brazilian holders or Brazilian holders, may become subject to taxation in Brazil. Although we believe that the ADSs do not fall within the definition of assets located in Brazil for purposes of Law No. 10,833, considering the general and unclear scope of such provisions and the lack of a judicial court ruling in respect thereto, we are unable to predict whether such understanding will ultimately prevail in the courts of Brazil.

For purposes of Brazilian taxation, there are two types of Non-Brazilian Holders of preferred shares or ADSs: (a) Non-Brazilian Holders that are not resident or domiciled in a tax haven jurisdiction (i.e., a country or location that does not impose income tax or where the maximum income tax rate is lower than 20% or where the internal legislation imposes restrictions to disclosure of shareholding composition or the ownership of the investment), and that, in the case of holders of preferred shares, are registered before the Central Bank and the CVM to invest in Brazil in accordance with Resolution No. 2,689; and (b) other Non-Brazilian Holders, which include any and all non-residents of Brazil who invest in equity securities of Brazilian companies through any other means and all types of investor that are located in tax haven jurisdiction. The investors mentioned in item (a) above are subject to a favorable tax regime in Brazil, as described below.

The deposit of preferred shares in exchange for ADSs may be subject to Brazilian tax on capital gains at the rate of 15%, or 25% in the case of investors domiciled in a tax haven jurisdiction, if the amount previously registered with the Central Bank as a foreign investment in the preferred shares is lower than (a) the average price per preferred share on a Brazilian stock exchange on which the greatest number of such shares were sold on the day of deposit; or (b) if no preferred shares were sold on that day, the average price on the Brazilian stock exchange on which the greatest number of preferred shares were sold in the 15 trading sessions immediately preceding such deposit. In such case, the difference between the amount previously registered and the average price of the preferred shares calculated as above will be considered to be a capital gain. Such taxation is not applicable in case of investors registered under Resolution No. 2,689 which are not located in a tax haven jurisdiction, which are currently tax exempt from income tax in such transaction.

The withdrawal of ADSs in exchange for preferred shares is not subject to Brazilian tax. Upon receipt of the underlying preferred shares, a Non-Brazilian Holder registered under Resolution No. 2,689 will be entitled to register the U.S. dollar value of such shares with the Central Bank as described below.

As a general rule, Non-Brazilian Holders registered under Resolution No. 2,689 which are not located in a tax haven jurisdiction are subject to income tax at a rate of 15% on gains realized on sales or exchanges of preferred shares outside a Brazilian stock exchange. With reference to proceeds of a redemption or of a liquidating distribution with respect to the preferred shares, the difference between the amount effectively received by the shareholder and the amount of the corresponding acquisition cost of the preferred shares redeemed or liquidated will be also subject to income tax at a rate of 15% once such transactions are treated as a sale or exchange not carried out on Brazilian stock exchange. Gains realized arising from transactions on a Brazilian stock exchange by an investor registered under Resolution No. 2,689 which is not located in a tax haven jurisdiction are exempt from Brazilian income tax. As of January 1, 2000, the preferential treatment under Resolution No. 2,689 is no longer applicable if the Non-Brazilian Holders of the preferred shares or ADSs are resident in a tax haven jurisdiction in accordance with Law No. 9,959 of January 27, 2000. As a consequence, gains realized on transactions performed by such holder on the Brazilian stock exchange are subject to income tax at a rate of 20%. In both transactions, in case of Non-Brazilian Holders who are located in a tax haven jurisdiction, the applicable rate is 25%.

Therefore, non-Brazilian Holders are subject to income tax at a rate of 20% on gains realized on sales or exchanges in Brazil of preferred shares that occur on a Brazilian stock exchange, unless such sale is made by a Non-Brazilian Holder which is not resident in a tax haven jurisdiction, and (a) such a sale is made within five business days of the withdrawal of such preferred shares in exchange for ADSs and the proceeds of such sale are remitted abroad within such five-day period, or (b) such a sale is made under Resolution No. 2,689 by Non-Brazilian Holders which register with the CVM. In these two cases the transaction will be tax exempt.

The “gain realized” as a result of a transaction on a Brazilian stock exchange is the difference between the amount in Brazilian currency realized on the sale or exchange of the shares and their acquisition cost, without any correction for inflation. There can be no assurance that the current preferential treatment for holders of ADSs and Non-Brazilian Holders of preferred shares under Resolution No. 2,689 will continue or will not be changed in the future.

Any exercise of preemptive rights relating to the preferred shares or ADSs will not be subject to Brazilian taxation. Any gain on the sale or assignment of preemptive rights relating to preferred shares by the depositary on behalf of holders of ADSs will be subject to Brazilian income taxation according to the same rules applicable to the sale or disposition of preferred shares.

Distributions of Interest Attributable to Shareholders’ Equity. In accordance with Law No. 9,249, dated December 26, 1995, as amended Brazilian corporations may make payments to shareholders characterized as distributions of interest on the company’s shareholders’ equity. Such interest is calculated by reference to the TJLP as determined by the Central Bank from time to time and cannot exceed the greater of:


	•	50% of net income (after social contribution on profits and before taking such distribution and any deductions for corporate income tax into account) for the period in respect of which the payment is made; or

	•	50% of the sum of retained profits and profits reserves.

Distributions of interest on shareholders’ equity in respect of the preferred shares paid to shareholders who are either Brazilian residents or Non-Brazilian Residents, including holders of ADSs, are subject to Brazilian income withholding tax at the rate of 15%, or 25% in case of shareholders domiciled in a tax haven jurisdiction, and shall be deductible by us as long as the payment of a distribution of interest is approved by our shareholders. The distribution of interest on shareholders’ equity may be determined by our board of directors. We cannot assure you that our board of directors will not determine that future distributions of profits may be made by means of interest on shareholders’ equity instead of by means of dividends.

The amounts paid as distribution of interest on shareholders’ equity are deductible for corporation income tax and social contribution on profit, both of which are taxes levied on our profits, as far as the limits and rules described above are observed by us.

There are no Brazilian inheritance, gift or succession taxes applicable to the ownership, transfer or disposition of preferred shares or ADSs by a Non-Brazilian Holder except for gift and inheritance taxes which are levied by some states of Brazil on gifts made or inheritances bestowed by individuals or entities not resident or domiciled in Brazil or domiciled within the state to individuals or entities resident or domiciled within such state in Brazil. There are no Brazilian stamp, issue, registration or similar taxes or duties payable by holders of preferred shares or ADSs.

Pursuant to Decree 4,494 of December, 2000, the conversion into foreign currency or the conversion into Brazilian currency of the proceeds received by a Brazilian entity from a foreign investment in the Brazilian securities market, including those in connection with the investment in the preferred shares and ADSs and those made under Resolution No. 2,689, is potentially subject to an exchange transactions tax (Imposto Sobre Operações Financeiras — IOF/Câmbio), although at present the rate of such tax is generally zero percent. Under Law No. 8,894 of June 21, 1994, or Law No. 8,894, such IOF tax rate may be increased at any time to a maximum of 25%, but any such increase will only be applicable to transactions occurring after such increase becomes effective.

Law No. 8,894 creates the Tax on Bonds and Securities Transactions (IOF/Títulos), which may be imposed on any transactions involving bonds and securities effected in Brazil, even if there transactions are performed on a Brazilian stock exchange. As a general rule, the rate of this tax is currently zero but the executive branch may increase such rate up to 1.5% per day, but only with respect to future transactions.

Financial transfers are taxed by the Contribuição Provisória sobre Movimentação Financeira, or CPMF, at a rate of 0.38%. The CPMF is levied upon the remittance of proceeds on the amount converted in reais of the transaction and is required to be withheld by the financial institution that carries out the transaction. Currently, the funds transferred from a bank account to acquire shares on the Brazilian stock exchange are exempt from CPMF.

Registered Capital. The amount of an investment in preferred shares held by a Non-Brazilian Holder who qualifies under Resolution No. 2,689 and obtains registration with the CVM, or by the depositary, as the depositary representing such holder, is eligible for registration with the Central Bank. Such registration allows the remittance outside of Brazil of any proceeds of distributions on the shares, and amounts realized with respect to disposition of such shares. The amounts received in Brazilian currency are converted into foreign currency through the use of the commercial market rate. The registered capital for preferred shares purchased in the form of ADSs or purchased in Brazil, and deposited with the depositary in exchange for ADSs will be equal to their purchase price (in U.S. dollars) to the purchaser. The registered capital for preferred shares that are withdrawn upon surrender of ADSs, as applicable, will be the U.S. dollar equivalent of the average price of preferred shares, as applicable, on a Brazilian stock exchange on which the greatest number of such preferred shares, as applicable, was sold on the day of withdrawal. If no preferred shares, as applicable, were sold on such day, the registered capital will refer to the average price on the Brazilian stock exchange on which the greatest number of preferred shares, as applicable, were sold in the 15 trading sessions immediately preceding such withdrawal. The U.S. dollar value of the preferred shares, as applicable, is determined on the basis of the average commercial market rate quoted by the Central Bank on such date or, if the average price of preferred shares is determined under the last preceding sentence, the average of such average quoted rates on the same 15 dates used to determine the average price of the preferred shares.

A Non-Brazilian Holder of preferred shares may experience delays in effecting such action, which may delay remittances abroad. Such a delay may adversely affect the amount, in U.S. dollars, received by the Non-Brazilian Holder.

The following discussion, subject to the limitations therein, is the opinion of Shearman & Sterling LLP, with respect to the material United States federal income tax consequences of purchasing, holding and disposing of our preferred shares or ADSs. This discussion applies only to beneficial owners of ADSs or preferred shares that are “U.S. Holders,” as defined below. This discussion is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, its legislative history, existing final, temporary and proposed Treasury Regulations, administrative pronouncements by the United States Internal Revenue Service, or IRS, and judicial decisions, all as currently in effect and all of which are subject to change (possibly on a retroactive basis) and to different interpretations.

This discussion does not purport to address all United States federal income tax consequences that may be relevant to a particular holder and you are urged to consult your own tax advisor regarding your specific tax situation. The discussion applies only to U.S. Holders who hold preferred shares or ADSs as “capital assets” (generally, property held for investment) under the Code and does not address the tax consequences that may be relevant to U.S. Holders in special tax situations including, for example:


	•	insurance companies;

	•	tax-exempt organizations;

	•	broker-dealers;

	•	traders in securities that elect to mark to market;

	•	banks or other financial institutions;

	•	holders whose functional currency is not the United States dollar;

	•	United States expatriates;


	•	holders that hold our preferred shares or ADSs as part of a hedge, straddle or conversion transaction; or

	•	holders that own, directly, indirectly, or constructively, 10% or more of the total combined voting power, if any, of our preferred shares or ADSs.

Except where specifically described below, this discussion assumes that we are not a passive foreign investment company, or PFIC, for United States federal income tax purposes. Please see the discussion under “—Taxation of U.S. Holders— Passive Foreign Investment Company Rules” below. Further, this discussion does not address the alternative minimum tax consequences of holding preferred shares or ADSs or the indirect consequences to holders of equity interests in partnerships or other entities that own our preferred shares or ADSs. In addition, this discussion does not address the state, local and foreign tax consequences of holding our preferred shares or ADSs.

You should consult your own tax advisor regarding the United States federal, state, local and foreign income and other tax consequences of purchasing, owning, and disposing of our preferred shares or ADSs in your particular circumstances.

You are a “U.S. Holder” if you are a beneficial owner of preferred shares or ADSs and you are for United States federal income tax purposes:


	•	an individual who is a citizen or resident of the United States;

	•	a corporation, or any other entity taxable as a corporation, created or organized in or under the laws of the United States or any state thereof, including the District of Columbia;

	•	an estate the income of which is subject to United States federal income tax regardless of its source; or

	•	a trust if a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all substantial decisions of the trust (or otherwise if the trust has a valid election in effect under current Treasury regulations to be treated as a United States person).

If a partnership holds preferred shares or ADSs, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. A prospective investor who is a partner of a partnership holding our preferred shares or ADSs should consult its own tax advisor.

For United States federal income tax purposes, a U.S. Holder of an ADS will be treated as the beneficial owner of the preferred shares represented by the ADS.

Cash distributions (including amounts withheld to pay Brazilian withholding taxes and distributions of notional interest charges on shareholders’ equity, but excluding distributions in redemption of the preferred shares treated as exchanges or sales under the Code) made by us to or for the account of a U.S. Holder with respect to preferred shares or ADSs generally will be taxable to such U.S. Holder as ordinary dividend income when such distribution is paid, actually or constructively, out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes). Distributions in excess of our current or accumulated earnings and profits will be treated first as a non-taxable return of capital reducing such U.S. Holder’s adjusted tax basis in the preferred shares or ADSs. Any distribution in excess of such tax basis will be treated as capital gain and will be either long-term or short-term capital gain depending upon whether the U.S. Holder held the preferred shares or ADSs for more than one year. As used below, the term “dividend” means a distribution that constitutes a dividend for U.S. federal income tax purposes.

A U.S. Holder will be entitled, subject to a number of complex limitations and conditions, to claim a United States foreign tax credit in respect of any Brazilian withholding taxes imposed on dividends received on preferred shares or ADSs. U.S. Holders who do not elect to claim a foreign tax credit may instead claim a deduction in respect of such withholding taxes. Dividends received with respect to the preferred shares or

ADSs will be treated as foreign source income, which may be relevant in calculating such U.S. Holder’s United States foreign tax credit limitation and generally will constitute “passive income” or, in the case of certain holders, “financial services income,” for United States foreign tax credit limitation purposes. Holders are urged to consult their tax advisors regarding the availability of the foreign tax credit in their particular circumstances. The IRS has expressed concern that intermediaries in connection with depository arrangements may be taking actions that are inconsistent with the claiming of foreign tax credits by United States persons who are holding depositary shares. Accordingly, investors should be aware that the discussion above regarding the ability to credit Brazilian withholding tax on dividends could be affected by future action taken by the IRS.

Dividends paid by us generally will not be eligible for the dividends received deduction available under the Code to certain United States corporation shareholders. Subject to certain exceptions for short-term and hedged positions, the U.S. dollar amount of dividends received by certain U.S. Holders (including individuals) prior to January 1, 2009 with respect to the ADSs will be subject to taxation at a maximum rate of 15% if the dividends represent “qualified dividend income.” Dividends paid on the ADSs will be treated as qualified dividend income if (i) the ADSs are readily tradable on an established securities market in the United States and (ii) we were not in the year prior to the year in which the dividend was paid, and are not in the year in which the dividend is paid, a passive foreign investment company (“PFIC”), foreign personal holding company (“FPHC”) or foreign investment company (“FIC”). We have applied to list the ADSs for trading on the New York Stock Exchange, and, if listed, the ADSs may qualify as readily tradable on an established securities market in the United States so long as they are so listed. However, no assurances can be given that the ADSs will be or remain readily tradable. Based on our audited consolidated financial statements as well as relevant market and shareholder data, we believe that we were not treated as a PFIC, FPHC or FIC for United States federal income tax purposes with respect to our 2003 taxable year. In addition, based on our audited consolidated financial statements and current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC, FPHC or FIC for our 2004 taxable year. Because these determinations are based on the nature of our income and assets from time to time, and involve the application of complex tax rules, no assurances can be provided that we will not be considered a PFIC, FPHC or FIC for the current, or any past or future tax year.

Based on existing guidance, it is not entirely clear whether dividends received with respect to the preferred shares will be treated as qualified dividends, because the preferred shares are not themselves listed on a United States exchange. In addition, the United States Treasury Department has announced its intention to promulgate rules pursuant to which holders of ADSs or preferred stock and intermediaries through whom such securities are held will be permitted to rely on certifications from issuers to establish that dividends are treated as qualified dividends. Because such procedures have not yet been issued, we are not certain that we will be able to comply with them. Holders of ADSs and preferred shares should consult their own tax advisers regarding the availability of the reduced dividend tax rate in the light of their own particular circumstances.

The amount of any cash distribution paid in Brazilian currency will equal the U.S. dollar value of the distribution, calculated by reference to the exchange rate in effect at the time the distribution is received by the depositary (in the case of ADSs) or by the U.S. Holder (in the case of preferred shares held directly by such U.S. Holder), regardless of whether the payment is in fact converted to U.S. dollars at that time. A U.S. Holder should not recognize any foreign currency gain or loss in respect of such distribution if such Brazilian currency is converted into U.S. dollars on the date received. If the Brazilian currency is not converted into U.S. dollars on the date of receipt, however, gain or loss may be recognized upon a subsequent sale or other disposition of the Brazilian currency. Such foreign currency gain or loss, if any, will be United States source ordinary income or loss.

Because our preferred shares will not be treated as “preferred stock” for purposes of Section 305 of the Code, distributions to U.S. Holders of additional shares of our “non-preferred stock” or preemptive rights relating to such “non-preferred stock” with respect to their preferred shares or ADSs that are made as part of a pro rata distribution to all shareholders in most instances will not be subject to United States federal income tax.

Deposits and withdrawals of preferred shares by U.S. Holders in exchange for ADSs will not result in the realization of gain or loss for United States federal income tax purposes.

A U.S. Holder generally will recognize capital gain or loss upon the sale, exchange or other taxable disposition of preferred shares or ADSs measured by the difference between the amount realized and the U.S. Holder’s adjusted tax basis in the preferred shares or ADSs. Any gain or loss will be long-term capital gain or loss if the preferred shares or ADSs have been held for more than one year. Long-term capital gains of certain U.S. holders (including individuals) are eligible for reduced rates of United States federal income taxation. The deductibility of capital losses is subject to certain limitations under the Code.

If a Brazilian tax is withheld on the sale or other disposition of a preferred share or ADS, the amount realized by a U.S. Holder will include the gross amount of the proceeds of that sale or other disposition before deduction of the Brazilian tax. Capital gain or loss, if any, realized by a U.S. Holder on the sale, exchange or other taxable disposition of a preferred share or ADS generally will be treated as United States source income or loss for United States foreign tax credit purposes. Consequently, in the case of a disposition of a preferred share that is subject to Brazilian tax imposed on the gain (or, in the case of a deposit, in exchange for an ADS or preferred share, as the case may be, that is not registered pursuant to Resolution No. 2,689, on which a Brazilian capital gains tax is imposed (see “—Taxation of Gains”)), the U.S. Holder may not be able to benefit from the foreign tax credit for that Brazilian tax unless the U.S. Holder can apply the credit against United States federal income tax payable on other income from foreign sources in the appropriate income category. Alternatively, the U.S. Holder may take a deduction for the Brazilian tax.

In general, a foreign corporation is a PFIC with respect to a U.S. Holder if, for any taxable year in which the U.S. Holder holds stock in the foreign corporation, at least 75% of its gross income is passive income or at least 50% of the value of its assets (determined on the basis of a quarterly average) produce passive income or are held for the production of passive income. For this purpose, passive income generally includes, among other things, dividends, interest, rents, royalties and gains from the disposition of investment assets (subject to various exceptions). Based upon the nature of our current and projected income, assets and activities, we do not expect the preferred shares or ADSs to be considered shares of a PFIC for United States federal income tax purposes. However, the determination of whether the preferred shares or ADSs constitute shares of a PFIC is a factual determination made annually and thus may be subject to change.

If, contrary to the discussion above, we are treated as a PFIC, a U.S. Holder would be subject to special rules (and may be subject to increased tax liability and form filing requirements) with respect to (a) any gain realized on the sale or other disposition of preferred shares or ADSs, and (b) any “excess distribution” made by us to the U.S. Holder (generally, any distribution during a taxable year in which distributions to the U.S. Holder on the preferred shares or ADSs exceed 125% of the average annual distributions the U.S. Holder received on the preferred shares or ADSs during the preceding three taxable years or, if shorter, the U.S. Holder’s holding period for the preferred shares or ADSs). Under those rules, (a) the gain or excess distribution would be allocated ratably over the U.S. Holder’s holding period for the preferred shares or ADSs, (b) the amount allocated to the taxable year in which the gain or excess distribution is realized and to taxable years before the first day on which we became a PFIC would be taxable as ordinary income, (c) the amount allocated to each prior year in which we were a PFIC would be subject to United States federal income tax at the highest tax rate in effect for that year and (d) the interest charge generally applicable to underpayments of United States federal income tax would be imposed in respect of the tax attributable to each prior year in which we were a PFIC.

A U.S. Holder who owns preferred shares or ADSs during any taxable year we are a PFIC must file IRS Form 8621. In general, if we are treated as a PFIC, the rules described above can be avoided by a U.S. Holder that elects to be subject to a mark-to-market regime for stock in a PFIC. A U.S. Holder may elect mark-to-market treatment for its preferred shares or ADSs, provided the preferred shares or ADSs, for purposes of the rules, constitute “marketable stock” as defined in Treasury Regulations. A U.S. Holder electing the mark-to-

market regime generally would compute gain or loss at the end of each taxable year as if the preferred shares or ADSs had been sold at fair market value. Any gain recognized by the U.S. Holder under mark-to-market treatment, or on an actual sale, would be treated as ordinary income, and the U.S. Holder would be allowed an ordinary deduction for any decrease in the value of preferred shares or ADSs as of the end of any taxable year, and for any loss recognized on an actual sale, but only to the extent, in each case, of previously included market-to-market income not offset by previously deducted decreases in value. Any loss on an actual sale of preferred shares or ADSs would be a capital loss to the extent in excess of previously included mark-to-market income not offset by previously deducted decreases in value. A U.S. Holder’s tax basis in preferred shares or ADSs would increase or decrease by gain or loss taken into account under the mark-to-market regime. A market-to-market election is generally irrevocable.

If we are deemed to be a PFIC for a taxable year, dividends on our ADSs would not be “qualified dividend income” subject to preferential rates of Unites States federal income tax, as described above. See “Certain United States Federal Income Tax Consequences—Distributions on preferred shares or ADSs.”

In general, dividends on preferred shares or ADSs, and payments of the proceeds of a sale, exchange or other disposition of preferred shares or ADSs, paid within the United States or through certain United States-related financial intermediaries to a U.S. Holder are subject to information reporting and may be subject to backup withholding at a current maximum rate of 28% unless the holder (i) is a corporation or other exempt recipient or (ii) provides an accurate taxpayer identification number and certifies that no loss of exemption from backup withholding has occurred.

You generally may obtain a refund of any amounts withheld under the backup withholding rules that exceed your United States federal income tax liability by filing a refund claim with the IRS. The amount of any backup withholding tax from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s United States federal income tax liability, provided that the required information is furnished to the IRS.

Under the terms and subject to the conditions contained in an underwriting agreement dated the date of this prospectus, the international underwriters named below, for whom Morgan Stanley & Co. Incorporated is acting as representative, have severally agreed to purchase, and we and the selling shareholders have agreed to sell to them, severally, the number of ADSs indicated below:

We and the selling shareholders have also entered into a Brazilian underwriting agreement with Banco Morgan Stanley Dean Witter S.A., Unibanco—União de Bancos Brasileiros S.A. and Banco Santander Brasil S.A., providing for the concurrent offer and sale of preferred shares in a public offering in Brazil.

The international underwriters and the Brazilian underwriters have entered into an intersyndicate agreement providing for the coordination of their activities. Under the intersyndicate agreement, the international underwriters and the Brazilian underwriters are permitted to purchase and sell preferred shares among each other and may also engage in stabilization activities. Under the terms of the intersyndicate agreement:


	•	the international underwriters, and any bank, broker or dealer to whom they sell ADSs, will not offer to sell or resell ADSs to any person whom they believe to be a Brazilian person or to any person whom they believe intends to resell ADSs to a Brazilian person; and

	•	the Brazilian underwriters, and any bank, broker or dealer to whom they sell preferred shares, will offer to sell or resell preferred shares only to persons whom they believe to be Brazilian persons and to persons whom they believe intend to resell preferred shares only to Brazilian persons.

The closing of this offering and the Brazilian offering are conditioned upon one another.

The international underwriters are offering our ADSs subject to their acceptance of the ADSs from us and the selling shareholders and subject to prior sale. The underwriting agreement provides that the obligations of the several international underwriters to pay for and accept delivery of the ADSs offered by this prospectus are subject to the approval of certain legal matters by their counsel and to certain other conditions. The international underwriters are obligated to take and pay for all of our ADSs offered by this prospectus if any of such ADSs are taken. However, the international underwriters are not required to take or pay for the ADSs covered by the international underwriters’ over-allotment option described below.

The per ADS price of ADSs sold by the international underwriters shall be the public offering price listed on the cover page of this prospectus, in United States dollars, less an amount not greater than the per ADS amount of the concession to dealers described below.

The international underwriters initially propose to offer part of our ADSs directly to the public at the public offering price listed on the cover page of this prospectus and part to certain dealers at a price that represents a concession not in excess of US$ an ADS, less than the public offering price. Any underwriter may allow, and such dealers may reallow, a concession not in excess of US$ an ADS to other international underwriters or to certain dealers. After the initial offering of our ADSs, the offering price and other selling terms may from time to time be varied by the representatives.

We and Comporte Participações S.A. have granted to the international underwriters an option, exercisable for 30 days from the date of this prospectus, to purchase up to an aggregate of 4,957,500 additional preferred shares, in the form of ADSs, at the public offering price listed on the cover page of this prospectus,

less underwriting discounts and commissions. The international underwriters may exercise this option solely for the purpose of covering over-allotments, if any, made in connection with the offering of our ADSs offered by this prospectus, of which no more than 15% of the ADSs sold by the international underwriters that are NASD members will be used to cover over-allotments sold by those members. To the extent the option is exercised, each international underwriter will become obligated, subject to certain conditions, to purchase about the same percentage of the additional ADSs as the number listed next to the international underwriter’s name in the preceding table bears to the total number of ADSs listed next to the names of all international underwriters in the preceding table. If the international underwriters’ option is exercised in full, the total price to the public would be US$304,060,000, the total international underwriters’ discounts and commissions would be US$12,922,550 and total proceeds to us and the selling shareholders would be US$291,137,450. The underwriting discounts and commissions are subject to a 15% Brazilian withholding tax that will be borne by us and each of the selling shareholders, respectively.

The following table shows the per ADS and total underwriting discounts and commissions to be paid by us and the selling shareholders assuming no exercise and full exercise of the over-allotment option.

The international underwriters have informed us that they do not intend sales to discretionary accounts to exceed five percent of the total number of our ADSs offered by them.

We have applied to list the ADSs for trading on the NYSE under the symbol “GOL.” We have applied to list the preferred shares for trading on the BOVESPA under the symbol “GOLL4.”

To meet NYSE distribution standards for the international offering, the international underwriters have undertaken to distribute the ADSs in a manner so as to:


	•	create a minimum of 2,000 round lots of ADSs, and

	•	offer a minimum public float of 1.1 million ADSs in the United States with an offering value in excess of US$60 million.

We, BSSF Air Holdings LLC, our directors and executive officers (other than those directors and executive officers who are also shareholders of Aeropar Participações S.A. and Comporte Participações S.A.) and certain of our other shareholders have agreed that, without the prior written consent of Morgan Stanley & Co. Incorporated on behalf of the international underwriters, we and they will not, during the period ending 180 days after the date of this prospectus:


	•	offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any of our ADSs or preferred shares or any securities convertible into or exercisable or exchangeable for our ADSs or preferred shares;

	•	file any registration Statement with the SEC or the CVM relating to the offering of any of our ADSs or preferred shares or any securities convertible into or exercisable or exchangeable for our ADSs or preferred shares; or

	•	enter into any swap or other arrangement that transfers to another person, in whole or in part, any of the economic consequences of ownership of our ADSs or preferred shares

whether any transaction described above is to be settled by delivery of our ADSs or preferred shares or such other securities, in cash or otherwise.

Two of our shareholders, Aeropar Participações S.A. and Comporte Participações S.A. (which is a selling shareholder in this offering), including their respective shareholders, have agreed to the restrictions described above, except that the applicable term of the restricted period in their case is 365 days instead of 180 days.

Notwithstanding the preceding two paragraphs, if (a) during the last 17 days of the 180-day or 365-day restricted period, as the case may be, we issue an earnings release, or (b) prior to the expiration of the 180-day or 365-day restricted period, as the case may be, we announce that we will release earnings results during the 16-day period beginning on the last day of the 180-day or 365-day period, as the case may be, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the date of the issuance of the earnings release.


	•	the sale of our ADSs or preferred shares to the international underwriters or the Brazilian underwriters;

	•	the issuance by us of our ADSs or preferred shares upon the exercise of an option or a warrant or the conversion of a security outstanding on the date of this prospectus of which the international underwriters have been advised in writing; or

	•	transactions by any person other than us and the selling shareholders relating to our ADSs or preferred shares or other securities acquired in open market transactions after the completion of the offering of the ADSs and the preferred shares.

In order to facilitate the offering of our ADSs, Morgan Stanley & Co. Incorporated may engage in transactions that stabilize, maintain or otherwise affect the price of our ADSs. Specifically, the international underwriters may over-allot in connection with the offering, creating a short position in our ADSs for their own account. In addition, to cover over-allotments or to stabilize the price of our ADSs, the international underwriters may bid for, and purchase, our ADSs in the open market. Finally, the international underwriters may reclaim selling concessions allowed to an underwriter or a dealer for distributing our ADSs in the offering, if the syndicate repurchases our previously distributed ADSs in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of our ADSs above independent market levels. The underwriters are not required to engage in these activities, and may end any of these activities at any time.

From time to time, Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Banco Morgan Stanley Dean Witter S.A, Unibanco—União de Bancos Brasileiros S.A. and Banco Santander Brasil S.A. have provided, and continue to provide, investment banking services to us.

We, the selling shareholders and the international underwriters have agreed to indemnify each other against certain liabilities, including liabilities under the Securities Act.

At our request, the international underwriters have reserved for sale, at the initial offering price, up to ADSs offered hereby for directors, officers, employees, business associates, customers and other persons related to us. The number of ADSs available for sale to the general public will be reduced to the extent such persons purchase such reserved ADSs. Any reserved ADSs that are not so purchased will be offered by the international underwriters to the general public on the same basis as the other ADSs offered hereby.

Prior to this offering, there has been no public market for our ADSs or preferred shares. The initial public offering prices of our ADSs and preferred shares will be determined by negotiations among us, the selling shareholders, the Brazilian underwriters and the representatives upon the conclusion of the book-building of the offering. Among the factors to be considered in determining the initial public offering prices will be our industry in general, our revenues, earnings and certain of our other financial operating information in recent periods, and the price-earnings ratios, market prices of securities and certain financial and operating information of companies engaged in activities similar to ours. The estimated initial public offering price range set forth on the cover page of this preliminary prospectus is subject to change as a result of market conditions and other factors.

We estimate that our expenses in connection with the global offering, other than underwriting discounts and commissions, will be as follows:

All amounts in the table are estimated except the Securities and Exchange Commission registration fee, the NYSE listing fee, the NASD filing fee and the Brazilian CVM and BOVESPA fees.

The depositary has agreed to pay some of these expenses on our behalf, subject to the closing of the global offering.

The total underwriting discounts and commissions that we are required to pay will be US$6.4 million or 4.25% of the gross proceeds of the global offering.

The validity of the ADSs will be passed upon for us by Shearman & Sterling LLP, New York, New York and for the underwriters by Cleary, Gottlieb, Steen & Hamilton, New York, New York. The validity of the preferred shares and other matters governed by Brazilian law will be passed upon for us by Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados, São Paulo, Brazil. Certain matters of Brazilian law will be passed upon for the underwriters by Machado, Meyer, Sendacz e Opice Advogados, São Paulo, Brazil.

Ernst & Young Auditores Independentes S.S., independent registered public accounting firm, have audited our consolidated financial statements at December 31, 2002 and 2003, and for each of the three years in the period ended December 31, 2003, as set forth in their report. We have included our consolidated financial statements in this prospectus and elsewhere in the registration statement in reliance on Ernst & Young Auditores Independentes S.S.’s report, given on their authority as experts in accounting and auditing.

We have filed with the Commission a registration statement (including amendments and exhibits to the registration statement) on Form F-1 under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.

Upon completion of this offering, we will become subject to the informational requirements of the U.S. Securities Exchange Act of 1934, which is also known as the Exchange Act. Accordingly, we will be required to file reports and other information with the Commission, including annual reports on Form 20-F and reports on Form 6-K. You may inspect and copy reports and other information to be filed with the Commission at the public reference facilities maintained by the Commission at 450 Fifth Street, N.W., Washington D.C. 20549 and at the Commission’s regional offices at 500 West Madison Street, Suite 1400, Chicago Illinois 60661, and 233 Broadway, New York, New York 10279. Copies of the materials may be obtained from the Public Reference Room of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. The public may obtain information on the operation of the Commission’s Public Reference Room by calling the Commission in the United States at 1-800-SEC-0330. In addition, the Commission maintains an internet website at http://www.sec.gov, from which you can electronically access the registration statement and its materials.

As a foreign private issuer, we are not subject to the same disclosure requirements as a domestic U.S. registrant under the Exchange Act. For example, we are not required to prepare and issue quarterly reports. However, we intend to furnish our shareholders with annual reports containing financial statements audited by our independent auditors and to make available to our shareholders quarterly reports containing unaudited financial data for the first three quarters of each fiscal year. We plan to file quarterly financial statements with the Commission within two months of the end of the first three quarters of our fiscal year, and we will file annual reports on Form 20-F within the time period required by the Commission, which is currently six months from December 31, the end of our fiscal year.

We will send the depositary a copy of all notices that we give relating to meetings of our shareholders or to distributions to shareholders or the offering of rights and a copy of any other report or communication that we make generally available to our shareholders. The depositary will make all these notices, reports and communications that it receives from us available for inspection by registered holders of ADSs at its office. The depositary will mail copies of those notices, reports and communications to you if we ask the depositary to do so and furnish sufficient copies of materials for that purpose.

We also file financial statements and other periodic reports with the CVM located at Rua Sete de Setembro, 111, Rio de Janeiro, Rio de Janeiro 20159-900, Brazil.

We and Comporte Participações S.A. are incorporated under the laws of Brazil. BSSF Air Holdings LLC was formed under the laws of the state of Delaware. Substantially all of our assets and those of the selling shareholders are located outside the United States. The majority of our directors and all our officers and certain advisors named herein reside in Brazil, and the majority of the selling shareholders’ officers and directors reside in Brazil or elsewhere outside the United States. As a result, it may not be possible for investors to effect service of process within the United States upon such persons or to enforce against them or us in United States courts judgments predicated upon the civil liability provisions of the federal securities laws of the United States.

We have been advised by our Brazilian counsel, Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados, that judgments of United States courts for civil liabilities based upon the federal securities laws of the United States may be, subject to the requirements described below, enforced in Brazil. A judgment against us, any selling shareholder or the persons described above obtained outside Brazil would be enforceable in Brazil without reconsideration of the merits, upon confirmation of that judgment by the Brazilian Federal Supreme Court. That confirmation will occur if the foreign judgment:


	•	fulfills all formalities required for its enforceability under the laws of the country where the foreign judgment is granted,

	•	is issued by a competent court after proper service of process is made in accordance with Brazilian law,

	•	is not subject to appeal,

	•	is for the payment of a sum certain,

	•	is authenticated by a Brazilian consular office in the country where the foreign judgment is issued and is accompanied by a sworn translation into Portuguese, and

	•	is not contrary to Brazilian national sovereignty, public policy or public morality.

We cannot assure you that the confirmation process described above will be conducted in a timely manner or that Brazilian courts would enforce a monetary judgment for violation of the United States securities laws with respect to the ADSs and the preferred shares represented thereby.


	•	original actions based on the federal securities laws of the United States may be brought in Brazilian courts and that, subject to applicable law, Brazilian courts may enforce liabilities in such actions against us, our directors, our executive officers, the selling shareholders and the advisors named in this prospectus; and

	•	the ability of a judgment creditor or the other persons named above to satisfy a judgment by attaching certain assets of ours or any of the selling shareholders, respectively, is limited by provisions of Brazilian law.

A plaintiff (whether Brazilian or non-Brazilian) residing outside Brazil during the course of litigation in Brazil must provide a bond to guarantee court costs and legal fees if the plaintiff owns no real property in Brazil that could secure such payment. The bond must have a value sufficient to satisfy the payment of court fees and defendant’s attorney fees, as determined by the Brazilian judge. This requirement does not apply to the enforcement of foreign judgments which have been duly confirmed by the Brazilian Federal Supreme Court.

We have audited the accompanying consolidated balance sheets of Gol Linhas Aéreas Inteligentes S.A (formerly known as Gol Transportes Aéreos S.A.) as of December 31, 2003 and 2002, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Gol Linhas Aéreas Inteligentes S.A (formerly known as Gol Transportes Aéreos S.A.) at December 31, 2003 and 2002, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2003, in conformity with U.S. generally accepted accounting principles.


	ERNST & YOUNG AUDITORES INDEPENDENTES S.S.

	/s/ Adilson Birolli Gonzalez
	Adilson Birolli Gonzalez
	Partner

On March 29, 2004, GOL Linhas Aéreas Inteligentes S.A. (the Company) became the parent company of GOL Transportes Aéreos S.A. (GOL) pursuant to a reorganization plan approved by the shareholders of GOL. The Company was incorporated by issuing 224 common shares to Aeropar Participações S.A. and 56 preferred shares to Comporte Participações S.A. for an aggregate amount of one hundred reais. In accordance with the reorganization plan, all outstanding common and preferred shares of GOL (except for 14 common shares and 8 class B preferred shares of GOL that are held by members of GOL’s board of directors) were contributed to the Company in exchange for the applicable number of common or preferred shares of the Company. The 116,199,986 common shares of GOL were exchanged for 109,448,267 common shares and 6,751,719 preferred shares of the Company. The 29,050,000 preferred shares class A of GOL were exchanged for 29,049,994 preferred shares and 6 common shares of the Company. The 23,542,977 preferred shares class B of GOL were exchanged for 23,542,977 preferred shares of the Company. The reorganization did not impact the operations or financial condition of GOL in any respect as of December 31, 2003 and as such, does not result in new basis of accounting.

On May 25, 2004, the shareholders approved a 2.80-for-one stock split for all outstanding common and preferred shares. As a result of the stock split, the aggregate number of preferred shares and common shares outstanding was increased to 168,793,243. As of May 25, 2004, the Company had 59,344,746 preferred and 109,448,497 common shares. All share and earnings per share information for all periods presented have been restated to give retroactive effect to the May 25, 2004 stock split. Also, on the same date the shareholders approved amendments to the Company’s bylaws whereby holders of common shares may convert their shares into preferred shares, at the rate of one common share to one preferred share, to the extent such shares are duly paid and provided that the amount of preferred shares does not exceed 50% of the total amount of shares issued. Any request for conversion must be delivered to the board of executive officers and, once accepted by the board of executive officers, must be confirmed by the board of directors at the first meeting after the date of the request of conversion.

The Company’s principal subsidiary, GOL, was incorporated on August 1, 2000 and its main purpose is to provide regular domestic air transportation services for passengers, cargo and mail in Brazil, under the concession regime as authorized by the Civil Air Transportation Office— DAC of the Ministry of Aviation through Ordinance No. 1109/ DGAC of August 18, 2000.

GOL commenced operations on January 15, 2001 and as of March 31, 2004 operated 22 Boeing 737-700/ 737-800 Next Generation aircraft, serving 28 cities.

The following table sets forth the ownership and voting percentage of the Company’s common shares (preferred shares of the Company are non-voting) as of March 29, 2004, the date of the reorganization described above:

Auréa Administrações e Participações and Comporte Participações S.A. are entities controlled by members of the board of directors of the Company. Aeropar Participações S.A. is a subsidiary of Áurea Administrações e Participações S.A.

BSSF Air Holdings Ltd. is a Cayman Islands limited company, which is a wholly owned indirect subsidiary of AIG Brazil Special Situations Fund.

These financial statements were prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”), using Brazilian Reais as functional and reporting currency. The accounting principles adopted under US GAAP differ in certain respects from accounting principles generally accepted in Brazil (“Brazilian GAAP”), which the Company uses to prepare its statutory financial statements.

Unaudited Interim Financial Information The financial information at March 31, 2004 and for the three months ended March 31, 2003 and 2004 is unaudited but, in the opinion of management, has been prepared on the same basis as the annual financial statements and includes all adjustments (consisting only of normal recurring adjustments) that the Company considers necessary for a fair presentation of the financial position at such dates and the operating results and cash flows for such periods. Results for the three months ended March 31, 2004 are not necessarily indicative of the results that may be expected for the year ended December 31, 2004.

Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures in the accompanying notes. Actual results could differ from these estimates.

Cash and cash equivalents Cash and cash equivalents consist of cash and short-term, highly liquid investments, which are readily convertible into cash and have a maturity of three months or less when purchased.

Inventories Inventories consist of expendable aircraft spare parts and supplies. These items are stated at average acquisition cost and charged to expense when used. An allowance for obsolescence is provided over the remaining estimated useful life of the related aircraft. These allowances are based on management estimates, which are subject to change.

Property and equipment Property and equipment are recorded at cost and are depreciated to estimated residual values over their estimated useful lives using the straight-line method. Flight equipment is comprised of maintenance, engineering, communication and meteorological equipment. The estimated useful lives for our property and equipment are as follows:

Measurement of Asset Impairments In accordance with Statement of Financial Accounting Standards No 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (SFAS 144), the Company records impairment charges on long-lived assets used in operations when events and circumstances indicate that the assets may be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. If impairment occurs, any loss is measured by comparing the fair value of the asset to its net book value.

Maintenance and repair costs Maintenance and repair costs, including the overhaul of aircraft components, are charged to operating expenses as incurred.

Net Revenues Passenger revenue is recognized either when transportation is provided or when the ticket expires unused. Tickets sold but not yet used are included in the accompanying balance sheets as air traffic liability. Revenue from the shipment of cargo is recognized when transportation is provided. Other revenue includes charter services, ticket change fees and other incidental services, and is recognized when the service is performed. The Company’s revenues are net of certain taxes, including state –value-added and other state and federal taxes that are collected from our customers and transferred to the appropriate government entities. Taxes collected from our customers are recorded in the other current liabilities prior to the submission to the appropriate government entity.

Advertising Advertising costs, which are included in sales and marketing, are expensed as incurred. Advertising expense in 2001, 2002 and 2003 was R$12,463, R$16,684 and R$25,396, respectively and R$6,967 for the three months ended March 31, 2004.

Income Taxes Deferred income taxes are provided under the liability method and reflect the net tax effects of temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. A valuation allowance for net deferred tax assets is provided unless realizability is judged by the Company to be more likely than not.

Derivative contracts To help mitigate the Company’s overall foreign currency and fuel volatility risks, the Company primarily uses foreign exchange and fuel contracts. The contracts are recorded at current market value in the balance sheet with any gains or losses recorded in financial expense.

Foreign currency transactions Transactions in foreign currency are recorded at the prevailing exchange rate at the time of the related transactions. Exchange differences are recognized in the statements of operations as they occur and are recorded in financial expense.

US$ dollar amounts The U.S. dollar amounts are included solely for the convenience of the reader and have been translated at the rate of R$2.9086 = US$1.00, the official exchange rate issued by the Brazilian Central Bank as of March 31, 2004. This translation should not be construed to imply that the Brazilian reais amounts represent, or have been or could be converted into, equivalent amounts in U.S. dollars.

In January 2003, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 46, Consolidation of Variable Interest Entities, an Interpretation of ARB No. 51 (FIN 46). In December 2003, the FASB modified FIN 46 to make certain technical corrections and address certain implementation issues that had arisen. FIN 46 provides a new framework for identifying variable interest entities (VIEs) and determining when a company should include the assets, liabilities, noncontrolling interests and results of activities of a VIE in its consolidated financial statements. The provisions of FIN 46 are effective for the year ending December 31, 2004. The adoption of FIN 46 as of January 1, 2004 did not have a significant impact on the Company’s financial statements.

The increase to the allowance for doubtful accounts was R$1,305 and R$2,455 in 2002 and 2003, respectively. There was no allowance for doubtful accounts as of December 31, 2001. There were no charge-offs during 2003, 2002 or 2001. The increase to the allowance for doubtful accounts was R$33 and the charge offs were R$119 during the three months ended March 31, 2004.

Deposits for aircraft leasing contracts All the Company’s aircraft are leased under operating leasing contracts. As required by the leasing contracts, the Company was obligated to make certain U.S. dollar deposits as a guarantee to the leasing companies. These deposits are non-interest bearing and refundable at the end of the respective lease agreements.

Deposits for aircraft and engine maintenance U.S. dollar deposits for aircraft and engine maintenance as stipulated in the respective lease agreements are made to specific accounts in the name of the lessor responsible for the maintenance services. Certain required aircraft and engine maintenance, as stipulated in the respective lease agreement, are funded from these deposits. The Company is required to pay the lessor for maintenance expenditures that exceed deposited amounts. The Company can apply deposits amounts that exceed maintenance expenditures to the final lease payment. These deposits are non-interest bearing.

At December 31, 2003, the Company had two revolving lines of credit. One of the revolving lines of credit is secured by the Company’s credit card receivables and allows for borrowings of up to R$102 million. As of December 31, 2003, R$35 million was outstanding under this facility. Another revolving credit facility is secured by the Company’s travel agency receivables and allows for borrowing of up to R$7 million. As of December 31, 2003, R$4 million was outstanding under this facility.

The weighted average annual interest rate for these Reais based short-term borrowings at December 31, 2003 and 2002 was 20% and 29%, respectively.

At March 31, 2004, the Company had four revolving lines of credit. Two of the revolving lines of credit are secured by our credit card receivables and allows for borrowings of up to R$123 million. As of March 31, 2004 R$49.5 million was outstanding under these facilities. Another revolving credit facility is secured by our travel agency receivables and allows for borrowing of up to R$7 million. As of March 31, 2004, R$4 million was outstanding under this facility. The other line of credit is secured by promissory notes and allows borrowings of up to R$20 million and as of March 31, 2004, R$5 was outstanding under this facility.

During 2002 and 2001, US dollar operating lease payments that were otherwise due were extended with the lessor to allow for the repayment of such amounts over a four-year period. The payable is non-interest bearing and provides for payments of R$1,861 in 2005, R$1,861 in 2006, R$1,782 in 2007 and R$643 in 2008.

At December 31, 2002, long-term vendor payable also included R$13,695 related to fuel charges that are payable in April 2004. Although the payable is non-interest bearing, it is adjusted for inflation.

The Company’ principal subsidiary GOL was organized in 2000 as a limited liability company and as of December 31, 2001 had 70,000,000 quotas with nominal value of R$1.00 each. During 2002, GOL increased its capital in the amount of R$5,000 and R$3,412 with issuance of 14,000,000 and 9,553,600 quotas on March 11, 2002 and April 29, 2002, respectively. On May 2, 2002 a General Meeting was held to change the corporate form of GOL from a limited liability company to a corporation, and the 93,553,600 quotas were exchanged into the same amount of common shares, with no par value.

In the Extraordinary General Meeting of GOL on August 8, 2002, capital was increased by R$8,088, with issuance of 22,646,400 common shares, with no par value.

On January 23, 2003, a subscription and option agreement was entered into under which class A and class B preferred shares of GOL were sold to entities controlled by the AIG Brazil Special Situations Fund. The terms of the subscription and option agreement provided for the optional repurchase of the preferred shares by GOL’s controlling shareholder, Áurea Administração e Participações S.A. (Áurea), at a later date. The share subscription was completed through a transaction executed on February 20 and 21, 2003. As a result, on February 20, 2003, capital was increased by R$242, with the issuance of 7,557,906 preferred voting shares, class A, with no par value, convertible into common shares. Also on the same date, capital was increased by R$755 with the issuance of 23,542,985 non-voting preferred shares, class B, with no par value. On February 21, 2003, capital was increased by R$93,203, with the issuance of another series of 21,492,094 preferred voting shares, Class A, with no par value, convertible into common shares. The preferred shares purchased on February 20 and 21, 2003 were acquired at different prices but were part of a single agreed upon transaction. The February 20 preferred shares were purchased for a lower price than the February 21 preferred shares to reflect the call option held by Áurea. According to the terms of the subscription and option agreement, the amount of shares subject to Áurea’s call option was based on financial indicators of GOL, as determined as of December 31, 2003. In February 2004, Aeropar Participações S.A. (Aeropar), as successor to Áurea under the subscription and option agreement, exercised the call option for the agreed upon aggregate price of R$1.00. As anticipated, this resulted in the repurchase by Aeropar of all of the February 20 preferred shares and 392,980 of the February 21 preferred shares. As the call option agreement was entered into between GOL’s shareholders, it had no impact on GOL’s financial condition or shares outstanding.

The series of class A preferred shares originally issued by GOL was convertible at the shareholders option at any time into common shares on a one-for-one basis.

Each common share and class A preferred share entitles its holder to vote at the Company’s shareholders meetings. According to the Company by-laws, our class B preferred shares are non-voting except under limited circumstances provided for under Brazilian corporation law, such as the transformation of the company into another corporate type, any merger, consolidation or spin-off of the company, the approval of any transactions between the company and its controlling shareholder or parties related to the controlling shareholder and any changes to the voting rights.

Upon liquidation, holders of preferred shares are entitled to receive, prior to any distribution to the holders of the Company’s common shares, a total amount of R$94,200, adjusted by the IGP-M Brazilian inflation rate, published by Fundação Getúlio Vargas. After such distribution, holders of our common shares are entitled to receive a total amount of R$94,200, also adjusted by the IGP-M. Any further distribution to be made to holders of our common and preferred shares will be made proportionately to their stakes in our capital stock. Holders of the Company’s preferred shares are entitled to receive dividends per share in the same amount of the dividends per share paid to holders of the Company’s common shares. Changes to the IGP-M Brazilian inflation rate will increase the applicable liquidation preference, but will have no impact on the reported statements of operations or financial condition.

The authorized, issued and outstanding preferred shares at December 31, 2003 were as follows:

On March 29, 2004, GOL Linhas Aéreas Inteligentes S.A. became the parent company of GOL pursuant to a reorganization plan approved by the shareholders of GOL. In accordance with the reorganization plan, all outstanding common and preferred shares of GOL (except for 14 common shares and 8 class B preferred shares of GOL that are held by members of GOL’s board of directors) were contributed to the Company in exchange for common and preferred shares of the Company. The 116,199,986 common shares of GOL were exchanged for 109,448,267 common shares and 6,751,719 preferred shares of the Company. The 29,050,000 preferred shares class A of GOL were exchanged for 29,049,994 preferred shares and 6 common shares of the Company. The 23,542,977 preferred shares class B of GOL were exchanged for 23,542,977 preferred shares of the Company. The preferred shares outstanding have no class designation. The rights and voting privileges of the common shares of the Company remain the same as those previously described above for GOL. The preferred shares of the Company are not convertible into any other security and are non-voting, except under the same limited circumstances provided by Brazilian laws as discussed above. The aggregate liquidation preference, including the adjustment by IGP-M, and divided rights discussed above remain unchanged.

As of March 31, 2004, the Company had 109,448,497 shares of common stock and 59,344,746 shares of preferred stock authorized, issued and outstanding. According to the Company by laws the capital can be increased up to R$1.0 million through the issuance of common or preferred shares.

On May 25, 2004, the shareholders approved a 2.80 for 1 stock split for all outstanding common and preferred shares. As a result of the stock split, the aggregate number of preferred shares and common shares outstanding was increased to 168,793,243. All share and earnings per share information for all periods presented have been restated to give effect to the May 25, 2004 stock split. Also, on the same date the

shareholders approved amendments to the Company’s bylaws whereby holders of common shares may convert their shares into preferred shares, at the rate of one common share to one preferred share, to the extent such shares are duly paid and provided that the amount of preferred shares does not exceed 50% of the total amount of shares issued. Any request for conversion must be delivered to the board of executive officers and, once accepted by the board of executive officers, must be confirmed by the board of directors at the first meeting after the date of the request of conversion.

On March 25, 2004 the board of directors authorized the issuance of up to 20,325,734 preferred shares.

The Company’s bylaws provide for a mandatory dividend to common and preferred shareholders in the aggregate of at least 25% of annual net distributable income determined in accordance with Brazilian corporation law. The December 31, 2003 dividend was R$26,503. The dividends payable are included in other current liabilities and ratification for payment will be made at the annual shareholders meeting. Our preferred shares are not entitled to fixed dividends but are instead entitled to receive dividends per share in the same amount of the dividends per share paid to holders of our common shares.

The December 31, 2003 dividends were paid to the shareholders in March 2004 after receiving approval at the annual shareholders meeting.

Under the Brazilian corporation law and according to our by-laws, the Company is required to maintain a “legal reserve” to which it must allocate 5% of its net income, less accumulated losses as determined in accordance with Brazilian GAAP for each fiscal year until the amount of the reserve equals 20% of paid-in capital. Accumulated losses, if any, may be charged against the legal reserve. The legal reserve can only be used to increase the capital of the Company. The legal reserve is subject to approval by the shareholders voting at the annual shareholders meeting and may be transferred to capital but is not available for the payment of dividends in subsequent years. At December 31, 2003, the allocation of retained earnings related to the legal reserve was R$5,579.

The Company leases all of its aircraft, as well as airport terminal space, other airport facilities, office space and other equipment. At December 31, 2003, the Company leased 22 aircraft under operating leases, with initial lease term expiration dates ranging from 2008 to 2011.

Future minimum lease payments under non-cancelable operating leases are denominated in US dollars. Such leases with initial or remaining terms in excess of one year at December 31, 2003 in reais were as follows:

Total rent expense for all operating leases in 2001, 2002, and 2003 was R$58,852, R$130,837 and R$189,112, respectively and R$47,330 for the three months ended March 31, 2004.

The Company has a non-cancelable agreement with one supplier for the use of the Open Skies system for booking flight reservations. This agreement expires in 2005, and can be extended at the Company’s option. The total future payment under this agreement is dependent upon the number of passengers transported and has a minimum annual payment of R$264.

At December 31, 2003 and the three months ended March 31, 2004, the Company had R$18.8 million notional amount of letters of credit outstanding to guarantee certain of its US dollar lease payments. At December 31, 2003 and the three months ended March 31, 2004, approximately R$9 and R$11.1 million, respectively, of the Company’s accounts receivable was collateral for outstanding letters of credit.

The Company is challenging the levy of Brazil’s state value-added tax on merchandise, electricity, telecommunication and transport services (the Imposto sobre Circulação de Mercadorias e Serviços, or ICMS) on the import of the Company’s leased aircraft and engines. The Company received an injunctive relief from Brazilian courts and has filed defenses in administrative proceedings that had the effect of suspending the application of ICMS on the imports of Company aircraft and engines under operating leases. Based on an analysis of the applicable laws and court precedents by Company external counsel, the Company believes that the ICMS does not apply to the import of aircraft and engines under operating lease transactions and is currently, not accruing or paying ICMS import taxes on the leased aircraft and engines and has not established a reserve for this matter.

The Company is party to other legal proceedings and claims that arise during the ordinary course of business. While the outcome of these lawsuits and proceedings cannot be predicted with certainty and could have a material adverse effect on our financial positions, results of operations and cash flows, it is our opinion, after consulting with outside counsel, that the ultimate disposition on such suits will not have a material adverse effect on our financial position, results of operation or cash flows.

During 2002, Áurea Administração e Participações S.A. a principal shareholder of the Company, issued debentures to us for R$19,280. These debentures were guaranteed by the Company’s credit rights and interest was set at the average rate for one-day interbank deposits plus 1%. The December 31, 2003 outstanding

balance of R$270 was repaid in January 2004. Interest paid amounted to R$1,901 and R$2,069 in 2002 and 2003, respectively.

The Company also had a loan payable to Breda Transportes e Turismo Ltda., a company controlled by Áurea Administração e Participações S.A., amounting to R$429 in 2002 that was fully paid during 2003.

On April 1, 2003, the Company entered into a five-year lease agreement with Áurea Administração e Participações S.A. for the lease of our headquarters located at Rua Tamoios, 246. The lease agreement provides for monthly payments of R$25, adjusted for inflation by the IGP-M.

The Company has entered into an exclusive bus transportation agreement with Expresso União Ltda., a company controlled by Áurea Administração e Participações S.A., for the transportation of our passengers, their baggage and our employees. The total payments under this agreement were R$87 and R$148 for 2002 and 2003, respectively and R$46 for the three months period ended March 31, 2004.

Under the terms of the Company’s shareholders’ agreement, five of the members of the board of directors have been appointed and elected by Aeropar Participações S.A. and three of the members of the board of directors have been appointed and elected by BSSF Air Holdings LLC.

At December 31, 2003 and 2002, the Company’s primary monetary assets and liabilities related to aircraft leasing operations. Based on discounted amount of future cash flows, the long-term vendor payable had an estimated fair value of R$5,175 and R$22,723 in 2003 and 2002, respectively. Due to their short-term nature, substantially, all other financial instruments included in the balance sheet are stated at amounts that approximate their fair values.

Financial instruments that expose the Company to credit risk involve mainly cash and accounts receivable. The Company maintains cash deposits with highly rated financial institutions. Credit risk on accounts receivable relates to amounts receivable from the major international credit card companies. These receivables are short-term and the majority of them settle within 30 days.

The Company’s revenue is basically generated in Brazilian reais, however its liabilities, particularly those related to aircraft leasing, are U.S. dollar denominated. The Company’s exchange exposure at December 31, 2003 is set out below:

Exchange rate exposure related to amounts payable arising from these leasing operations is managed together with commercial hedging strategies. At December 31, 2003, the notional amounts of outstanding foreign currency futures contracts was approximately R$75,000 and the fair value was approximately R$1,950. All foreign exchange contracts related to the purchase of US dollars expired in January 2004. As these

contracts do not qualify as hedges for financial reporting purposes changes in fair value are reported as financial expense. There were no foreign exchange contracts outstanding as of March 31, 2004.

The Company is exposed to the effect of changes in the price and availability of aircraft fuel. To manage these risks, during 2003 the Company entered into crude oil option and swap agreements. Prices for crude oil are highly correlated to jet fuel, making crude oil derivatives effective at offsetting jet fuel prices to provide some short-term protection against a sharp increase in average fuel price. These derivatives do not qualify as hedges for financial reporting purposes and changes in fair value of such derivative contracts are recorded as financial expense.

At December 31, 2003, the Company had three crude oil contracts outstanding for up to 103,000 barrels of oil, with the longest remaining term of one month. As those contracts were entered into near year-end, the fair value is minimal. The Company had no such contracts outstanding at December 31, 2002 or at the three months ended March 31, 2004.

The Company’s acquisition of fuel and oil is made substantially from one supplier.

Components of Financial income (expense) for the year ending December 31 was as follows:

For the three months ending, March 31 the financial income (expense), net was as follows (unaudited):

Income taxes in Brazil include federal income tax and social contribution. The statutory composite tax rates were 34% for 2001, 2002 and 2003. The effective tax rate on income (loss) before income taxes differed from the statutory composite rate for the years ended December 31, for the following reasons:

In connection with the Company’s March 29, 2004 reorganization, the Extraordinary General Meeting of the Company’s shareholders approved the merger of stockholder BSSF II Holdings Ltda. into GOL. The preferred shares previously owned by BSSF II Holdings Ltda. were cancelled and reissued to BSSF Air Holdings Ltd. With this merger, the Company acquired the right to amortize for Brazilian local statutory and tax purposes a goodwill premium of approximately R$86 million generated from BSSF II Holdings Ltd. acquisition of its ownership in GOL. The amortization of this premium for local statutory and tax purposes will result in future tax benefit for the Company over an estimated period of up to five years. The R$29.2 million tax benefit of the goodwill premium has been recorded as a deferred tax asset at March 31,

2004, with a corresponding increase to additional paid in capital. As the Company realizes the tax benefit of the goodwill premium, a reclassification from additional paid in capital to commons shares will be made.

The Company’s preferred shares are not entitled to receive any fixed dividends. Rather, the preferred shareholders are entitled to receive dividends per share in the same amount of the dividends per share paid to holders of the common shares. Consequently, basic earnings per share are computed by dividing income by the weighted average number of all classes of shares outstanding during the year. The Company has no dilutive securities outstanding.

On April 4, 2004, the Company obtained approval from the Civil Air Transportation Office of Brazil—DAC to increase the size of its fleet to 25 aircraft.

During May 2004, the Company entered into two year operating lease agreements and expects to take delivery of three Boeing 737-300 aircraft in the last six months of 2004 and up to two additional Boeing 737-300 aircraft late in 2004, which will be used to meet Company’s short term capacity needs. The estimated aggregate lease payments for these aircraft would be US$4.1 and US$6.9 in the first and second year of the operating lease agreement, respectively. The Company will not be required to make any aircraft leasing contract deposits for these aircraft.

During May 2004, the Company signed an agreement with The Boeing Company for firm aircraft orders of 15 737-800 Next Generation aircraft scheduled for delivery between 2007 and 2009. Committed expenditures for these aircraft and related equipment, including estimated amounts for contractual price escalations and predelivery deposits, will be approximately US$8.5 million in 2004 for deposits, no payments in 2005, US$55.1 million in 2006, US$334.6 million in 2007, US$264.7 million in 2008 and US$197.7 million in 2009.

The Company also has options to purchase 28 737-800 Next Generation aircraft that are exercisable between 2005 and 2010.

At a shareholders’ meeting held on May 25, 2004, the Company’s shareholders approved an executive stock option plan for key senior executive officers. Initially, 937,412 of the Company’s preferred shares have been reserved for issuance under the plan. The Company expects that the number of preferred shares reserved for issuance under this executive stock option plan will be increased to 6,000,000 preferred shares and to grant these new options over a three-year period, subject to the approval of the compensation committee and the Company’s shareholders at a shareholders’ meeting. The terms under which these new options will be granted will be determined by the compensation committee and the board of directors.

Subsequent to the approval of the plan, the Company issued to executive officers stock options to purchase up to 937,412 preferred shares at an exercise price of R$3.04 per share. Fifty percent of the options will vest on October 25, 2004, with the remaining 50% vesting at the end of each quarter subsequent to October 25, 2004, on a pro rata basis. Each option will expire two years after the vesting date.

In connection with the initial grant of preferred stock options, the Company will record deferred stock compensation of R$20.1 million (US$6.9 million), representing the difference between the exercise price of

the options and the deemed fair value of the preferred stock. This amount will be amortized to operations over the vesting period. The amortization of stock options is expected to be approximately R$11.1 million for 2004; R$6.7 million for 2005; and R$2.3 million in 2006. This grant did not affect previously reported earnings per share information.

On May 24, 2004, the Company formed GOL Finance LLP for the purpose of facilitating cross-border transactions, including the lease and purchase of aircraft. GOL Finance LLP, the initial capital of which was US$7.0 million, is based in the United Kingdom.

[Inside Back Cover Art: Graphic (center): Photo collage including pictures of Gol aircraft, personnel, and facilities]

Until , 2004, 25 days after the date of this prospectus, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to unsold allotments or subscriptions.

Neither the laws of Brazil nor the Registrant’s by-laws or other constitutive documents provide for indemnification of directors or officers. The Registrant does not maintain liability insurance and has not entered into indemnity agreements which would insure or indemnify its directors or officers in any manner against liability which he or she may incur in his or her capacity as such.

The securities of the Registrant that were issued or sold by the Registrant within the past three years and not registered with the Commission are described below. All such securities were issued, subscribed and fully paid for outside the United States, in accordance with the Brazilian corporation law. As such, the issuance and subscription of securities described below were not subject to the registration requirements of the Securities Act.

On March 12, 2004, the Registrant issued 80 common shares and 20 preferred shares, which were fully subscribed and paid for by Aeropar Participações S.A. and Comporte Participações S.A., respectively, as their initial participation in the Registrant’s capital stock.


	•	39,088,667 common shares, which were subscribed for by Aeropar Participações S.A. and paid for through a contribution by Aeropar Participações S.A. of 39,088,667 common shares of Gol Transportes Aéreos S.A.;

	•	11,247,808 preferred shares, which were subscribed for by Aeropar Participações S.A. and paid for through a contribution by Aeropar Participações S.A. of 2,839,602 Class A preferred shares of Gol Transportes Aéreos S.A. and 8,408,206 Class B preferred shares of Gol Transportes Aéreos S.A.;

	•	2,411,328 preferred shares, which were subscribed for by Comporte Participações S.A. and paid for through a contribution by Comporte Participações S.A. of 2,411,328 common shares of Gol Transportes Aéreos S.A.;

	•	7,535,396 preferred shares, which were subscribed for by BSSF Air Holdings Ltd. and paid for through a contribution by BSSF Air Holdings Ltd. of 7,535,396 Class A preferred shares of Gol; and

	•	2 common shares, which were subscribed for by BSSF Air Holdings Ltd. and paid for through a contribution by BSSF Air Holdings Ltd. of 2 Class A preferred shares of Gol.

On May 25, 2004, the Registrant issued to executive officers stock options to purchase up to 937,412 preferred shares at an exercise price of R$3.04 per share.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 6 of this Registration Statement, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted against the Registrant by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.


	1. For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement at the time it was declared effective.

	2. For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	3. For the purposes of Item 512(F) of Regulation S-K, the undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this Amendment No. 2 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of São Paulo, São Paulo, Brazil, on June 23, 2004.


	By:	/s/ Constantino de Oliveira Junior



	Name: Constantino de Oliveira Junior
	Title: President, Chief Executive Officer


	By:	/s/ Richard F. Lark, Jr.



	Name: Richard F. Lark, Jr.
	Title: Vice President—Finance, Chief Financial Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 2 to the Registration Statement has been signed by the following persons on June 23, 2004 in the capacities indicated:


†	Confidential treatment requested.

EX-1.1 2 y97722a2exv1w1.txt INTERNATIONAL UNDERWRITING AGREEMENT Exhibit 1.1 33,050,000 PREFERRED SHARES GOL LINHAS AEREAS INTELIGENTES S.A. NON-VOTING PREFERRED SHARES, NO PAR VALUE (IN THE FORM OF AMERICAN DEPOSITARY SHARES) UNDERWRITING AGREEMENT June 23, 2004 June 23, 2004 Morgan Stanley & Co. Incorporated 1585 Broadway New York, New York 10036 Dear Sirs and Mesdames: Gol Linhas Aereas Inteligentes S.A., a Brazilian corporation (sociedade anonima) (the "COMPANY"), proposes to issue and sell to the several International Underwriters named in Schedule II hereto (the "INTERNATIONAL UNDERWRITERS"), BSSF Air Holdings LLC ("BSSF") and Comporte Participacoes S.A. ("COMPORTE" and, together with BSSF, the "SELLING SHAREHOLDERS") severally propose to sell to the several International Underwriters, an aggregate of 33,050,000 non-voting preferred shares (acoes preferenciais) of the Company, all of which shall be deposited pursuant to the Deposit Agreement, as defined below, and delivered in the form of American Depositary Shares as hereinafter provided (the "FIRM ADSS"). [-] Firm ADSs are to be issued and sold by the Company and [-] Firm ADSs are to be sold by the Selling Shareholders, each Selling Shareholder selling the amount set forth opposite such Selling Shareholder's name in Schedule I hereto. Morgan Stanley & Co. Incorporated shall act as representative (the "REPRESENTATIVE") of the several International Underwriters. The Company and Comporte severally also propose to issue and sell to the several International Underwriters not more than an additional 4,957,500 non-voting preferred shares of the Company, all of which shall be deposited pursuant to the Deposit Agreement and delivered in the form of American Depositary Shares (the "ADDITIONAL ADSS"), if and to the extent that you, as Representative, shall have determined to exercise, on behalf of the International Underwriters, the right to purchase such Additional ADSs granted to the International Underwriters in Section 3 hereof. The non-voting preferred shares of the Company to be outstanding after giving effect to the sales contemplated hereby are hereinafter referred to as the "PREFERRED SHARES." The Company and the Selling Shareholders are hereinafter collectively referred to as the "SELLERS." The Firm ADSs and the Additional ADSs are hereinafter collectively referred to as the "ADSS" and the ADSs, together with the Preferred Shares represented by such ADSs, shall be hereinafter referred to as the "SECURITIES." Each ADS will represent two Preferred Shares. The ADSs purchased by the International Underwriters will be evidenced by American Depositary Receipts ("ADRS") to be issued pursuant to a Deposit Agreement (the "DEPOSIT AGREEMENT"), to be dated as of the Closing Date (as defined below), to be entered into among the Company, The Bank of New York, as depositary (the "DEPOSITARY"), and all holders and beneficial owners from time to time of the ADRs. The Company has filed with the U. S. Securities and Exchange Commission (the "COMMISSION") a registration statement, including a prospectus, relating to the Securities. The 1 registration statement as amended at the time it becomes effective, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as amended (the "SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT"; the prospectus in the form first used to confirm sales of Securities is hereinafter referred to as the "PROSPECTUS." If the Company has filed an abbreviated registration statement to register additional Securities pursuant to Rule 462(b) under the Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then any reference herein to the term "REGISTRATION STATEMENT" shall also be deemed to include such Rule 462 Registration Statement. In addition to the Securities subject to this Agreement, [-] Preferred Shares (the "BRAZILIAN SHARES") will be sold to the underwriters set forth in the Schedule (the "BRAZILIAN UNDERWRITERS") to the underwriting agreement, dated as of the date hereof, among the Company, Gol Transportes Aereos S.A. ("GOL"), Companhia Brasileira de Liquidacao e Custodia, the Selling Shareholders and the Brazilian Underwriters in connection with the offering and sale of the Brazilian Shares in Brazil (the "BRAZILIAN UNDERWRITING Agreement"). The ADSs will be sold pursuant to the Prospectus, and the Brazilian Shares will be sold pursuant to a registration statement, including a prospectus (the "BRAZILIAN PROSPECTUS"), filed with and approved by the Brazilian Securities Commission (Comissao de Valores Mobiliarios) (the "CVM"), with respect to the offer and sale of the Brazilian Shares (the "BRAZILIAN REGISTRATION STATEMENT"). The International Underwriters have agreed to reserve a portion of the Securities to be purchased by them under this Agreement for sale to the Company's directors, officers, employees, business associates and related persons (collectively, "PARTICIPANTS"), as set forth in the Prospectus under the heading "Underwriters" (the "DIRECTED SHARE PROGRAM"). The Securities to be sold by Morgan Stanley and its affiliates pursuant to the Directed Share Program are referred to hereinafter as the "DIRECTED SHARES." Any Securities not confirmed for purchase in the Directed Share Program by the end of the business day on which this Agreement is executed will be offered to the public by the International Underwriters. The International Underwriters and the Brazilian Underwriters simultaneously are entering into an agreement between their respective syndicates (the "INTERSYNDICATE AGREEMENT"), which provides for, among other things, the transfer of Securities between the two syndicates. 1. Representations and Warranties of the Company and Gol. Each of the Company and Gol represents and warrants to and agrees with each of the International Underwriters that: (a) The Registration Statement has become effective, no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or, to the best of each of the Company's and Gol's knowledge, threatened by the Commission. (b) A registration statement on Form F-6 (File No. 333-116181) in respect of the ADSs has been filed with the Commission; such registration statement, in the form heretofore delivered to the Representative and, excluding exhibits, to the Representative for each of the other International Underwriters, has been declared effective by the Commission in such form; no other document with respect to such registration statement has heretofore been filed with the 2 Commission; no stop order suspending the effectiveness of such registration statement has been issued and, to the best of each of the Company's and Gol's knowledge, no proceeding for that purpose has been initiated or threatened by the Commission (the various parts of such registration statement, taken together, including all exhibits thereto, each as amended at the time such part of the registration statement became effective, are hereinafter called the "ADS REGISTRATION STATEMENT"). (c) (i) The Registration Statement and the ADS Registration Statement did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Registration Statement, the Prospectus and the ADS Registration Statement comply and, as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder and (iii) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement, the Prospectus or the ADS Registration Statement based upon information relating to any International Underwriter furnished to the Company in writing by such International Underwriter through you expressly for use therein. (d) The Brazilian Registration Statement, which has been filed by the Company with the CVM with respect to the concurrent Brazilian offering pursuant to Instrucao CVM No. 400 of 29/12/2003 ("BRAZILIAN SECURITIES LAW"), as well as the Brazilian Prospectus, has been prepared in accordance with the Brazilian Securities Law and the regulations and rules promulgated thereunder, and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. (e) The Company has been duly incorporated, is validly existing as a corporation in good standing under the laws of Brazil, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company. (f) Gol has been duly incorporated, is validly existing as a corporation in good standing under the laws of Brazil, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of 3 its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on Gol; and all of the issued shares of capital stock of Gol have been duly authorized and are validly issued, fully paid and non-assessable, and (other than shares held by directors of Gol, as described in the Prospectus) are owned directly the Company, free and clear of any security interests, claims, liens, equities or other encumbrances. (g) This Agreement has been duly authorized, executed and delivered by each of the Company and Gol. (h) The authorized capital stock of the Company conforms as to legal matters in all material respects to the description thereof contained in the Prospectus under the caption "Description of Capital Stock". (i) The Company has no direct or indirect subsidiaries other than Gol and Gol Finance LLP. (j) The non-voting preferred shares of the Company outstanding prior to the issuance of the Securities to be sold by the Company have been duly authorized and are validly issued, fully paid and non-assessable. (k) The Securities to be sold by the Company (i) have been duly authorized and, when issued and delivered in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable, (ii) the issuance and sale thereof will not be subject to any preemptive or similar rights that have not been effectively waived nor give rise to any registration rights relating to the Preferred Shares or any other securities of the Company or Gol (other than as described in the Prospectus), and (iii) are free and clear of any security interests, claims, liens, equities or other encumbrances. (l) The execution and delivery by the Company of, and the performance by the Company of its obligations under, this Agreement, the Brazilian Underwriting Agreement and the Deposit Agreement will not contravene any provision of applicable law or the by-laws (estatuto social) of the Company or any agreement or other instrument binding upon the Company that is material to the Company, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under this Agreement, the Brazilian Underwriting Agreement and the Deposit Agreement, except (i) such as may be required by the securities or Blue Sky laws of the States of the United States or securities laws of other jurisdictions in connection with the offer and sale of the Securities, (ii) such as may be required from the Brazilian Central Bank (Banco Central do Brasil) (the "CENTRAL BANK") and the CVM relating to the Deposit Agreement under Annex V to Resolution No. 1,289 of March 20, 1987, as amended, ("ANNEX V") of the Conselho 4 Monetario Nacional (the "CMN"), (iii) from the CVM relating to the registration of the Company as a publicly-held company, the offering of the Brazilian Shares in Brazil (the "BRAZILIAN OFFERING") and the offering of the Securities as provided for in this Agreement and in the Brazilian Underwriting Agreement, (iv) from the Central Bank relating to the payment of the fees, commissions and expenses contemplated by this Agreement and the Deposit Agreement and (v) such as may be required by the Brazilian Aviation Department (Departamento de Aviacao Civil) (the "DAC"), all of which have been obtained or will be duly obtained (except for those described in clause (i) and in clause (iv), specifically with respect to any payment outside of Brazil pursuant to Section 9 hereof) prior to the Closing Date (as defined below). (m) The execution and delivery by Gol of, and the performance by Gol of its obligations under, this Agreement and the Brazilian Underwriting Agreement will not contravene any provision of applicable law or the by-laws (estatuto social) of Gol or any agreement or other instrument binding upon Gol that is material to Gol, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over Gol, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by Gol of its obligations under this Agreement and the Brazilian Underwriting Agreement, except (i) such as may be required by the securities or Blue Sky laws of the States of the United States or securities laws of other jurisdictions in connection with the offer and sale of the Securities, (ii) such as may be required from the Central Bank and the CVM relating to the Deposit Agreement under Annex V of the CMN, (iii) from the CVM relating to the registration of the Company as a publicly-held company, the Brazilian Offering and the offering of the Securities as provided for in this Agreement and in the Brazilian Underwriting Agreement, (iv) from the Central Bank relating to the payment of the fees, commissions and expenses contemplated by this Agreement and the Deposit Agreement and (v) such as may be required by the DAC, all of which have been obtained or will be duly obtained (except for those described in clause (i) and in clause (iv), specifically with respect to any payment outside of Brazil pursuant to Section 9 hereof) prior to the Closing Date (as defined below). (n) There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of either the Company or Gol from that set forth in the Prospectus. (o) There are no legal, arbitration, or governmental proceedings pending or, to the best of each of the Company's and Gol's knowledge, threatened to which either of the Company or Gol is a party or to which any of the properties of either the Company or Gol is subject that are required to be described in the Registration Statement or the Prospectus and are not so described nor are there any statutes, regulations, contracts or other documents that are required to be 5 described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required. (p) Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder. (q) Neither the Company nor Gol is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus neither will be, required to register as an "investment company" as such term is defined in the Investment Company Act of 1940, as amended or a "passive foreign investment company" or a "controlled foreign corporation" as such terms are defined in the United States Internal Revenue Code. (r) Each of the Company and Gol (i) is in compliance with all applicable laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business and (iii) is in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on either the Company or Gol. (s) There are no costs or known liabilities associated with Environmental Laws (including, without limitation, any capital or operating expenditures required for clean-up, closure of properties or compliance with Environmental Laws or any permit, license or approval, any related constraints on operating activities and any potential liabilities to third parties) that would, singly or in the aggregate, have a material adverse effect on either the Company or Gol. (t) There are no contracts, agreements or understandings between either the Company or Gol and any person granting such person the right to require either the Company or Gol to file a registration statement under the Securities Act with respect to any securities of either the Company or Gol or to require the Company to include such securities within the Securities registered pursuant to the Registration Statement, except as contemplated in (i) the shareholders' agreement by and among Aeropar Participacoes S.A. ("AEROPAR"), Comporte Participacoes S.A., BSSF, BSSF Air Holdings Ltd., Constantino de Oliveira, Constantino de Oliveira Jr., Henrique Constantino, Joaquim Constantino Neto, Ricardo Constantino and the Company, dated as of March 29, 2004 (the "SHAREHOLDERS' AGREEMENT"), which rights have been effectively waived, (ii) the 6 Subscription and Option Agreement dated January 20, 2003, by and among Aurea Administracao e Participacoes S.A., BSSF Air Holdings Ltd., BSSF II Holdings Ltda. and Gol (the "SUBSCRIPTION AND OPTION AGREEMENT") and (iii) the addendum to the Subscription and Option Agreement. (u) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, (i) neither the Company nor Gol has incurred any material liability or obligation, direct or contingent, nor entered into any material transaction, in each case, not in the ordinary course of business or as described in the Prospectus; (ii) neither the Company nor Gol has purchased any of its outstanding capital stock, nor, except as disclosed in the Prospectus, declared, paid or otherwise made any dividend or distribution of any kind on its capital stock; (iii) there has not been any material change in the capital stock, short-term debt or long-term debt of either the Company or Gol, or any change in the terms of any aircraft leases, except in each case as described in the Prospectus; and (iv) there has been no prohibition or suspension of the operation of either the Company's or Gol's aircraft, including, but not limited to, as a result of action taken by the DAC or other applicable regulatory agencies or bodies. (v) Each of the Company and Gol has good and marketable title to all real property and good and marketable title to all personal property owned by it that is material to the business of the Company or Gol, as the case may be, in each case free and clear of all liens, encumbrances and defects except such as are described in the Prospectus or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company or Gol, as the case may be; and any real property, buildings, aircraft, aircraft engines and other material personal property held under lease by either the Company or Gol are held by it under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company or Gol, as the case may be, in each case except as described in the Prospectus. (w) Each of the Company and Gol owns or possesses, or can acquire on reasonable terms, all material patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names currently employed by it in connection with the business now operated by it, and neither the Company nor Gol has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing that, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse affect on either the Company or Gol, except as described in "Business -- Legal Matters and Administrative Proceedings -- Trademark" in the Prospectus. (x) To the best of each of the Company's and Gol's knowledge, (i) no material labor dispute with the employees of either the Company or Gol exists or 7 is imminent; (ii) other than as described in the Prospectus, no union organizing activities are currently taking place concerning the employees of either the Company or Gol; (iii) there has been no violation of any law or regulation relating to discrimination in the hiring, promotion or pay of employees or any applicable wage or hour laws concerning the employees of either the Company or Gol; and (iv) there is no existing, threatened or imminent labor disturbance by the employees of any of its principal suppliers, manufacturers or contractors that could, singly or in the aggregate, have a material adverse effect on either the Company or Gol. (y) Each of the Company and Gol and its owned and leased properties are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the business in which it is engaged; neither the Company nor Gol has been refused any insurance coverage sought or applied for; and neither the Company nor Gol has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not, singly or in the aggregate, have a material adverse effect on either the Company or Gol, except as described in the Prospectus. (z) Each of the Company and Gol possesses all certificates, authorizations, approvals, licenses, concessions and permits issued by the appropriate regulatory authorities necessary to conduct its business (the "GOVERNMENT APPROVALS"), and neither the Company nor Gol has received any notice of proceedings relating to the revocation or modification of any Government Approvals that, if the subject of an unfavorable decision, ruling or finding, would, singly or in the aggregate, have a material adverse effect on either the Company or Gol, except as described in the Prospectus. (aa) Each of the Company and Gol maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles in the United States ("U.S. GAAP") and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. (bb) The Securities are not subject to any restrictions on transfer pursuant to the Company's or Gol's by-laws, Brazilian law or any agreement or other instrument to which the Company or Gol is a party that have not been effectively waived. 8 (cc) The Deposit Agreement has been duly authorized by the Company and, when duly executed and delivered by the Company, and, assuming the Depositary has satisfied those legal requirements that are applicable to it to the extent necessary to make the Deposit Agreement enforceable against it, will constitute a valid, binding and enforceable agreement of the Company, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium and other similar laws affecting the rights of creditors generally and the application of general equitable principles, and, assuming the accuracy and compliance with the representations, warranties and covenants made by the Selling Shareholders herein, upon issuance by the Depositary of ADRs evidencing ADSs against the deposit of Preferred Shares in respect thereof in accordance with the provisions of the Deposit Agreement, such ADRs will be duly and validly issued and the persons in whose names the ADRs are registered will be entitled to the rights specified therein and in the Deposit Agreement; and the Deposit Agreement and the ADRs conform in all material respects to the descriptions thereof contained in the Prospectus. (dd) There are no contracts, agreements or understandings between either the Company or Gol and any person that would give rise to a valid claim against either the Company or Gol or any International Underwriter for a brokerage commission, finder's fee or other like payment in connection with this offering. (ee) Except as disclosed in the Prospectus, under current, and to the best of each of the Company's and Gol's knowledge, pending or proposed, laws and regulations of Brazil and any political subdivision thereof, all dividends and other distributions declared and payable on the Securities, including those in the form of ADSs, may be paid by the Company to the holder thereof in reais, so long as the ADR program remains registered with the Central Bank and the CVM pursuant to Annex V of the CMN, which may be converted into foreign currency and freely transferred out of Brazil and all such payments made to holders thereof who are non-residents of Brazil will not be subject to income, withholding or other taxes under laws and regulations of Brazil or any political subdivision or taxing authority thereof or therein and will otherwise be free and clear of any other tax, duty, withholding or deduction in Brazil or any political subdivision or taxing authority thereof or therein and without the necessity of obtaining any governmental authorization in Brazil or any political subdivision or taxing authority thereof or therein. (ff) In connection with the transactions contemplated by this Agreement, neither the Company nor Gol has taken, nor will it take, any action for the purpose of stabilizing or manipulating the price of the Securities. (gg) The Company has consented to the deposit of the Preferred Shares by the Selling Shareholders with the Depositary and the issuance by the Depositary of the ADRs evidencing the ADSs to be delivered by the Selling 9 Shareholders, acting through the Company as provided hereunder, to the International Underwriters on the Closing Date. (hh) The Company's and Gol's auditor and the Audit Committees of their Boards of Directors have been advised of: (i) any significant deficiencies in the design or operation of internal controls which could adversely affect the Company's or Gol's ability to record, process, summarize, and report financial data; and (ii) any fraud, whether or not material, that involves management or other employees who have a role in the Company's or Gol's internal controls; any material weaknesses in internal controls have been identified for the Company's and Gol's auditors; and since the date of the most recent evaluation of such disclosure controls and procedures, there have been no significant changes in internal controls or in other factors that could significantly affect internal controls, including any corrective actions with regard to significant deficiencies and material weaknesses. (ii) The Company is a "foreign private issuer," as defined in Rule 3b-4 under the Exchange Act. (jj) Each of the Company and Gol has the power to submit, and pursuant to Section 15 of this Agreement has legally, validly, effectively and irrevocably submitted, to the jurisdiction of any New York State or United States Federal court sitting in The City of New York, and has the power to designate, appoint and empower, and pursuant to Section 15 of this Agreement, has legally, validly and effectively designated, appointed and empowered an agent for service of process in any suit or proceeding based on or arising under this Agreement in any New York State or United States Federal court sitting in The City of New York. (kk) The Company has applied to list the Preferred Shares on the Sao Paulo Stock Exchange (the "BOVESPA") and the ADSs on the New York Stock Exchange (the "NYSE"). (ll) The audited consolidated financial statements as of December 31, 2003 and the unaudited consolidated financial statements as of March 31, 2004, included in the Prospectus, together with the related notes and schedules, present fairly the financial position of each of the Company and its subsidiaries as at the dates indicated and the results of operations and statement of changes in financial position of each of the Company and its subsidiaries for the periods specified; such financial statements have been prepared in conformity with U.S. GAAP applied on a consistent basis during the periods involved; the other financial and statistical data set forth in the Prospectus are accurately presented and prepared, where applicable, on a basis consistent with the financial statements and books and records of each of the Company and its subsidiaries; and neither the Company nor its subsidiaries has any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), not disclosed in the Prospectus. 10 (mm) Neither the Company nor Gol has sustained, since the date of the last audited financial statements, any loss or interference with its business from fire, explosion, flood or other calamity, regardless of whether covered by insurance. (nn) Any statistical and market-related data included in the Prospectus are based on or derived from sources that each of the Company and Gol believes to be reasonably reliable and accurate, and the Company or Gol has obtained the written consent to the use of such data from such sources to the extent required. (oo) All tax returns required to be filed by each of the Company and Gol have been filed, and all taxes and other assessments of a similar nature (whether imposed directly or through withholding) including any interest, additions to tax or penalties applicable thereto due or claimed to be due from either the Company or Gol have been paid, other than those being contested in good faith and for which adequate reserves have been provided, except as otherwise described in the Prospectus. (pp) There is no tax, duty, levy, impost, deduction, charge or withholding imposed by Brazil or any political subdivision thereof or taxing authority therein either (i) on or by virtue of the Company's execution, delivery, performance or enforcement of this Agreement or the Deposit Agreement or of any other document to be furnished hereunder or thereunder, or (ii) on any payment to be made pursuant to this Agreement and the Deposit Agreement, except withholding tax at the rate of 15% on fees, commissions and expenses payable to the International Underwriters and Contribution of Intervention in the Economic Order (Contribuicao de Intervenicao no Dominio Economico) ("CIDE"), which may be payable at a rate of 10% by the Brazilian payor on payments made in connection with the provision of certain technical services, potentially including the fees, commissions and expenses payable to the International Underwriters. (qq) There is no tax, duty, levy, impost, deduction, charge or withholding imposed by Brazil or any political subdivision thereof or taxing authority therein either (i) on or by virtue of Gol's execution, delivery, performance or enforcement of this Agreement or of any other document to be furnished hereunder or thereunder, or (ii) on any payment to be made pursuant to this Agreement, except withholding tax at the rate of 15% on fees, commissions and expenses payable to the International Underwriters and CIDE, which may be payable at a rate of 10% by the Brazilian payor on payments made in connection with the provision of certain technical services, potentially including the fees, commissions and expenses payable to the International Underwriters. (rr) Neither the Company nor Gol has sent or received any communication regarding termination of, or intent not to renew, any of the contracts or agreements referred to or described in the Prospectus, except where such termination or non-renewal would not have a material adverse effect on 11 either the Company or Gol or either of their businesses, and no such termination or non-renewal has been threatened by either the Company or Gol, or, to the best of each of the Company's and Gol's knowledge, any other party to any such contract or agreement. (ss) This Agreement and the Deposit Agreement are in proper legal form under the laws of Brazil for the enforcement thereof in Brazil against the Company and Gol (solely with respect to this Agreement), and it is not necessary in order to ensure the legality, validity, enforcement or admissibility into evidence of this Agreement or the Deposit Agreement in Brazil that this Agreement or the Deposit Agreement be filed or recorded with any court or other authority in Brazil or that any tax or fee be paid in Brazil on or in respect of this Agreement or the Deposit Agreement or any other document, other than court costs, including (without limitation) filing fees and deposits to secure judgments, except that (i) the signatures of the parties thereto signing outside Brazil shall have been notarized by a notary public licensed as such under the law of the place of signing and the signature of such notary public shall have been legalized by the relevant Brazilian Consulate, (ii) this Agreement and the Deposit Agreement shall have been translated into Portuguese by a sworn translator, and (iii) this Agreement and the Deposit Agreement shall have been registered with the appropriate Registry of Titles and Deeds (Cartorio de Titulos e Documentos) in Brazil, together with their sworn translations. (tt) No consent, approval, authorization or order of, or qualification with, any governmental body or agency, other than those obtained, is required in connection with the offering of the Directed Shares in any jurisdiction where the Directed Shares are being offered. (uu) Neither the Company nor Gol has offered, or caused Morgan Stanley or its affiliates to offer, Securities to any person pursuant to the Directed Share Program with the intent to influence unlawfully (i) a customer or supplier of the Company or Gol to alter the customer's or supplier's level or type of business with the Company or Gol, or (ii) a trade journalist or publication to write or publish favorable information about either the Company or Gol or its products and services. 2. Representations and Warranties of the Selling Shareholders. Each Selling Shareholder represents and warrants to and agrees with each of the International Underwriters that: (a) This Agreement has been duly authorized, executed and delivered by or on behalf of such Selling Shareholder. (b) The execution and delivery by such Selling Shareholder of, and the performance by such Selling Shareholder of its obligations under, this Agreement and the Brazilian Underwriting Agreement do not and will not contravene any provision of applicable law, or the organizational documents of such Selling 12 Shareholder (if such Selling Shareholder is a legal entity), or any agreement or other instrument binding upon such Selling Shareholder or any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Selling Shareholder, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by such Selling Shareholder of its obligations under this Agreement, except (i) such as may be required by the securities or Blue Sky laws of the States of the United States or securities laws of other jurisdictions in connection with the offer and sale of the Securities, (ii) such as may be required from the Central Bank and the CVM relating to the Deposit Agreement under Annex V of the CMN, (iii) from the CVM relating to the registration of the Company as a publicly-held company, the Brazilian Offering and the offering of the Securities as provided for in this Agreement and in the Brazilian Underwriting Agreement, (iv) from the Central Bank relating to the payment of the fees, commissions and expenses contemplated by this Agreement and the Deposit Agreement and (v) such as may be required by the DAC, all of which have been obtained or will be duly obtained (except for those described in clause (i) and in clause (iv), specifically with respect to any payment outside of Brazil pursuant to Section 9 hereof)) prior to the Closing Date. (c) Such Selling Shareholder owns, and on the Closing Date will own, the Securities to be sold by such Selling Shareholder free and clear of all security interests, claims, liens, equities or other encumbrances and has, and on the Closing Date will have, the legal right and power, and all authorizations and approvals required by law, to enter into this Agreement and to sell, transfer and deliver the Securities to be sold by such Selling Shareholder. (d) Upon payment for the Securities to be sold by such Selling Shareholder pursuant to this Agreement, delivery of the Preferred Shares in the form of ADSs, as directed by the International Underwriters, to Cede & Co. ("CEDE") or such other nominee as may be designated by the Depository Trust Company ("DTC"), registration of such ADSs in the name of Cede or such other nominee and the crediting of such ADSs on the books of DTC to securities accounts of the International Underwriters (assuming that neither DTC nor any such International Underwriter has notice of any adverse claim (within the meaning of Section 8-105 of the New York Uniform Commercial Code (the "UCC")) to such ADSs), (A) DTC shall be a "protected purchaser" of such ADSs within the meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the International Underwriters will acquire a valid security entitlement in respect of such ADSs and (C) no action based on any "adverse claim," within the meaning of Section 8-102 of the UCC, to such ADSs may be asserted against the International Underwriters with respect to such security entitlement. For purposes of this representation, such Selling Shareholder may assume that when such payment, delivery and crediting occur, (x) such ADSs will have been registered in the name of Cede or another nominee designated by DTC, in each case on the Depositary's ADS share registry in accordance with the Deposit Agreement and applicable law, (y) DTC will be registered as a "clearing corporation" within the 13 meaning of Section 8-102 of the UCC and (z) appropriate entries to the accounts of the several International Underwriters on the records of DTC will have been made pursuant to the UCC. (e) Upon payment for the Securities to be sold to the International Underwriters by such Selling Shareholders pursuant to this Agreement, all right, title and interest in the Securities will be transferred to the International Underwriters free and clear of all security interests, claims, liens, equities or other encumbrances. (f) Such Selling Shareholder has no reason to believe that the representations and warranties of the Company contained in Section 1 of this Agreement are not true and correct, is familiar with the Registration Statement and Prospectus and has no knowledge of any material fact, condition or information not disclosed in the Prospectus that has had, or may have, a material adverse effect on the Company. Such Selling Shareholder is not prompted by any information concerning the Company that is not set forth in the Prospectus to sell its Securities pursuant to this Agreement. (g) (i) The Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, provided that the representations and warranties set forth in this paragraph 2 (h) are limited to statements or omissions made in reliance upon information relating to such Selling Shareholder furnished to the Company in writing by such Selling Shareholder expressly for use in the Registration Statement, the Prospectus or any amendments or supplements thereto. (h) In connection with the transactions contemplated by this Agreement, such Selling Shareholder has not taken and will not take any action for the purpose of stabilizing or manipulating the price of the Securities. (i) Such Selling Shareholder has deposited, or will deposit prior to the Closing Date, Preferred Shares with the Depositary against the issuance of the ADRs evidencing the ADSs to be sold by it, acting through the Company as provided hereunder, to the International Underwriters and has instructed or will instruct the Depositary to deliver such ADSs to the International Underwriters at the Closing Date. (j) No persons are entitled to preemptive or other rights to acquire the Securities from such Selling Shareholder, and the Preferred Shares may be 14 deposited, without any restrictions on transfer, with the Depositary against the issuance of ADRs evidencing ADSs as contemplated in the Deposit Agreement. (k) This Agreement and the Deposit Agreement are in proper legal form under the laws of Brazil for the enforcement thereof in Brazil against such Selling Shareholder, and it is not necessary in order to ensure the legality, validity, enforcement or admissibility into evidence of this Agreement and the Deposit Agreement in Brazil that this Agreement and the Deposit Agreement be filed or recorded with any court or other authority in Brazil or that any tax or fee be paid in Brazil on or in respect of this Agreement or the Deposit Agreement or any other document, other than court costs, including (without limitation) filing fees, except that, to the extent applicable (i) the signatures of the parties thereto shall have been notarized by a notary public licensed as such under the law of the place of signing and the signature of such notary public shall have been legalized by a Brazilian Consulate, (ii) this Agreement and the Deposit Agreement shall have been translated into Portuguese by a sworn translator, and (iii) this Agreement and the Deposit Agreement shall have been registered with the appropriate Registry of Titles and Deeds in Brazil, together with their sworn translations. (l) Such Selling Shareholder has the power to submit, and pursuant to Section 15 of this Agreement, has legally, validly, effectively and irrevocably submitted, to the jurisdiction of any New York State or United States Federal court sitting in The City of New York, and has the power to designate, appoint and empower, and pursuant to Section 15 of this Agreement, has legally, validly and effectively designated, appointed and empowered, an agent for service of process in any suit or proceeding based on or arising under this Agreement in any New York State or United States Federal court sitting in The City of New York. 3. Agreements to Sell and Purchase. Each Seller, severally and not jointly, hereby agrees to sell to the several International Underwriters, and each International Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from such Seller at $[-] a Preferred Share ($[-] an ADS) (the "PURCHASE PRICE") the number of Firm ADSs (subject to such adjustments to eliminate fractional shares as you may determine) that bears the same proportion to the number of Firm ADSs to be sold by such Seller as the number of Firm ADSs set forth in Schedule II hereto opposite the name of such International Underwriter bears to the total number of Firm ADSs. On the basis of the representations and warranties contained in this Agreement, and subject to its terms and conditions, the Company and Comporte agree to sell to the International Underwriters the Additional ADSs, and the International Underwriters shall have the right to purchase, severally and not jointly, up to 2,478,750 Additional ADSs, at the Purchase Price. You may exercise this right on behalf of the International Underwriters in whole or from time to time in part by giving written notice of each election to exercise the option not later than 30 days after the date of this Agreement. Any exercise notice shall specify the number of Additional ADSs to be purchased by the International Underwriters and the date on which such Additional ADSs are 15 to be purchased. Each purchase date must be at least one business day after the written notice is given and may not be earlier than the closing date for the Firm ADSs nor later than ten business days after the date of such notice. Additional ADSs may be purchased as provided in Section 5 hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm ADSs. On each day, if any, that Additional ADSs are to be purchased (an "OPTION CLOSING DATE"), each International Underwriter agrees, severally and not jointly, to purchase the number of Additional ADSs (subject to such adjustments to eliminate fractional shares as you may determine) that bears the same proportion to the total number of Additional ADSs to be purchased on such Option Closing Date as the number of Firm ADSs set forth in Schedule II hereto opposite the name of such International Underwriter bears to the total number of Firm Securities. Each of the Company, its directors and executive officers (other than those directors and executive officers who are also shareholders of Aeropar and Comporte) and BSSF hereby agrees that, without the prior written consent of Morgan Stanley on behalf of the International Underwriters, it will not, during the period ending 180 days after the date of the Prospectus (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Securities or any securities convertible into or exercisable or exchangeable for Securities; (ii) file any registration statement with the Commission relating to the offering of any Securities or any securities convertible into or exercisable or exchangeable for Securities; or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Securities, whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of Securities or such other securities, in cash or otherwise. Furthermore, BSSF hereby confirms that it has agreed with the Company that, subject to certain exceptions, it will not transfer any ADSs or Preferred Shares or issue any options or warrants to purchase ADSs or Preferred Shares or securities convertible into, or exchangeable for, or represent rights to receive, ADSs or Preferred Shares after the expiration of the 180-day period described in the preceding sentence unless such issuance or transfer is pursuant to an organized sales process. Each of Comporte and Aeropar (including their respective shareholders) hereby agrees that, without the prior written consent of Morgan Stanley on behalf of the International Underwriters, it will not, during the period ending 365 days after the date of the Prospectus (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Securities or any securities convertible into or exercisable or exchangeable for Securities; (ii) file any registration statement with the Commission relating to the offering of any Securities or any securities convertible into or exercisable or exchangeable for Securities; or (iii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Securities, whether any such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of Securities or such other securities, in cash or otherwise; provided, however, that, solely with respect to Aeropar, the restrictions provided in this paragraph shall not apply to the lending of Securities by 16 Aeropar to the BOVESPA, which Securities will be subsequently deposited with a broker, for the purpose of permitting one-day trading in the Brazilian stock market. Notwithstanding the foregoing, if (i) during the last 17 days of the 180-day or 365-day restricted period, as the case may be, the Company issues an earnings release relating to the Company; or (ii) prior to the expiration of the 180-day or 365-day restricted period, as the case may be, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the 180-day or 365-day period, as the case may be, the restrictions imposed by this letter shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release. Solely with respect to the Selling Shareholders, the restrictions provided in the third paragraph of this Section 3 shall not apply to (A) offers, sales, assignments or transfers of Securities made to corporations, partnerships, limited liability companies or other entities to the extent such entities are wholly-owned by such Seller, so long as each transferee agrees in writing to be bound by the restrictions set forth herein, (B) the pledge of Securities to third parties in connection with financing arrangements, so long as any such third party agrees in writing to be bound by the restrictions set forth herein; and (C) the distribution of Securities by such Seller to its owners of record as of the date hereof, so long as each transferee agrees in writing to be bound by the restrictions set forth herein. The restrictions contained in the third paragraph of this Section 3 shall not apply to (A) the Securities to be sold hereunder or under the Brazilian Registration Statement, (B) the issuance by the Company of ADSs or Preferred Shares upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof of which the International Underwriters have been advised in writing, (C) transactions by any person or entity other than the Company relating to ADSs or Preferred Shares or other securities acquired in open market transactions after the completion of the offering of the Securities, (D) the issuance by the Company of options to acquire securities of the Company as described in the Prospectus under "Management and Corporate Governance -- Executive Stock Options" and "Management and Corporate Governance -- Stock Option Plan" or (E) the exchange of the Preferred Shares for ADRs, so long as the holder thereof remains the owner of such ADSs and the ADRs evidenced thereby. In addition, each Selling Shareholder agrees that, without the prior written consent of Morgan Stanley on behalf of the International Underwriters, it will not, during the period ending 180 days or 365 days after the date of the Prospectus, as the case may be, make any demand for, or exercise any right with respect to, the registration of any Securities or any security convertible into or exercisable or exchangeable for Securities. 4. Terms of Public Offering. The Sellers are advised by you that the International Underwriters propose to make a public offering of their respective portions of the Securities as soon after the Registration Statement, the ADS Registration Statement and this Agreement have become effective as in your judgment is advisable. The Sellers are further advised by you that the Securities are to be offered to the public initially at $[-] a Preferred Share ($[-] an ADS) (the "PUBLIC OFFERING PRICE") and to certain dealers selected by you at a price that represents a concession not in excess of $[-] a Preferred Share ($[-] an ADS) under the Public Offering Price, 17 and that any International Underwriter may allow, and such dealers may reallow, a concession, not in excess of $[-] a Preferred Share ($[-] an ADS), to any International Underwriter or to certain other dealers. 5. Payment and Delivery. Payment for the Firm ADSs to be sold by each Seller shall be made to such Seller in federal or other funds immediately available in New York City against delivery of such Firm ADSs for the respective accounts of the several International Underwriters at 10:00 a.m., New York City time, on [-], 2004, or at such other time on the same or such other date, not later than [-], 2004, as shall be designated in writing by you. The time and date of such payment are hereinafter referred to as the "CLOSING DATE." (a) Payment for any Additional ADSs shall be made to the Company and Comporte in federal or other funds immediately available in New York City against delivery of such Additional ADSs for the respective accounts of the several International Underwriters at 10:00 a.m., New York City time, on the date specified in the corresponding notice described in Section 3 or at such other time on the same or on such other date, in any event not later than [-], 2004, as shall be designated in writing by you. (b) The Firm ADSs and Additional ADSs shall be registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date or the applicable Option Closing Date, as the case may be. The Firm ADSs and Additional ADSs shall be delivered to you on the Closing Date or an Option Closing Date, as the case may be, for the respective accounts of the several International Underwriters, with any transfer taxes payable in connection with the transfer of the Securities to the International Underwriters duly paid, against payment of the Purchase Price therefor. 6. Conditions to the International Underwriters' Obligations. The obligations of the Sellers to sell the Securities to the International Underwriters and the several obligations of the International Underwriters to purchase and pay for the Securities on the Closing Date are subject to the condition that the Registration Statement and the ADS Registration Statement shall have become effective not later than [-] (New York City time) on the date hereof. The several obligations of the International Underwriters are subject to the following further conditions: (a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date: (i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading or of any review for a possible change that does not indicate the direction of the possible change, in the rating accorded any of the Company's or Gol's securities by any "nationally recognized statistical rating organization," as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; 18 (ii) the representations and warranties of the Company, Gol and the Selling Shareholders contained in this Agreement shall remain true and correct; and (iii) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of either the Company or Gol, from that set forth in the Prospectus that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Securities on the terms and in the manner contemplated in the Prospectus. (b) The International Underwriters shall have received on the Closing Date a certificate, dated the Closing Date and signed by an executive officer of each of the Company and Gol, to the effect set forth in Section 6(a)(i) and (with respect to the Company and Gol) (ii) above and that each of the Company and Gol has complied in all material respects with all of the agreements and satisfied in all material respects all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date. Each of the officers signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened. (c) The International Underwriters shall have received on the Closing Date an opinion of Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados, Brazilian outside counsel for each of the Company, Gol and Comporte, dated the Closing Date, to the effect that: (i) each of the Company and Gol has been duly incorporated, is validly existing as a corporation in good standing under the laws of Brazil, has the corporate power and authority to own, lease and operate its property and to conduct its business as described in the Prospectus and is duly qualified to transact business and in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or in good standing would not, singly or in the aggregate, have a material adverse effect on either the Company or Gol; (ii) the authorized capital stock of the Company conforms as to legal matters to the description thereof contained in the Prospectus; (iii) the Preferred Shares (including those to be sold by the Selling Shareholders) outstanding prior to the issuance of the Securities to be sold by the Company have been duly authorized and are validly issued, fully paid and non-assessable; (iv) the Securities to be sold by the Company and Comporte have been duly authorized and, when issued, paid for and delivered in accordance with the terms of this Agreement and the Brazilian Underwriting Agreement, will be 19 validly issued, fully paid and non-assessable, the issuance of such Securities will not be subject to any preemptive or similar rights that have not been effectively waived, or give rise to any registration rights relating to the Securities or any other securities of the Company other than as described in the Prospectus, and there are no restrictions on transfers of the Securities; (v) this Agreement has been duly authorized by each of the Company, Gol and Comporte; and the Deposit Agreement has been duly authorized by the Company; (vi) the execution and delivery by each of the Company, Gol and Comporte of, and the performance by each of the Company, Gol and Comporte of its obligations under, this Agreement and the Brazilian Underwriting Agreement will not contravene any provision of applicable law or the by-laws of either the Company, Gol or Comporte, or, to such counsel's knowledge, any agreement or other instrument binding upon any of the Company, Gol or Comporte that is material to any of the Company, Gol or Comporte, or, to such counsel's knowledge, any judgment, order or decree of any governmental body, agency or court having jurisdiction over any of the Company, Gol or Comporte, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by any of the Company, Gol or Comporte of its obligations under this Agreement and the Brazilian Underwriting Agreement, except (i) such as may be required by the securities or Blue Sky laws of the States of the United States or securities laws of other jurisdictions in connection with the offer and sale of the Securities, (ii) such as may be required from the Central Bank and the CVM relating to the Deposit Agreement under Annex V of the CMN, (iii) from the CVM relating to the registration of the Company as a publicly-held company, the Brazilian Offering and the offering of the Securities as provided for in this Agreement and in the Brazilian Underwriting Agreement, (iv) from the Central Bank relating to the payment of the fees, commissions and expenses contemplated by this Agreement and the Deposit Agreement and (v) such as may be required by the DAC, all of which have been obtained or will be duly obtained (except for those described in clause (i) and in clause (iv), specifically with respect to any payment outside of Brazil pursuant to Section 9 hereof)) prior to the Closing Date; (vii) the execution and delivery by the Company of, and the performance by the Company of its obligations under, the Deposit Agreement will not contravene any provision of applicable law or the by-laws of the Company, or, to such counsel's knowledge, any agreement or other instrument binding upon the Company that is material to the Company or, to such counsel's knowledge, any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company of its obligations under the Deposit Agreement, except (i) such as may be required by the securities or Blue Sky laws of the States of the United States or securities laws of other jurisdictions in connection with the 20 offer and sale of the Securities, (ii) such as may be required from the Central Bank and the CVM relating to the Deposit Agreement under Annex V of the CMN, (iii) from the CVM relating to the registration of the Company as a publicly-held company, the Brazilian Offering and the offering of the Securities as provided for in this Agreement and in the Brazilian Underwriting Agreement, (iv) from the Central Bank relating to the payment of the fees, commissions and expenses contemplated by this Agreement and the Deposit Agreement and (v) such as may be required by the DAC, all of which have been obtained or will be duly obtained (except for those described in clause (i) and in clause (iv), specifically with respect to any payment outside of Brazil pursuant to Section 9 hereof)) prior to the Closing Date; (viii) the statements relating to legal matters, documents or proceedings included in the Prospectus under the captions "Legal Matters and Administrative Proceedings," "Description of Capital Stock" and "Underwriters" and (B) the Registration Statement in Items 6 and 7 to the extent such statements constitute summaries of legal matters, documents or proceedings referred to therein, in each case fairly summarize in all material respects such matters, documents or proceedings; (ix) nothing has come to the attention of such counsel that causes such counsel to believe that (A) the Registration Statement or the Prospectus (except for the financial statements and financial schedules and other financial and statistical data included therein, as to which such counsel need not express any belief) at the time the Registration Statement became effective contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (B) the Prospectus (except for the financial statements and financial schedules and other financial and statistical data included therein, as to which such counsel need not express any belief) as of its date or as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (x) to such counsel's knowledge, Gol possesses the governmental licenses necessary to conduct its commercial airline operations as described in the Prospectus and Gol is in compliance with the terms and conditions of all such governmental licenses, except where the failure to so comply would not, singly or in the aggregate, have a material adverse effect on either the Company or Gol; and all of the governmental licenses are valid and in full force and effect, except where the invalidity of such governmental licenses or the failure of such governmental licenses to be in full force and effect would not, singly or in the aggregate, have a material adverse effect on either the Company or Gol; (xi) assuming that this Agreement is not executed and delivered in Brazil, no stamp or other issuance or transfer taxes or duties, and no capital gains, income, withholding or other taxes, are payable to Brazil or any political 21 subdivision or taxing authority hereof or therein (other than Brazilian tax payable by reason of the fact that its income generally is subject to tax in Brazil) by or on behalf of the International Underwriters in connection with (A) the deposit by the Company on its own behalf and on behalf of the Selling Shareholders with the Depositary of Preferred Shares against the issuance of ADRs evidencing the ADSs, (B) the sale and delivery by the Company on its own behalf and on behalf of the Selling Shareholders to or for the respective accounts of the International Underwriters of Securities, or (C) the sale and delivery outside Brazil by the International Underwriters of the Securities to the initial purchasers thereof in the manner contemplated herein, in each case except as described in the Prospectus; (xii) upon payment to the Company and the Selling Shareholders for the Securities to be sold to the International Underwriters by the Company and the Selling Shareholders, respectively, pursuant to this Agreement, all right, title and interest in the Securities will be transferred to the International Underwriters free and clear of all security interests, claims, liens, equities or other encumbrances; (xiii) to the best of such counsel's knowledge after discussions with the appropriate officers of each of the Company and Gol, there are no legal, arbitration or governmental proceedings pending or threatened to which either the Company or Gol is a party or to which any of the properties of either the Company or Gol is subject that could reasonably be expected to, singly or in the aggregate, have a material adverse effect on either the Company or Gol, except as described in the Prospectus; and (xiv) each of the Company and Comporte owns, and on the Closing Date will own, the Securities to be sold by it free and clear of all security interests, claims, liens, equities or other encumbrances and has, and on the Closing Date will have, the legal right and power, and all authorizations and approvals required by law, to enter into this Agreement and to sell, transfer and deliver the Securities to be sold by it. (d) The International Underwriters shall have received on the Closing Date an opinion of Shearman & Sterling LLP, outside counsel for the Company and Gol, dated the Closing Date, to the effect that: (i) the statements relating to legal matters, documents or proceedings included in the Prospectus under the caption "Description of American Depositary Shares," in so far as such statements constitute summaries of legal matters, documents or proceedings, fairly summarize in all material respects such matters, documents or proceedings; (ii) neither the Company nor Gol is, and after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus neither will be, required to register as an investment company, under the Investment Company Act of 1940, as amended; 22 (iii) (A) the Registration Statement and the Prospectus (except for the financial statements and financial schedules and other financial and statistical data included therein, as to which such counsel need not express any belief) appear on their face to be appropriately responsive in all material respects to the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder, (B) no facts have come to such counsel's attention which gave such counsel reason to believe that the Registration Statement or the Prospectus (except for the financial statements and financial schedules and other financial and statistical data included therein, as to which such counsel need not express any belief) at the time the Registration Statement became effective contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (C) no facts have come to such counsel's attention which gave such counsel reason to believe that the Prospectus (except for the financial statements and financial schedules and other financial and statistical data included therein, as to which such counsel need not express any belief) as of its date or as of the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (iv) this Agreement has been duly executed and delivered by each of the Company and Gol; and the Deposit Agreement has been duly executed and delivered by the Company; (v) assuming the Deposit Agreement has been duly authorized by the Company and duly authorized, executed and delivered by the Depositary, the Deposit Agreement is a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium or other similar laws affecting the rights of creditors generally and the application of general principles of equity (regardless of whether enforcement is considered in a proceeding in equity or at law) and, assuming the accuracy of, and compliance with, the representations, warranties and covenants made by the Selling Shareholders herein, upon due and authorized issuance by the Depositary of ADRs (including any master ADR issued in connection therewith) evidencing ADSs against the deposit of the Preferred Shares in respect thereof in accordance with the provisions of the Deposit Agreement, such ADRs will be duly issued and the persons in whose names the ADRs are registered will be entitled to the rights specified therein and in the Deposit Agreement; (vi) the deposit of the Preferred Shares, the issuance and sale of the ADRs being delivered on the Closing Date in respect thereof pursuant to the Deposit Agreement and the performance by the Company of its obligations in this Agreement and the Deposit Agreement, do not require any consent, approval, authorization, registration or qualification of or with any court or governmental 23 agency of the United States or the State of New York except such as have been obtained or effected under the Securities Act or Exchange Act or in connection with the listing of the ADSs on the NYSE or as may be required under the Blue Sky laws of any jurisdiction in the United States in connection with the purchase and distribution of the ADRs by the International Underwriters (as to which such counsel need not express any comment or opinion); and (vii) under the laws of the State of New York relating to submission to personal jurisdiction, each of the Company and Gol has, pursuant to Section 15 of this Agreement, submitted to the personal jurisdiction of any New York State or United States Federal court sitting in The City of New York in any action arising out of or relating to this Agreement, has to the fullest extent permitted by law waived any objection to the venue of a proceeding in any such court, and has appointed CT Corporation as its authorized agent for the purpose described in Section 15 hereof, and service of process effected on such agent in the manner set forth in Section 15 hereof will be effective to confer valid personal jurisdiction over the Company in any such action. (e) The International Underwriters shall have received on the Closing Date an opinion of Shearman & Sterling LLP, counsel for the Selling Shareholders, dated the Closing Date, to the effect that: (i) this Agreement and the Deposit Agreement have been duly authorized by BSSF, and each of this Agreement and the Deposit Agreement has been duly executed and delivered by or on behalf of each of the Selling Shareholders; (ii) the execution and delivery by each Selling Shareholder of, and the performance by such Selling Shareholder of its obligations under, this Agreement and the Deposit Agreement will not contravene any provision of the laws of the State of New York or the federal laws of the United States or, to the best of such counsel's knowledge, any agreement or other instrument binding upon such Selling Shareholder that is governed by the laws of the State of New York or the federal law of the United States or, to such counsel's knowledge, any judgment, order or decree of any U.S. Federal or New York State governmental body, agency or court having jurisdiction over such Selling Shareholder, and no consent, approval, authorization or order of, or qualification with, any U.S. Federal or New York State governmental body or agency is required for the performance by such Selling Shareholder of its obligations under this Agreement, except such as may be required by the securities or Blue Sky laws of the States of the United States or securities laws of other jurisdictions in connection with the offer and sale of the Securities (as to which such counsel expresses no comment or opinion) or have been obtained or effected under the Securities Act or Exchange Act or in connection with the listing of the ADSs on the NYSE; (iii) upon payment to the Selling Shareholders for the Securities to be sold to the International Underwriters by the Selling Shareholders pursuant to this 24 Agreement, delivery of the Preferred Shares in the form of ADSs, as directed by the International Underwriters, to Cede or such other nominee as may be designated by DTC, registration of such ADSs in the name of Cede or such other nominee and the crediting of such ADSs on the books of DTC to securities accounts of the International Underwriters (assuming that neither DTC nor any such International Underwriter has notice of any adverse claim within the meaning of Section 8-105 of the UCC to such ADSs), (A) DTC shall be a "protected purchaser" of such ADSs within the meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the International Underwriters will acquire a valid security entitlement in respect of such ADSs and (C) no action based on any "adverse claim" (within the meaning of Section 8-102 of the UCC) to such ADSs may be asserted against the International Underwriters with respect to such security entitlement; in giving this opinion, counsel for the Selling Shareholders may assume that when such payment, delivery and crediting occur, (x) such ADSs will have been registered in the name of Cede or another nominee designated by DTC, in each case on the Depositary's ADS share registry in accordance with the Deposit Agreement, by-laws and applicable law, (y) DTC will be registered as a "clearing corporation" within the meaning of Section 8-102 of the UCC and (z) appropriate entries to the accounts of the several International Underwriters on the records of DTC will have been made pursuant to the UCC. (iv) upon payment to the Selling Shareholders for the Shares to be sold to the International Underwriters by the Selling Shareholders pursuant to this Agreement, all right, title and interest in the Securities will be transferred to the International Underwriters free and clear of all security interests, claims, liens, equities or other encumbrances; (v) nothing has come to the attention of such counsel that causes such counsel to believe that (A) the statements, schedules and data relating to the Selling Shareholders contained in the Registration Statement or the Prospectus at the time the Registration Statement became effective contained an untrue statement of a material fact relating to the Selling Shareholders or omitted to state a material fact relating to the Selling Shareholders required to be stated therein or necessary to make the statements therein not misleading or (B) the statements, schedules and data relating to the Selling Shareholders contained in the Prospectus as of its date or as of the Closing Date contained or contains an untrue statement of a material fact relating to the Selling Shareholders or omitted or omits to state a material fact relating to the Selling Shareholders necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (vi) under the laws of the State of New York relating to submission to jurisdiction, each of the Selling Shareholders has, pursuant to Section 15 of this Agreement, submitted to the personal jurisdiction of any New York State or United States Federal court sitting in The City of New York in any action arising out of or relating to this Agreement, has to the fullest extent permitted by law waived any objection to the venue of a proceeding in any such court, and has 25 appointed CT Corporation, as its authorized agent for the purpose described in Section 15 hereof, and service of process effected on such agent in the manner set forth in Section 15 hereof will be effective to confer valid personal jurisdiction over such Selling Shareholder in any such action; the waiver by each Selling Shareholder pursuant to Section 15 hereof of any immunity to jurisdiction to which they may otherwise be entitled (including sovereign immunity and immunity from pre-judgment attachment, post-judgment attachment and execution) is legal, valid and binding under New York and federal law, subject to the limitations provided by the United States Foreign Sovereign Immunities Act of 1976. (f) The International Underwriters shall have received on the Closing Date an opinion of General Counsel for the Company and Gol, dated the Closing Date, to the effect that there are no legal, arbitration or governmental proceedings pending or threatened to which either the Company or Gol is a party or to which any of the properties of either the Company or Gol is subject that could reasonably be expected to, singly or in the aggregate, have a material adverse effect on either the Company or Gol, except as described in the Prospectus. (g) The International Underwriters shall have received on the Closing Date an opinion of [-], [in-house counsel] for BSSF, dated the Closing Date, to the effect that (i) the execution and delivery by BSSF of, and the performance by BSSF of its obligations under, this Agreement will not contravene any provision of the organizational documents of BSSF or any agreement or other instrument binding upon BSSF or any judgment, order or decree of any governmental body, agency or court having jurisdiction over BSSF, and no consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by BSSF of its obligations under this Agreement, except such as may be required by the securities or Blue Sky laws of the States of the United States or securities laws of other jurisdictions in connection with the offer and sale of the Securities (as to which such counsel expresses no comment or opinion) or have been obtained or effected under the Securities Act or Exchange Act or in connection with the listing of the ADSs on the NYSE; and (ii) BSSF owns, and on the Closing Date will own, the Securities to be sold by it free and clear of all security interests, claims, liens, equities or other encumbrances and has, and on the Closing Date will have, the legal right and power, and all authorizations and approvals required by law, to enter into this Agreement and to sell, transfer and deliver the Securities to be sold by it. (h) The International Underwriters shall have received on the Closing Date an opinion of Machado, Meyer, Sendacz e Opice, Brazilian counsel for the International Underwriters, dated the Closing Date, covering the matters referred to in Sections 6(c)(iv), 6(c)(v), 6(c)(viii) (but only as to the statements in the 26 Prospectus under "Description of Capital Stock" and "Underwriters") and 6(c)(ix) above. (i) The International Underwriters shall have received on the Closing Date an opinion of Cleary, Gottlieb, Steen & Hamilton, counsel for the International Underwriters, dated the Closing Date, covering the matters referred to in Sections 6(c)(viii) (but only as to the statements in the Prospectus under "Description of American Depositary Shares" and "Underwriters") and letter covering the matters referred to in 6(d)(iii) above. With respect to Section 6(c)(ix) above, Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados and Machado, Meyer, Sendacz e Opice Advogados, with respect to Section 6(d)(iii) above, Shearman & Sterling LLP and Cleary, Gottlieb, Steen & Hamilton may state that their beliefs are based upon their participation in the preparation of the Registration Statement and Prospectus and any amendments or supplements thereto and review and discussion of the contents thereof, but are without independent check or verification, except as specified. With respect to Section 6(e) above, Shearman & Sterling LLP may rely upon an opinion or opinions of counsel for any Selling Shareholders and, with respect to factual matters and to the extent such counsel deems appropriate, upon the representations of each Selling Shareholder contained herein and in other documents and instruments; provided that (i) each such counsel for the Selling Shareholders is satisfactory to your counsel, (ii) a copy of each opinion so relied upon is delivered to you and is in form and substance satisfactory to your counsel, (iii) copies of any such other documents and instruments shall be delivered to you and shall be in form and substance satisfactory to your counsel and (iv) Shearman & Sterling LLP shall state in their opinion that they are justified in relying on each such other opinion. (j) The opinions of Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga Advogados and Shearman & Sterling LLP described in Sections 6(c), 6(d) and 6(e) above (and any opinions of counsel for any Selling Shareholder referred to in the immediately preceding paragraph) shall be rendered to the International Underwriters at the request of the Company or one or more of the Selling Shareholders, as the case may be, and shall so state therein. (k) Emmet, Marvin & Martin LLP, counsel for the Depositary, shall have furnished to the Representative their written opinion, dated the Closing Date, in form and substance satisfactory to the Representative, to the effect that: (i) The Deposit Agreement has been duly and validly authorized, executed and delivered by the Depositary and, assuming due authorization, execution and delivery by the Company, constitutes a legal, valid, binding and enforceable agreement of the Depositary, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium and other similar laws affecting the rights of creditors generally and the 27 application of general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or at law); (ii) When executed and delivered by the Depositary against the deposit of duly authorized, validly issued, fully paid and nonassessable Preferred Shares in accordance with the terms of the Deposit Agreement, the ADRs will be duly and validly issued and will entitle the registered holders thereof to the rights specified therein and in the Deposit Agreement; and (iii) In rendering such opinion, such counsel may state that they express no opinion as to the laws of any jurisdiction outside the United States. (l) The International Underwriters shall have received, on each of the date hereof and the Closing Date, a letter dated the date hereof or the Closing Date, as the case may be, in form and substance satisfactory to the International Underwriters, from Ernst & Young Auditores Independentes S.S., independent public accountants, containing statements and information of the type ordinarily included in accountants' "comfort letters" to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement and the Prospectus; provided that the letter delivered on the Closing Date shall use a "cut-off date" not earlier than the date hereof. (m) The "lock-up" agreements, each substantially in the form of Exhibit A hereto, between you and certain shareholders, officers and directors of the Company relating to sales and certain other dispositions of Securities or certain other securities, delivered to you on or before the date hereof, shall be in full force and effect on the Closing Date. (n) The ADSs shall have been approved for listing on the NYSE, subject only to official notice of issuance. (o) The Preferred Shares shall have been approved for listing on the BOVESPA, subject only to official notice of issuance. The several obligations of the International Underwriters to purchase Additional ADSs hereunder are subject to the delivery to you on the applicable Option Closing Date of such documents as you may reasonably request with respect to the good standing of the Company, the due authorization and issuance of the Additional ADSs to be sold on such Option Closing Date and other matters related to the issuance of such Additional ADSs. 7. Covenants of the Company. In further consideration of the agreements of the International Underwriters herein contained, the Company covenants with each International Underwriter as follows: (a) To furnish to you, without charge, five signed copies of the Registration Statement (including exhibits thereto) and the ADS Registration Statement (including exhibits thereto) and for delivery to each other International 28 Underwriter a conformed copy of the Registration Statement (without exhibits thereto) and the ADS Registration Statement (without exhibits thereto) and to furnish to you in New York City, without charge, prior to 10:00 a.m. New York City time on the business day next succeeding the date of this Agreement and during the period mentioned in Section 7(c) below, as many copies of the Prospectus and any supplements and amendments thereto or to the Registration Statement or the ADS Registration Statement as you may reasonably request. (b) Before amending or supplementing the Registration Statement, the ADS Registration Statement, or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which you reasonably object, and to file with the Commission within the applicable period specified in Rule 424(b) under the Securities Act any prospectus required to be filed pursuant to such Rule. (c) If, during such period after the first date of the public offering of the Securities, in the opinion of counsel for the International Underwriters, the Prospectus is required by law to be delivered in connection with sales by an International Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the International Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the International Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Securities may have been sold by you on behalf of the International Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with law. (d) To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request. (e) To make generally available to the Company's security holders and to you as soon as practicable an earning statement covering the twelve-month period ending June 30, 2005 that satisfies the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder. (f) To use its best efforts to effect and maintain the listing of the Preferred Shares on the BOVESPA, to maintain the registration of the Company with the CVM and to maintain the registration of the ADR program with the Central Bank and the CVM. 29 (g) To use its best efforts to effect the listing of the ADSs on the NYSE, including the filing with the NYSE of all required documents and notices for non-U.S. companies that have securities that are traded on the NYSE. (h) To file any documents or reports with respect to the Securities required to be filed with the CVM and the BOVESPA in the time period required for such filing. (i) To use the net proceeds received by it from the sale of the Securities in the manner specified in the Prospectus under the caption "Use of Proceeds." (j) To furnish to the holders of the ADSs, directly or through the Depositary, with a copy to the Representative, (A) after the end of each fiscal year, an annual report (in English) that will include a review of operations and annual audited consolidated financial statements (including consolidated balance sheets, statements of income, statements of change in shareholders' equity and statements of cash flow) with an opinion by an independent accountant and prepared in conformity with U.S. GAAP; and (B) after the end of each of the first three quarterly periods of each fiscal year, unaudited consolidated financial information prepared in accordance with U.S. GAAP, equivalent in substance to the information that would be required to be filed on Form 10-Q, if the Company were required to file quarterly reports on Form 10-Q. (k) To publish an earnings release reporting financial results prepared in accordance with U.S. GAAP (i) no later than the publishing of an earnings release reporting financial results for the corresponding period prepared in accordance with generally accepted accounting principles in Brazil and (ii) that has a level of detail substantially similar to such earnings release prepared in accordance with generally accepted accounting principles in Brazil. 8. Expenses. Regardless of whether the transactions contemplated in this Agreement are consummated or this Agreement is terminated, the Company and Gol agree to pay or cause to be paid all expenses incident to the performance of the Sellers' obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company's and Gol's counsel, the Company's and Gol's accountants and counsel for the Selling Shareholders in connection with the registration and delivery of the Securities under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, the ADS Registration Statement, any preliminary prospectus, the Prospectus and amendments and supplements to any of the foregoing, including all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Securities to the Underwriters, (iii) all expenses and taxes incident to (A) the deposit by the Sellers of the Preferred Shares with the Depositary and the issuance and delivery of the ADRs evidencing the ADSs in exchange therefor by the Depositary to the Sellers, (B) the sale and delivery of the ADSs by the Sellers to or for the account of the International Underwriters and (C) the sale and delivery outside Brazil of the ADSs by the International Underwriters to each 30 other and the initial purchasers thereof in the manner contemplated herein, including, in any such case, any Brazilian income, capital gains, withholding transfer or other tax (but excluding any brokerage fee and any Brazilian income tax on capital gains from the sale of the Securities and on the income of any International Underwriter whose net income is subject to tax by Brazil) asserted against an International Underwriter by reason of the purchase and sale of any Securities pursuant to this Agreement or the Agreement Between Underwriters, including without limitation any taxes referred to in Section 1(pp) above, (iv) the cost of printing or producing any Blue Sky or Legal Investment memorandum in connection with the offer and sale of the Securities under state securities laws and all expenses in connection with the qualification of the Securities for offer and sale under securities laws of various jurisdictions as provided in Section 7(d) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky or Legal Investment memorandum, (v) all filing fees incurred in connection with the review and qualification of the offering of the Securities by the NASD, Inc., (vi) all fees and expenses in connection with the preparation and filing of the registration statement on Form 8-A relating to the Preferred Shares and all costs and expenses incident to listing the Securities on the NYSE and other national securities exchanges and the BOVESPA and other foreign stock exchanges and the registration of the Securities with the CVM, (vii) the cost of printing certificates representing the Securities, (viii) the costs and charges of any transfer agent, registrar or depositary, including the fees and expenses (including fees and disbursements of counsel), if any, of the Depositary and any custodian appointed under the Deposit Agreement, other than the fees and expenses to be paid by holders of ADRs (other than the International Underwriters in connection with the initial purchase of the Securities), (ix) the costs and expenses of the Company and Gol relating to travel and lodging expenses of the representatives and officers of the Company and Gol and one-half of the cost of any aircraft chartered in connection with the road show, (x) the document production charges and expenses associated with preparing this Agreement, the Agreement Between Underwriters, the Deposit Agreement and any other documents in connection with the offering, purchase and sale of the Securities and (xi) all other costs and expenses incident to the performance of the obligations of the Company and Gol hereunder for which provision is not otherwise made in this Section. It is understood, however, that except as provided in this Section, Section 9 entitled "Indemnity and Contribution", Section 10 entitled "Directed Share Program Indemnification" and Section 12(b) below, the Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, stock transfer taxes payable on resale of any of the Securities by them and any advertising expenses connected with any offers they may make. The provisions of this Section shall not supersede or otherwise affect any agreement that the Sellers may otherwise have for the allocation of such expenses among themselves. 9. Indemnity and Contribution. (a) The Company and Gol, jointly and severally, agree to indemnify and hold harmless each International Underwriter, each person, if any, who controls any International Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and each affiliate of any International Underwriter within the meaning of Rule 405 under the Securities Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration 31 Statement, the ADS Registration Statement or any amendments thereto, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company or Gol shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any International Underwriter furnished to the Company or Gol in writing by such International Underwriter through you expressly for use therein; provided, however, that the foregoing indemnity agreement with respect to any preliminary prospectus shall not inure to the benefit of any International Underwriter from whom the person asserting any such losses, claims, damages or liabilities purchased Securities, or any person controlling such International Underwriter, if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such International Underwriter to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Securities to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities, unless such failure is the result of noncompliance by the Company or Gol with Section 7(a) hereof. (b) Each Selling Shareholder agrees, severally and not jointly, to indemnify and hold harmless each International Underwriter, each person, if any, who controls the Company, Gol or any International Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act and each affiliate of any International Underwriter within the meaning of Rule 405 under the Securities Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the ADS Registration Statement or any amendment thereto, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company or Gol shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such Selling Shareholder furnished in writing to the Company by or on behalf of such Selling Shareholder expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto. The liability of each Selling Shareholder under the indemnity agreement contained in this paragraph shall be limited to an amount equal to the aggregate Public Offering Price (less any concession under Section 4) of the Shares sold by such Selling Shareholder under this Agreement. (c) Each International Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, the Selling Shareholders, the directors of the Company, the officers of the Company who sign the Registration Statement and each person, if any, who controls the Company or any Selling Shareholder within the meaning of either Section 15 of the Securities Act or Section 20 of the 32 Exchange Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereto, any preliminary prospectus or the Prospectus (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only with reference to information relating to such International Underwriter furnished to the Company in writing by such International Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus, the Prospectus or any amendments or supplements thereto. (d) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 9(a), 9(b) or 9(c) such person (the "INDEMNIFIED PARTY") shall promptly notify the person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for (i) the fees and expenses of more than one separate firm (in addition to any local counsel) for all International Underwriters and all persons, if any, who control any International Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or who are affiliates of any International Underwriter within the meaning of Rule 405 under the Securities Act, (ii) the fees and expenses of more than one separate firm (in addition to any local counsel) for the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either such Section and (iii) the fees and expenses of more than one separate firm (in addition to any local counsel) for all Selling Shareholders and all persons, if any, who control any Selling Shareholder within the meaning of either such Section, and that all such fees and expenses shall be reimbursed as they are incurred. In the case of any such separate firm for the International Underwriters and such control persons and affiliates of any International 33 Underwriters, such firm shall be designated in writing by Morgan Stanley. In the case of any such separate firm for the Company, and such directors, officers and control persons of the Company, such firm shall be designated in writing by the Company. In the case of any such separate firm for the Selling Shareholders and such control persons of any Selling Shareholders, such firm shall be designated in writing by the persons named as attorneys-in-fact for the Selling Shareholders under the Powers of Attorney. The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, the indemnifying party agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding. (e) To the extent the indemnification provided for in Section 9(a), 9(b) or 9(c) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the Securities or (ii) if the allocation provided by clause 9(e)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 9(e)(i) above but also the relative fault of the indemnifying party or parties on the one hand and of the indemnified party or parties on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Sellers on the one hand and the International Underwriters on the other hand in connection with the offering of the Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Securities (before deducting expenses) received by each Seller and the total underwriting discounts and commissions received by the International Underwriters, in each case as set forth in the table on the cover of 34 the Prospectus, bear to the aggregate Public Offering Price of the Securities. The relative fault of the Sellers on the one hand and the International Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Sellers or by the International Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The International Underwriters' respective obligations to contribute pursuant to this Section 9 are several in proportion to the respective number of Securities they have purchased hereunder, and not joint. (f) The Sellers, Gol and the International Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 9 were determined by pro rata allocation (even if the International Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 9(e). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 9, no International Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that such International Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 9 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any indemnified party at law or in equity. (g) The indemnity and contribution provisions contained in this Section 9 and the representations, warranties and other statements of the Company, Gol and the Selling Shareholders contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any International Underwriter, any person controlling any International Underwriter or any affiliate of any International Underwriter, any Selling Shareholder or any person controlling any Selling Shareholder, or the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Securities. 10. Directed Share Program Indemnification. (a) The Company and Gol, jointly and severally, agree to indemnify and hold harmless Morgan Stanley and its affiliates, within the meaning of Rule 405 under the Securities Act, and each person, if any, who controls Morgan 35 Stanley or its affiliates within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act ("MORGAN STANLEY ENTITIES"), from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) (i) caused by any untrue statement or alleged untrue statement of a material fact contained in any material prepared by or with the consent of either the Company or Gol for distribution to Participants in connection with the Directed Share Program, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) caused by the failure of any Participant to pay for and accept delivery of Directed Shares that the Participant has agreed to purchase; or (iii) related to, arising out of, or in connection with the Directed Share Program other than losses, claims, damages or liabilities (or expenses relating thereto) that are finally judicially determined to have resulted from the bad faith or gross negligence of Morgan Stanley Entities. (b) In case any proceeding (including any governmental investigation) shall be instituted involving any Morgan Stanley Entity in respect of which indemnity may be sought pursuant to Section 10(a), the Morgan Stanley Entity seeking indemnity shall promptly notify the Company or Gol in writing, and the Company or Gol, upon request of the Morgan Stanley Entity, shall retain counsel reasonably satisfactory to the Morgan Stanley Entity to represent the Morgan Stanley Entity and any others the Company or Gol may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any Morgan Stanley Entity shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Morgan Stanley Entity unless (i) the Company or Gol shall have agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include the Company or Gol on the one hand and the Morgan Stanley Entity on the other hand and representation of both such parties by the same counsel would be inappropriate due to actual or potential differing interests between them. Neither the Company nor Gol shall, in respect of the legal expenses of the Morgan Stanley Entities in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Morgan Stanley Entities. Any such firm for the Morgan Stanley Entities shall be designated in writing by Morgan Stanley. Neither the Company nor Gol shall be liable for any settlement of any proceeding effected without their written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Company and Gol agree to indemnify the Morgan Stanley Entities from and against any loss or liability by reason of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time a Morgan Stanley Entity shall have requested either the Company or Gol to reimburse it for fees and expenses of counsel as contemplated by the second and third sentences of this paragraph, each of the Company and Gol agrees that it shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Company or Gol of the aforesaid request and (ii) neither the Company nor Gol shall have reimbursed the Morgan Stanley Entity in accordance with such request prior to the date of such settlement. Neither the Company nor Gol shall, without the prior written consent of Morgan Stanley, effect any settlement of any pending or threatened proceeding in respect of which any Morgan Stanley Entity is or 36 could have been a party and indemnity could have been sought hereunder by such Morgan Stanley Entity, unless such settlement includes an unconditional release of the Morgan Stanley Entities from all liability on claims that are the subject matter of such proceeding. (c) To the extent the indemnification provided for in Section 10(a) is unavailable to a Morgan Stanley Entity or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each of the Company and Gol, in lieu of indemnifying the Morgan Stanley Entity thereunder, shall contribute to the amount paid or payable by the Morgan Stanley Entity as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and Gol on the one hand and the Morgan Stanley Entities on the other hand from the offering of the Directed Shares or (ii) if the allocation provided by clause 10(c)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 10(c)(i) above but also the relative fault of the Company and Gol on the one hand and of the Morgan Stanley Entities on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company and Gol on the one hand and of the Morgan Stanley Entities on the other hand in connection with the offering of the Directed Shares shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Directed Shares (before deducting expenses) and the total underwriting discounts and commissions received by the Morgan Stanley Entities for the Directed Shares bear to the aggregate Public Offering Price of the Shares. If the loss, claim, damage or liability is caused by an untrue or alleged untrue statement of a material fact, the relative fault of the Company and Gol on the one hand and the Morgan Stanley Entities on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement or the omission or alleged omission relates to information supplied by the Company or Gol or by the Morgan Stanley Entities and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. (d) Each of the Company and Gol and the Morgan Stanley Entities agree that it would not be just or equitable if contribution pursuant to this Section 10 were determined by pro rata allocation (even if the Morgan Stanley Entities were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in Section 10(c). The amount paid or payable by the Morgan Stanley Entities as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by the Morgan Stanley Entities in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 10, no Morgan Stanley Entity shall be required to contribute any amount in excess of the amount by which the total price at which the Directed Shares distributed to the public were offered to the public exceeds the amount of any damages that such Morgan Stanley Entity has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of 37 the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 10 are not exclusive and shall not limit any rights or remedies that may otherwise be available to any Morgan Stanley Entity at law or in equity. (e) The indemnity and contribution provisions contained in this Section 10 shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Morgan Stanley Entity or the Company or Gol, the officers or directors of the Company or Gol or any person controlling the Company or Gol and (iii) acceptance of and payment for any of the Directed Shares. 11. Termination. The International Underwriters may terminate this Agreement by notice given by you to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the Nasdaq National Market or the Sao Paulo Stock Exchange, (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance services in the United States or Brazil shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by U. S. Federal, New York State or Brazilian authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets, currency exchange rates or controls or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Securities on the terms and in the manner contemplated in the Prospectus. 12. Effectiveness; Defaulting International Underwriters. This Agreement shall become effective upon the execution and delivery hereof by the parties hereto. (a) If, on the Closing Date or an Option Closing Date, as the case may be, any one or more of the International Underwriters shall fail or refuse to purchase Securities that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Securities that such defaulting International Underwriter or International Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Securities to be purchased on such date, the other International Underwriters shall be obligated severally in the proportions that the number of Firm ADSs set forth opposite their respective names in Schedule II bears to the aggregate number of Firm ADSs set forth opposite the names of all such non-defaulting International Underwriters, or in such other proportions as you may specify, to purchase the Securities which such defaulting International Underwriter or International Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Securities that any International Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 12 by an amount in excess of one-ninth of such number of Securities without the written consent of such International Underwriter. If, on the Closing Date, any International 38 Underwriter or International Underwriters shall fail or refuse to purchase Firm Securities and the aggregate number of Firm ADSs with respect to which such default occurs is more than one-tenth of the aggregate number of Firm ADSs to be purchased, and arrangements satisfactory to you, the Company and the Selling Shareholders for the purchase of such Firm ADSs are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting International Underwriter, the Company or the Selling Shareholders. In any such case either you or the relevant Sellers shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement and in the Prospectus or in any other documents or arrangements may be effected. If, on an Option Closing Date, any International Underwriter or International Underwriters shall fail or refuse to purchase Additional ADSs and the aggregate number of Additional ADSs with respect to which such default occurs is more than one-tenth of the aggregate number of Additional Securities to be purchased on such Option Closing Date, the non-defaulting International Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the Additional ADSs to be sold on such Option Closing Date or (ii) purchase not less than the number of Additional ADSs that such non-defaulting International Underwriters would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting International Underwriter from liability in respect of any default of such International Underwriter under this Agreement. (b) If this Agreement shall be terminated by the International Underwriters, or any of them, because of any failure or refusal on the part of any Seller to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason any Seller shall be unable to perform its obligations under this Agreement, the Sellers will reimburse the International Underwriters or such International Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such International Underwriters in connection with this Agreement or the offering contemplated hereunder. 13. Counterparts. This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. 14. Applicable Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York. 15. Submission to Jurisdiction; Appointment of Agent for Service. (a) Each of the Company and the Selling Shareholders irrevocably submits to the non-exclusive jurisdiction of any New York State or United States Federal court sitting in The City of New York over any suit, action or proceeding arising out of or relating to this Agreement, the Prospectus, the Registration Statement, the Deposit Agreement, the ADS Registration Statement or the offering 39 of the Preferred Shares or the ADSs. Each of the Company and the Selling Shareholders irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. To the extent that the Company or any Selling Shareholder has or hereafter may acquire any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect to itself or its property, the Company or any such Selling Shareholder, as applicable, irrevocably waives, to the fullest extent permitted by law, such immunity in respect of any such suit, action or proceeding. (b) Gol irrevocably submits to the non-exclusive jurisdiction of any New York State or United States Federal court sitting in The City of New York over any suit, action or proceeding arising out of or relating to this Agreement and irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. To the extent that Gol has or hereafter may acquire any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect to itself or its property, Gol irrevocably waives, to the fullest extent permitted by law, such immunity in respect of any such suit, action or proceeding. (c) Each of the Company, Gol and the Selling Shareholders hereby irrevocably appoints CT Corporation, with offices at 111 Eighth Ave., New York, New York 10011 as its agent for service of process in any suit, action or proceeding described in the preceding paragraph and agrees that service of process in any such suit, action or proceeding may be made upon it at the office of such agent. Each of the Company, Gol and the Selling Shareholders waives, to the fullest extent permitted by law, any other requirements of or objections to personal jurisdiction with respect thereto. Each of the Company, Gol and the Selling Shareholders represents and warrants that such agent has agreed to act as the Company's, Gol's and the Selling Shareholders' agent for service of process, and each of the Company, Gol and the Selling Shareholders agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect. 16. Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the International Underwriters could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Company, Gol or the Selling Shareholders, as the case may be, with respect to any sum due from it to any International Underwriter or any person controlling any International Underwriter shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such International Underwriter or controlling 40 person of any sum in such other currency, and only to the extent that such International Underwriter or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to such International Underwriter or controlling person hereunder, the Company, Gol and the Selling Shareholders agrees as a separate obligation and notwithstanding any such judgment, to indemnify such International Underwriter or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to such International Underwriter or controlling person hereunder, such International Underwriter or controlling person agrees to pay to the Company, Gol or any Selling Shareholder, as the case may be, an amount equal to the excess of the dollars so purchased over the sum originally due to such International Underwriter or controlling person hereunder. 17. Taxes. All payments to be made by the Company, Gol and the Selling Shareholders under this Agreement shall be paid free and clear of and without deduction or withholding for or on account of, any present or future taxes, levies or imposts by Brazil or by any department, agency or other political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto (collectively, "TAXES"). If any Taxes are required by law to be deducted or withheld in connection with such payments, the Company, Gol and the Selling Shareholders will increase the amount paid so that the full amount of such payment is received by the International Underwriters. 18. Headings. The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement. 41 Very truly yours, Gol Linhas Aereas Inteligentes S.A. By: ---------------------------------- Name: Title: Gol Transportes Aereos S.A. By: ---------------------------------- Name: Title: BSSF Air Holdings LLC By: ---------------------------------- Name: Title: Comporte Participacoes S.A. By: ---------------------------------- Name: Title: Accepted as of the date hereof Morgan Stanley & Co. Incorporated Acting on behalf of itself and the several International Underwriters name in Schedule II hereto. By: Morgan Stanley & Co. Incorporated By: ----------------------------- Name: Title: 42 SCHEDULE I

I-1 SCHEDULE II

II-1 EXHIBIT A [FORM OF LOCK-UP LETTER] ________________, 2004 Morgan Stanley & Co. Incorporated 1585 Broadway New York, NY 10036 Dear Sirs and Mesdames: The undersigned understands that Morgan Stanley & Co. Incorporated ("Morgan Stanley") proposes to enter into an Underwriting Agreement (the "Underwriting Agreement") with Gol Linhas Aereas Inteligentes S.A., a Brazilian corporation (sociedade anonima) (the "Company") and Gol Transportes Aereos S.A. ("Gol"), providing for the public offering (the "Public Offering") by the several International Underwriters, including Morgan Stanley (the "International Underwriters"), of 33,050,000 non-voting preferred shares (acoes preferenciais) of the Company, all of which shall be deposited and delivered in the form of American Depositary Shares as provided in the Underwriting Agreement (the "Securities"). To induce the International Underwriters that may participate in the Public Offering to continue their efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of Morgan Stanley on behalf of the International Underwriters, it will not, during the period commencing on the date hereof and ending [180/365] days after the date of the final prospectus relating to the Public Offering (the "Prospectus"), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any Securities or any securities convertible into or exercisable or exchangeable for Securities or (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Securities or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (a) transactions relating to shares of Securities or other securities acquired in open market transactions after the completion of the Public Offering, (b) transfers of shares of Securities or any security convertible into Securities as a bona fide gift or gifts, (c) distributions of shares of Securities or any security convertible into Securities to limited partners or stockholders of the undersigned, (d) the Securities to be sold hereunder or under the Brazilian Registration Statement or (e) the exchange of the Preferred Shares for ADRs, so long as the holder thereof remains the owner of such ADSs and the ADRs evidenced thereby; provided that in the case of any transfer or distribution pursuant to clause (b) or (c), (i) each donee or distributee shall sign and deliver a A-1 lock-up letter substantially in the form of this letter and (ii) the undersigned shall not be required to, and shall not voluntarily, file a report under Section 16(a) of the Securities Exchange Act of 1934, reporting a reduction in beneficial ownership of shares of Securities during the restricted period referred to in the foregoing sentence. [In addition, the foregoing restrictions shall not apply to (A) offers, sales, assignments or transfers of Securities made to corporations, partnerships, limited liability companies or other entities to the extent such entities are wholly-owned by such Seller, so long as each transferee agrees in writing to be bound by the restrictions set forth herein, (B) the pledge of Securities to third parties in connection with financing arrangements, so long as any such third party agrees in writing to be bound by the restrictions set forth herein; and (C) the distribution of Securities by such Seller to its owners of record as of the date hereof, so long as each transferee agrees in writing to be bound by the restrictions set forth herein.]1 In addition, the undersigned agrees that, without the prior written consent of Morgan Stanley on behalf of the International Underwriters, it will not, during the period commencing on the date hereof and ending [180/365] days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any shares of Securities or any security convertible into or exercisable or exchangeable for Securities. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of the undersigned's shares of Securities except in compliance with the foregoing restrictions. If: (1) during the last 17 days of the [180/365]-day restricted period the Company issues a earnings release; or (2) prior to the expiration of the [180/365]-day restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the [180/365]-day period, the restrictions imposed by this letter shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release. The undersigned understands that the Company and the International Underwriters are relying upon this agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives, successors and assigns. - -------- 1 For lock-up letters for the Selling Shareholders only. A-2 Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Underwriting Agreement, the terms of which are subject to negotiation among the Company, Gol and the International Underwriters. Very truly yours, -------------------------------- (Name) -------------------------------- (Address) A-3 EX-5.1 3 y97722a2exv5w1.txt OPINION OF MATTOS,FILHO,VEIGA FILHO, MARREY JR. EXHIBIT 5.1 Sao Paulo, June 22, 2004. Gol Linhas Aereas Inteligentes S.A. Rua Tamoios 246 Sao Paulo, SP Brazil Ladies and Gentlemen: We are qualified to practice law in the Federative Republic of Brazil ("Brazil") and have acted as Brazilian counsel to Gol Linhas Aereas Inteligentes S.A. (the "Company"), a corporation organized under the laws of Brazil, in connection with the offer and sale by the Company of American Depositary Shares (the "Primary Offering ADSs"), each representing two (2) newly-issued preferred shares of the Company, without par value, and the offer and sale by BSSF Air Holdings LLC ("BSSF") and Comporte Participacoes S.A. ("Comporte" and, together with BSSF, the "Selling Shareholders") of American Depositary Shares (the "Secondary Offering ADSs"), each representing two (2) preferred shares of the Company, without par value, in accordance with the Underwriting Agreement (the "Underwriting Agreement") to be entered into among the Company, the Selling Shareholders and the Underwriters named therein (the "Underwriters"). An aggregate of additional American Depositary Shares, each representing two (2) preferred shares of the Company (the "Optional ADSs" and together with the Primary Offering ADSs and the Secondary Offering ADSs, the "Securities"), may be sold by the Selling Shareholders in connection with the over-allotment option, as contemplated by the Company's Registration Statement on Form F-1 (No. 333-116054), filed with the Securities and Exchange Commission on June 1st, 2004 (as amended, the "Registration Statement"). For the purposes of giving this opinion we have examined and/or relied upon copies of the following documents: (i) a draft of the Underwriting Agreement; (ii) a copy of the Registration Statement; and (iii) such other documents, stock transfer books and registers, corporate records and certificates of officers of the Company as we may have deemed necessary for the purpose of this opinion. We have not made any investigation of the laws of any jurisdiction outside Brazil and this opinion is given solely in respect of the laws of Brazil, as of the date hereof and not in respect of any other law. Sao Paulo Sao Paulo Brasilia Av. Paulista, 1499 20(degrees)andar Rio de Janeiro 01311-928 Sao Paulo SP Brasil Salvador Tel (55 11) 3147 7600 Fax (55 11) 3147 7770 www.mattosfilho.com.br In giving this opinion we have made the following assumptions: (i) that all documents submitted to us as facsimile or copy or specimen documents conform to their originals; (ii) that the signatures on the originals, certified copies or copies of all documents submitted to us are genuine; and (iii) that all documents submitted to us as originals are authentic. As to factual matters, we have relied upon the representations and warranties made in the Underwriting Agreement by the Company and on certificates, documents and oral or written information of the Company provided to us by officers of the Company on behalf of the Company. Based on the above assumptions, we are of the opinion that (i) the preferred shares represented by the Primary Offering ADSs are duly and validly authorized and, when legally issued and fully paid for, will be non-assessable and (ii) the preferred shares represented by the Secondary Offering ADSs and by the Optional ADSs are duly and validly authorized, legally issued, fully paid and non-assessable. This opinion is limited to the matters expressly stated herein and does not extend to, and is not to be read as extended by implication to, any other matter in connection with the Underwriting Agreement or the transaction or documents referred to therein. This opinion will be governed by and construed in accordance with the laws of Brazil in effect on the date hereof. We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to us under the captions "Validity of Securities" and "Enforcement of Judgments Against Foreign Persons" in the Prospectus constituting a part of the Registration Statement. Very truly yours, /s/ [illegible] MATTOS FILHO, VEIGA FILHO, MARREY JR. E QUIROGA ADVOGADOS 2 EX-8.2 4 y97722a2exv8w2.txt OPINION OF MATTOS, FILHO, VEIGA, FILHO, MARREY JR. EXHIBIT 8.2 Sao Paulo, June 21, 2004. Gol Linhas Aereas Inteligentes S.A. Rua Tamoios 246 Sao Paulo, SP Brazil Ladies and Gentlemen: 1. We have acted as Brazilian counsel to Gol Linhas Aereas Inteligentes S.A. (the "Company"), a corporation organized under the laws of Brazil, in connection with the Registration Statement on Form F-1 (No. 333-116054) filed by the Company with the U.S. Securities and Exchange Commission on June 1st, 2004 (as amended, the "Registration Statement"), relating to the offer and sale of American depositary shares, each representing two (2) preferred shares of the Company, without par value. 2. We confirm that we have reviewed the information in the prospectus included in the Registration Statement under the caption "Taxation - Brazilian Tax Considerations" and that, in our opinion, the statements of law included therein, insofar as they relate to the Brazilian tax consequences currently applicable to non-Brazilian holders, address the material tax consequences of the ownership and disposition of the preferred shares and the American depositary shares. In rendering this opinion, we expressly incorporate in this opinion the statements set forth under the caption "Taxation - Brazilian Tax Considerations" in the prospectus included in the Registration Statement, including the limitations on the matters covered by that section set forth therein. Our opinion expressed in this paragraph is limited to the federal laws of Brazil and is based upon existing provisions of federal laws and regulations, the regulations of the Federal Revenue Department (Departamento da Receita Federal) thereunder and administrative and judicial interpretations thereof, including existing interpretations thereof of the Federal Revenue Department, the Federal Attorney for Revenues (Procuradoria-Geral da Fazenda) as of the date hereof, all of which are subject to subsequent, different interpretations and applications with effect from the date of effectiveness of the underlying laws and regulations. 3. We are furnishing this opinion letter to you in connection with the filing of the Registration Statement. This opinion is limited to the matters expressly stated herein and does not extend to, and is not to be read as extended by implication to, any other matter in connection with the Registration Statement or the transactions or documents referred to therein. 4. We hereby consent to the use of this opinion as an Exhibit to the Registration Statement and to the use of our name in the Registration Statement. In giving this consent, we do not Sao Paulo Sao Paulo Brasilia Av. Paulista, 1499 20(degrees)andar Rio de Janeiro 01311-928 Sao Paulo SP Brasil Salvador Tel (55 11) 3147 7600 Fax (55 11) 3147 7770 www.mattosfilho.com.br thereby concede that we are within the category of persons whose consent is required by the Act or the General Rules and Regulations promulgated thereunder. 5. This opinion will be governed by and construed in accordance with the laws of Brazil in effect on the date hereof. Yours faithfully, /s/ [illegible] MATTOS FILHO, VEIGA FILHO, MARREY JR. E QUIROGA ADVOGADOS 2 EX-10.1 5 y97722a2exv10w1.txt AGREEMENT Exhibit 10.1 1/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE THIS COMMERCIAL SALE PROMISE AGREEMENT AND OTHER COVENANTS IS ENTERED INTO BY AND BETWEEN, ON ONE SIDE, PETROBRAS DISTRIBUIDORA S.A., A MIXED ECONOMY COMPANY, REGISTERED WITH THE CORPORATE TAXPAYERS' ROLL (CNPJ/MF) UNDER No. *****, WITH OFFICES IN THE CITY OF RIO DE JANEIRO, STATE OF RIO DE JANEIRO, AT RUA GENERAL CANABARRO, No 500, 14o ANDAR, REPRESENTED HEREIN BY ITS AVIATION PRODUCTS MANAGER, MR. EDIMILSON ANTONIO DATO SANT'ANNA, BEARER OF THE IDENTIFICATION CARD No. *****, ISSUED BY CREA-RJ, AND REGISTERED WITH THE INDIVIDUAL TAXPAYERS' ROLL (CPF/MF) UNDER No. *****, AND BY ITS INTERNATIONAL AVIATION MARKET MANAGER, MR. ROGERIO FUCHS DE JESUS, BEARER OF THE IDENTIFICATION CARD No. *****, ISSUED BY IFP-RJ, AND REGISTERED WITH THE INDIVIDUAL TAXPAYERS' ROLL (CPF/MF) UNDER No. *****, HEREINAFTER REFERRED TO AS "BR DISTRIBUIDORA", AND, ON THE OTHER SIDE, GOL TRANSPORTES AEREOS LTDA., WITH OFFICES AT RUA HELENA, No 335, 3o ANDAR, CONJUNTO 32, VILA OLIMPIA, SAO PAULO, STATE OF SAO PAULO, REGISTERED WITH THE CORPORATE TAXPAYERS' ROLL (CNPJ/MF) UNDER No. *****, REPRESENTED HEREIN BY ITS EXECUTIVE OFFICER, MR. CONSTANTINO DE OLIVEIRA JUNIOR, BEARER OF THE IDENTIFICATION CARD No. ***** SEP-DF, AND REGISTERED WITH THE INDIVIDUAL TAXPAYERS' ROLL (CPF/MF) UNDER No. *****, HEREINAFTER REFERRED TO AS "PROMISEE-BUYER", AND SHALL BE GOVERNED BY THE FOLLOWING CLAUSES AND CONDITIONS: CLAUSE ONE 1.1 BR DISTRIBUIDORA promises to sell to PROMISEE-BUYER and PROMISEE-BUYER, in turn, promises to buy from BR DISTRIBUIDORA, on an exclusive basis, PROVIDED THAT THE VALUES CHARGED THEREBY *****, ***** months, from ***** through *****, quantities of QAV-1 representing the full consumption of PROMISEE-BUYER in all airports where BR DISTRIBUIDORA maintains aircraft fueling facilities. 1.1.1 The product described in the preceding item is intended for PROMISEE-BUYER's own use, for the performance of its activities, in the locations provided for in Attachment I, or to where they shall be transferred to, in substitution for the addresses referred to in Attachment I; 2/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE 1.1.2 The parties have hereby established that PROMISEE-BUYER's QAV-1 consumption shall be of ***** cubic meters per month (***** m3/month) until October 2001, and ***** cubic meters per month (***** m3/month) as of November 2001, totalizing ***** cubic meters (***** m3) of QAV-1, until the termination of the agreement. 1.1.2.1 This agreement may be terminated if PROMISEE-BUYER reaches the total of the consumption set forth in clause 1.1.2 before the term provided for in clause 1.1. 1.1.3 BR DISTRIBUIDORA shall ***** for use to PROMISEE-BUYER the volume of up to ***** cubic meters (***** m3) of QAV-1, up to the amount of ***** reais (R$ *****), which shall be delivered upon request thereof at the airport(s). 1.1.4 The product ***** shall be paid by ***** to ***** a single installment, upon the termination or rescission hereof, at the sale price restated by the IPCA variation. 1.2 The quantities of products acquired by PROMISEE-BUYER shall be established on an annual basis. Should the total consumption established in clause 1.1.2 fail to be reached until the effective date hereof, this agreement shall be automatically extended for no more than forty-eight (48) months, in the event that this agreement is not denounced by either party, in writing, in at least thirty (30) days before the termination thereof. 1.2.1 However, in case the quantity actually acquired by PROMISEE-BUYER does not reach the total quantity established in item 1.1.2 until the end of the maximum contractual term established above, the product ***** shall be invoiced in one sole installment, increased by fine of equal value to the difference between the quantity actually acquired and the total quantity established above, without prejudice to the other penalties provided for herein. CLAUSE TWO 2.1 BR DISTRIBUIDORA shall sell the product hereunder to PROMISEE-BUYER at the price charged by BR DISTRIBUIDORA in effect on the day and place of delivery. 2.1.1 In QAV-1 price composition, the price of the producing establishment shall comply with Inter-ministerial Directive no. 8 of 01/28/99, issued by the State Ministry of Mines and Energy and the Treasury Department and Directives no. 177 of 12/02/98 and 179 of 12/03/98, of Agencia Nacional do Petroleo - ANP, or other legal instrument which might substitute them; 3/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE 2.1.2 The producer price shall be increased by the following: 2.1.2.1 The freight portion according to resolution of the abovementioned Directives; 2.1.2.2 The portion called "Fixed Differential", which value in R$/L (Reais per Liter) is specified in Attachment I, which after being initialed by the parties shall become an integral part hereof, with annual restatement by the IPCA index published by IBGE, if the accumulated variation of such index, as of the beginning of the agreement, is equal or higher than *****% (***** percent); 2.1.2.3 The Variable Lease portion charged by INFRAERO - the state-owned company in charge of administrating Brazilian airports - representing *****% of the Refinery price; 2.1.2.4 PIS-COFINS aliquot; 2.1.2.5 The ICMS aliquot due in accordance with the aliquots of each State of the Union, and any taxes, fees and emoluments legally provided for. 2.1.2.6 The financial charges portion based on CDI index published by the Central Bank, related to the payment term granted to PROMISEE-BUYER. 2.1.3 The product sold by BR DISTRIBUIDORA shall be measured upon delivery and invoiced for payment in the following conditions: - Supplies made from the ***** until the *****, shall be paid on the ***** of the same month; - Supplies made from the ***** until the *****, shall be paid on the ***** of the same month; - Supplies made from the ***** until the *****, shall be paid on the ***** of the subsequent month. 2.1.4 It is understood that the above term is established in reason of the present market conditions. The parties undertake to reexamine, in mutual agreement, the payment term, in case of change in the present market conditions. 2.1.5 The payment referred to in item 2.2 shall be made at BR DISTRIBUIDORA's offices located at Rua General Canabarro, 500 / 6o andar, or in other place expressly indicated for such purpose by it; 2.1.6 The payment term referred to in item 2.2 is subject to determination of the credit limit of PROMISEE-BUYER, upon presentation of guaranties. 2.2 The parties hereby agree that any price conditions or payment terms offered by BR DISTRIBUIDORA to PROMISEE-BUYER different from those established herein, shall be understood as mere liberality, and they may, therefore, at the sole discretion of BR DISTRIBUIDORA, be suspended or 4/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE discontinued, not constituting a right whatsoever in respect to PROMISEE-BUYER. 2.3 In case of delay to pay the invoices, PROMISEE-BUYER shall pay BR DISTRIBUIDORA the indexed debt, plus pro-rata interest in arrears day, of ***** percent (*****) per month and a ***** percent (*****) fine upon the updated value of the debt, and charges for the arrears shall incur as of the due date of the respective titles. 2.4 In case of delay in the payment of invoices as described in clause 2.1.3, BR DISTRIBUIDORA may require from PROMISEE-BUYER the payment of the product price described in clause 2.1.1, at the time of delivery thereof, on demand. CLAUSE THREE 3.1 BR DISTRIBUIDORA shall be specifically incumbent upon: 3.1.1 Supply the QAV-1 required to meet the full monthly consumption contracted by PROMISEE-BUYER, in the locations defined in Attachment I, in times that are compatible with the operation of the flights thereof, included in the HOTRAN (timetable) published by the Civil Aviation Department; 3.1.2 Maintain the service quality and service agility according to the standards established for similar operations; 3.1.3 Maintain the quality of the products supplied within the technical specifications free from water or other contaminants, and make the reports of the periodical tests required for evidencing of such quality available; 3.1.4 Comply and cause to be complied with by itself, its employees and representatives, all legal and regulatory resolutions related with its activity as Distributor of Oil Derivatives, specially Resolutions, Directives and other acts issued by the regulatory body of the Federal Government; 3.1.5 BR DISTRIBUIDORA shall not be liable for an eventual lack of aviation kerosene in the places and times mentioned in sub-item 3.1.1, whenever such lack is derived from Governmental Acts and any other events of force majeure or acts of God, as provided for in article 1058 of the Brazilian Civil Code. 3.2 BR DISTRIBUIDORA shall be bound to reimburse, directly or through an insurance company, any additional cost incurred to by PROMISEE-BUYER confirmedly resulting from any operation failures by BR DISTRIBUIDORA. 5/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE CLAUSE FOUR 4.1. PROMISEE-BUYER shall be specifically liable for the following obligations, besides others which are implicitly or explicitly contained in the several clauses and conditions hereof: 4.1.1 Acquire from BR DISTRIBUIDORA, from the effective date until the termination hereof, the totality of the global consumption of aviation kerosene in the localities specified in Attachment I; 4.1.2 Make the payments of the values correspondent to the supplies made by BR DISTRIBUIDORA, as set forth in clause two hereof. 4.1.3 PROMISEE-BUYER shall not assign, subrogate, negotiate or, in any other form, transfer this agreement or any rights or obligations arisen thereof, under penalty of application of the sanctions provided for in the agreement. 4.1.4 The payment of any amounts incurred by BR DISTRIBUIDORA or any losses which might be suffered by it directly or indirectly derived from the default provided for in sub-item 4.1.6; 4.1.5 Comply and cause to comply with all Laws and Regulations, Directives and rules in effect, related to the performance of its activities; 4.1.6 Maintain and preserve in perfect conditions, operation, cleaning and presentation all materials, elements, and items comprising BR DISTRIBUIDORA brand, for as long as the supply shall continue, including preserving the environment. 4.2 In case PROMISEE-BUYER shall amend its articles of incorporation implying into change of name, assignment, transfer or lien of company quotas, alteration of the administration or management or any other modality implying in modifications or transfer of partners' liability, BR DISTRIBUIDORA shall be notified within the term of 72 (seventy-two) hours through the Titles and Deeds Notary's Office. 4.3 Considering that BR DISTRIBUIDORA's products are provided of appropriate quality, ensuring PROMISEE-BUYER the confidence in the quality standards of the products which are supplied to it, PROMISEE-BUYER shall be bound to verify the quality control of the products received and to fully comply with this agreement, notably with respect to the safety, health and environment preservation standards. 6/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE CLAUSE FIVE 5.1 This agreement may be lawfully terminated, at the discretion of the innocent party, regardless of judicial or extrajudicial notification or summons, being applied to the party in breach the penalty provided for in item 5.2 and in clause six, upon occurrence of any of the following assumptions: 5.1.1 Default in compliance with any clause or condition hereof; 5.1.2 Judicial or extrajudicial liquidation of either party; 5.1.3 In case bankruptcy or judicial composition of PROMISEE-BUYER has been required, filed or homologated; 5.1.4 In case PROMISEE-BUYER has not timely made any payment of invoice with respect a purchase of product from BR DISTRIBUIDORA; 5.1.5 Non-compliance by PROMISEE-BUYER of the commitment to purchase from BR DISTRIBUIDORA the QAV-1 consumption mentioned in item 1.1 above, in accordance with this instrument. 5.2 The termination of this agreement caused by PROMISEE-BUYER shall accelerate the maturity of the debt as a whole with respect to BR DISTRIBUIDORA, which shall be immediately liquidated, at once, whether related to the product supply, to the ***** referred to in clause 1.3, or other agreements existing during the effectiveness hereof, in addition to damages arising therefrom. CLAUSE SIX 6.1 Neither party may be held responsible for non-compliance of the contractual obligations, if it is caused by an event of force majeure or act of God, as provided for in article 1058 of the Brazilian Civil Code. 6.2 The application of this agreement shall be suspended should an event of force majeure or act of God occurs, impairing the compliance thereof by either party, and the execution thereof shall continue as soon as the cause provoking the suspension shall cease. 6.3 Should the suspension mentioned in item 6.2 above occurs, the effectiveness of this agreement shall be automatically extended for as long as may be required to compensate the time during which the execution of the agreement was suspended. 6.4 After termination of the suspension period mentioned in item 6.2 above, and in case of default of any of the obligations assumed herein by the parties, this agreement shall be automatically terminated, being applied to the party in breach the penalties provided for herein. 7/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE CLAUSE SEVEN 7.1 PROMISEE-BUYER shall be bound to reimburse BR DISTRIBUIDORA eventual fines which might be applied to BR DISTRIBUIDORA due to non-compliance by PROMISEE-BUYER of orders and instructions of Agencia Nacional do Petroleo - ANP and/or other competent bodies to regulate the marketing and distribution of derivatives of oil, hydrated alcohol and products of other source of power. CLAUSE EIGHT 8.1 The obligations hereunder shall be extensive to assignees and/or successors of the parties hereto and to all persons who might operate and/or subrogate in PROMISEE-BUYER's activity, at whatever title, and either party hereto may only be released upon the agreement, in writing, of the other party. CLAUSE NINE 9.1 The supply of the products indicated in item 1.1 is subject to the normal supply market conditions and to the alterations which might be imposed by ANP and/or other competent bodies to regulate the supply of derivatives of oil, hydrated alcohol and other sources of energy, including with respect to prices, delivery and payment terms. CLAUSE TEN 10.1 Any tolerance by BR DISTRIBUIDORA as to eventual contractual breach by PROMISEE-BUYER shall not imply in novation or waiver to the rights, to which it is entitled by law or hereby. CLAUSE ELEVEN 11.1 The following persons execute this instrument, in the capacity of guarantor(s) and main payer(s), jointly liable with PROMISEE-BUYER for the full compliance of all clauses and conditions hereof, including for the payment of all and any debt of PROMISEE-BUYER with respect to BR DISTRIBUIDORA incurred during the effectiveness of this agreement and extensions thereof: - Ricardo Constantino, RG no. *****, CPF no. ***** - Joaquim Constantino Neto, RG no. *****, CPF no. *****; - Constantino de Oliveira Junior, RG no. *****, CPF no. ***** and - Henrique Constantino, RG no. *****, CPF no. ***** 8/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE 11.1.1 The guarantor(s) expressly waive(s) as main payer(s), to the benefit of the order of appointment to PROMISEE-BUYER's assets, as provided for in article 1.492, I of the Civil Code, as well as provided for in article 1.500 of the same code; 11.1.2 The obligation assumed herein shall be maintained in the assumptions of sub-clause I, II and III of article 1.503 of the Civil Code, as well as in cases of novation, merger or incorporation of the guaranteed party; 11.1.3 The registered guarantor(s) is (are) also obliged annually and also, at any time, during the effectiveness hereof, whenever requested by BR DISTRIBUIDORA, including communicating any alteration occurred in its (their) equity; 11.1.4 BR DISTRIBUIDORA may require from PROMISEE-BUYER the substitution of guarantors, whenever, upon certificates and other qualified documents, is evidenced the non-existence or insufficiency of real estate in the name of the present guarantors, or also, whenever, also upon certificates and other qualified documents, including evaluation reports, is evidenced the jeopardizing of the guarantors' equity; 11.1.5 PROMISEE-BUYER hereby shall be bound to present new guarantors in the maximum term of 15 (fifteen) days, should any other fact modifying or preventing the guarantee presented herein occurs. The acceptance shall always depend on the previous agreement of BR DISTRIBUIDORA, depending on the economic-financial conditions of the person appointed. 11.1.6 The guarantees presented herein shall also comprise the agreements previously entered into by PROMISEE-BUYER with BR DISTRIBUIDORA, as well as the correspondent debts. CLAUSE TWELVE 12.1 All taxation (taxes, fees, tax or para-fiscal contributions and any emoluments) directly or indirectly derived from this agreement or the execution thereof, shall be of the exclusive responsibility of the party obliged to the payment thereof, in the form defined by tax legislation, and such party shall not be liable to any reimbursement by the other party, at whatever title. CLAUSE THIRTEEN 13.1 PROMISEE-BUYER shall be liable for the compliance of the laws and regulations related to environment protection, including for the procurement and valid maintenance of all licenses, and it shall also adopt the applicable measures and procedures in order to repel any aggression, danger or risk to the environment which might be caused by the activities developed by it, even if contracted or delegated to third parties. 9/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE 13.1.1 For purposes of this agreement, the expression `environment' or those related to environmental responsibility comprise other themes regulated by the rules related to it, such as public health, urban ordainment, historical/cultural patrimony and environmental administration. 13.1.2 The fact of BR DISTRIBUIDORA assisting PROMISEE-BUYER, in any way, in the procurement and maintenance of the documents required for the development of the activities thereof does not excludes or diminishes PROMISEE-BUYER's responsibility. 13.2 PROMISEE-BUYER and its representatives are exclusively liable for the sanctions imposed by environmental rules and by all and any damages caused to the environment deriving from the exercise of its activities, or casualties of any nature, especially in reason of defects, inefficient storage, utilization, conservation, handling or final disposition of assets, packaging, products and equipment owned by it or which are under its possession in reason of loan, lease or other business form, even though transferred to third party alien to this agreement. 13.2.1 The environmental liability of PROMISEE-BUYER comprises all sanctions and requirements contained in Law no. 9.605/98 and other laws or normative acts dealing with or which might deal with an environmental matter. 13.2.2 The responsibility of PROMISEE-BUYER for environmental damages caused or arisen during the effectiveness of the agreement and eventual extensions, shall remain notwithstanding the effects thereof are known or shall occur after termination of the agreement. 13.2.3 PROMISEE-BUYER shall be bound to hold BR DISTRIBUIDORA harmless against all and any lien, risks, losses or expenses derived from eventual environmental damages or performance/sanctions derived from non-compliance of laws and rules regulating the environment, whether before public law bodies or entities, private individuals or private entities, indemnifying directly or indirectly all damages, losses and/or expenses caused and eventually imputed, directly or indirectly to BR DISTRIBUIDORA. 13.2.4 In case of violation by PROMISEE-BUYER of rules related to the environment or in case PROMISEE-BUYER does not adopt the measures required to avoid damages and losses in such respect, BR DISTRIBUIDORA may, at its discretion, promptly suspend the supply of the product described in clause 1.1 until PROMISEE-BUYER shall adopt the measures required to cure such violation. 13.2.5 In case damages to the environment shall occur, PROMISEE-BUYER is obliged to inform the competent authorities immediately, 10/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE as well as to take all actions in order to repair and minimize the environmental damages and impacts. PROMISEE-BUYER shall also be bound to inform BR DISTRIBUIDORA, immediately and efficiently, about said damages, as well as notifications, summons and tax assessment notices received by it, and such fact shall not imply in assumption of any responsibility by BR DISTRIBUIDORA. 13.2.5.1 If PROMISEE-BUYER does not comply with the obligation provided for in item 13.2.5 above, it shall be liable for the losses derived from such behavior. CLAUSE FOURTEEN 14.1 PROMISEE-BUYER and BR DISTRIBUIDORA represent, for all legal purposes and effects that the conditions included in this instrument result from negotiation among the parties. CLAUSE FIFTEEN 15.1 The parties attribute to such agreement, for tax effects only, the value of one hundred reais (R$ 100.00). CLAUSE SIXTEEN 16.1 PROMISEE-BUYER undertakes not to use, in all activities related with the execution hereof, infantile labor, in the terms of sub-clause XXXIII of art. 7 of the Federal Constitution in effect, as well as to make efforts to cause said measure to be adopted in the agreements entered into with its input suppliers and/or service providers. CLAUSE SEVENTEEN 17.1 The parties agree that the conditions included herein may not be provided or disclosed to third parties, as well as warrant that only the employees who really need to know them shall have access to such conditions. 17.1.1 The parties undertake to keep the information referred to in item 17.1 above confidential, until 3 (three) years as of the date of extinction of this transaction. 17.1.2 Information requested by any governmental body or agency, regulatory body or those requested by law may be disclosed. In either case, however, such determination shall be immediately communicated to the other company, so that it might oppose to the request. Non-communication shall imply in non-compliance of the agreement. 11/13 (LOGO)PETROBRAS CSPA/AVIATION WITH DISTRIBUIDORA S.A. GUARANTEE CLAUSE EIGHTEEN 18.1 The parties hereby elect the court of the city of Rio de Janeiro, to the exclusion of any other to settle any dispute arising out of this agreement, the party in breach having to bear the judicial and extrajudicial expenses and costs, in addition to the attorneys' fees calculated on the basis of 20% of the sentenced value. IN WITNESS WHEREOF, this instrument was executed in 3 (three) counterparts of the same tenor, in the presence of 2 (two) witnesses, in order to produce its due and legal effects. Rio de Janeiro, February 1st, 2001. /s/ Edmilson Antonio Dato Sant'Anna /s/ Constantino de Oliveira Junior - ------------------------------------ ---------------------------------- PETROBRAS DISTRIBUIDORA S.A. GOL TRANSPORTES AEREOS LTDA. EDMILSON ANTONIO DATO SANT'ANNA CONSTANTINO DE OLIVEIRA JUNIOR Aviation Products Manager /s/ Rogerio Fuchs de Jesus - ------------------------------------ ROGERIO FUCHS DE JESUS International Aviation Market Manager GUARANTORS /s/ Ricardo Constantino /s/ Joaquim Constantino Neto - ------------------------------------ ------------------------------- RICARDO CONSTANTINO JOAQUIM CONSTANTINO NETO /s/ Constantino de Oliveira Junior /s/ Henrique Constantino - ------------------------------------ ------------------------------- CONSTANTINO DE OLIVEIRA JUNIOR HENRIQUE CONSTANTINO WITNESSES /s/ Maria de Nazare G. Sousa /s/ Antonio Carlos Vilira de Campos - ------------------------------ ------------------------------------- NAME: Maria de Nazare G. Sousa NAME: Antonio Carlos Vilira de Campos CPF: 280.073.441-87 CPF: 659.590.948-00 [LOGO]PETROBRAS 1 DISTRIBUIDORA S.A. AMENDMENT # 1 TO THE COMMERCIAL SALE PROMISE AGREEMENT AND OTHER COVENANTS ENTERED INTO ON FEBRUARY 1, 2001 BY AND BETWEEN PETROBRAS DISTRIBUIDORA S.A. AND GOL TRANSPORTES AEREOS LTDA. A) PETROBRAS DISTRIBUIDORA S.A., A MIXED ECONOMY COMPANY, REGISTERED WITH THE CORPORATE TAXPAYERS' ROLL (CNPJ/MF) UNDER No. *****, WITH OFFICES IN THE CITY OF RIO DE JANEIRO, STATE OF RIO DE JANEIRO, AT RUA GENERAL CANABARRO, N(degree) 500, 14(degree) ANDAR, HEREIN REPRESENTED BY ITS AVIATION PRODUCTS - - MANAGER, MR. EDIMILSON ANTONIO DATO SANT'ANNA, BEARER OF THE IDENTIFICATION CARD No. ***** ISSUED BY IFP-RJ, AND REGISTERED WITH THE INDIVIDUAL TAXPAYERS' ROLL (CPF/MF) UNDER No. ***** AND BY ITS AVIATION SERVICES COMMERCIAL MANAGER, MR. ROGERIO FUCHS DE JESUS, BEARER OF THE IDENTIFICATION CARD No. *****, ISSUED BY IFP-RJ, AND REGISTERED WITH THE INDIVIDUAL TAXPAYERS' ROLL (CPF/MF) UNDER No. ***** HEREINAFTER REFERRED TO AS "BR DISTRIBUIDORA"; B) GOL TRANSPORTES AEREOS LTDA., WITH OFFICES AT RUA HELENA, N(degree) 335, 3(degree) ANDAR, CONJUNTO 32, VILA OLIMPIA, SAO PAULO, STATE OF SAO PAULO, REGISTERED WITH THE CORPORATE TAXPAYERS' ROLL (CNPJ/MF) UNDER No. *****, REPRESENTED HEREIN BY ITS EXECUTIVE OFFICER, MR. CONSTANTINO DE OLIVEIRA JUNIOR, BEARER OF THE IDENTIFICATION CARD No. ***** SEP-DF, AND REGISTERED WITH THE INDIVIDUAL TAXPAYERS' ROLL (CPF/MF) UNDER No. ***** HEREINAFTER SIMPLY REFERRED TO AS "PROMISEE-BUYER; The Parties have agreed to amend the Commercial Sale Promise Agreement and Other Covenants entered into on February 1, 2001, as follows: CLAUSE ONE 1.1 This Amendment is intended for changing the provisions of the Commercial Sale Promise Agreement and Other Covenants entered into on February 1, 2001, it being understood that all the other clauses and conditions shall remain unchanged. CLAUSE TWO 2.1 Item 1.1, Clause One, of the agreement amended hereby shall become effective as of the execution hereof with the following wording: [LOGO]PETROBRAS 2 DISTRIBUIDORA S.A. 1.1 BR DISTRIBUIDORA promises to sell to PROMISEE-BUYER, which, in turn, promises to buy from BR DISTRIBUIDORA, on an exclusive basis, PROVIDED THAT THE VALUES CHARGED THEREBY ARE THE *****, the quantities of QAV-1 representing a hundred percent (100%) of PROMISEE-BUYER's consumption in all airports where BR DISTRIBUIDORA maintains aircraft supply facilities, from ***** through *****. 2.2 Item 1.1.1, Clause One, of the agreement amended hereby shall become effective as of the execution hereof with the following wording: 1.1.1 The product described in the preceding item is intended for PROMISEE-BUYER's own use, to perform its activities; 2.3 Items 1.1.2, 1.1.2.1, 1.2, and 1.2.1 shall be revoked as of the execution hereof. 2.4 Item 1.1.4, Clause One, of the agreement amended hereby shall become effective as of the execution hereof with the following wording: 1.1.4 BR DISTRIBUIDORA ***** to PROMISEE-BUYER ***** m(3), which shall be paid in a single installment, on 4/1/2004, at the sale price restated by the IPCA variation. 2.5 Item 1.1.5 shall be added to Clause One, and is hereby effective with the following wording: 1.1.5 BR DISTRIBUIDORA shall ***** to PROMISEE-BUYER an additional volume of ***** cubic meters (***** m(3)) of QAV-1, to be delivered upon request at the airports(s), and paid in a single installment upon the termination or rescission hereof, at the sale price restated by the IPCA variation. CLAUSE THREE 3.1 Item 2.1.2.6, Clause Two, of the agreement amended hereby shall become effective as of the execution hereof with the following wording: 2.1.2.6 The financial charges portion based on the CDI index published by the Central Bank, related to ***** days. [LOGO]PETROBRAS 3 DISTRIBUIDORA S.A. CLAUSE FOUR 4.1 Item 3.1.1, Clause Three, of the agreement amended hereby shall become effective as of the execution hereof with the following wording: 3.1.1 Supply the QAV-1 required to meet a hundred percent (100%) of PROMISEE-BUYER's consumption in all airports where BR DISTRIBUIDORA maintains aircraft fueling facilities from ***** to *****, in times that are compatible with the operation of its flights, as included in the Timetable (HOTRAN) published by the Civil Aviation Department; CLAUSE FIVE 5.1 Item 4.1.1, Clause Four, of the agreement amended hereby shall become effective as of the execution hereof with the following wording: 4.1.1 Acquire from BR DISTRIBUIDORA, from the effective date until the termination hereof a hundred percent (100%) of the consumption of aviation kerosene in all airports where BR DISTRIBUIDORA maintains aircraft fueling facilities; CLAUSE SIX 6.1 Items 11.2, 11.2.1, 11.2.2, 11.2.3, 11.2.4, and 11.3 shall be added to Clause Eleven, and is hereby effective with the following wording: 11.2 PROMISEE-BUYER shall also offer as a guarantee to the full compliance with all clauses and conditions hereof, including for the payment of any and all monies due by PROMISSEE-BUYER to BR DISTRIBUIDORA during the effectiveness hereof, and any extensions thereof, in a first and special mortgage, the property owned by AUREA ADMINISTRACAO E PARTICIPACOES S.A., described below, the among of which is estimated by the undersigned parties at ***** (R$ *****), ONE PARCEL OF LAND located in the City of Sao Vicente, at a site called ILHA DAS CAXETAS, a part of a larger object of M 33549, with 133.28 m frontward to Rua Fernando Ferrari, 180.00 m on the right side, plus the improvement of the curve, where it confronts the parcel of land of Raimundo de Lucca Filho and wife; 108.15 m backwards, plus the improvement of curve, where it confronts with Lago Pompeba, ending an area of 27.133.45 square meters [description of the property according to the property registration of S. Vicente, book 2 - General Register, enrollment 92011, name of the property Ilha das Caxetas, in the city of Sao Vicente - SP]. In addition to the property described above, PROMISSEE-BUYER shall give to BR DISTRIBUIDORA [LOGO]PETROBRAS 4 DISTRIBUIDORA S.A. in a first and special mortgage, the constructions and improvements now existing and/or to be made in the future regarding the same property. The properties now mortgaged are free and clear of any and all personal and real tax burdens, debts or responsibilities, such as legal and conventional mortgage, charges (taxes, fees, etc.) servitude, jurisdiction, rent, etc. 11.2.1 The property mortgaged hereby was inherited by AUREA ADMINISTRACAO E PARTICIPACOES S.A. from the estate of Raimundo de Lucca Filho, according to deed transcribed in the 2nd Notary's Office of Santos/SP, deed book 758, page 202, on 12/14/2001, registered in the Property Registration of Sao Vicente, State of Sao Paulo, book 2 - General Register, enrollment 92011, record 02, on 4/9/2002. 11.2.2 PROMISSEE-BUYER FURTHER offers in full compliance with all clauses and conditions hereof, including for the payment of any and all monies due by PROMISSEE-BUYER to BR DISTRIBUIDORA during the effectiveness hereof, and any extensions thereof, in SECOND MORTGAGE, the property owned by BREDA TRANSPORTES E TURISMO LTDA., described below, the amount of which the undersigned estimate at ***** (R$*****), a land designated as Areas A, B, and C, located at Avenida Dom Jaime de Barros Camara, in Bairro Planalto, which begins at point 1, located in the right corner of Avenida Dom Jaime de Barros Camara, such point being 308.69 m away from the left corner of Travessa Oneda, from this point it follows on a straight line at 308.69 m towards 75(degree)05'17"NW, confronting the left with Avenida Dom Jaime de Barros Camara, to which it confronts, until point 2, at this point it deflects to the right and follows in a curve to the right, in an equal radius of 9.00 m, to the distance of 14.14 m of concordance curve between the right corner of Avenida Dom Jaime de Barros Camara and the left corner of Travessa da Oneda, to which it all confronts until point 4; at this point it deflects to the right and follows on a straight line to the distance of 317.69 m and towards 74(degree)38'59"SE, confronting to the left with the property of Kumi Sato, Riuti Harada, Nelson Corazza, Andre Oneda and Francisco Vicentainer Filho, until point 5; at this point it deflects to the right and follows on a straight line at a distance of 142.50 m, and towards 16(degree)07'58"SW, confronting the left with the property of Fiat Automoveis S/A until point 01, where the measures and confrontations started, enclosing an area of 43.855.93 m(2). [LOGO]PETROBRAS 5 DISTRIBUIDORA S.A. 11.2.3 The property DESCRIBED IN ITEM 11.2.2 hereby mortgaged was inherited by BREDA TRANSPORTES E TURISMO LTDA., according to deed transcribed at the 5th Notary's Office of Santo Andre/SP, in the registry of Sao Bernardo do Campo, State of Sao Paulo, book 142, page 324, on 4/9/2001, registered in the Real State Registry of the city of Sao Bernardo, State of Sao Paulo, under number 5, enrollment 33106. 11.2.4 During the effectiveness hereof, PROMISSEE-BUYER shall be bound to, in relation to the properties mortgaged: a) maintain the conservation, cleaning, and sanitation thereof; b) timely pay all taxes levied on said properties; c) comply with all requirements of the competent authorities; d) contract and maintain in full force, if applicable, insurance covering fire, lightning, explosions and consequences thereof, of all properties and improvements, at the maximum amount permitted by the insurance company, such policy being issue or subrogated in the name of BR DISTRIBUIDORA, during the effectiveness hereof, BR DISTRIBUIDORA being authorized, in case PROMISSEE-BUYER fails to contract such insurance from a company in good standing, at its discretion, and charge from PROMISSEE-BUYER the respective premium, including those regarding renewal. 11.2.5 PROMISSEE-BUYER, upon notice from BR DISTRIBUIDORA that it shall pay the insurance premium set forth above and the corresponding expenses, shall have ten (10) days to make such payment. 11.2.6 Upon notice from BR DISTRIBUIDORA is hereby bound to reinforce or substitute the mortgage hereby granted within no more than fifteen (15) days, in case of depreciation or full or partial disposal of the properties mortgaged or any action affecting the properties mortgaged, the acceptance of which shall at all times require the previous consent of BR DISTRIBUIDORA, depending on the among of the properties presented. 11.3 In guarantee of the full compliance with this Amendment, the guarantee offered in the agreement hereby amended shall be maintained, the guarantors of which are Ricardo Constantino (RG ***** CPF *****), Joaquim Constantino Neto (RG *****, CPF *****, Constantino de Oliveira Junior (RG *****, CPF *****) and Henrique Constantino (RG ***** and CPF *****), which expressly consent to the amendments made. [LOGO]PETROBRAS 6 DISTRIBUIDORA S.A. CLAUSE SEVEN 7.1 The amendments herein shall become effective as of the execution hereof. 7.2 The parties hereto ratify all the other clauses and conditions of the Commercial Sale Promise Agreement and Other Covenants, executed on February 1, 2001. IN WITNESS WHEREOF, this instrument was executed in 3 (three) counterparts of the same tenor, in the presence of 2 (two) witnesses, in order to produce its due and legal effects. Rio de Janeiro, May 1st, 2002. /s/ Edimilson Antonio Dato Sant'Anna /s/ Rogerio Fuchs de Jesus Edimilson Antonio Dato Sant'Anna Rogerio Fuchs de Jesus Aviation Products Manager Aviation Services Commercial Manager Petrobras Distribuidora S.A. Petrobras Distribuidora S.A. /s/ Constantino Junior Constantino Junior President Gol Transportes Aereos Ltda. GUARANTORS /s/ Ricardo Constantino Ricardo Constantino /s/ Joaquim Constantino Neto Joaquim Constantino Neto /s/ Constantino Junior Constantino Junior /s/ Henrique Constantino Henrique Constantino WITNESSES: /s/ Gabriela B.A. Milhomem Gabriela B.A. Milhomem CPF * /s/ Carlos Eduardo A. Puschiano Carlos Eduardo A. Puschiano CPF: [illegible] [notarized] [LOGO]PETROBRAS 7 DISTRIBUIDORA S.A. Attachments: I - Differentials; II - Deed of the property mortgaged as first mortgage; III - Real estate registry of the property mortgaged as first mortgage; IV - Certificate to the non-existence of burdens and disposals in the real estate registry in relation to the property mortgaged as first mortgage; V - Assessment report of the property mortgaged as first mortgage; VI - Copy of the last building and land tax (IPTU); VII - Registration of the first mortgage on behalf of Petrobras Distribuidora ..S.A. of the property mortgaged as second mortgage; VIII - Copy of the insurance of the property mortgaged as first mortgage on behalf of Petrobras Distribuidora S.A. EX-10.2 6 y97722a2exv10w2.txt SERVICE AGREEMENT EXHIBIT 10.2 SERVICE AGREEMENT BY AND BETWEEN GOL - TRANSPORTES AEREOS S.A. AND VEM - VARIG ENGENHARIA E MANUTENCAO S.A. TABLE OF CONTENTS 1. INTRODUCTION 2. PURPOSES 3. APPLICABILITY 4. MATERIALS 5. SERVICES 6. STANDARDS OF THE SERVICES 7. TERMS AND CONDITIONS 8. ACTS OF GOD 9. PRICE AND PAYMENT CONDITIONS 10. LIABILITIES 11. RESPONSIBILITIES 12. INSURANCE 13. MISCELLANEOUS THIS AGREEMENT, dated February 24th, 2003, is entered into by and between VEM - VARIG ENGENHARIA E MANUTENCAO, a company organized and existing under the laws of the Federative Republic of Brazil, with main offices in the City of Rio de Janeiro, RJ, at Estrada das Canarias, 1862, Predio 2, Bloco C, Ilha do Governador, CEP 21941-480, registered with the Corporate Taxpayers' Roll ("CNPJ/MF") under n(degree) 04.775.827/0001-28, hereinafter referred to as "VEM" and GOL - TRANSPORTES AEREOS S.A., a Brazilian company that is the concessionaire of a public service of air navigation, with main offices in Sao Paulo, SP, at Avenida Pedro Bueno, 1757, Jardim Aeroporto, CEP 04342-011, registered with the Corporate Taxpayers' Roll ("CNPJ/MF") under n(degree) 04.020.028/0005-75, represented herein as provided for under its By-Laws, hereinafter simply referred to as "GOL". 1. INTRODUCTION 1.1. VEM keeps and operates aeronautical maintenance facilities homologated by the Department of Civil Aviation ("DAC"), FAA, JAA and other foreign aeronautical authorities, providing Services of maintenance, overhaul, modification and tests of aircraft, accessories and portions, and is willing and able to render maintenance Services for GOL. 1.2. GOL, an airline company, homologated by the Department of Civil Aviation ("DAC") wishes to hire VEM to perform the maintenance services of its aircraft and portions thereof. 2. PURPOSES 10.1. The purpose of this agreement is to provide a cover for the rendering of technical and maintenance services to be performed by VEM in the aircraft operated by GOL including, but without limitation the services in aircraft, rent of components, special services, special projects and technical assistance. 10.2. GOL shall deliver the scope of the services to VEM that shall perform in its facilities the Maintenance Services of the aircraft and portions thereof in compliance and in accordance with the requirements of the aeronautical authorities. 3. APPLICABILITY This maintenance agreement shall apply to the aircraft B737-700/-800 and parts thereof, which are commercially operated by GOL. In case GOL incorporates to its fleet aircraft of any model that is different from the ones used as of the date of validity of this agreement, VEM shall use its best efforts to comply with the requirements of GOL in the maintenance of these new models. 4. MATERIALS VEM shall be responsible for the supply to GOL of the materials that are necessary for the performance of the Services. However, at its discretion, GOL may also supply the materials for the services. 5. SERVICES 10.1. SERVICES IN AIRCRAFT - All the services of scheduled maintenance and / or extraordinary maintenance of the aircraft shall be performed by VEM to GOL, provided that VEM possesses all the technical capability to perform them and availability of space in its facilities located in the cities of Rio de Janeiro or Porto Alegre. 10.2. SPECIAL SERVICES - All the services not related to the routine preventive and corrective maintenance (the "Special Services"), such as the standardization of aircrafts and its interiors to operate in the GOL fleet, preparation of aircraft to return to the lessors, alterations of configuration, etc. 10.3. SPECIAL PROJECTS - Comprise all the engineering projects requested by GOL (the "Special Projects"), such as projects for the new configuration of interiors, projects for the installation of assorted equipment and on board communications, etc. 6. STANDARDS OF THE SERVICES The Services performed by VEM in the aircraft, accessories, and parts of the GOL fleet, shall be in accordance with the applicable aeronautical regulations, as well as with the good aeronautical technique, the recommendations of the manufacturers of the aircraft, parts, and manuals thereof. 7. TERMS AND CONDITIONS This agreement shall be valid for a year, at the end of which, it shall be automatically renewed for an equal period, successively, unless one of the parties notifies to the other, within a term of at least ninety (90) days before the end of the agreement, about its intent not to renew it. 8. ACTS OF GOD Acts of God or Force Majeure (under the terms of Article 1058 of the Brazilian Civil Code) occurred to one of the parties extend for the effective term of their duration the terms for the fulfillment of the contractual obligations, provided that such acts are proven to affect the fulfillment of the agreement, such as: I. Strike of the employees; II. Interruption of the public means of transportation; III. Public calamity, so decreed by the competent Public Authorities; IV. Shortage of raw materials, components or materials on the part of the sub contractors, GOL and / or suppliers of VEM. V. Accidents in the Services that damage the parts already performed or equipment in use, in a proven manner without any fault or malice from VEM. 9. PRICE AND PAYMENT CONDITIONS 10.1. PRICES A - LABOR: For the labor to be applied in the services, VEM shall charge GOL the following unitary prices for the man hour: - Normal man hour for hangar technicians............... US$ * - Normal man hour for workshop technicians............. US$ * - Normal man hour for Engineering...................... US$ * NOTE: Extraordinary hours shall have an accretion of *% (*%) in relation to the normal hours and shall only be performed by express authorization from GOL. B - MATERIALS: The materials to be applied in the services of the aircraft, accessories, and parts thereof shall be charged based on the list price paid by VEM accreted of a handling fee of * percent (*%), in this amount shall be included the taxes, transportation and customs release. The loaning of components shall be charged reciprocally in accordance with the rate of * (*%) of the listed price per day. C - SUBCONTRACTING: For the performance of the services of Recovery of Components, for which VEM is not yet qualified to perform, VEM may, by request and with the express authorization from GOL, send the component to perform the service in a qualified third party workshop. 10.2. PAYMENT CONDITIONS A - INVOICING: The total price shall be calculated in United States (USA) Dollars and shall be in accordance with the prices defined under item 9.1, and these shall be translated into Brazilian Reais at the commercial exchange rate in force on the date of the issuance of the invoice. To the calculated amount shall accreted the taxes and charges which come to fall upon the services hereby contracted, in compliance with the legislation in force on the date of the payment. B - CONDITIONS AND PLACE OF PAYMENT: - CONDITIONS: The amount for the labor, materials and others, calculated by the services performed, shall be paid by GOL to VEM, within the maximum term of thirty (30) days after the date of issuance of the invoice. The payment conditions may be altered in accordance with the provisions under Attachment "III". - PLACE OF PAYMENT: The payment shall be effected by means of a deposit in the checking account, or by a bank transfer for the following account: Bank: BRADESCO Account Number: * Checking Account: * Branch: * To the credit of: VEM-VARIG ENGENHARIA E MANUTENCAO S.A. C - DELAYED PAYMENT: Any payment which is not performed as of the date stipulated above, or in accordance with the provisions under Attachment "III", shall suffer an accretion of indexation according to the variation of the Consumer's Price Index and a penalty for the amount equivalent to 1.5% per month, or the highest amount that is permitted by the legislation, applying in this case whichever is smaller. 10. LIABILITIES 10.1. ON THE PART OF VEM: 10.1.1 - Supplying all the labor, materials, parts and technical services that are necessary for the: I. Maintenance of the aircraft belonging to GOL in airworthiness condition, in compliance of the Airworthiness Guidelines issued by the Department of Civil Aviation - DAC or aeronautical authorities of the countries that are the holders of the certificates of homologation of the aircraft operated by GOL. II. Performance of the services of incorporations of modifications proposed by the manufacturers of aircraft, and parts thereof. III. Performance in the aircraft and parts thereof the services defined by GOL, in accordance with the maintenance program that is applicable and which is approved by the aeronautical authorities. IV. Maintain a copy of the maintenance records of the aircraft and parts thereof as required by the DAC. V. Employ its best efforts to keep the aircraft of the GOL fleet in accordance with a technical standard that is compatible with other international operators of the same size and reputation. 10.1.2 - For general overhauls, repairs, tests in components for which VEM is not qualified, VEM may manage the sending thereof to homologated / qualified workshops for the performance of these services; 10.1.3 - Manage with the operational area of GOL the stops of the aircraft for Services scheduled maintenance so as to make the spaces available in the maintenance line for the performance of the services; 10.1.4 - Make all efforts, when requested by GOL to do so, towards the release of the aircraft in the shortest time interval that is feasible, the aircraft that is grounded due to technical reasons; 10.1.5 - VEM shall furnish all of the technical documents in connection with the Services performed in the aircraft belonging to GOL and parts thereof in accordance with the requirements of the aeronautical authorities. 10.2. ON THE PART OF GOL: 10.2.1 - Granting the access to the aircraft and to the technical records of the fleet to the authorized personnel of VEM; 10.2.2 - Providing VEM, whenever requested to do so, an updated copy of the Maintenance manuals, Electrical Diagrams, Part Catalogues and other technical documents required by the services and by aeronautical authorities; 10.2.3 - Coordinating with VEM all the schedules for the stops of the aircraft that provide the best conditions that are possible for the performance of the Services, within the planning of the use of the hangars. 10.3. WARRANTIES VEM warrants the perfect performance of the services and the good workmanship of the labor employed and the materials purchased by it, undertaking to repair, in its own facilities, and without any charge to GOL, the defects resulting only from the labor employed in the service. This period of warranty shall be of one thousand (1,000) flight hours or six (6) months, whichever happens first and is subject to the receipt, by VEM of a communication from GOL within forty eight (48) hours by any written form about the deficiency of the service, with a description of the failure occurred and of the acknowledgement by VEM of such failure, this period of warranty to be counted from the date of the receipt, by GOL, of the service contracted and performed in accordance with this agreement. The liability of VEM under this term of warranty is limited to the performance of the service, without any cost to GOL, only to correct the mentioned defect, the corrective measures being of the exclusive competence of VEM. The warranty established in the preceding item, about liabilities and responsibility on the part of VEM is subject to the waiver on the part of GOL of each and any other means of warranty, obligation or civil liability on the part of VEM, its Directors, employees, representatives and / or agents. VEM shall perform, at its own discretion, the correction services dealt with under this clause, in its workshops, or it shall indicate a homologated workshop for its performance. There shall be no reimbursement of expenses without their written approval by VEM. The warranties hereby agreed to shall cover the labor defects only and exclude any consequential damage. 11. RESPONSIBILITIES 11.1. The responsibility of VEM shall be limited to the performance of services, and it shall not extend to any eventual consequences or accidents that involve personnel or materials belonging to GOL, no responsibility being incumbent upon VEM, still, for the undue use, on the part of GOL, of the Aircraft, its Engines, and Parts, as well as for any use beyond the limits of time or of use normally established by the competent authorities. 11.2. GOL shall be responsible for any damages or losses caused to VEM in connection with the performance of the services foreseen under this Agreement, resulting from acts practiced by GOL or by its representatives. 11.3. GOL undertakes full and exclusive responsibility for every and any risks to which its representatives are subject during their activities before VEM, for the purposes of this Agreement, GOL obliging itself to hire, at its own expenses, the insurance necessary to cover all of the said risks. 12. INSURANCE GOL undertakes to maintain in full force, at its own cost and expenses, the following Insurance coverage for the following amounts and as specified below, in a manner and by means of terms and conditions that are satisfactory to VEM: I. Aeronautical Comprehensive Civil Liability Insurance - ("Comprehensive Airline Liability Insurance") including but not being limited to Legal liability before Third Parties, Third parties in the Ground, Passengers, Luggage and Cargo, Contractual Civil Liability, including coverage against Risks of War and Related Ones in accordance with the English Clause AV.52, or its equivalent, with a Combined Single limit (Personal Damages / Material Damages) for not less that six hundred million of United States Dollars (US$ 600,000,000.00) per occurrence. II. Hull Insurance against All Risks ("Hull All Risks") - and Insurance of Parts, and Spare Engines during the performance of the services at facilities belonging to VEM or under its control or while in transit between the facilities belonging to GOL and to VEM; III. Hull Insurance, Risks of War ("Hull War Risks") including Parts, and Spare Engines; IV. Each one of the Insurance Coverage described above shall contain the Clause of Exclusion of Sub Rogation of Rights in favor of VEM. All of the Civil Liability insurance coverage described above shall (i) contain a standard "Cross Liability" clause and (ii) include VEM, its directors, employees, agents and representatives as additional Insured parties. V. VEM reserves itself the right to reject the receipt of Aircraft, Parts and / or Spare Engines belonging to GOL until it presents a Certificate of Insurance issued by its respective Insurers evidencing the conditions required above, in a manner that they are reasonably approved by VEM and, upon being requested to do so, GOL shall submit to VEM proof that the respective Insurance Premiums have been duly liquidated. GOL shall be responsible for any Deductible sums that shall be applied and are comprised by the Insurance Coverage required by this Agreement. 12.1. VEM, whenever requested to do so by GOL, shall submit proof that all the activities and/ or performance of the services foreseen herein, are duly insured in an insurance policy of its own. 13. MISCELLANEOUS 13.1. VEM shall allow the visit by representatives of GOL to follow up the development of the Services. Such technical representative of GOL shall represent the interests of GOL in this agreement. 13.2. It shall be of the responsibility of GOL the payment of any taxes or charges that fall upon the Services agreed to. 13.3. The transportation of the aircraft up to the facilities belonging to VEM, where the Services shall be performed, as well as the transfer and experimentation flights shall be of the absolute responsibility and cost of GOL. 13.4. The parties hereby elect the COURT of the city of Rio de Janeiro to settle any doubts arising out, in the whole or part, of this agreement. 13.5. The communications by fax, telex, letter, e-mail or any other type of written communication between the parties to this agreement shall be effected to the following addresses: "VEM" - VARIG ENGENHARIA E MANUTENCAO S/A Gerencia de Vendas America Latina Rua Augusto Severo, 851 - Predio 2 - CEP 90240-480 Bairro Sao Joao - Porto Alegre - RS - Brazil Telephone: (5551) 3358-7258 Fax: (5551) 3358-7004 E-mail: and "GOL" - TRANSPORTE AEREOS S/A. Avenida Pedro Bueno, 1757 - CEP 04342-011 Jardim Aeroporto - Sao Paulo - SP - Brazil Telephone: (5551) 5034-5600 Fax: (5551) 5034-5774 E-mail: IN WITNESS WHEREOF, the parties execute this instrument herein, in two (02) counterparts of the same tenor and form, in the presence of the undersigned witnesses. "GOL" - TRANSPORTE AEREOS S/A. "VEM" - VARIG ENGENHARIA E MANUTENCAO S/A Signed: /s/ Constantino de Oliveira Signed: /s/ Luiz Alberto Dias Correa Name: Constantino de Oliveira Name: Luiz Alberto Dias Correa Junior Position: President Position: General Marketing and Sales Manager Name: [blank] Name: [blank] Position: [blank] Position: [blank] Witnesses: Signed: /s/ Francisco E. C. Mendes Signed: [illegible signature] Name: Francisco E. C. Mendes Name: [illegible] Position: Maintenance Director Position: [illegible] PROPOSAL FOR THE RENDERING OF MAINTENANCE SERVICES FOR THE AIRCRAFT B737-700/-800 OF GOL - TRANSPORTES AEREOS S.A. YEAR 2003 PORTO ALEGRE, NOVEMBER 20TH, 2002 PROPOSAL CONTENTS 1. PRICE 1.1. SERVICES AT A FIXED PRICE FOR THE LABOR 1.2. ADDITIONAL SERVICES 1.3. PRICES FOR THE LABOR AND FOR THE MATERIALS A - LABOR B - MATERIALS C - SUBCONTRACTING 2. DATE AND TERMS FOR THE PERFORMANCE OF THE SERVICES 3. SITE FOR THE PERFORMANCE OF THE SERVICES 4. PAYMENT CONDITIONS, MANNER, AND PLACE 4.1. CONDITIONS FOR THE PAYMENT 4.2. FORM OF THE PAYMENT 4.3. LOCATION OF THE PAYMENT 4.4. DELAYED PAYMENT 5. WARRANTY 6. LOGISTICAL SUPPORT In accordance with the Meeting held in Porto Alegre on November 20th, 2002 between the representatives of GOL - TRANSPORTES AEREOS S.A. and representatives of VEM - ENGENHARIA E MANUTENCAO S.A., having for its basis the "Work Scope" received from GOL via e-mails on October 02nd, 2002, we submit in continuation the REV. A of our proposal POAPY-030/02, as well as the other conditions to perform in the facilities belonging to VEM during the year 2003, the "C" Check services in the aircraft with the prefixes PR-GOA, PR-GOB, PR-GOC, PR-GOD, PR-GOE and PR-GOL and the services of incorporation of AD' sand SB's in 09 additional aircrafts being, 02 B737-800 and in 07 B737-700 aircrafts. 1. PRICE FOR THE SERVICES 1.1 SERVICES AT A FIXED PRICE FOR THE LABOR: We submit in the ATTACHMENT I to this proposal herein the fixed prices for the performance of the services that we list and comment below: a) Performance of the Maintenance Work Cards; b) Incorporation of the AD Notes and Service Bulletins as listed under ATTACHMENT II; c) Removal and installation of components. Does not include the components in accordance with MPD 737NG - Appendix F. GOL shall inform which components must be replaced. The PSEU units P/N 285A1600-2/-3 shall be sent for their modification at the manufacturer in accordance with the CSB's 285A1600-32-01/-02. We are not quoting the modification of the LE Slat Actuators P/N 381800-1001/-1003. d) Weighing of the aircraft (included only for the aircraft which have the Maintenance Work Cards). e) General external painting fuselage and wings PR-GOL and PR-GOA (does not include the marking of the doors and the landing gear housing). The price includes the labor and all the consumable materials. GOL shall provide the paint for the painting including the primer and the templates with the logotype. 1.2 ADDITIONAL SERVICES: For the services that we list below we cannot submit a proposal at a fixed price for the labor cots but we have estimated the amounts that are submitted in the ATTACHMENT I. The estimated amounts shall be charged based in the labor and in the materials effectively applied in the services in accordance with the prices defined under the ITEM 1.3 of this proposal. a) Inspection reports generated by the Routine items or by any AD Note or Inspection Service Bulletin; b) Recovery of Portions and Parts of the aircraft (landing gear doors, Nose Cowl, flight surfaces, radome, etc.); c) Incorporation of SB's, AD's and SL's that are recommended and not scheduled; d) Recovery of components; e) Elimination of pending items in the flight log book; f) Refurbishing of the interior of the passenger, service and command cockpit areas; and g) Preparation of engineering project NOTE: The services above shall be mentioned only by an express authorization from the Technical Representative of GOL who is then following up on the services. 1.3 PRICE FOR THE LABOR AND MATERIALS: A - LABOR For the labor to be applied to the services listed under ITEM 1.2, VEM shall charge GOL the following prices for the man hour: - Normal man hour for hangar technicians.................... US$ * - Normal man hour for workshop technicians.................. US$ * - Normal man hour for Engineering........................... US$ *

NOTE: Extraordinary hours shall have an accretion of *% (*%) in relation to the normal hours and shall only be performed by express authorization from GOL. B - MATERIALS: The materials to be applied by VEM in the services of the aircraft, accessories and their portions / parts shall be charged based on the list / replenishment price paid by VEM accreted of a handling fee of nineteen percent (19%), in this amount shall be included the taxes, transportation and customs release. NOTE: GOL shall be responsible for the supply to VEM of the materials required for the performance of the Services. But, at the discretion of GOL, VEM may also supply the materials for the services. C - SUBCONTRACTING: For the performance of the services of Refurbishing of components, of which VEM is not yet qualified for the performance, VEM may, by request and with the express authorization from GOL, send the component for the service to be performed at a qualified workshop belonging to a third party. Over the amount for the contracted service paid by VEM, shall be accreted a handling fee of * percent (*%). 2. DATE AND TERMS FOR THE PERFORMANCE OF THE SERVICES The services shall be performed in accordance with the dates foreseen and the terms stipulated under the ATTACHMENT I. The dates for the beginning of the services may be altered by common agreement between the parties. 3. SITE FOR THE PERFORMANCE OF THE SERVICES The Services shall be performed at VEM'S facilities at "Aeroporto Salgado Filho" airport in the Porto Alegre - RS. 4. PAYMENT CONDITIONS, MANNER, AND PLACE 4.1. PAYMENT CONDITIONS: The amount estimated for the payment of the services scheduled for the fifteen (15) aircrafts during the year 2003 is of * (US$ *, which are payable in * monthly installments of *) each one, with the maturity date on the 15th day of each month beginning in March, 2003. In case the amount estimated in the ATTACHMENT I for the services in each aircraft is not surpassed after the final calculation of the labor and materials to be invoiced, VEM shall issue a credit to the benefit of GOL. If the opposite happens, VEM shall issue an invoice for the difference in excess of each aircraft, the payment of which shall be effected by GOL thirty (30) days after the presentation of the invoice. 4.2. PAYMENT MANNER: The amounts shall be calculated in United States Dollars and translated into Brazilian Reais at the commercial exchange rate in force on the date of the issuance of the invoice. To the calculated amount shall be added the taxes and charges that eventually come to fall upon the invoiced services, as provided for under the legislation in force on the date of the issuance of the invoice. 4.3. PAYMENT PLACE: The payment shall be effected by means of a checking account deposit or bank transfer to the following account: Bank: BRADESCO Account Number: * Checking Account: * Branch: * To the credit of: VEM-VARIG ENGENHARIA E MANUTENCAO S.A. 4.4. DELAYED PAYMENT: Any payment which is not performed as of the date stipulated above, shall suffer an accretion of indexation according to the variation of the Consumer's Price Index and a penalty for the amount equivalent to *% per month, or the highest amount that is permitted by the legislation, applying in this case whichever is smaller. 5. WARRANTY VEM warrants the perfect performance of the services and the good workmanship of the labor employed and the materials purchased by it, undertaking to repair, in its own facilities, and without any charge to GOL, the defects resulting only from the labor employed in the service. The period of warranty is subject to the receipt, by VEM of a communication from GOL by any written form about the deficiency of the service, with the description of the failure occurred, within the term of one thousand five hundred (1,500) flight hours or six (6) months, whichever comes first, this term of warranty to be counted from the date of the receipt, by GOL, of each service performed, provided that such defect is acknowledged by VEM. 6. LOGISTICAL SUPPORT During the period in which we will be performing the services in the aircraft VEM offers during the business days, for up to four (4) persons, the following logistical support for the representatives of GOL: a) terrestrial transportation between the hotel, the location of the services and back to the hotel; b) Lunch at the "A" Restaurant of the "Fundacao Rubem Berta" on business days; c) A room equipped with a micro computer, telephone, internet and fax for their use strictly for business purposes. Looking forward to hearing from you, greetings. Porto Alegre, November 20th, 2002. Very truly yours, Signed: [illegible signature] Leonildo S. Plettes Sales Manager for Latin America ATTACHMENT I LABOR AND MATERIALS ESTIMATED PRICE FOR THE PERFORMANCE OF THE "C" CHECK'S AND SB'S / AD'S IN THE AIRCRAFTS B737-700/-800 OF GOL - LINHAS AEREAS S.A. DURING THE YEAR 2003
DESCRIPTION OF THE SERVICES PREFIX OF THE AIRCRAFT --------------------------------------------------------------------------------------------- GOA GOB GOC GOD GOE GOF GOG GOH --- --- --- --- --- --- --- --- 1) Scheduled Maintenance * * * * * * * * Work Cards Air worthiness Directives * * * * * * * * (AD's) and Service Bulletins 3) Components (only removal * * * * * * * * and installation) 4) Weighing (included in the * * * * * * * * Work Cards) 5) Painting see note 1 * * * * * * * * FIXED PRICE LABOR TOTAL * * * * * * * * ESTIMATED AMOUNTS INSPECTION REPORTS * * * * * * * * REFURBISHING OF PARTS * * * * * * * * MATERIALS * * * * * * * * ESTIMATED PRICE TOTAL * * * * * * * * ESTIMATED US$ TOTAL PER * * * * * * * * AIRCRAFT ESTIMATED TERM IN CALENDAR * * * * * * * * DAYS ESTIMATED DATE FOR THE * * * * * * * * BEGINNING OF THE SERVICES

DESCRIPTION OF THE SERVICES PREFIX OF THE AIRCRAFT ---------------------------------------------------------------------------------------------- GOI GOJ GOK GOL GOM GON GOO TOTAL --- --- --- --- --- --- --- ----- 1) Scheduled Maintenance * * * * * * * * Work Cards Air worthiness Directives * * * * * * * * (AD's) and Service Bulletins 3) Components (only removal * * * * * * * * and installation) 4) Weighing (included in the * * * * * * * * Work Cards) 5) Painting see note 1 * * * * * * * * FIXED PRICE LABOR TOTAL * * * * * * * * ESTIMATED AMOUNTS INSPECTION REPORTS * * * * * * * * REFURBISHING OF PARTS * * * * * * * * MATERIALS * * * * * * * * ESTIMATED PRICE TOTAL * * * * * * * * ESTIMATED US$ TOTAL PER * * * * * * * * AIRCRAFT ESTIMATED TERM IN CALENDAR * * * * * * * DAYS ESTIMATED DATE FOR THE * * * * * * * BEGINNING OF THE SERVICES
ATTACHMENT II List of the A. D. Notes and SB's with a fixed price for the labor in accordance with the Work Scope received from GOL
AD'S AND SB'S NBR NOTE - ----------------- ---- 2001-13-23(SB ###-##-####) Only inspection 2001-17-02 737-21A1139 737-25A1372 737-26A1083 737-26A1109 ###-##-#### 737-28A1142 Requires special tool ###-##-#### ###-##-#### 737-30A1049 ###-##-#### 737-32A1343 Send unit to RPO ###-##-#### 737-35A1058 ###-##-#### 737-55A1066 See the note ###-##-#### 737-55A1080 737-55A1082 See the note 737-55A1074 NOTE: For SB 737-55A1066 and 55A1082 we have quoted only the labor for the Removal, Installation and Adjustment of the Elevators. The Elevators shall be sent abroad for their modification.
ATTACHMENT III TIMETABLE OF THE AIRCRAFT AIRCRAFT: ______________________ REGISTRATION:____________________ DATE FORESEEN FOR THE ARRIVAL: ___________________________________ The Service is scheduled to begin on ______________, 20__, and the Aircraft must be at VEM'S facilities, located at ___________________ in the City of __________ - Brazil, on the following date: ______________, 20__. For the performance of the services of "___" Check in the Aircraft______________ we estimate the term of _____ (______) calendar days. PRICE AND CONDITIONS OF THE PAYMENT (IN CASE IT IS AGREED TO DIFFERENTLY FROM CLAUSE 9.2): IN AGREEMENT: GOL TRANSPORTES AEREOS S/A VEM - VARIG ENG. & MANUTENCAO S/A ___________________________________ __________________________________ ATTACHMENT IV RECEIPT FOR THE DELIVERY / RETURN DATE ___________________________________ TIME: __________________________________ LOCATION: ______________________________ WE HAVE RECEIVED FROM GOL / VEM, IN ACCORDANCE WITH THE AGREEMENT FOR SERVICES OF MAINTENANCE AND MODIFICATION OF AIRCRAFT DATED ______________, 20_, BETWEEN VEM- VARIG ENGENHARIA E MANUTENCAO S.A., AND GOL TRANSPORTES AEREOS S/A, THE FOLLOWING AIRCRAFT: TYPE:___________________________________ REGISTRATION NUMBER: ___________________ TOTAL FUEL IN THE AIRCRAFT: _____ LBS __ DELIVERED BY: __________________________ POSITION:_______________________________ RECEIVED BY:____________________________ POSITION:______________________________ ATTACHMENT V INVENTORY LIST OF THE EQUIPMENT THAT IS NOT INSTALLED GOL and VEM hereby acknowledge the receipt of the following manuals, certificates, and items of equipment which are not installed on board the Aircraft marked with the Manufacturer's Serial Number:_________ and Registration Number: ____, and delivered to VEM by GOL on the following date: __________, 200_, At __________.
ITEM QUANTITY INITIALS / INSPECTION MARK (VEM / GOL) A. MANUALS 1. _____________ _______________ _________ / _____ 2. _____________ _______________ _________ / _____ 3. _____________ _______________ _________ / _____ 4. _____________ _______________ _________ / _____ 5. _____________ _______________ _________ / _____ 6. _____________ _______________ _________ / _____ 7. _____________ _______________ _________ / _____ 8. _____________ _______________ _________ / _____
B. CERTIFICATES 1. _____________ _______________ _________ / _____ 2. _____________ _______________ _________ / _____ 3. _____________ _______________ _________ / _____ 4. _____________ _______________ _________ / _____ 5. _____________ _______________ _________ / _____ 6. _____________ _______________ _________ / _____ 7. _____________ _______________ _________ / _____ 8. _____________ _______________ _________ / _____ C. EQUIPMENT THAT IS NOT INSTALLED 1. _____________ _______________ _________ / _____ 2. _____________ _______________ _________ / _____ 3. _____________ _______________ _________ / _____ 4. _____________ _______________ _________ / _____ 5. _____________ _______________ _________ / _____ 6. _____________ _______________ _________ / _____ 7. _____________ _______________ _________ / _____ 8. _____________ _______________ _________ / _____

D. SPARE PARTS PART N(degree) DESCRIPTION MANUFACTURER QUANTITY INITIALS (MAINTENANCE DIVISION / GOL) 1. _______________ _______________ _______________ ________ / _____ 2. _______________ _______________ _______________ ________ / _____ 3. _______________ _______________ _______________ ________ / _____ 4. _______________ _______________ _______________ ________ / _____ 5. _______________ _______________ _______________ ________ / _____ 6. _______________ _______________ _______________ ________ / _____ 7. _______________ _______________ _______________ ________ / _____ 8. _______________ _______________ _______________ ________ / _____ 9. _______________ _______________ _______________ ________ / _____ 10. _______________ _______________ _______________ ________ / _____
TECHNICAL REPRESENTATIVE APPOINTED BY GOL BY: ______________________________________________ POSITION: ________________________________________ AUTHORIZED REPRESENTATIVE OF VEM BY: ______________________________________________ POSITION: ________________________________________ ATTACHMENT VI AUTHORIZATION FOR ADDITIONAL SERVICES AND / OR ALTERATIONS OF SERVICES REGISTRATION NUMBER OF THE AIRCRAFT: ___________________________________ SERIAL NUMBER OF THE AIRCRAFT:__________________________________________ DATE: __________________________________________________________________ - ADD: ________________________________________________________ - EXCLUDE: ____________________________________________________ - MODIFY: _____________________________________________________ NEW DATE FOR THE SCHEDULED RETURN (IF SUCH IS THE CASE): _______________ APPROVED AND AUTHORIZED BY: _________________________________________ Technical Representative Appointed by GOL APPROVED AND ACCEPTED BY: _________________________________________ Authorized Representative of VEM EX-10.3 7 y97722a2exv10w3.txt OPEN SKIES RESERVATION SERVICES AGREEMENT EXHIBIT 10.3 OPEN SKIES, INC. RESERVATION SERVICES AND SOFTWARE LICENSE USE AGREEMENT This Host Reservation Services and Software License to Use Agreement ("Agreement") is made between OPEN SKIES, INC., a Utah corporation ("OPEN SKIES"), and GOL - Transportes Aereos Ltda., a Brazil corporation, ("Customer") as of October 6, 2000 ("Effective Date"). The purpose of this Agreement is to set forth the mutually agreeable terms and conditions under which OPEN SKIES shall perform Host Reservation Services and Software License to Use for Customer. 1. DEFINITIONS 1.1 "CUSTOM ENHANCEMENT REQUEST" means a request by Customer to: (a) modify hardware and software used by OPEN SKIES to provide the Host Reservation Services or (b) otherwise enhance the Host Reservation Services as further described in Section 6 of this Agreement. 1.2 "ELECTRONIC RESERVATION" is equivalent to a "Passenger Name Record". 1.3 "HOST RESERVATION SERVICES" means the services to be performed by OPEN SKIES and hosted on the OPEN SKIES Reservation Services Hardware and Software located at an OPEN SKIES approved facility as described in Exhibit A. 1.4 "INTELLECTUAL PROPERTY RIGHTS" includes copyrights, patents, trademarks, service marks, design rights (whether registered or unregistered), trade secrets, know-how, expertise and all other similar proprietary rights. 1.5 "MATERIALS" means all tangible materials developed in the course of this Agreement including documents, records, and computer software programs. 1.6 "PASSENGER NAME RECORD (PNR)" means an individual electronic record with a unique record locator number, which may contain one or more passenger names and booked segments. 1.7 "RESERVATION SERVICES HARDWARE AND SOFTWARE" means the hardware and software used by OPEN SKIES, and licensed to Customer, to provide the Host Reservation Services. 1.8 "PASSENGER BOARDED" means an individual passenger boarded, per individual flight number. 1.9 "FLIGHT BOOKED FEE" means the fee applied for each individual passenger booked for a single flight number. 1.10 "SERVICE FEES" means the fees payable by Customer as specified in Exhibit B. 1.11 "SKYLIGHTS SERVER TRANSACTION" means an individual query to the OPEN SKIES reservation system. These queries may include flight availability requests, fare inquiries, credit card approvals, segment sell, end transactions and other transactions involving passenger shopping and booking activities. 1.22 "SOFTWARE LICENSE USE" means the license to use the software to provide Reservation Services. 2. OPEN SKIES OBLIGATIONS OPEN SKIES shall use reasonable commercial efforts to perform the Host Reservation Services and Software License Use in accordance with the terms and conditions of this Agreement. OPEN SKIES may select qualified and reputable subcontractors to fulfill any of OPEN SKIES' obligations. 3. CUSTOMER OBLIGATIONS 3.1 GENERAL OBLIGATIONS. Customer shall comply with the general obligations stated below, as well as the payment obligations specified in Exhibit B and will perform and observe the Customer responsibilities outlined in all Exhibits and attachments, including Exhibit E. GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] ------------ ------------- Customer OPEN SKIES Initials Initials 3.2 ACCESS. Customer will provide OPEN SKIES with access to and use of all information, Customer data, internal resources, and facilities as reasonably determined by OPEN SKIES to be necessary to deliver the Host Reservation Services. 3.3 COOPERATION. Customer agrees to cooperate with OPEN SKIES and respond to all reasonable requests to facilitate OPEN SKIES' delivery of Host Reservation Services. OPEN SKIES will not be liable for failure to provide the Host Reservation Services due to delayed, false or inaccurate information provided by Customer. 3.4 NOTICE OF INCREASED USAGE. Customer agrees to provide OPEN SKIES with at least thirty (30) days prior notice of any marketing initiatives, acquisitions, alliances, schedule changes or other promotions that will likely increase Customer's usage of the Reservation Services or otherwise adversely impact the Reservation Services Hardware and Software performance and available capacity. 3.5 CUSTOMER CONTACTS. Customer designates the person set forth in Exhibit D 1.2 as the primary authorized contact for account management, project funding, performance, payment and other commercial issues with respect to the Reservation Services (the "Customer Account Liaison"). Customer further designates the person(s) set forth in Exhibit D1.3 as the authorized contacts to utilize the telephone support and Internet technical support system (the "Authorized Support Contacts"). Customer will ensure that all Authorized Support Contacts will have received adequate training on the Reservation Services. Customer may change their designated Account Liaison or Authorized Support Contacts by written notice to OPEN SKIES. 3.6 CUSTOMER COSTS. Customer will be responsible for all its own costs and expenses except for those costs and expenses for which OPEN SKIES is specifically responsible as set out in this Agreement. 3.7 USE BY CUSTOMER. The Host Reservation Services and associated Materials and information provided to Customer as part of this Agreement are for the sole and exclusive use of Customer. Customer may, however, permit agents hired by Customer or Customer's subcontractors to access the Host Reservation Services solely for the purpose of procuring reservation services for and on behalf of Customer; provided that: (i) Customer promptly provides OPEN SKIES the names of each such agent and (ii) each such agent agrees to be bound by the terms and conditions of this Agreement including, but not limited to, the confidentiality provisions of Section 9. Customer may not transfer any Material or information, in any form whatsoever, to any other third party nor allow any third party to access or use the Host Reservation Services or such Material or information without the prior written consent of OPEN SKIES. Such transfer of or access to the Host Reservation Services or Material or information shall constitute a material breach of this Agreement. 3.8 TRAINING. Except for the initial training provided by OPEN SKIES as described in Exhibit A, Customer will be responsible for training Customer employees and authorized agents on use of the Reservation Services including, but not limited to, use of any new functions or Custom Enhancement Request for which OPEN SKIES provides user documentation. 3.9 TELECOMMUNICATIONS AND EQUIPMENT. Unless otherwise specified in Exhibit A, Customer shall be responsible for all telecommunication dedicated, dial-up or wireless circuits used by Customer in connection with the transmission of data between the Reservation Services Hardware and Software and the Customer's site(s). Customer shall provide, install and operate compatible hardware and communications equipment, which meets OPEN SKIES required specifications, necessary for connecting to the Reservation Services Hardware and Software. Customer is required to have Internet Access and Internet electronic mail capability in order to communicate properly with OPEN SKIES support. Customer agrees to order all required circuits it is responsible for within 10 days of execution of this Agreement or a minimum of 90 days in advance of the projected installation date whichever is later. 4. HARDWARE AND SOFTWARE OPEN SKIES will perform Host Reservation Services using the Reservation Services Hardware and Software, and licensing the use of the Software to Customer. Title to the Reservation Services Hardware and Software is GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] -------------------- -------------------- Customer OPEN SKIES Initials Initials retained by Hewlett-Packard (HP) and/or OPEN SKIES and Customer has no rights thereto except as specifically permitted under this Agreement. OPEN SKIES may upgrade and replace the Reservation Services Hardware and Software as OPEN SKIES, in its sole discretion, deems appropriate provided that OPEN SKIES maintains the same level of services. 5. PRICE AND PAYMENT 5.1 SERVICE FEES. In consideration for OPEN SKIES' provision of Host Reservation Services as described in this Agreement, Customer will pay OPEN SKIES the Service Fees as set forth in Exhibit B and as stated elsewhere in this Agreement. 5.2 EXPENSES. Customer shall bear all expenses incurred by OPEN SKIES personnel in connection with travel to Customer's site(s) to implement the Reservation Services, or to provide training, consulting, support or other services at Customer's site at Customer's request. Such expenses shall include, without limitation, air travel (it is OPEN SKIES policy to have all personnel travel business class for all flights over 5 hours), ground transportation, lodging, meals and incidentals. If Customer does not pay the provider(s) directly for travel and related expenses for such personnel, OPEN SKIES will bill Customer, and Customer agrees to pay, the actual cost of such expenses plus a service fee of * percent (*%). This fee is applied to travel arranged through OPEN SKIES' travel provider for all air travel, lodging or ground transportation for all OPEN SKIES employees. 5.3 PAYMENT TERMS. All payments made under this Agreement shall be made in United States dollars either: (a) by electronic funds transfer, prepaid, to the bank account designated on the invoice; or (b) by check drawn on a United States bank and delivered to the address indicated on the invoice. All payments under this Agreement are due within thirty (30) days from OPEN SKIES' invoice date. Service Fees as stated in Exhibit B will be invoiced in advance at the beginning of each month for the Host Reservation. Services to be rendered for the following month. (By way of example, OPEN SKIES will invoice Customer on January 1 for services to be performed from February 1 through February 28). Any amounts not paid when due will bear interest at the lesser of: (a) 1.5% per month or (b) the maximum rate allowable by law. In addition to any interest charge any payments due that are more than 10 days late will be subject to an automatic 5% late fee. OPEN SKIES may change credit or payment terms at any time when, in OPEN SKIES' opinion, Customer's financial condition, previous payment record, or the nature of Customer's relationship with OPEN SKIES so warrants. 5.4 FEE ADJUSTMENT. Upon implementation of any significant Enhancement to the Reservation Services Hardware and Software, OPEN SKIES reserves the right to increase the Service Fees charged to Customer proportionally to such enhancement. OPEN SKIES shall give Customer not less than ninety (90) days prior written notice of any such increase in the Service Fees. 5.5 FAILURE TO PAY. If Customer fails to pay any sum when due after ten (10) days written notice, OPEN SKIES may, without breach of this Agreement, discontinue performance under this Agreement until all outstanding payments are received. 5.6 TAXES. Taxes, such as sales, use, service, value added or like taxes, are not included in the Service Fees and will be invoiced, if applicable, as separate items. Taxes on income are specifically excluded from the taxes described in this Section. 6. CUSTOM ENHANCEMENT REQUESTS 6.1 REQUESTS. Customer may submit a written Custom Enhancement Request for enhancements to the Host Reservation Services to better support Customer's business requirements. Each Custom Enhancement Request must include (a) a description of the requested change; (b) the purpose for the change; (c) the priority; (d) date of requested implementation; and (e) signature of authorized requester. 6.2 IMPLEMENTATION. Implementation of any Custom Enhancement Request is entirely at OPEN SKIES' GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] --------------- --------------- Customer OPEN SKIES Initials Initials discretion. If OPEN SKIES agrees to implement a Custom Enhancement Request, OPEN SKIES will advise Customer of the estimated schedule for implementation and of any anticipated impact on the provision of Host Reservation Services presently being provided. If Customer then requests OPEN SKIES to proceed with implementation, Customer agrees to pay OPEN SKIES the fees for such implementation as agreed to by the parties. 7. WARRANTIES 7.1 GENERAL WARRANTIES. OPEN SKIES warrants that the Reservation Services shall be performed in a professional and workmanlike manner and shall function in substantial compliance with the requirements outlined in Exhibit A. OPEN SKIES explicitly does not warrant that the operation of the Reservation System and the provision of the Reservation Services will be without defect or error-free. Each party warrants to the other that it has full right and authority to enter into this Agreement and consummate the transactions contemplated herein. 7.2 YEAR 2000 COMPLIANCE. OPEN SKIES warrants that the Reservation System will be able to accurately process date data (including, but not limited to, calculating, comparing, and sequencing) from, into, and between the twentieth and twenty-first centuries, and the years 1999 and 2000, including leap year calculations, when used in accordance with the documentation provided by OPEN SKIES, provided that all other products (e.g. hardware, software, firmware and other equipment not provided by OPEN SKIES under this Agreement) used in combination with Reservation System are operational and properly exchange date data with the Reservation System. Customer otherwise retains sole responsibility to ensure the Year 2000 readiness of its information technology and business environment. 7.3 REMEDIES. If OPEN SKIES receives notice of breach of warranty under this Section 7, OPEN SKIES will make commercially reasonable efforts to repair the Reservation System and/or Reservation Services to remedy such breach. If OPEN SKIES is unable, within a reasonable time, to remedy a breach of warranty under this Section 7, Customer will be entitled to terminate this Agreement as provided in Section 11.2. This Section 7.3 states Customer's sole and exclusive remedies for OPEN SKIES' breach of warranty under this Agreement. 7.4 DISCLAIMER OF OTHER WARRANTIES. THE EXPRESS WARRANTIES OF OPEN SKIES STATED IN THIS SECTION 7 ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. 8. INTELLECTUAL PROPERTY RIGHTS 8.1 All Intellectual Property Rights existing prior to the Effective Date shall belong to the party that owned such rights immediately prior to the Effective Date. Neither party shall gain by virtue of this Agreement any rights of ownership of copyrights, patents, trade secrets, trademarks or Intellectual Property Rights owned by the other. 8.2 HP and/or OPEN SKIES, as the case may be, shall own all Intellectual Property Rights, title and interest pertaining to the Reservation Services Hardware and Software and to the Materials developed by OPEN SKIES for the purposes of this Agreement. Customer acknowledges that information, software, and documentation created by OPEN SKIES in the course of delivering Host Reservation Services may be used by OPEN SKIES and its affiliated companies to facilitate delivery of similar services to other customers. 9 CONFIDENTIAL INFORMATION 9.1 During the term of this Agreement, either party may receive or have access to technical information, as well as information about product plans and strategies, promotions, customers and related non-technical business information which the disclosing party considers to be confidential ("Confidential Information"). Before such Confidential Information is disclosed, the parties shall first agree to disclose and receive such information in confidence. If then disclosed, the Confidential Information shall be marked as confidential at the time of disclosure, or if disclosed orally but stated to be confidential, shall be designated as GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] ----------- ----------- Customer OPEN SKIES Initials Initials confidential in a writing by the disclosing party summarizing the Confidential Information disclosed and sent to the receiving party within thirty (30) days after such verbal disclosure. 9.2 Confidential Information may be used by the receiving party only with respect to the performance of its obligations under this Agreement, and only by those employees of the receiving party and its subcontractors who have a need to know such information for purposes related to this Agreement, provided that such subcontractors have signed separate agreements containing substantially similar confidentiality provisions. The receiving party shall protect the Confidential Information of the disclosing party by using the same degree of care (but not less than a reasonable degree of care) to prevent the unauthorized use, dissemination or publication of such Confidential Information, as the receiving party uses to protect its own confidential information of a like nature. The receiving party's obligation under this Section 9 shall be for a period of three years after the date of disclosure or one (1) year from the end of the Agreement term, whichever is greater. 9.3 The obligations stated in this Section 9 shall not apply to any information which is: (a) already known by the receiving party prior to disclosure; (b) publicly available through no fault of the receiving party; (c) rightfully received from a third party without a duty of confidentiality; (d) disclosed by the disclosing party to a third party without a duty of confidentiality on such third party; (e) independently developed by the receiving party prior to or independent of the disclosure; (f) disclosed under requirement of law which is binding to the disclosing party; or (g) disclosed by the receiving party with the disclosing party's prior written approval. 10. REMEDIES AND LIABILITY NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT: (A) OPEN SKIES' AGGREGATE LIABILITY IN CONNECTION WITH THIS AGREEMENT AND THE PROVISION OF HOST RESERVATION SERVICES TO CUSTOMER, REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT OR OTHERWISE) SHALL NOT EXCEED THE LESSER OF $100,000 OR THE AGGREGATE AMOUNT PAID BY CUSTOMER TO OPEN SKIES FOR THE HOST RESERVATION SERVICES UNDER THIS AGREEMENT; (B) OPEN SKIES SHALL NOT BE LIABLE FOR ANY EXEMPLARY, SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY KIND (INCLUDING WITHOUT LIMITATION LOST PROFITS), EVEN IF OPEN SKIES HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; AND (C) OPEN SKIES SHALL NOT BE LIABLE FOR ANY CLAIMS OF THIRD PARTIES RELATING TO THE PROVISION OF HOST RESERVATION SERVICES, AND CUSTOMER SHALL DEFEND OPEN SKIES FROM, AND INDEMNIFY AND HOLD OPEN SKIES HARMLESS AGAINST, ALL SUCH CLAIMS. (D) THE LIMITATIONS SET FORTH IN CLAUSES "(A)" AND "(C)" ABOVE SHALL NOT APPLY TO LIABILITY FOR DEATH, PERSONAL INJURY OF A PHYSICAL NATURE OR DAMAGE TO TANGIBLE PERSONAL PROPERTY CAUSED BY OPEN SKIES' NEGLIGENCE OF INTENTIONAL MISCONDUCT BUT ANY SUCH LIABILITY SHALL NOT EXCEED $1,000,000. THE FOREGOING STATES THE ENTIRE LIABILITY OF OPEN SKIES WITH REGARD TO THIS AGREEMENT AND THE PROVISION OF HOST RESERVATION SERVICES HEREUNDER. THE LIMITATIONS OF LIABILITY CONTAINED IN SECTION 7 ABOVE AND THIS SECTION 10 ARE A FUNDAMENTAL PART OF THE BASIS OF OPEN SKIES' BARGAIN HEREUNDER, AND OPEN SKIES WOULD NOT ENTER INTO THIS AGREEMENT ABSENT SUCH LIMITATIONS. 11. TERM AND TERMINATION 11.1 TERM. Unless otherwise terminated earlier under this Section 11, this Agreement shall commence on the Effective Date and continue for a period of five (5) years. This Agreement will renew automatically for one (1) year periods unless written notice is given by one party to the other at least sixty (60) days prior to [ILLEGIBLE] [ILLEGIBLE] GOL-1-8-2001 ----------- ------------- Customer OPEN SKIES Initials Initials the end of the initial or any subsequent term. Any such renewal shall be on the same terms and conditions as this Agreement, except that OPEN SKIES may increase the Service Fees payable by Customer for any renewal term; provided that OPEN SKIES gives Customer written notice of such increase in Service Fees at least ninety (90) days prior to the end of the previous term. 11.2 TERMINATION FOR CAUSE. 11.2.1 Except for non-payment by Customer, either party may terminate this Agreement for material breach provided the terminating party gives the other party written notice of termination and such other party has not cured such material breach within ninety (90) days after receipt of such notice. In the event of non-payment by Customer, OPEN SKIES may give ten (10) days written notice and terminate the Agreement at the end of the ten day notice period if payment has not been made. 11.2.2 OPEN SKIES shall not be in material breach if its failure to perform hereunder is due to problems caused by Customer software and associated data, or by hardware or other equipment failures for hardware or other equipment not maintained by OPEN SKIES. 11.2.3 If Customer terminates due to OPEN SKIES' material breach, OPEN SKIES will, upon Customer's request, provide Customer with duplicates of magnetic tapes or print-outs of Customer's database. 11.2.4 If OPEN SKIES terminates due to Customer's material breach, Customer will (i) pay OPEN SKIES in full for all Host Reservation Services performed by OPEN SKIES up to the date of termination, and (ii) reimburse OPEN SKIES in full for any costs, losses, expenses or damages OPEN SKIES incurs as a result of the termination. OPEN SKIES will, upon Customer's request and at reasonable expense to Customer, provide Customer with duplicates of magnetic tapes or print-outs of Customer's database. 11.2.5 If either party becomes insolvent, is unable to pay its debt when due, ceases to operate in the normal course of business, has a receiver appointed, or has its assets assigned, it shall be considered a material breach and the other party may cancel any unfulfilled obligations and terminate for cause without notice. 12. GENERAL 12.1 NON-RESTRICTIVE RELATIONSHIP. This Agreement does not prevent either party from (i) entering into similar agreements with others, whether or not in the same industry, or (ii) independently developing any materials, products or services which are similar to those of either party irrespective of their similarity to any materials, products or services delivered hereunder, or (iii) using in any way it deems appropriate any idea, concept, know-how or technique which relates to information technology and is developed or provided by either party or jointly by both parties during the course of this Agreement. 12.2 PUBLICITY. Customer's purchase and use of OPEN SKIES' Host Reservation Services will be deemed to constitute Customer's permission for OPEN SKIES to use Customer as a reference in marketing these services unless Customer specifically revokes this permission in writing. OPEN SKIES will contact Customer regarding details of the reference. In no event will either party publicize or disclose to any third party, without the consent of the other party, either the price or other material terms of this Agreement. 12.3 NO JOINT VENTURE. Nothing contained in this Agreement shall be construed as creating a joint venture, partnership or employment relationship between the parties, not shall either party have the right, power or authority to create any obligation or duty, express or implied, on behalf of the other. 12.4 NO ASSIGNMENT. Except with respect to OPEN SKIES' rights regarding the use of subcontractors, neither party may assign, directly or indirectly by operation of law, any rights or obligations under this Agreement without the prior written consent of the other party. 12.5 FORCE MAJEURE. OPEN SKIES shall not be responsible for any failure to fulfill its obligations hereunder due to causes beyond its reasonable control, including without limitation acts or omissions of government GOL - 1-8-2001 [illegible] [illegible] ___________ ___________ Customer OPEN SKIES Initials Initials or military authority, acts of God, shortages of materials, transportation delays, fires, floods, labor disturbances, riots or wars. 12.6 NOTICES. All notices that are required to be given under this Agreement shall be in writing and shall be sent to the address of the OPEN SKIES and Customer recipient set out in Section 12.6.1 below, or such other address as the representative of each party may designate by notice given in accordance with the Section 12.6. Any such notice may be delivered by hand, by overnight courier, by first class pre-paid letter or by facsimile transmission, and shall be deemed to have been delivered upon receipt. 12.6.1 For the purposes of this Section 12.6 the address of each party shall be: CUSTOMER: GOL - TRANSPORTES AEROS LTDA. Attention: Wilson Maciel Ramos Address: Avenida Dom Jaime de Barros Camara, 300 Planalto 09895-400 Sao Bernardo do Campo/SP Brazil Telephone: 011-55-11-4355-6502 Facsimile: 011-55-11-4355-6525 OPEN SKIES: Attention: Finance Dept. Address: 6322 South 3000 East Salt Lake City, UT 84121, U.S.A. Telephone: (801) 947-7800 Facsimile: (801) 947-7801 12.7 WAIVER. Neither party's failure to exercise any of its rights under this Agreement shall constitute or be deemed to constitute a waiver or forfeiture of such rights. 12.8 SEVERABILITY. If any term or provision of this Agreement is held to be illegal or unenforceable, the validity or enforceability of the remainder of this Agreement shall not be affected. 12.9 EXHIBITS. The Exhibit(s) attached and listed below are part of this Agreement: Exhibit A Open Skies Services, Software & Support Exhibit B Fee Schedule Exhibit C Open Skies Contacts Exhibit D Customer Contacts Exhibit E Customer Responsibility Checklist 12.10 SURVIVAL. The following provisions survive termination of this Agreement. Section 5 (Price and Payment), Section 7 (Warranties), Section 8 (Intellectual Property Rights), Section 9 (Confidential Information). GOL - 1-8-2001 [Illegible] [Illegible] ------------------ -------------------- Customer OPEN SKIES Initials Initials Section 10 (Remedies and Liabilities). 12.11 HEADINGS. The headings in this Agreement are for the convenience of the parties only, and are in no way intended to define or limit the scope or interpretation of the Agreement or any provision hereof. 12.12 RELATIONSHIP. OPEN SKIES is an independent contractor and nothing in this Agreement shall render either party an employee, agent or partner of the other. Neither party shall be liable for the acts or omissions of the other. 12.13 ENTIRE AGREEMENT. This Agreement and its exhibits constitute the entire agreement between OPEN SKIES and Customer, and supersede any prior or contemporaneous communications, representations or agreements between the parties, whether oral or written, regarding the subject matter of this Agreement. Customer's additional or different terms and conditions shall not apply. The terms and conditions of this Agreement may not be changed except by an amendment signed by an authorized representative of each party. 12.14 APPLICABLE LAW. This Agreement is made under and shall be construed in accordance with the law of California without giving effect to that jurisdiction's choice of law rules. IN WITNESS WHEREOF, OPEN SKIES and Customer, each acting with proper authority, have caused this Agreement to be executed as of the date set forth below. SIGNED FOR AND ON BEHALF OF SIGNED FOR AND ON BEHALF OF CUSTOMER OPEN SKIES, INC. By: /s/ Constantino De Oliveira Junior By: /s/ Gordon Evans Name: Constantino De Oliveira Junior Name: Gordon Evans Title: President Title: Vice President Date: Date: GOL - 1-8-2001 ____________ ____________ Customer OPEN SKIES Initials Initials EXHIBIT A OPEN SKIES SERVICES, SOFTWARE & SUPPORT 1. INCLUDED SERVICES OPEN SKIES will provide certain services and support functions during the term of this Agreement related to the Host Reservations Services and related applicable products. 1.1 IMPLEMENTATION SERVICES AND SOFTWARE LICENSE 1.1.1 Data Center Implementation Services. OPEN SKIES will configure, install, activate and test the necessary data center hardware and software for providing the Reservation Services to the Customer. Unless otherwise specified, this service does not include communication circuits, wireless data services or any remote communication devices including routers, or network hardware. Client personal computers, workstations or other customer devices connected to the OPEN SKIES Reservation Services Hardware and Software are the responsibility of the Customer and must meet the minimum specifications as required by OPEN SKIES. 1.1.2 Network Configuration and Design Services. OPEN SKIES will supply recommended technical diagrams and will advise Customer on required network hardware requirements, as necessary. It is highly recommended that the Customer have internal or 3rd party network expertise available for the installation and configuration of their required network. 1.1.3 System Integration Services. During the implementation of Host Reservation Services and before production use of such services, OPEN SKIES will assist in the assessment of third party hardware & software to ensure compatibility with the OPEN SKIES Reservation Services Hardware and Software. The Customer shall be responsible for the cost of modifying or replacing any third party systems including hardware and software. Future integration services may be included on a cost estimated basis. 1.1.4 Customer Site Installation Services. OPEN SKIES will assist customer with the installation, testing of the required telecommunications connection between the OPEN SKIES designated data center, and the Customer designated facility. The Customer shall be responsible for the cost of troubleshooting or connecting of the Customer's internal network. Additional technical support for on-site assistance after the initial conversion for production use of the Host Reservation Services shall be quoted on a project basis at the request of the Customer. 1.1.5 Initial Training Services. OPEN SKIES will supply the following training for the Reservation Services: * Up to a maximum of five (5) days and up to ten (10) customer employees at the Open Skies Offices in Salt Lake City, Utah. Topics will include use of FlightSpeed, Airport Check-In, Irregular Operations, Flight Scheduling & Fare Maintenance, SkyLights and Reservations and Supervisory Features. Alternatively, at an additional cost OPEN SKIES will provide onsite training for this portion of Initial Training Services, providing that the training facility, equipment and environment is deemed comparable and acceptable by OPEN SKIES. Such arrangements must be pre-approved by OPEN SKIES in advance by written notice and are dependent on scheduling availability. All related expenses will be the responsibility of the Customer. * Customer must complete basic computer familiarization and Windows training for all trainees, before the initial training. * Up to five (5) days on-site with three (3) Open Skies employees, typically during cutover to the production Host Reservation Services. * Customer will be provided a maximum of one user reference manual set per attendee listed in initial training. Electronic copies are available upon request. Technical specification and technical reference manuals are for internal OPEN SKIES use only, unless otherwise specified in this Agreement or by other arrangement. All OPEN SKIES provided materials are in the GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] ----------- ----------- Customer OPEN SKIES Initials Initials English language unless otherwise specified within this Agreement. 1.1.6 Notification of Completion of Implementation Services. Upon completion of the Implementation Services as described in this Section 1, Exhibit A, OPEN SKIES will provide written notification to the Customer Account Liaison named in Exhibit D, Section 1.2. 1.1.7 The Software configured, installed, activated and tested under this section will be licensed to Customer during the term of this Agreement. 1.2 CONVERSION SERVICES <> 1.2.1 Passenger Name Records. OPEN SKIES will automatically convert and process the Customer's passenger name records into the OPEN SKIES Reservation Services Hardware and Software, if in an acceptable format as required by OPEN SKIES. Specifications for the required format may be provided by OPEN SKIES at request of the Customer. 1.2.2 Electronic Tickets (if Applicable). OPEN SKIES will automatically convert and process the Customer's existing electronic ticket records into the OPEN SKIES Reservation Services Hardware and Software, if in an acceptable format as required by OPEN SKIES. Specifications for the required format may be provided by OPEN SKIES at request of the Customer. 1.3 INCLUDED SUPPORT 1.3.1 RESPONSE CENTER SUPPORT. OPEN SKIES will include at no additional charge, English speaking, 24 hours a day and 7 days a week Response Center support via email, an Internet application or by telephone. This support is subject to the following levels: 1.3.2 HOURS. Non-emergency OPEN SKIES Response Center support is available during normal business hours (08:00 to 17:00 Mountain Standard Time, Monday-Friday, excluding Open Skies holidays). An English speaking OPEN SKIES Response Center Engineer will respond within 4 working hours of call origination. 1.3.3 INITIAL SUPPORT. Included in the first thirty- (30) days following the implementation of Host Reservation Services, Customer is allotted a maximum of (10) ten available hours of included Response Center support. This allotment of hours is for the specified period only and may not be carried forward. 1.3.4 BASIC SUPPORT. After the expiration of Initial Support, Customer is allotted a maximum of (5) five monthly hours of included Response Center support. This allotment of hours is for the specified period only and may not be carried forward. 1.3.5 SUPPORT RATE. Hours more than the applicable Initial or Basic Support for the Response Center will be invoiced at the rate specified in Exhibit B, Section 3. 1.3.6 AVAILABLE ASSISTANCE. The OPEN SKIES Response Center may be contacted for assistance in the following areas. All services are in English, unless otherwise specified in this Agreement. 1.3.6.1 EMERGENCY. An "Emergency" is defined as an aircraft incident or emergency on behalf of the Customer, a complete system outage or a system error in which the Customer cannot generate Electronic Reservations using the Host Reservation Services. System outages due to customer misuse of the system will incur support charges at the rate specified in Exhibit B, Section 3. - The OPEN SKIES Response Center Engineers may be reached, without charge, in the event of an emergency 24 hours daily and 7 days a week. - The Customer will be provided an emergency contact number that may be utilized for Emergency use only. The Customer will be requested to leave a message with a contact name and telephone number, in English, on the emergency response system. This will initiate an automatic remote notification to a qualified OPEN SKIES representative, based upon a pre-determined order of contact. The system will continue to call an OPEN SKIES representatives (at fifteen (15) second intervals) until it GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] ----------- ----------- Customer OPEN SKIES Initials Initials receives an answer. A representative of OPEN SKIES will return the Customer's call within (15) fifteen minutes. - Provided the Emergency is due to an outage of the Host Reservation Services, OPEN SKIES will advise Customer every (4) four hours regarding the status of the error or problem and the anticipated period to resolution. Senior OPEN SKIES management will be notified and briefed on the situation. - Customer is required to provide OPEN SKIES with an after-hours emergency contact number in Exhibit D, Section 1.1., which will be answered by the Customer when called by the support engineer. 1.3.6.2 ERROR REPORTING: Customer may report an identified Host Reservation Services error or "bug" at no additional cost. 1.3.6.3 GENERAL HELP. Customer may request application help or assistance for Host Reservation Services and products as specified in Exhibit A, Section 1.3. 1.3.6.4 REQUEST REPORTING. Customer may utilize the OPEN SKIES Internet support system to contact the OPEN SKIES Response Center electronically for the following service requests: - Enhancement requests - New product concepts or requests - Additional training requests - Consulting services These services are subject to the Service Fees as described in Exhibit B and are accepted at the discretion of OPEN SKIES. If the request is accepted by OPEN SKIES a price quote and time schedule will be generated. The Customer will then decide whether to authorize the work to be performed by OPEN SKIES. 1.3.6.5 DIRECT CONSULTATION. "Direct Consultation" is defined as Customer initiated contact directly to OPEN SKIES research & development personnel, thereby bypassing the OPEN SKIES Response Center. Direct Consultation will be invoiced at the rate described in Exhibit B. 2. INCLUDED PRODUCTS AND THIRD PARTY SOFTWARE 2.1 PRODUCT FEATURE AND FUNCTIONALITY DESCRIPTION 2.1.1 OPENRES (Hosted Reservations System Software Application & Database). Flight Speed Booking Engine Functions: - Integrated schedule/fare/availability display - Ability to retrieve availability displays and fares simultaneously - Ability to book/change/divide/cancel reservations - Complete PNR history - Books up to 40 passengers per PNR - Supports eight flight segments per passenger - Route fare table display - Passenger and PNR search by flight, date, name, telephone number, IATA number, ARC#, travel date, origin and/or destination city - Ignore record/changes capability - Reduce number in party - Easy to use Divide functionality - Unlimited PNR remarks to Database Capacity - Reservation holds for airline specified time frame - Optional assigned seating and advance boarding pass - Complete on-line agent help system - Application security at the agent level - Customer and travel agency profiles maintained on-line - Queuing system to queue PNRs between agents/department GOL-1-8-2001 ---------------- ---------------- Customer OPEN SKIES Initials Initials - - Increased Level of Passenger Security - bag tag numbers, numbers of bags, on board count - - Multiple Classes of Service - - Profile and Identify Passengers - at check-in and on printed manifest Revenue Accounting Features: - - Travel agency accounts receivable system - - Batch and on-line invoice printing - - Daily customer receipts reconciliation/balancing - - Flight revenue reporting - - Flight liability reporting - - Load factor by flight/date/week/month reporting - - Earned/unearned revenue reporting - - Revenue/mile report per segment - - Direct link credit card authorization and capture - - Form of payment reporting Airport Functionality: - - Agent Logon Security - - Aircraft Versions, for seating, as required - - Boarding Passes - - Canceled/Confirmed flight Passenger Lists, as required - - Check-in any number of passengers at a time, booked on same PNR - - Connection Name List - - Efficient, easy to use check-in program - - Flight Data and History, as required - - Flight manifest printing/faxing available - - Flight close/lock capability - - General Information Display - - Group PNR List, as required - - Inventory Display - - Non-Revenue Passenger List - - No-Show Passenger List - - On-Line Help Screens - - Passenger Check-In/Displays - - Receipt/invoice printing at ticket counter - - Seat Assignment Control - - Special Service Requests - - Third Party Handling Security, as required - - Unaccompanied Minor Information - - Support for internal messaging to other stations - - Optionally, supports pre-assigned seating or use of boarding cards, system generated check-in number - - Update flight information/following data, including Irregular Operations (IROP) - - Passenger Name List Displays - - Support for interfacing with SITA or ARINC messaging services - - Optional support for peripheral bag tag printing - - Optional support for peripheral boarding pass printing Flight Schedule Functions - - Build non-stop flight legs and Create direct/connecting flights with multiple flight legs, as required - - Ability to create direct/connecting flights from existing non-stop flight legs - - Change any flight segment (number, times, etc.) all on-line with automated Queuing and Protection GOL - 1-8-2001 [Illegible] [Illegible] --------------- ----------------- Customer OPEN SKIES Initials Initials - - Print flight schedules, as required - - Offline creation & modification ability prior to live activation Operations Functionality: - - Aircraft Version/Configuration/Data, as required - - AVS tables - Set AU's for CRSs and OpenRes independently - - Batch programs and Booking ranges - - Manifest reporting/PNL queuing capability for delayed flights - - "Get Smart" (GS) Direct Reference System - - Emergency Passenger Name List lock, as required - - Fares Maintenance - - Flight information control and display - - Group control, as required - - Historical Passenger Name List - - Historical No Show - - Inventory control - - Inventory maintenance - - Inventory reconciliation - - Load Factor Displays - - Management reports - - Office queue - - Pricing maintenance - - Security control - - System schedule maintenance - - Display of Through and Connecting Passengers - - Teletype messaging as required - - Delay code table Passenger Operation Functions: - - Air Carrier Information - policies and procedures - - Flight Following System - for station, operations and reservations agents - - Flight Schedule Database Management - O&D, begin/end dates, fares, taxes, PFCs - - Operations Reports - - System Administration Menus - on-demand reports, as required Reservations Functions: - - Auto Quality Control - to prevent PNR errors - - Daily Reservations File Database Management - - Easy-to-Learn and Use Reservations Screens - - Flight Availability/Flight Information - - Integrated Fare Quoting and Itinerary Pricing - - Itinerary Faxing capability - - Manual Override PNR Maintenance - by security logon - - Reservations Reports - - Travel Agency Database Management Stations Functions: - - Airport Add/Collects - cash, charge or combinations of other media - - Baggage Check-In and Positive Bag Match capability. - - Cash-out/Sales by Agent - - Check-In Passenger Functions - Easy-to-Use and Train - - Check-In and Booking for Airport Locations - - Flight Following Input and Retrieval GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] --------------- --------------- Customer OPEN SKIES Initials Initials - Historical Manifests - Historical No-Shows - Ability to create or modify PNR's real-time - Gender count reporting for weight and balance calculation 2.2 CREDIT CARD PROCESSING & SETTLEMENT INTERFACE Banks & Services. OPEN SKIES currently supports the following services for Authorization Services: - Card Types: OPEN SKIES currently supports VISA, American Express, MasterCard and Discover Card transactions. Not supported are debit cards, ATM cards other credit cards requiring an accompanying Personal Identification Number (PIN). - Authorization: VISANET - Settlement: U.S. Bank, or other OPEN SKIES approved bank or clearing service. Upon request, OPEN SKIES will provide specifications for settlement records, which are required for conformity by the Customer's selected bank. Data Circuits. Customer must arrange and pay for necessary circuits for authorization and settlement file transmissions. 2.2.1 GLOBAL DISTRIBUTION SYSTEM (GDS) INTERFACE:((IF APPLICABLE)) - Ability to accept/process IATA standard type-B booking requests - Guaranteed Ticketing Product with automated credit card approval through OpenRes - Ability to confirm CRS bookings with ticket number notification - Ability to auto-cancel or hold when payment not received, reply message sent to travel agency - Accept and process MVT messages for flight information updates - CRS notification of Automatic Schedule Change (ASC) messages - Teletype message send/receive - Teletype queue handling capability - Generation of outbound BSM messages - Handling of (a) name change (b) divide (c) initial booking (d) change (e) cancel requests - ARC/IATA number validation against agency table in OpenRes - Last seat availability - Automated credit file creation for cancellation requests - Creation of outgoing AVS messages - CRS/OpenRes record locator cross reference table Ticketed, Type B (as applicable): - Product availability for the following third party GDS: SABRE, Worldspan, Galileo, Amadeus and other distribution systems supporting the IATA AIRTIMP Type B message format. Customer is required to negotiate and maintain the appropriate agreements for this connectivity (typically full availability participation) - Supports the use of third party SITA network for transmission of high speed Type B messages - Host to host direct messaging capability with SABRE and Worldspan - Carrier must assume role for Agency Settlement Instant Pay (as applicable): - Currently available for the following third party GDS: SABRE, Worldspan and Galileo. Customer is required to negotiate and maintain the appropriate agreements for this connectivity - Requires a X.25 gateway (a PC with ICON interface card). - Supports credit card authorization via host - Allows for nightly, automated settlement processing of credit card transactions - Carrier must assume role for Agency Settlement 2.2.2 FLIGHT SPEED (Graphical User Interface for Reservations) Reservation Call Center: GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] -------------------- -------------------- Customer OPEN SKIES Initials Initials - Login/Logout - Password change (manual and automatic) - Scratch Pad - Online help - General Reference - Availability - automatically searches multi airport cities - Online calendar - Availability searches by (a) flight type (b) fare class (c) maximum fare (d) day of week - View available flights (a) sort flights by either time or type (b) view total price, person and total cost (c) view totals in multiple currencies (d) view flight rules (e) view manifest and standby lists (f) create a standby or overlook passenger (g) view flight following - Reserved flights (a) view tax break down for each flight/passenger (b) fare override - Enter passenger name, gender, title & special service code/infant. - Three address lines, four phone number fields - Name/Address retrieval capability from stored phone number - Ability to issue itinerary by (a) mail (b) fax (c) airport or send to airline email server - Forms of payment (a) credit cards (b)credit files (c) cash (d) check (e) Hold (f) agency, etc. - Ability to create credit shells and files. - Enter comments for (a) freeform (b) manifest (c) itinerary - Airline defined Mandatory comments entered automatically - Ability to create up to 6 default comments per category (a) freeform (b) manifest (c) itinerary - End Record - Retrieve PNR by reservation number, last record retrieved or last modified - Expired hold database search - Ability to restore PNR from Holds pending available inventory - PNR search capability to (a) name (b) phone number (c) credit card number (d) agency number (e) last 10 modified records (f) last 10 ended records (g) parent/child of a divided record (h) name and city pair (i) name and origin/destination (j) name and travel date - Flight Information Displays - Ability to create daily airline specific note pages for company updates - Send and process queues - Complete history of all changes to PNR - Delete passenger with no flown segments - Ability to inhibited passenger flown segment cancellation - Automatic payment verification (credit card confirmed, pending or declined) - Built in user security from server - Service fees - Print itinerary through OPEN SKIES approved printers - Credit history - Four customizable main screen backgrounds. - Main screen fonts and colors customizable. - Company-wide ability to access fully functional training system - Airline defined preferences (a) availability (b) name and address (c) payments (d) misc. 2.2.3 REVENUE MANAGEMENT SYSTEM General - Access database option supports up to 70 fare classes; SQL Server database option supports unlimited fare classes. - Supports up to three cabins per departure - Interfaces directly with information extracted from the OpenRes Reservation Services Hardware and Software - Optionally, capable of enabling system use of any ODBC capable database. Demand Forecasting: GOL - 1-8-2001 [Illegible] [Illegible] ___________ ___________ Customer OPEN SKIES Initials Initials - Probabilistic based - Uses historical current booking patterns - Influenced by seasonal booking patterns - Influenced by special events and holidays as specified by the user - Forecasts remaining demand, no-shows and go-shows by class Optimization Model: - Expected marginal seat revenue based - Optimizes inventory by leg, segment or network (OD) - Influenced by up-sell potential - Limited by user specified minimums, maximums and protection levels - Determines the optional authorization structure that maximizes revenue - Calculates the revenue improvement from recommended authorizations - Loads recommended authorizations automatically or waits for user approval Overbooking Model: - Uses remaining demand, no show, and go show forecasts - Controlled by user specified cost of voluntary and involuntary denied boarding. - Determines overbooking level that minimizes empty seat and denied boarding costs - Loads recommended overbooking levels automatically or waits for user approval Interactive Fare Control and Management Tool: - Creates, loads, modifies and discontinues fares in the OpenRes Reservation Services Hardware and Software - Allows user to maintain complete control of pricing, promotions, restrictions, etc. Interactive Decision Support Tools: - Group decision support and pricing tool - Competitive fare analysis tool for customers with ATPCO access - Forecast Analysis Tool - Advanced Ad hoc Report Generator - Advanced Ad hoc Graph Generator - Automatically prints, faxes or e-mails reports and graphs nightly as scheduled by user - Complete control of events, markets, security and system configuration - Performance and feedback reports let your airline track system results - Graphical agent communicates advice, warnings and status messages verbally to user - Extensive on-line user help system - Group decision support and pricing tool - Competitive fare analysis tool for customers with ATPCO access Interactive Optimization Analysis Tool: - Orders recommended authorizations by highest revenue opportunity - Sophisticated "what if" tool allows analysts to apply their own market knowledge 2.2.4 SKY LIGHTS INTERNET ONLINE BOOKING INTERFACE - Availability inquiries by city pair - Supports Internet Explorer and Netscape Browsers - Individual Date or Date Range searches - Secure credit card authorization and confirmation - Optional customization to match Customer's functional and graphical requirements - Concise booking process - Calendar and detail options GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] ------------ ------------- Customer OPEN SKIES Initials Initials - Receipt processing - Utilizes JavaScript - Supports multiple fare configurations: lowest fare per flight; Internet special fare; and multiple fares per flight. - Supports triangular flights and open-jaw flights and searches. 2.2.5 INFOPAK REPORTS (Standard preformatted) - AGENCY AGING REPORT: Displays travel agency reservations or all reservations with payment(s) past due. - AGENT COMMISSION: Displays all initial bookings, additions to reservation and cancellations by transaction date and currency. - BOOKING BY AGENT: Displays individual user booking performance by booking date(s). - BOOKINGS BY ORIGIN: Displays segments sold by originating city based on booking date. - CAPACITY/LID REPORT: This report displays capacity/lid inventory by flight date. - CAPACITY REPORT: Displays booking information by flight date and capacity or lid. - CHECK-IN REPORT: Displays the names/number of passengers booked and those that checked-in. - CITY PAIR EARNED/UNEARNED REVENUE REPORT: Displays summary/detail information by flight date, city pair, flight number and whether the reservation was booked directly with the airlines or a Travel Agency. - CREDIT BALANCE REPORT: Displays all reservations by booking date that are less than zero (i.e. credit balances). - CREDIT FILE COMMISSION REPORT: Displays all IATA and ARC record locators that have a Credit File entry. - CREDIT FILE REPORT: Displays all credit file entries by date, credit code and whether you want to see zero balances or not. - DAYS OUT BOOKING: Displays travel date statistics from a specific booking date. - DUPLICATE BOOKING REPORT: Displays passengers booked on more than one reservation for the same flight and date. - ENPLANEMENT/DEPLANEMENT REPORT: Displays the number of passengers enplaning/deplaning a city by flight date. - FEES/DISCOUNTS BY DATE REPORT: Displays date fees/discounts are entered. - FLIGHT CLOSE: Displays the final flight close-out generated by flight date and city pair - FLIGHT LINE REPORT: Displays passenger counts for an entire flight routing - FLIGHT LOAD REPORT: Displays how many passengers are boarding, traveling through and checked for a particular city by flight date. - FLIGHT MANIFEST: Displays all passengers booked on a particular flight by origin and destination. - FLIGHT SPECIFIC LOAD FACTOR: Displays the load factor for non-stop, direct and connecting passengers by flight date, origination city, destination city, flight number and load based on capacity or lid. - INVENTORY REPORT: Displays seats sold by flight date and flight number. - LOAD FACTOR SEARCH REPORT: Displays load factor for non-stop, thru and connecting passengers by flight date, load factor percentage, above or below load factor and capacity or lid. - PAYMENT BATCH REPORT: Displays payments by batch date. - PAYMENT RECEIPT REPORT: Displays all payment types entered by individual agents or all agents in a department. - PAYMENT REPORT BY AGENCY, CURRENCY AND TYPE: Displays payments for a specific agency or all agencies with an option to see a specific currency or all currencies by payment type. - PAYMENT SUMMARY/DETAIL REPORT: Displays summary/detail information about payments. - PAYMENT TOTALS: Displays all payment types entered for a requested date or date range. - PNR OUT OF BALANCE REPORT: Displays by currency, reservations, which have a credit or balance due. - PROCESS QUEUE REPORT: Displays itinerary printing information entered in the ticketing field. - REVENUE BY BOOKING: Reports number of seats and monetary amount booked, held and confirmed by booking date. - REVENUE BY FLIGHT DATE: Reports summary or detail revenue by flight date, earned, unearned or both and load based on capacity or lid. - REVENUE BY MILE: Reports base and gross revenue by seat mile generated by booking date. GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] -------------------- -------------------- Customer OPEN SKIES Initials Initials - SALES SUMMARY DETAIL REPORT: Displays summary/detail information of sales by payment date, department and if it is confirmed or unconfirmed. - SEAT REPORT: Displays seat assignments for a specific flight date, flight number, origin & destination. - SEATING ZONE REPORT: Displays seating location by row, flight date, flight number, origin & destination. - UNAPPROVED PAYMENTS: Displays all credit card payments, by payment date, that are currently pending or have been declined. - OTHER OPTIONAL OR CUSTOMER REPORTS: May be available or customizable at an additional charge. 2.3 THIRD PARTY SOFTWARE INCLUDED OPEN SKIES Supplied Third Party Software. OPEN SKIES will supply the following software within the Host Reservation Services at no additional cost to Customer: - Operating System Software. MPE/iX Software. - Relational Database Software. IMAGE/SQL. - Database Management Software Licenses. Adager Software. - Client Fax Server Software. Office Extended Fax (HP3000/Client) GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] --------------- --------------- Customer OPEN SKIES Initials Initials EXHIBIT B FEE SCHEDULE 1. SERVICE FEES 1.1 MONTHLY FEES
HOSTED OPENRES MONTHLY PASSENGERS BOARDED PASSENGER BOARDED FEE -------------------------- --------------------- 0 to 45,000 passengers boarded per month $*/month Next 40,000 passengers boarded per month $* Next 60,000 passengers boarded per month $* Next 80,000 passengers boarded per month $* Any additional passengers boarded per month $*
SKYSALES FEES
SKY SALES MONTHLY FLIGHTS BOOKED FLIGHT BOOKED FEE ---------------------- ----------------- 0 to 45,000 flights booked per month $* per flight booked Next 40,000 flights booked per month $* per flight booked Next 60,000 flights booked per month $* per flight booked Next 80,000 flights booked per month $* per flight booked Any additional flights booked per month $* per flight booked
SKYAGENT FEES
SKYAGENT MONTHLY FLIGHTS BOOKED FLIGHT BOOKED FEE ---------------------- ----------------- ~~Up to 60,000 Flights Booked per month $* / Flight Booked Next 40,000 Flights Booked per month $* / Flight Booked Any Additional Flights Booked per month $* / Flight Booked~~
SKYSEATS
MONTHLY SEATS ASSIGNED SKYSEATS FEE ---------------------- ----------------- ~~Up to 60,000 Seats Assigned per month $* / Seat Assigned Next 40,000 Seats Assigned per month $* / Seat Assigned Any Additional Seats Assigned per month $* / Seat Assigned~~
GOL - 1-8-2001 ILLEGIBLE ILLEGIBLE ------------- ------------- Customer OPEN SKIES Initials Initials SKYTIME MONTHLY FLIGHT INFO REQUESTS SKYTIME FEE Up to 60,000 Flight Info. Requests per month $*/Flight Info. Requests Next 40,000 Flight Info. Requests per month $*/Flight Info. Requests Any additional Flight Info. Requests per month $*/Flight Info. Request 1.2 MESSAGE CHARGES MESSAGES PER SEGMENT INCREASE IN SEGMENT RATE 0 to 19 * 20 to 39 * 40 to 59 * 60 to 79 * 80 to 99 * Greater than 100 * [ILLEGIBLE] [ILLEGIBLE] GOL-1-8-2001 ---------------- ---------------- Customer OPEN SKIES Initials Initials 2. PRODUCT FEES BASE PRODUCT FEES
SERVICE DESCRIPTION UNITS INCLUDED UNIT FEES IMPLEMENTATION OTHER FEES FEES* License to Use Host Reservation Services * * * Software with Flight Unlimited Users * Speed Graphical User * Interface Airport Check-In System Unlimited Users * * * Database Capacity 2 million PNR Records * Provided (Unique Record * * * Locator Numbers) * InfoPak Reports Unlimited Users * * *
OPTIONAL PRODUCT FEES
PRODUCT UNITS UNIT FEES IMPLEMENTATION OTHER FEES DESCRIPTION INCLUDED FEES* License to Use Revenue Unlimited $* License Use * * Management Users Fee System License to Use SkySales Internet Unlimited See Flight Booked * * Booking Interface Users Rate Chart SkyAgent Travel Unlimited $* License Use * * Agency Registration Users Fee And Booking Engine SkySeats Seat Unlimited $* License Use * * Assignment Module Users Fee SkyTime Flight Unlimited $* License Use * * Information Module Users Fee
* Excludes any customization of the product GOL-1-8-2001 [ILLEGIBLE] [ILLEGIBLE] ---------------- ---------------- Customer OPEN SKIES Initials Initials 3. SUPPORT FEES
OPEN SKIES FEES RESPONSE CENTER SUPPORT INITIAL SUPPORT: For first (30) days after implementation, (10) ten available hours of included Response Center Support. * BASIC SUPPORT: After Initial Support, (5) monthly available hours of included Response Center Support. * ADDITIONAL NORMAL HOURLY SUPPORT: Normal user support more than Initial or Base Support Hours or as otherwise described in this Agreement. * EXTENDED SUPPORT: Extended support for Revenue Management, Take Flight, Skylights, APIs, GDS Connectivity or Customer 3rd party systems or interfaces. * DIRECT CONSULTATION SUPPORT: Customer initiated contact directly to OPEN SKIES research & development personnel, thereby bypassing the OPEN SKIES Response Center. Direct * Consultation will be invoiced at this rate.
4. OTHER FEES
OPEN SKIES OTHER SERVICES FEES CUSTOM PROGRAMMING * DEDICATED ACCOUNT MANAGEMENT * BUSINESS PROCESS AND CONSULTING SERVICES *
5. PAYMENT OF IMPLEMENTATION AND INSTALLATION FEES. Immediately upon signing this Agreement, * * of all implementation and installation fees are due and payable. * percent (*%) will be due and payable upon system activation date for Host Reservation Services. The remaining balances of all implementation and installation fees are due and payable after the completion of the first 3 months of airline operations from the date of the first flight. [Illegible] [Illegible] GOL-1-8-2001 ---------------- ---------------- Customer OPEN SKIES Initials Initials 6. IMPLEMENTATION SERVICES TIMEFRAME: During the course of planning discussions related to this Agreement, OPEN SKIES acknowledges the "Target Dates" as requested by the Customer for completion of applicable portions of Implementation Services. These key dates are: - "FIRST PASSENGER BOOKING" (ACTIVATION OF HOST RESERVATION SERVICES FOR CUSTOMER CALL CENTER USE): TO BE DETERMINED - "FIRST FLIGHT" (ACTIVATION OF HOST RESERVATION SERVICES FOR CUSTOMER AIRPORT LOCATION USE): TO BE DETERMINED On the effective date of this Agreement, OPEN SKIES agrees to work with Customer, using best efforts to plan, coordinate and progress toward completion of the required Implementation Services within the timeframe preceding the Target Date(s). OPEN SKIES further agrees to initiate, mutually with the Customer, project-scope-analysis and project-planning communication to establish the final schedule for Implementation Services. The Customer understands these dates are objective dates, which are dependent on certain third-party agreements on behalf of both the Customer and OPEN SKIES. These third-party agreements may include but are not limited to the following as an example: - Airport Facility Use Agreements - All Telecommunications and Data Circuits - Credit Card Settlement and Authorization Agreements - Global Distribution System Agreements - Data Conversion Systems OPEN SKIES highly recommends that the Customer establish a primary Technical Project Manager contact who will be assigned to interact with the OPEN SKIES appointed Project Manager as soon as possible. Failure to appoint this individual may jeopardize the delivery of Implementation Services by OPEN SKIES. 7. FEE COMMENCEMENT FOLLOWING IMPLEMENTATION SERVICES: The following three scenarios will determine the commencement schedule for the remaining fees and monthly recurrent fees as outlined in Exhibit B of this Agreement. 7.1 COMPLETION OF IMPLEMENTATION SERVICES ON-TIME FOR TARGET DATES: Effective on the Target Date of the Customer's "First Passenger Booking" (availability of the Host Reservation Services for use by Customer), all remaining and applicable fees will commence as listed in Exhibit B. These fees will commence regardless of actual use of Host Reservation Services or subsequent delay by the Customer. 7.2 REQUESTED DELAY BY OPEN SKIES: In the event that OPEN SKIES requests a delay in order to complete remaining Implementation Services, the remaining applicable fees will commence only on the actual date of completion of Implementation Services. OPEN SKIES will provide written notice of the new planned Target Date(s) and outline remaining Implementation Services. 7.3 REQUESTED BY CUSTOMER: In the event the Customer requests a delay in the completion of the Implementation Services based on reasons out of the control of the Customer, the recurring fees as outlined in Exhibit B will be rescheduled in accordance to a mutually agreed project plan. Such requested delay may result in rescheduling portions or all of the remaining Implementation Services to the next available time frame as evaluated by OPEN SKIES, unless mutually agreed in writing otherwise. In the event the Customer requests a delay in the completion of the Implementation Services based on reasons within the control of Customer, the recurring fees as outlined in Exhibit B will remain effective. Such requested delay may result in rescheduling portions or all of the remaining Implementation Services to the next available time frame as evaluated by OPEN SKIES, unless mutually agreed in writing otherwise. OPEN SKIES reserves the right to apply additional installation fees as are necessary when rescheduling the Implementation Services due to Customer request if adequate notice is not provided OPEN SKIES. All fees as described in the Agreement and Exhibit B are to be applied based on the scheduled Target Dates. [Illegible] [Illegible] GOL - 1-8-2001 -------------- -------------- Customer OPEN SKIES Initials Initials EXHIBIT C OPEN SKIES CONTACTS 1. CUSTOMER CONTACTS OPEN SKIES agrees to provide contacts for the following areas. Customer should use these contacts as necessary. Customer contract to non-authorized OPEN SKIES personnel may result in Direct Consultation Fees as described in Exhibit B, Item 3. 1.1 OPEN SKIES RESPONSE CENTER CONTACT. The following number is to be utilized as described in Exhibit A, Section 1.3.1. (U.S.) TELEPHONE: (801) 947-7838 EMERGENCY: (801) 947-7855 1.2 COMMERCIAL ACCOUNT EXECUTIVE/LIAISON. OPEN SKIES agrees that the following individual is authorized to communicate with Customer on behalf of OPEN SKIES with respect to account management, project funding, performance and other commercial issues with respect to the Reservation Services: NAME: TIME FRIEND ADDRESS: 6322 SOUTH 3000 E., SALT LAKE CITY, UT 84121 TELEPHONE: (801) 947-7815 FACSIMILE: (801) 947-7811 E-MAIL: TFRIEND@OPENSKIES.COM 1.3 AUTHORIZED FINANCIAL CONTACT. Customer may contact OPEN SKIES finance department at the following telephone number or e-mail regarding payments, invoices or other financial issues: NAME: GEORGE BENEDICT PHONE: 801-947-7848 EMAIL: GBENEDICT@OPENSKIES.COM NAME GORDON EVANS PHONE: 801-947-7878 EMAIL: GEVANS@OPENSKIES.COM GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] ----------- ----------- Customer OPEN SKIES Initials Initials EXHIBIT D CUSTOMER CONTACTS 1. CUSTOMER CONTACTS 1.1 CUSTOMER EMERGENCY CONTACT. Customer agrees that the following number is available and will be answered after hours for OPEN SKIES use in case of an emergency related to the Host Reservation Services. Failure for OPEN SKIES to obtain an answer from this Emergency Contact will prevent OPEN SKIES from providing support during an emergency. This may cause the system to be unavailable until such time that an Customer Emergency Contact may be reached. TELEPHONE: 55-11-3848-7795 (DEDALUS: GOL APPLICATION AND DATA CENTER SOLUTION PROVIDER HELP-DESK) 1.2 CUSTOMER ACCOUNT EXECUTIVE/LIAISON. Customer agrees that the following individual is authorized to communicate with OPEN SKIES and make decisions on behalf of Customer with respect to account management, project funding, performance, payment and other commercial issues with respect to the Reservation Services: NAME: WILSON MACIEL RAMOS TITLE: VICE-PRESIDENT - ADMINISTRATION AND IT ADDRESS: AVENIDA DOM JAIME DE BARROS CAMARA, 300 PLANALTO 09895-400 SAO BERNARDO DO CAMPO/SP BRAZIL TELEPHONE: 55-11-4355-6502 FACSIMILE: 55-11-4355-6525 E-MAIL: wmramos@golnaweb.com.br 1.3 AUTHORIZED SUPPORT CONTACTS. Customer may designate up to three (3) Authorized Support Contacts. The Authorized Support Contacts shall be the only persons authorized to access OPEN SKIES' telephone and Internet technical support systems (described in Exhibit A) on behalf of Customer: - ------------------------------------------------------------------------------- NAME: MARIA ALICE GARCIA CAPPARELLI PHONE: 55-11-4355-6530 TITLE: I.T GENERAL MANAGER EMAIL: macapparelli@golnaweb.com.br - ------------------------------------------------------------------------------- GOL - 1-8-2001 [ILLEGIBLE INITIALS] [ILLEGIBLE INITIALS] -------------------- -------------------- Customer OPEN SKIES Initials Initials ___________________________________________________________________________ NAME: CARLOS ALBERTO PINHEIRO PHONE: 55 - 11 - 4355 - 6531 TITLE: SYSTEM MANAGER EMAIL: capinheiro@golnaweb.com.br --------------------------------------------------------------------------- NAME: DEDALUS.COM PHONE: 55 - 11 - 3848 - 7795 TITLE: GOL APPLICATION AND DATA EMAIL: noc@dedalus.com.br CENTER SOLUTION PROVIDER ___________________________________________________________________________ 1.4 CUSTOMER FINANCIAL/ACCOUNTS PAYABLE CONTACT. Customer agrees that the following individual(s) is(are) the proper accounting contracts to whom all invoices and accounting documents will be delivered to. These contacts we see to the timely payments of all invoices for services rendered under this agreement. NAME: WILSON MACIEL RAMOS TITLE: VICE-PRESIDENT - ADMINISTRATION AND IT ADDRESS: AVENIDA DOM JAIME DE BARROS CAMARA, 300 PLANALTO 09895-400 SAO BERNARDO DO CAMPO/SP BRAZIL TELEPHONE: 55 - 11 - 4355 - 6502 FACSIMILE: 55 - 11 4355 - 6525 E-MAIL: wmramos@golnaweb.com.br NAME: TITLE: ADDRESS: TELEPHONE: FACSIMILE: E-MAIL: GOL - 1-8-2001 [Illegible] [Illegible] ___________ ___________ Customer OPEN SKIES Initials Initials EXHIBIT E CUSTOMER RESPONSIBILITY CHECKLIST 1. HARDWARE & SOFTWARE This list may not be all-inclusive, depending on the technical requirements of the Customer. 1.1 CURRENT SOFTWARE VERSION UPGRADES Customer is required to maintain the latest version of supported OPEN SKIES and related third party software as directed by the OPEN SKIES Response Center. Upon receipt of upgraded software, newer versions or notification of third party software updates, Customer must update their software versions within 15 days. Failure to complete the advised upgrades may result in the suspension of Supplied Support as described in Exhibit A, Section 1.3. 1.2 EQUIPMENT SPECIFICATIONS The Equipment Specifications outline the required, supportable hardware and software necessary for proper function and efficient operation of the OPEN SKIES Host Reservation Services and applicable products. Unless otherwise specified in this Agreement, the equipment and software listed below are the responsibility of the Customer. Call Center PC/Workstation Minimum Requirements (for FlightSpeed). - Personal Computer with an Intel Pentium class processor (any speed greater than 300 Mhz). This includes Pentium, Pentium II and III class machines but excludes Celeron based systems or non-Intel brand based processors. - BIOS and Operating System must be year 2000 compliant - Minimum of 1 GB of hard disk space for operating system and OPEN SKIES software - Windows 95/98 operating system - 15" color SVGA monitor (minimum of 800x600 resolution). Recommend non-interlaced monitors. - Minimum of 64 Megabytes of RAM - 10/100 Network Interface Card (TCP/IP protocol) - Mouse or other Microsoft Compatible Pointing Device Airport PC/Workstation Minimum Requirements. - Personal Computer with an Intel Pentium class processor (any speed greater than 300 Mhz). This includes Pentium, Pentium II and III class machines but excludes Celeron based systems or non-Intel brand based processors. - BIOS and Operating System must be year 2000 compliant - Minimum of 1 GB of hard disk space for operating system and OPEN SKIES software - Windows 95/98 operating system - 15" color SVGA monitor (minimum of 800x600 resolution). Recommend non-interlaced monitors. - Minimum of 64 Megabytes of RAM - 10/100 Network Interface Card (TCP/IP protocol) - Mouse or other Microsoft Compatible Pointing Device - Terminal Emulation Software: Reflections (version 6.0 or higher); (or) Minisoft (version 320 32 bit) - Minimum of two serial ports Airport Peripheral Equipment <>. - - BAG TAG PRINTERS: Genicom UBI 201 Bag Tag Printer. A firmware upgrade to the printer through Genicom is required to support this OPEN SKIES product feature. Air Transport Association approved printer stock is required. The manufacturer of the printer may supply additional bag tag stock information GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] ------------ ------------- Customer OPEN SKIES Initials Initials and specification. - - BOARDING PASS PRINTERS: OPTION A. Intermec EzCoder 301 Card Stock Printer. The manufacturer may supply specifications for card stock as supported by this printer. OPTION B: Three-inch thermal roll printer (Citizen idP3210 or Epson Thermal Roll Printers). Specifications for thermal roll stock are available from the printer manufacturer. SkyLights Booking System Server, Minimum Requirements ((IF APPLICABLE)) - - Server class machine required, minimum processor type Intel Pentium III, 700 Mhz or greater - - IMPORTANT: Must be a dedicated, exclusive use PC server - - BIOS and Operating System must be year 2000 compliant - - Requires Windows NT 4.0 with Service Pack 5 installed running IIS 3+ or UNIX operating system - - Minimum of 256 Megabytes of RAM - - Minimum of 2 Gigabytes of hard disk space for operating system and software (RAID 5 Configuration is highly recommended) - - Network/firewall/router equipment and related software (as appropriate) - - Dedicated access to Internet with sufficient bandwidth for expected volume - - Secure Socket Layer encryption Key/Certificate (SSL). Service through VeriSign is recommended Web Hosting Server/Services, Minimum Requirements ((IF APPLICABLE)) - - This service is available from numerous third parties providing web hosting. - - It consists of the hosted system and site, which provides web access for the Customer's primary Internet website to the public. - - Necessary bandwidth for access to the Internet may require consultation with third party for appropriate sizing. Minimum of T1 access is recommended. Revenue Management System Server/Workstation Minimum Requirements. ((IF APPLICABLE)) - - IMPORTANT: Must be a dedicated, exclusive use PC Workstation/Server - - Microsoft Access database version: Windows 98 Recommended or alternatively Windows 95. Microsoft Access 98 or greater. - - SQL Server version: Windows NT Server 4.0 or higher with Service Pack 5 installed. Microsoft SQL Server version 7.0 or greater. - - 700MHz Intel Pentium III Processor with MMX (or faster-Windows NT can support additional processors) - - 128 MB RAM (or higher); AGP and PCI bus; 100-133 MHz FSB - - 19" Monitor (or larger) - - At least 18 GB IDE Hard Disk (Ultra66 or Wide SCSI/Ultra SCSI-2 recommended); Maximum of two partitions. RAID controllers and backup hardware devices recommended for NT systems. - - Minimum 8 MB 3D AGP Video Graphics Card - - 3D 64-Bit Sound Card with Speakers - - 10/100 MB Network Card (with 100 MB network, end to end) - - 56K Modem, with dedicated analog line or ISDN modem - - 3.5" Floppy Disk Drive - - 24X CD-ROM Drive - - Internal R/W CD ROM with CDs or an Internal 1 GB Iomega Jazz Drive with Jazz Disks - - 30-Minute capable UPS (Uninterrupted Power Supply) - - WinZip Decompression Software (version 7.0) - - Symantec pcAnywhere32 (version 8.0 or higher) - - Reflections Terminal Emulation Software (version 6.0 or higher) GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] ----------- ----------- Customer OPEN SKIES Initials Initials E-mail Server, Minimum Requirements < < IF APPLICABLE > > - BIOS and Operating System must be year 2000 compliant - Must be scalable and robust to handle anticipated e-mail volume for receipt e-mailing to passenger - Refer to e-mail software instructions and technical documentation for proper hardware configuration. - Customer may consider third party email hosting or email broadcast services available. Fax Server, Minimum Requirements < < IF APPLICABLE > > - BIOS and Operating System must be year 2000 compliant - Must be scalable and robust to handle anticipated fax volume for fax transmissions to passengers - Office Extend Fax Server Software recommended - Refer to fax software instructions for proper hardware configuration and sizing. Printers and Peripherals < < IF APPLICABLE > > - Customer should contact OPEN SKIES for recent information regarding supported printers and peripherals. Data Warehouse Workstation < < IF APPLICABLE > > - IMPORTANT: Must be a dedicated, exclusive use workstation - PC Workstation, 700 MHz Intel Pentium III Processor with MMX (or faster; or more CPUs) - BIOS and Operating System must be year 2000 compliant - 128 MB RAM (or higher) - Refer to query tool software instructions for proper hardware configuration and sizing. 1.3 THIRD PARTY SOFTWARE REQUIRED. Customer Supplied Third Party Software. Customer is required to purchase directly from providers other related third party software licenses necessary to use the Host Reservation Services, including the following: - Local Network Server Operating System(s) License: Windows NT 4.0, Novell or similar Operating System supporting TCP/IP protocols - Terminal Emulation Software: Reflections (version 6.0 or higher); (or) Minisoft (version 320 32 bit) on each client workstation requiring access to Reporting and Airport Check-In capabilities. - Print Spooling Software. Espul Software. Required for non-Jet Direct network printers. - Optional: Postal Code lookup software - Optional: Office Extend Fax (Fax server) 1.4 NETWORK HARDWARE, SOFTWARE AND DATA CIRCUITS. - Data Circuits. Customer must already have or must install the necessary equipment and circuits to support their primary call center sites and remote locations, including field stations. OPEN SKIES requires a LAN/WAN network supporting TCP/IP protocols. - Routers, DSU/CSUs and Modems. Customer should contact OPEN SKIES for recent information regarding supported routers and other network communication equipment. - IP Addressing. OPEN SKIES requires that all hosted Customers use Internet Registered IP addresses on all client workstations or devices that require connectivity to the OPEN SKIES Host Reservation Services. Alternatively, OPEN SKIES requires a NAT (Network Address Translation) router to be installed behind the OPEN SKIES gateway router. The NAT must then have the Internet Registered IP address. - Customer Provided Data Circuits. OPEN SKIES requires a review of the proposed primary or backup data circuit(s) prior to a third party agreement and installation. Where possible, OPEN SKIES will use reasonable effort to provide all necessary specifications and extend management of the data circuit as permitted by the Customer and the third party supplying the data circuit(s). GOL - 1-8-2001 [ILLEGIBLE] [ILLEGIBLE] -------------------- -------------------- Customer OPEN SKIES Initials Initials 1.5 CREDIT CARD PROCESSING & SETTLEMENT Banks & Services. OPEN SKIES currently supports the following services for Authorization Services: - Card Types: OPEN SKIES currently supports VISA, American Express, MasterCard and Discover Card transactions. Not supported are debit cards, ATM cards other credit cards requiring an accompanying Personal Identification Number (PIN). - Authorization: VISANET - Settlement: U.S. Bank, or other OPEN SKIES approved bank or clearing service. Upon request, OPEN SKIES will provide specifications for settlement records, which are required for conformity by the Customer's selected bank. Data Circuits. Customer must arrange and pay for necessary circuits for authorization and settlement file transmissions. 1.6 GLOBAL DISTRIBUTION SYSTEM PARTICIPATION AND DATA CIRCUITS Customer must negotiate and have in place, no later than 30 days prior to service, the necessary participating agreements with each of the OPEN SKIES supported Global Distribution Systems. Connection fees as described in Exhibit B and line charges may apply. 4 Hosted Services Agreement NAVITAIRE Inc. AMENDMENT NO. 1 TO NAVITAIRE HOSTED SERVICES AGREEMENT This Amendment No. 1 to the NAVITAIRE Hosted Services Agreement (this "Amendment"), effective as of DATE July 31, 2003, is entered into by and between NAVITAIRE Inc., a Delaware corporation and the successor by merger to Open Skies, Inc. ("NAVITAIRE"), ("NAVITAIRE"), and GOL Linhas Aeries Inteligentes, a Brazilian corporation ("Customer"). Initially capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Agreement (as defined below). A. Open Skies, Inc., a predecessor of NAVITAIRE, and Customer are parties to that certain NAVITAIRE Hosted Services Agreement dated as of October 6, 2000 (the "Agreement"), pursuant to which NAVITAIRE performs Hosted Services for Customer for services commencing January 8, 2001. B. Section 18.1 of the Agreement permits the parties to amend the terms and conditions of the Agreement provided such amendment is made in writing signed by the parties. C. NAVITAIRE and Customer desire to amend the terms of the Agreement as provided below. Accordingly, and in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 1. Amendment to Add the Check-In API functionality in GOL's Live account, as specified below. GOL IPR 28251: CHECK-IN API INTERFACE FOR GOL OPEN SKIES TO PROVIDE THE FOLLOWING FOR THE HOSTED CHECK-IN API: Check-In access from the GOL Production Environment Check-In access from the GOL Test Environment Documentation Support Desk access for any issues related to the API, subject to terms of current contract IMPLEMENTATION US$* (Please note the second API to be implemented is a $* fee.) MONTHLY API INFRASTRUCTURE HOSTING FEE (THIS IS APPLICABLE PER API)
TOTAL MONTHLY HOSTED SEGMENTS COST - ----------------------------- ---- 0-500,000 US$ * 500,001-1,500,000 US$ * 1,500,001+ US$ *
1 Hosted Services Agreement NAVITAIRE Inc. This fee is in addition to the standard Host Reservations charges. 2. NO OTHER CHANGES. Except as specifically amended by this Amendment, all other provisions of the Agreement remain in full force and effect. This Amendment shall not constitute or operate as a waiver of, or estoppel with respect to, any provisions of the Agreement by any party hereto. 3. COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. 4. SUCCESSORS AND ASSIGNS. This Amendment shall inure to the benefit of and be binding upon NAVITAIRE and the Customer and their respective successors, heirs and assigns. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written. NAVITAIRE INC. By: /s/ illegible signature ---------------------------------- Its: CEO --------------------------------- CUSTOMER By: /s/ illegible signature ---------------------------------- Its: --------------------------------- Airline: ----------------------------- 2 Hosted Services Agreement NAVITAIRE Inc. AMENDMENT NO. 2 TO NAVITAIRE HOSTED SERVICE AGREEMENT This Amendment No. 2 to the NAVITAIRE Hosted Services Agreement (this "Amendment"), effective as of November 1, 2003, is entered into by and between NAVITAIRE Inc., a Delaware corporation and the successor by merger to Open Skies, Inc. ("NAVITAIRE"), ("NAVITAIRE"), and Gol Transportes Aereos S.A. (formerly known as Gol Transportes Aereos Ltda.), a Brazilian corporation ("Customer"). Initially capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Agreement (as defined below). A. Open Skies, Inc., a predecessor of NAVITAIRE, and Customer are parties to that certain NAVITAIRE Hosted Services Agreement dated as of October 6, 2000 (the "Agreement"), pursuant to which NAVITAIRE performs Hosted Services for Customer for services commencing January 8, 2001. B. Section 18.1 of the Agreement permits the parties to amend the terms and conditions of the Agreement provided such amendment is made in writing signed by the parties. C. NAVITAIRE and Customer desire to amend the terms of the Agreement as provided below. Accordingly, and in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 1 Amendment to add the Booking API functionality in GOL's Live account, as specified below. GOL IPR 19525: API QUESTIONS GOL IPR 32968: WE'D LIKE TO TAKE THE (BOOKING) API LIVE OPEN SKIES TO PROVIDE THE FOLLOWING FOR THE HOSTED BOOKING API: - -------------------------------------------------------------------------------- Booking API access from the GOL Production Environment - -------------------------------------------------------------------------------- Booking API access from the GOL Test Environment - -------------------------------------------------------------------------------- Documentation - -------------------------------------------------------------------------------- Support Desk access for any issues related to the API, subject to terms of current contract - -------------------------------------------------------------------------------- IMPLEMENTATION US$ * (Please note that this is the second API to be implemented at Customer, and therefore incurs a $* fee instead of the customary $15,000 fee.) MONTHLY API INFRASTRUCTURE HOSTING FEE - -------------------------------------------------------------------------------- TOTAL MONTHLY HOSTED SEGMENTS COST - -------------------------------------------------------------------------------- 0-500,000 US$ * - -------------------------------------------------------------------------------- 500,001-1,500,000 US$ * - -------------------------------------------------------------------------------- 1,500,001+ US$ * - -------------------------------------------------------------------------------- This fee is in addition to the standard Host Reservations charges; as well as the Skylights booking charge as documented in the Hosted Reservations Services agreement. Booking API transactions are subject to segment fees and Skylights segment fees, per the existing contract. [SEAL - SAOGJ Aprovado GOL] 1 Hosted Services Agreement NAVITAIRE Inc. API TRANSACTION THRESHOLD As the API is not intended for robotic processes or low fare search by the third parties, Navitaire will charge an incremental $* per transaction for any transactions exceeding a 20 to 1 look-to-book ratio. 2 NO OTHER CHANGES. Except as specifically amended by this Agreement, all other provisions of the Agreement remain in full force and effect. This Amendment shall not constitute or operate as a waiver, or estoppel with respect to, any provisions of the Agreement by any party hereto. 3 COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. 4 SUCCESSORS AND ASSIGNS. This Amendment shall inure to the benefit of and be binding upon NAVITAIRE and the Customer and their respective successors, heirs and assigns. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written. NAVITAIRE INC. By: [ILLEGIBLE SIGNATURE] ------------------------ Title: CEO --------------------- Date: December 10, 2003 ---------------------- CUSTOMER By: [ILLEGIBLE SIGNATURE] ------------------------ Title: PRESIDENT --------------------- Airline: [ILLEGIBLE] ------------------- Date: December 2nd, 2003 ---------------------- [SAOGJ -ABROVADO- GOL SEAL] 2 OPPENHEIMER: 1487412 v01 09/25/2003 Hosted Services Agreement NAVITAIRE Inc. AMENDMENT NO. 3 TO NAVITAIRE HOSTED SERVICES AGREEMENT This Amendment No. 3 to the Open Skies, Inc. Reservation Services and Software License Use Agreement (this "Amendment"), effective as of November 1, 2003, is entered into by and between NAVITAIRE Inc., a Delaware corporation and the successor by merger to Open Skies, Inc. ("NAVITAIRE"), ("NAVITAIRE"), and GOL Transportes Aereos S.A. (formerly known as GOL Transportes Aereos Ltda.), a Brazilian corporation ("Customer"). Initially capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in the Agreement (as defined below). A. Open Skies, Inc., a predecessor of NAVITAIRE, and Customer are parties to that certain Open Skies, Inc. Reservation Services and Software License Use Agreement dated as of October 6, 2000 (the "Agreement"), pursuant to which NAVITAIRE performs Hosted Services for Customer for services commencing January 8, 2001. B. Section 18.1 of the Agreement permits the parties to amend the terms and conditions of the Agreement provided such amendment is made in writing signed by the parties. C. NAVITAIRE and Customer desire to amend the terms of the Agreement as provided below. Accordingly, and in consideration of the foregoing, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree as follows: 1 AMENDMENT REGARDING REVENUE MANAGEMENT SERVICES. In lieu of the Revenue Management Services stated in the Agreement, NAVITAIRE will provide Customer with Hosted Revenue Management Services. Options to use O&D will be discussed as a separate agreement after completion of the O&D pilot project that is in progress. Optimizing by O&D may incur additional charges. NAVITAIRE will work with Customer to structure the O&D optimization such that Customer's business needs are met without incurring additional O&D fees. NAVITAIRE TO PROVIDE THE FOLLOWING FOR THE HOSTED REVENUE MANAGEMENT SERVICES: Installation and transfer to a hosted environment, including 8 days of web training Access from GOL's production environment Documentation Support Desk access for any issues subject to terms of current contract IMPLEMENTATION FEES US$ * These Implementation Fees assume that all staff work from their respective home offices throughout the installation. Implementation is expected to be completed by February 1, 2004. GOL is responsible for timely delivery of quality data from their current system. [SAOGJ Aprovado GOL SEAL] Hosted Services Agreement NAVITAIRE Inc. MONTHLY RECURRING SERVICE FEES - REVENUE MANAGEMENT SERVICES/PRODUCTS
HOSTED REVENUE MANAGEMENT SERVICES RMS ------------------- PER HOSTED BOARDED MONTHLY BOARDED PASSENGER TIER PASSENGER - ------------------------------ ------------------- First 500,000 monthly Boarded Passengers $* US per Boarded Passenger 500,001 and higher monthly Boarded Passengers $* US per Boarded Passenger
This fee schedule replaces the license RMS fee schedule in Exhibit B, Section 2 of the current Agreement. SERVICE LEVEL AND PENALTIES Penalty measurement will commence 30 days after completion of the installation. 1. Delivery of Forecast, Business *% of the data delivers complete by Statistics, and Recommendations 8:00am in the time zone of GOL headquarters (Brazil) receiving the results, averaged over a 90-day period, with the exception of mutually agreed upon scheduled downtime for system maintenance. 2. Availability of the User Interface *% of the scheduled availability, averaged over a 90-day period. Scheduled availability is from 8:00am to 6:00pm in the time zone of GOL headquarters (Brazil) Monday through Friday, and Saturday and Sunday as agreed upon, with the exception of mutually agreed upon scheduled downtime for system maintenance. PERFORMANCE STANDARDS NAVITAIRE will make commercially reasonable best efforts to achieve the Service Levels as described above. Deliverable 1 above will be measured based upon each calendar day. Should NAVITAIRE fail to deliver the appropriate data by the agreed to time, that day would be considered a failed delivery. For each day missed that falls below the agreed to service level, NAVITAIRE will credit GOL * of the standard monthly ASP Service Fee. Deliverable 2 above will be measured based on minutes of system availability during the defined business day. For each minute missed that falls below the agreed to service level, NAVITAIRE will credit GOL with * of the standard monthly ASP Service Fee (* hours per day, * business days per month). In no event shall these credits exceed * for any single day and * percent (*%) of the total monthly fee for any single month. 2 Hosted Services Agreement NAVITAIRE INC. This service level will be measured on a quarterly basis with the NAVITAIRE Account Manager responsible for reporting relevant information by the 5th business day of the month following the relevant quarter (as an example, the 5th of April, July, October and January for calendar quarters). Credits will be applied to the following month's invoice for Revenue Management Services. 2 NO OTHER CHANGES. Except as specifically amended by this Amendment, all other provisions of the Agreement remain in full force and effect. This Amendment shall not constitute or operate as a waiver of, or estoppel with respect to, any provisions of the Agreement by any party hereto. 3 COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement. 4 SUCCESSORS AND ASSIGNS. This Amendment shall inure to the benefit of and be binding upon NAVITAIRE and the Customer and their respective successors, heirs and assigns. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written. NAVITAIRE INC. By: [ILLEGIBLE] ---------------------------- Title: CEO ------------------------- CUSTOMER By: [ILLEGIBLE] ---------------------------- Title: ------------------------- AIRLINE: ----------------------- [SEAL - SAOGJ - Aprovado - GOL] [ILLEGIBLE] [ILLEGIBLE] [ILLEGIBLE] 3 EX-10.4 8 y97722a2exv10w4.txt AIRCRAFT PURCHASE AGREEMENT EXHIBIT 10.4 AIRCRAFT GENERAL TERMS AGREEMENT AGTA-GOT BETWEEN THE BOEING COMPANY AND GOL TRANSPORTES AEREOS SA TABLE OF CONTENTS
PAGE ARTICLES NUMBER -------- ------ 1. Subject Matter of Sale 1 2. Price, Taxes and Payment 1 3. Regulatory Requirements and Certificates 3 4. Detail Specification; Changes 4 5. Representatives, Inspection, Demonstration Flights, Test Data and Performance Guarantee Compliance 4 6. Delivery 5 7. Excusable Delay 5 8. Risk Allocation/Insurance 7 9. Assignment, Resale or Lease 8 10. Termination for Certain Events 9 11. Notices 10 12. Miscellaneous 10 EXHIBITS A Buyer Furnished Equipment Provisions Document B Customer Support Document C Product Assurance Document APPENDICES I Insurance Certificate II Purchase Agreement Assignment III Post-Delivery Sale Notice IV Post-Delivery Lease Notice V Purchaser's/Lessee's Agreement VI Owner Appointment of Agent - Warranties VII Contractor Confidentiality Agreement
i AIRCRAFT GENERAL TERMS AGREEMENT NUMBER AGTA-GOT between The Boeing Company and GOL Transportes Aereos SA Relating to BOEING AIRCRAFT This Aircraft General Terms Agreement Number AGTA-GOT (AGTA) between The Boeing Company, including its wholly-owned subsidiary McDonnell Douglas Corporation, (BOEING) and GOL Transportes Aereos SA (CUSTOMER) will apply to all Boeing aircraft contracted for purchase from Boeing by Customer after the effective date of this AGTA. Article 1. Subject Matter of Sale. 1.1 Aircraft. Boeing will manufacture and sell to Customer and Customer will purchase from Boeing aircraft under purchase agreements that incorporate the terms and conditions of this AGTA. 1.2 Buyer Furnished Equipment. Exhibit A, Buyer Furnished Equipment Provisions Document to the AGTA, contains the obligations of Customer and Boeing with respect to equipment purchased and provided by Customer, which Boeing will receive, inspect, store, and install in an aircraft before delivery to Customer. This equipment is defined as BUYER FURNISHED EQUIPMENT (BFE). 1.3 Customer Support. Exhibit B, Customer Support Document to the AGTA, contains the obligations of Boeing relating to Materials (as defined in Part 3 thereof), training, services, and other things in support of aircraft. 1.4 Product Assurance. Exhibit C, Product Assurance Document to the AGTA, contains the obligations of Boeing and the suppliers of equipment installed in each aircraft at delivery relating to warranties, patent indemnities, software copyright indemnities, and service life policies. Article 2. Price, Taxes, and Payment. 2.1 Price. 2.1.1 AIRFRAME PRICE is defined as the price of the airframe for a specific model of aircraft described in a purchase agreement. (For Models 717-200, 737-600, 737-700, 737-800, 737-900, 777-200LR and 777-300ER the Airframe Price includes the engine price at its basic thrust level.) - 1 - 2.1.2 OPTIONAL FEATURES PRICES are defined as the prices for optional features selected by Customer for a specific model of aircraft described in a purchase agreement. 2.1.3 ENGINE PRICE is defined as the price set by the engine manufacturer for a specific engine to be installed on the model of aircraft described in a purchase agreement (not applicable to Models 717-200, 737-600, 737-700, 737-800, 737-900, 777-200LR and 777-300ER). 2.1.4 AIRCRAFT BASIC PRICE is defined as the sum of the Airframe Price, Optional Features Prices, and the Engine Price, if applicable. 2.1.5 ESCALATION ADJUSTMENT is defined as the price adjustment to the Airframe Price (which includes the basic engine price for Models 717-200, 737-600, 737-700 737-800, 737-900, 777-200LR and 777-300ER) and the Optional Features Prices resulting from the calculation using the economic price formula contained in the Airframe and Optional Features Escalation Adjustment supplemental exhibit to the applicable purchase agreement. The price adjustment to the Engine Price for all other models of aircraft will be calculated using the economic price formula in the Engine Escalation Adjustment supplemental exhibit to the applicable purchase agreement. 2.1.6 ADVANCE PAYMENT BASE PRICE is defined as the estimated price of an aircraft rounded to the nearest thousand U. S. dollars, as of the date of signing a purchase agreement, for the scheduled month of delivery of such aircraft using commercial forecasts of the Escalation Adjustment. 2.1.7 AIRCRAFT PRICE is defined as the total amount Customer is to pay for an aircraft at the time of delivery, which is the sum of the Aircraft Basic Price, the Escalation Adjustment, and other price adjustments made pursuant to the purchase agreement. 2.2 Taxes. 2.2.1 Taxes. TAXES are defined as all taxes, fees, charges, or duties and any interest, penalties, fines, or other additions to tax, including, but not limited to sales, use, value added, gross receipts, stamp, excise, transfer, and similar taxes imposed by any domestic or foreign taxing authority, arising out of or in connection with the performance of the applicable purchase agreement or the sale, delivery, transfer, or storage of any aircraft, BFE, or other things furnished under the applicable purchase agreement. Except for UNITED STATES income taxes and WASHINGTON STATE business and occupation taxes imposed on Boeing or Boeing's assignee, Customer will be responsible for and pay all Taxes. Customer is responsible for filing all tax returns, reports, declarations and payment of any Taxes related to or imposed on BFE. 2.2.2 Reimbursement of Boeing. Customer will promptly reimburse Boeing on demand, net of additional taxes thereon, for any Taxes that are imposed on and paid by Boeing or that Boeing is responsible for collecting. If Customer disputes the payment of any - 2 - taxes payable by Boeing for which Customer is responsible under this Agreement, Boeing will consider with Customer the taking of such action as Customer may reasonably request. 2.3 Payment. 2.3.1 Advance Payment Schedule. Customer will make advance payments to Boeing for each aircraft in the amounts and on the dates indicated in the schedule set forth in the applicable purchase agreement. 2.3.2 Payment at Delivery. Customer will pay any unpaid balance of the Aircraft Price at the time of delivery of each aircraft. 2.3.3 Form of Payment. Customer will make all payments to Boeing by unconditional wire transfer of immediately available funds in United States Dollars in a bank account in the United States designated by Boeing. 2.3.4 Monetary and Government Regulations. Customer is responsible for complying with all monetary control regulations and for obtaining necessary governmental authorizations related to payments. Article 3. Regulatory Requirements and Certificates. 3.1 Certificates. Boeing will manufacture each aircraft to conform to the appropriate Type Certificate issued by the United States Federal Aviation Administration (FAA) for the specific model of aircraft and will obtain from the FAA and furnish to Customer at delivery of each aircraft either a Standard Airworthiness Certificate or an Export Certificate of Airworthiness issued pursuant to Part 21 of the Federal Aviation Regulations. 3.2 FAA or Applicable Regulatory Authority Manufacturer Changes. 3.2.1 A MANUFACTURER CHANGE is defined as any change to an aircraft, data relating to an aircraft, or testing of an aircraft required by the FAA to obtain a Standard Airworthiness Certificate, or by the country of import and/or registration to obtain an Export Certificate of Airworthiness. A Manufacturer's Change does not include a Boeing failure to incorporate changes required under FAA regulations. Any issue regarding a defect in design, materials, or workmanship, are the subject of the Boeing Product Assurance Exhibit C to this AGTA. 3.2.2 Boeing will bear the cost of incorporating all Manufacturer Changes into the aircraft: (i) resulting from requirements issued by the FAA prior to the date of the Type Certificate for the applicable aircraft; (ii) resulting from requirements issued by the FAA prior to the date of the applicable purchase agreement; and - 3 - (iii) for any aircraft delivered during the 24 month period immediately following the date of the applicable purchase agreement (regardless of when the requirement for such change was issued by the FAA). 3.2.3 Customer will pay Boeing's charge for incorporating all other Manufacturer Changes into the aircraft resulting from an FAA regulation change, including all changes for validation of an aircraft required by any governmental agency of the country of import and/or registration. 3.3 FAA Operator Changes. 3.3.1 An OPERATOR CHANGE is defined as a change in equipment that is required by Federal Aviation Regulations which (i) is generally applicable to transport category aircraft to be used in United States certified air carriage and (ii) the required compliance date is on or before the scheduled delivery month of the aircraft. 3.3.2 Boeing will deliver each aircraft with Operator Changes incorporated or, at Boeing's option, with suitable provisions for the incorporation of such Operator Changes, and Customer will pay Boeing's applicable charges. 3.4 Export License. If an export license is required by United States law or regulation for any aircraft or any other things delivered under the purchase agreement, it is Customer's obligation to obtain such license. As requested, and at Boeing's expense, Boeing will assist Customer in applying for and obtaining any such export license. Customer will furnish any required supporting documents. Article 4. Detail Specification; Changes. 4.1 Configuration Changes. The DETAIL SPECIFICATION is defined as the Boeing document that describes the configuration of each aircraft purchased by Customer. The Detail Specification for each aircraft may be amended (i) by Boeing to reflect the incorporation of Manufacturer Changes and Operator Changes or (ii) by the agreement of the parties. In either case the amendment will describe the particular changes to be made and any effect on design, performance, weight, balance, scheduled delivery month, Aircraft Basic Price, Aircraft Price, and/or Advance Payment Base Price. 4.2 Development Changes. DEVELOPMENT CHANGES are defined as changes to aircraft that do not affect the Aircraft Price or scheduled delivery month, and do not adversely affect guaranteed weight, guaranteed performance, or compliance with the interchangeability or replaceability requirements set forth in the applicable Detail Specification. Boeing may, at its option, incorporate Development Changes into the Detail Specification and into an aircraft prior to delivery to Customer. 4.3 Notices. Boeing will promptly notify Customer of any amendments to a Detail Specification. - 4 - Article 5. Representatives, Inspection, Demonstration Flights, Test Data and Performance Guarantee Compliance. 5.1 Office Space. Twelve months before delivery of the first aircraft purchased, and continuing until the delivery of the last aircraft on firm order of each purchase agreement, Boeing will furnish, free of charge, suitable office space and equipment for the accommodation of up to three representatives of Customer in or conveniently located near the assembly plant. 5.2 Inspection. Customer's representatives may inspect each aircraft at any reasonable time, provided such inspection does not interfere with Boeing's performance. 5.3 Demonstration Flights. Prior to delivery, Boeing will fly each aircraft up to 4 hours to demonstrate to Customer the function of the aircraft and its equipment using Boeing's production flight test procedures. Customer may designate up to five representatives to participate as observers. 5.4 Test Data; Performance Guarantee Compliance. PERFORMANCE GUARANTEES are defined as the written guarantees in a purchase agreement regarding the operational performance of an aircraft. Boeing will furnish to Customer flight test data obtained on an aircraft of the same model to evidence compliance with the Performance Guarantees. Performance Guarantees will be met if reasonable engineering interpretations and calculations based on the flight test data establish that the particular aircraft being delivered under the applicable purchase agreement would, if actually flown, comply with the guarantees. 5.5 Special Aircraft Test Requirements. Boeing may use an aircraft for flight and ground tests prior to delivery, without reduction in the Aircraft Price, if the tests are considered necessary by Boeing (i) to obtain or maintain the Type Certificate or Certificate of Airworthiness for the aircraft or (ii) to evaluate potential improvements that may be offered for production or retrofit incorporation, and (iii) do not, without Customer approval, exceed four (4) flight test hours or six (6) ground test hours. Article 6. Delivery. 6.1 Notices of Delivery Dates. Boeing will notify Customer of the approximate delivery date of each aircraft at least 30 days before the scheduled month of delivery and again at least 14 days before the scheduled delivery date. 6.2 Place of Delivery. Each aircraft will be delivered at a facility selected by Boeing in the same state as the primary assembly plant for the aircraft. 6.3 Bill of Sale. At delivery of an aircraft, Boeing will provide Customer a bill of sale conveying good title, free of encumbrances. 6.4 Delay. Customer may, with not less than 14 days notice, delay delivery of an aircraft by not more than 5 calendar days beyond Boeing's scheduled delivery date as long as any such delay will not, in any event, cause the delivery of such aircraft to then occur in a month - 5 - later than that previously scheduled and agreed upon. If Customer delays acceptance of an aircraft beyond the scheduled delivery date, or such Customer delay, Customer will reimburse Boeing for all costs incurred by Boeing as a result of the delay. - 6 - Article 7. Excusable Delay. 7.1 General. Boeing will not be liable for any delay in the scheduled delivery month of an aircraft or other performance under a purchase agreement caused by (i) acts of God; (ii) war or armed hostilities; (iii) government acts or priorities; (iv) fires, floods, or earthquakes; (v) strikes or labor troubles causing cessation, slowdown, or interruption of work; (vi) inability, after due and timely diligence, to procure materials, systems, accessories, equipment or parts; or (vii) any other cause to the extent such cause is beyond Boeing's control and not occasioned by Boeing's fault or negligence. A delay resulting from any such cause is defined as an EXCUSABLE DELAY. 7.2 Notice. Boeing will give written notice to Customer (i) of a delay as soon as Boeing concludes that an aircraft will be delayed beyond the scheduled delivery month due to an Excusable Delay and, when known, (ii) of a revised delivery month based on Boeing's appraisal of the facts. 7.3 Delay in Delivery of Twelve Months or Less. If the revised delivery month is 12 months or less after the scheduled delivery month, Customer will accept such aircraft when tendered for delivery, subject to the following: 7.3.1 The calculation of the Escalation Adjustment will be based on the previously scheduled delivery month. 7.3.2 The advance payment schedule will be adjusted to reflect the revised delivery month. 7.3.3 All other provisions of the applicable purchase agreement, including the BFE on-dock dates for the delayed aircraft, are unaffected by an Excusable Delay. 7.4 Delay in Delivery of More Than Twelve Months. If the revised delivery month is more than 12 months after the scheduled delivery month, either party may terminate the applicable purchase agreement with respect to such aircraft within 30 days of the notice. If either party does not terminate the applicable purchase agreement with respect to such aircraft, all terms and conditions of the applicable purchase agreement will remain in effect. 7.5 Aircraft Damaged Beyond Repair. If an aircraft is destroyed or damaged beyond repair for any reason before delivery, Boeing will give written notice to Customer specifying the earliest month possible, consistent with Boeing's other contractual commitments and production capabilities, in which Boeing can deliver a replacement. Customer will have 30 days from receipt of such notice to elect to have Boeing manufacture a replacement aircraft under the same terms and conditions of purchase, except that the calculation of the Escalation Adjustment will be based upon the scheduled delivery month in effect immediately prior to the date of such notice, or, failing such election, the applicable purchase agreement will terminate with respect to such aircraft. Boeing will not be obligated to manufacture a replacement aircraft if reactivation of the production line for the specific model of aircraft would be required. - 7 - 7.6 Termination. Termination under this Article will discharge all obligations and liabilities of Boeing and Customer with respect to any aircraft and all related undelivered Materials (as defined in Exhibit B, Customer Support Document), training, services, and other things terminated under the applicable purchase agreement, except that Boeing will return to Customer, without interest, an amount equal to all advance payments paid by Customer for the aircraft. If Customer terminates the applicable purchase agreement as to any aircraft, Boeing may elect, by written notice to Customer within 30 days, to purchase from Customer any BFE related to the aircraft at the invoice prices paid, or contracted to be paid, by Customer. 7.7 Exclusive Rights. The termination rights in this Article are in substitution for all other rights of termination or any claim arising by operation of law due to delays in performance covered by this Article. Article 8. Risk Allocation/Insurance. 8.1 Title and Risk with Boeing. 8.1.1 Boeing's Indemnification of Customer. Until transfer of title to an aircraft to Customer, Boeing will indemnify and hold harmless Customer and Customer's observers from and against all claims and liabilities, including all expenses and attorneys' fees incident thereto or incident to establishing the right to indemnification, for injury to or death of any person(s), including employees of Boeing but not employees of Customer, or for loss of or damage to any property, including an aircraft, arising out of or in any way related to the operation of an aircraft during all demonstration and test flights conducted under the provisions of the applicable purchase agreement, whether or not arising in tort or occasioned by the negligence of Customer or any of Customer's observers. 8.1.2 Definition of Customer. For the purposes of this Article, "Customer" is defined as GOL Transportes Aereos SA, its divisions, subsidiaries, affiliates, the assignees of each, and their respective directors, officers, employees, and agents. 8.2 Insurance. 8.2.1 Insurance Requirements. Customer will purchase and maintain insurance acceptable to Boeing and will provide a certificate of such insurance that names Boeing as an additional insured for any and all claims and liabilities for injury to or death of any person or persons, including employees of Customer but not employees of Boeing, or for loss of or damage to any property, including any aircraft, arising out of or in any way relating to Materials, training, services, or other things provided under Exhibit B of the AGTA, which will be incorporated by reference into the applicable purchase agreement, whether or not arising in tort or occasioned by the negligence of Boeing, except with respect to legal liability to persons or parties other than Customer or Customer's assignees arising out of an accident caused solely by a product defect in an aircraft. Customer will provide such certificate of insurance at least thirty (30) days prior to the scheduled delivery of the first aircraft under a purchase agreement. The insurance certificate will reference each aircraft delivered to Customer pursuant to each applicable purchase agreement. Annual renewal certificates will be submitted to Boeing before the expiration of the policy periods. The form of the insurance certificate, attached as Appendix - 8 - I, states the terms, limits, provisions, and coverages required by this Article 8.2.1. The failure of Boeing to demand compliance with this 8.2.1 in any year will not in any way relieve Customer of its obligations hereunder nor constitute a waiver by Boeing of these obligations. 8.2.2 Noncompliance with Insurance Requirements. If Customer fails to comply with any of the insurance requirements of Article 8.2.1 or if any of the insurers fails to pay a claim covered by the insurance or otherwise fails to meet any of insurer's obligations required by Appendix I, Customer will provide the same protection to Boeing as that required by Article 8.2.1 above. 8.2.3 Definition of Boeing. For purposes of this article, "Boeing" is defined as The Boeing Company, its divisions, subsidiaries, affiliates, assignees of each, and their respective directors, officers, employees, and agents. Article 9. Assignment, Resale, or Lease. 9.1 Assignment. This AGTA and each applicable purchase agreement are for the benefit of the parties and their respective successors and assigns. No rights or duties of either party may be assigned or delegated, or contracted to be assigned or delegated, without the prior written consent of the other party, except: 9.1.1 Either party may assign its interest to a corporation that (i) results from any merger, reorganization, or acquisition of such party, (ii) acquires substantially all the assets of such party, and (iii) is considered its subsidiary, its controlling company or is controlled by such party; 9.1.2 Boeing may assign its rights to receive money; and 9.1.3 Boeing may assign any of its rights and duties to any wholly-owned subsidiary of Boeing. 9.1.4 Boeing may assign any of its rights and duties with respect to Part 1, Articles 1, 2, 4 and 5 of Exhibit B, Customer Support Document to the AGTA, to Alteon Training L.L.C. 9.2 Transfer by Customer at Delivery. Boeing will take any requested action reasonably required for the purpose of causing an aircraft, at time of delivery, to be subject to an equipment trust, conditional sale, lien, or other arrangement for Customer to finance the aircraft. However, no such action will require Boeing to divest itself of title to or possession of the aircraft until delivery of and payment for the aircraft. A sample form of assignment acceptable to Boeing is attached as Appendix II. 9.3 Sale or Lease by Customer After Delivery. If, following delivery of an aircraft, Customer sells or leases the aircraft (including any sale and lease-back for financing purposes), all of Customer's rights with respect to the aircraft under the applicable purchase agreement will inure to the benefit of the purchaser or lessee of such aircraft, effective upon Boeing's receipt of the written agreement of the purchaser or lessee, in a form satisfactory to - 9 - Boeing, to comply with all applicable terms and conditions of the applicable purchase agreement. Sample forms of agreement acceptable to Boeing are attached as Appendices III and IV. 9.4 Notice of Sale or Lease After Delivery. Customer will give notice to Boeing as soon as practicable of the sale or lease of an aircraft, including in the notice the name of the entity or entities with title and/or possession of such aircraft. 9.5 Exculpatory Clause in Post-Delivery Sale or Lease. If, following the delivery of an aircraft, Customer sells or leases such aircraft and obtains from the transferee any form of exculpatory clause protecting Customer from liability for loss of or damage to the aircraft, and/or related incidental or consequential damages, including without limitation loss of use, revenue, or profit, Customer shall obtain for Boeing the purchaser's or lessee's written agreement to be bound by terms and conditions substantially as set forth in Appendix V. This Article 9.5 applies only if purchaser or lessee has not provided to Boeing the written agreement described in Article 9.3 above. 9.6 Appointment of Agent - Warranty Claims. If, following delivery of an aircraft, Customer appoints an agent to act directly with Boeing for the administration of claims relating to the warranties under the applicable purchase agreement, Boeing will deal with the agent for that purpose, effective upon Boeing's receipt of the agent's written agreement, in a form satisfactory to Boeing, to comply with all applicable terms and conditions of the applicable purchase agreement. A sample form of agreement acceptable to Boeing is attached as Appendix VI. 9.7 No Increase in Boeing Liability. No action taken by Customer or Boeing relating to the resale or lease of an aircraft or the assignment of Customer's rights under the applicable purchase agreement will subject Boeing to any liability beyond that in the applicable purchase agreement or modify in any way Boeing's obligations under the applicable purchase agreement. Article 10. Termination of Purchase Agreements for Certain Events. 10.1 Termination. If either party (i) ceases doing business as a going concern, or suspends all or substantially all its business operations, or makes an assignment for the benefit of creditors, or generally does not pay its debts as they become due, or admits in writing its inability to pay its debts; or (ii) petitions for or acquiesces in the appointment of any receiver, trustee or similar officer to liquidate or conserve its business or any substantial part of its assets; commences any legal proceeding such as bankruptcy, reorganization, readjustment of debt, dissolution, or liquidation available for the relief of financially distressed debtors; or becomes the object of any such proceeding, unless the proceeding is dismissed or stayed within a reasonable period, not to exceed 90 days, - 10 - the other party may terminate any purchase agreement with respect to any undelivered aircraft, Materials, training, services, and other things by giving written notice of termination. 10.2 Repayment of Advance Payments. If either party terminates the applicable purchase agreement under this Article, Boeing will repay to Customer, without interest, an amount equal to any advance payments received by Boeing from Customer with respect to undelivered aircraft. Article 11. Notices. All notices required by this AGTA or by any applicable purchase agreement will be in English, will be effective on the date of receipt, and will be transmitted by any customary means of written communication, addressed as follows: Customer: GOL Transportes Aereos SA Rua Tamoios 246 Jardim Aeroporto Sao Paulo, SP 04630-000 Brazil Attention: President Boeing: Boeing Commercial Airplanes P.O. Box 3707 Seattle, Washington 98124-2207 U.S.A. Attention: Vice President - Contracts Mail Code 21-34 Article 12. Miscellaneous. 12.1 Government Approval. Boeing and Customer will assist each other in obtaining any governmental consents or approvals required to effect certification and sale of aircraft under the applicable purchase agreement. 12.2 Headings. Article and paragraph headings used in this AGTA and in any purchase agreement are for convenient reference only and are not intended to affect the interpretation of this AGTA or any purchase agreement. - 11 - 12.3 GOVERNING LAW. THIS AGTA AND ANY PURCHASE AGREEMENT WILL BE INTERPRETED UNDER AND GOVERNED BY THE LAWS OF THE STATE OF WASHINGTON, U.S.A., EXCEPT THAT WASHINGTON'S CHOICE OF LAW RULES SHALL NOT BE INVOKED FOR THE PURPOSE OF APPLYING THE LAW OF ANOTHER JURISDICTION. 12.4 Waiver/Severability. Failure by either party to enforce any provision of this AGTA or any purchase agreement will not be construed as a waiver. If any provision of this AGTA or any provision of any purchase agreement are held unlawful or otherwise ineffective by a court of competent jurisdiction, the remainder of the AGTA or the applicable purchase agreement will remain in effect. 12.5 Survival of Obligations. The Articles and Exhibits of this AGTA including but not limited to those relating to insurance, DISCLAIMER AND RELEASE and the EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES will survive termination or cancellation of any purchase agreement or part thereof. 12.6 AGTA Changes. The intent of the AGTA is to simplify the standard contracting process for terms and conditions which are related to the sale and purchase of all Boeing aircraft. This AGTA has been mutually agreed to by the parties as of the date indicated below. From time to time the parties may elect, by mutual agreement to update, or modify the existing articles as written. If such changes are made, any existing executed Purchase Agreement(s) will be governed by the terms and conditions of the Revision level of the AGTA in effect based on the date of the executed Purchase Agreement. DATED AS OF 2004 ------------------------ GOL TRANSPORTES AEREOS SA THE BOEING COMPANY By By ------------------------ ------------------------ Its Its ------------------------ ------------------------ Witness: - ---------------------------- - ---------------------------- - 12 - EXHIBIT A TO AIRCRAFT GENERAL TERMS AGREEMENT AGTA-GOT BETWEEN THE BOEING COMPANY AND GOL TRANSPORTES AEREOS SA BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT BUYER FURNISHED EQUIPMENT PROVISIONS DOCUMENT 1. General. Certain equipment to be installed in the Aircraft is furnished to Boeing by Customer at Customer's expense. This equipment is designated "Buyer Furnished Equipment" (BFE) and is listed in the Detail Specification. Boeing will provide to Customer a BFE Requirements On-Dock/Inventory Document (BFE Document) or an electronically transmitted BFE Report which may be periodically revised, setting forth the items, quantities, on-dock dates and shipping instructions relating to the in sequence installation of BFE as described in the applicable Supplemental Exhibit to this Exhibit A in a purchase agreement at the time of aircraft purchase. 2. Supplier Selection. Customer will: 2.1 Select and notify Boeing of the suppliers of BFE items by those dates appearing in Supplemental Exhibit BFE1 to the applicable purchase agreement at the time of aircraft purchase. 2.2 Meet with Boeing and such selected BFE suppliers promptly after such selection to: 2.2.1 complete BFE configuration design requirements for such BFE; and 2.2.2 confirm technical data submittal requirements for BFE certification. 3. Customer's Obligations. Customer will: 3.1 comply with and cause the supplier to comply with the provisions of the BFE Document or BFE Report; 3.1.1 deliver technical data (in English) to Boeing as required to support installation and FAA certification in accordance with the schedule provided by Boeing or as mutually agreed upon during the BFE meeting referred to above; 3.1.2 deliver BFE including production and/or flight training spares and BFE Aircraft Software to Boeing in accordance with the quantities and schedule provided therein; and A-1 3.1.3 assure that all BFE Aircraft Software is delivered in compliance with Boeing's then-current Standards for Loadable Systems, as informed by Boeing from time to time; 3.1.4 assure that all BFE parts are delivered to Boeing with appropriate quality assurance documentation; 3.2 authorize Boeing to discuss all details of the BFE directly with the BFE suppliers; 3.3 authorize Boeing to conduct or delegate to the supplier quality source inspection and supplier hardware acceptance of BFE at the supplier location; 3.3.1 require supplier's contractual compliance to Boeing defined quality assurance requirements, source inspection programs and supplier delegation programs, including availability of adequate facilities for Boeing resident personnel; and 3.3.2 assure that all BFE supplier's quality systems are approved to Boeing's then current standards for such systems; 3.4 obtain from supplier a non-exclusive, perpetual, royalty-free, irrevocable license for Boeing to copy BFE Aircraft Software. The license is needed to enable Boeing to load the software copies in (i) the aircraft's mass storage device (MSD), (ii) media (e.g., diskettes, CD-ROMs, etc.), (iii) the BFE hardware and/or (iv) an intermediate device or other media to facilitate copying of the BFE Aircraft Software into the aircraft's MSD, BFE hardware and/or media, including media as Boeing may deliver to Customer with the aircraft; 3.5 grant Boeing a license, extending the same rights set forth in paragraph 3.4 above, to copy: a) BFE Aircraft Software and data Customer has modified and/or b) other software and data Customer has added to the BFE Aircraft Software; 3.6 provide necessary field service representation at Boeing's facilities to support Boeing on all issues related to the installation and certification of BFE; 3.7 deal directly with all BFE suppliers to obtain overhaul data, provisioning data, related product support documentation and any warranty provisions applicable to the BFE; 3.8 work closely with Boeing and the BFE suppliers to resolve any difficulties, including defective equipment, that arise; 3.9 be responsible for modifying, adjusting and/or calibrating BFE as required for FAA approval and for all related expenses; A-2 3.10 assure that a proprietary information agreement is in place between Boeing and BFE suppliers prior to Boeing providing any documentation to such suppliers, 3.11 warrant that the BFE will comply with all applicable FARs and the U.S. Food and Drug Administration (FDA) sanitation requirements for installation and use in the Aircraft at the time of delivery. Customer will be responsible for supplying any data and adjusting, calibrating, re-testing or updating such BFE and data to the extent necessary to obtain applicable FAA and FDA approval and shall bear the resulting expenses. 3.12 warrant that the BFE will meet the requirements of the Detail Specification; and 3.13 be responsible for providing equipment which is FAA certifiable at time of Aircraft delivery, or for obtaining waivers from the applicable regulatory agency for non-FAA certifiable equipment. 4. Boeing's Obligations. Other than as set forth below, Boeing will provide for the installation of and install the BFE and obtain certification of the Aircraft with the BFE installed. 5. Nonperformance by Customer. If Customer's nonperformance of obligations in this Exhibit or in the BFE Document causes a delay in the delivery of the Aircraft or causes Boeing to perform out-of-sequence or additional work, Customer will reimburse Boeing for all resulting expenses and be deemed to have agreed to any such delay in Aircraft delivery. In addition Boeing will have the right to: 5.1 provide and install specified equipment or suitable alternate equipment and increase the price of the Aircraft accordingly; and/or 5.2 deliver the Aircraft to Customer without the BFE installed. 6. Return of Equipment. BFE not installed in the Aircraft will be returned to Customer in accordance with Customer's instructions and at Customer's expense. 7. Title and Risk of Loss. 7.1 With respect to Aircraft manufactured in the State of Washington, title to and risk of loss of BFE provided for such Aircraft will at all times remain with Customer A-3 or other owner. Boeing will have only such liability for BFE as a bailee for mutual benefit would have, but will not be liable for loss of use. 7.2 With respect to Aircraft manufactured in the State of California, Customer agrees to sell and Boeing agrees to purchase each item of BFE concurrently with its delivery to Boeing. A reasonable shipset price for the BFE shall be established with Customer. Customer and Boeing agree that the Aircraft Price will be increased by the amount of said shipset price and such amount will be included on Boeing's invoice at time of Aircraft delivery. Boeing's payment for the purchase of each shipset of BFE from Customer will be made at the time of delivery of the Aircraft in which the BFE is installed. 8. Interchange of BFE To properly maintain Boeing's production flow and to preserve Boeing's delivery commitments, Boeing reserves the right, if necessary, due to equipment shortages or failures, to interchange new items of BFE acquired from or for Customer with new items of the same part numbers acquired from or for other customers of Boeing. Used BFE acquired from Customer or from other customers of Boeing will not be interchanged. 9. Indemnification of Boeing. Customer hereby indemnifies and holds harmless Boeing from and against all claims and liabilities, including costs and expenses (including attorneys' fees) incident thereto or incident to successfully establishing the right to indemnification, for injury to or death of any person or persons, including employees of Customer but not employees of Boeing, or for loss of or damage to any property, including any Aircraft, arising out of or in any way connected with any nonconformance or defect in any BFE and whether or not arising in tort or occasioned by the negligence of Boeing. This indemnity will not apply with respect to any nonconformance or defect caused solely by Boeing's installation of the BFE. 10. Patent Indemnity. Customer hereby indemnifies and holds harmless Boeing from and against all claims, suits, actions, liabilities, damages and costs arising out of any actual or alleged infringement of any patent or other intellectual property rights by BFE or arising out of the installation, sale or use of BFE by Boeing. 11. Definitions. For the purposes of the above indemnities, the term "Boeing" includes The Boeing Company, its divisions, subsidiaries and affiliates, the assignees of each, and their directors, officers, employees and agents. A-4 EXHIBIT B TO AIRCRAFT GENERAL TERMS AGREEMENT AGTA-GOT BETWEEN THE BOEING COMPANY AND GOL TRANSPORTES AEREOS SA CUSTOMER SUPPORT DOCUMENT This document contains: Part 1: Maintenance and Flight Training Programs; Operations Engineering Support Part 2: Field Services and Engineering Support Services Part 3: Technical Information and Materials Part 4: Alleviation or Cessation of Performance Part 5: Protection of Proprietary Information and Proprietary Materials B i CUSTOMER SUPPORT DOCUMENT PART 1: BOEING MAINTENANCE AND FLIGHT TRAINING PROGRAMS; OPERATIONS ENGINEERING SUPPORT 1. Boeing Training Programs. 1.1 Boeing will provide maintenance training and flight training programs to support the introduction of a specific model of aircraft into service. The training programs will consist of general and specialized courses and will be described in a Supplemental Exhibit to the applicable purchase agreement. 1.2 Boeing will conduct all training at Boeing's primary training facility for the model of aircraft purchased unless otherwise agreed. 1.3 All training will be presented in the English language. If translation is required, Customer will provide interpreters. 1.4 Customer will be responsible for all expenses of Customer's personnel. Boeing will transport Customer's personnel between their local lodging and Boeing's training facility. 2. Training Planning Conferences. Customer and Boeing will conduct planning conferences approximately 12 months before the scheduled delivery month of the first aircraft of a model to define and schedule the maintenance and flight training programs. 3. Operations Engineering Support. 3.1 As long as an aircraft purchased by Customer from Boeing is operated by Customer in scheduled revenue service, Boeing will provide operations engineering support. Such support will include: 3.1.1 assistance with the analysis and preparation of performance data to be used in establishing operating practices and policies for Customer's operation of aircraft; 3.1.2 assistance with interpretation of the minimum equipment list, the definition of the configuration deviation list and the analysis of individual aircraft performance; 3.1.3 assistance with solving operational problems associated with delivery and route-proving flights; B 1-1 3.1.4 information regarding significant service items relating to aircraft performance or flight operations; and 3.1.5 if requested by Customer, Boeing will provide operations engineering support during an aircraft ferry flight. 4. Training at a Facility Other Than Boeing's. If requested by Customer, Boeing will conduct the classroom portions of the maintenance and flight training (except for the Performance Engineer training courses) at a mutually acceptable alternate training site, subject to the following conditions: 4.1 Customer will provide acceptable classroom space, simulators (as necessary for flight training) and training equipment required to present the courses; 4.2 Customer will pay Boeing's then-current per diem charge for each Boeing instructor for each day, or fraction thereof, that the instructor is away from their home location, including travel time; 4.3 Customer will reimburse Boeing for the actual costs of round-trip transportation for Boeing's instructors and the shipping costs of training Materials between the primary training facility and the alternate training site; 4.4 Customer will be responsible for all taxes, fees, duties, licenses, permits and similar expenses incurred by Boeing and its employees as a result of Boeing's providing training at the alternate site or incurred as a result of Boeing providing revenue service training; and 4.5 Those portions of training that require the use of training devices not available at the alternate site will be conducted at Boeing's facility or at some other alternate site. 5. General Terms and Conditions. 5.1 Boeing flight instructor personnel will not be required to work more than 5 days per week, or more than 8 hours in any one 24-hour period, of which not more than 5 hours per 8-hour workday will be spent in actual flying. These foregoing restrictions will not apply to ferry assistance or revenue service training services, which will be governed by FAA rules and regulations. 5.2 NORMAL LINE MAINTENANCE is defined as line maintenance that Boeing might reasonably be expected to furnish for flight crew training at Boeing's facility, and will include ground support and aircraft storage in the open, but will not include provision of spare parts. Boeing will provide Normal Line Maintenance services for any B 1-2 aircraft while the aircraft is used for flight crew training at Boeing's facility in accordance with the Boeing Maintenance Plan (Boeing document D6-82076) and the Repair Station Operation and Inspection Manual (Boeing document D6-25470), which terms are available to Customer upon reasonable request. Customer will provide such services if flight crew training is conducted elsewhere. Regardless of the location of such training, Customer will be responsible for providing all maintenance items (other than those included in Normal Line Maintenance) required during the training, including, but not limited to, fuel, oil, landing fees and spare parts. Boeing will assist Customer with purchase of any such items, at no additional cost to Customer. 5.3 If the training is based at Boeing's facility, and the aircraft is damaged during such training, Boeing will make all necessary repairs to the aircraft as promptly as possible. Customer will pay Boeing's reasonable charge, including the price of parts and materials, for making the repairs. If Boeing's estimated labor charge for the repair exceeds $25,000, Boeing and Customer will enter into an agreement for additional services before beginning the repair work. 5.4 If the flight training is based at Boeing's facility, several airports in surrounding states may be used, at Boeing's option. Unless otherwise agreed in the flight training planning conference, it will be Customer's responsibility to make arrangements for the use of such airports. 5.5 If Boeing agrees to make arrangements on behalf of Customer for the use of airports for flight training, Boeing will pay on Customer's behalf any landing fees charged by any airport used in conjunction with the flight training. Boeing will submit to Customer an invoice for any such landing fees Boeing has paid on Customer's behalf, approximately 60 days after flight training is completed, when all landing fee charges have been received and verified. Customer will pay to Boeing within 30 days of the date of the invoice. 5.6 If requested by Boeing, in order to provide the flight training or ferry flight assistance, Customer will make available to Boeing an aircraft after delivery to familiarize Boeing instructor or ferry flight crew personnel with such aircraft. If flight of the aircraft is required for any Boeing instructor or ferry flight crew member to maintain an FAA license for flight proficiency or landing currency, Boeing will be responsible for the costs of fuel, oil, landing fees and spare parts attributable to that portion of the flight. 5.7 If any part of the training described in Article 1.1 of this Exhibit is not used by Customer within 12 months after the delivery of the last aircraft under the relevant purchase agreement, Boeing will not be obligated to provide such training. B 1-3 CUSTOMER SUPPORT DOCUMENT PART 2: FIELD AND ENGINEERING SUPPORT SERVICES 1. Field Service Representation. Boeing will furnish field service representation to advise Customer with respect to the maintenance and operation of an aircraft (FIELD SERVICE REPRESENTATIVES). 1.1 Field Service representation will be available at or near Customer's main maintenance or engineering facility beginning before the scheduled delivery month of the first aircraft and ending 12 months after delivery of the last aircraft covered by a specific purchase agreement. 1.2 Customer will provide, at no charge to Boeing, suitable furnished office space and office equipment at the location where Boeing is providing Field Service Representatives. As required, Customer will assist each Field Service Representative with visas, work permits, customs, mail handling, identification passes and formal introduction to local airport authorities. 1.3 Boeing Field Service Representatives are assigned to various airports around the world. Whenever Customer's aircraft are operating through any such airport, the services of Boeing's Field Service Representatives are available to Customer. 2. Engineering Support Services. Boeing will, if requested by Customer, provide technical advisory assistance for any aircraft and Boeing Product (as defined in Part I of Exhibit C). Technical advisory assistance, provided from the Seattle area or at a base designated by Customer as appropriate, will include: 2.1 Operational Problem Support. If Customer experiences operational problems with an aircraft, Boeing will analyze the information provided by Customer to determine the probable nature and cause of the problem and to suggest possible solutions. 2.2 Schedule Reliability Support. If Customer is not satisfied with the schedule reliability of a specific model of aircraft, Boeing will analyze information provided by Customer to determine the nature and cause of the problem and to suggest possible solutions. 2.3 Maintenance Cost Reduction Support. If Customer is concerned that actual maintenance costs of a specific model of aircraft are excessive, Boeing will analyze information provided by Customer to determine the nature and cause of the problem and to suggest possible solutions. B 2-1 2.4 Aircraft Structural Repair Support. If Customer is designing structural repairs and desires Boeing's support, Boeing will analyze and comment on Customer's engineering releases relating to structural repairs not covered by Boeing's Structural Repair Manual. 2.5 Aircraft Modification Support. If Customer is designing aircraft modifications and requests Boeing's support, Boeing will analyze and comment on Customer's engineering proposals for changes in, or replacement of, systems, parts, accessories or equipment manufactured to Boeing's detailed design. Boeing will not analyze or comment on any major structural change unless Customer's request for such analysis and comment includes complete detailed drawings, substantiating information (including any information required by applicable government agencies), all stress or other appropriate analyses, and a specific statement from Customer of the substance of the review and the response requested. 2.6 Facilities, Ground Equipment and Maintenance Planning Support. Boeing will, at Customer's request, evaluate Customer's technical facilities, tools and equipment for servicing and maintaining aircraft, to recommend changes where necessary and to assist in the formulation of an initial maintenance plan for the introduction of the aircraft into service. 2.7 Post-Delivery Service Support. Boeing will, at Customer's request, perform work on an aircraft after delivery but prior to the initial departure flight or upon the return of the aircraft to Boeing's facility prior to completion of that flight. In that event the following provisions will apply. 2.7.1 Boeing may rely upon the commitment authority of the Customer's personnel requesting the work. 2.7.2 As title and risk of loss has passed to Customer, the insurance provisions of Article 8.2 of the AGTA apply. 2.7.3 The provisions of the Boeing Warranty in Part 2 of Exhibit C of this AGTA apply. 2.7.4 Customer will pay Boeing for requested work not covered by the Boeing Warranty, if any. 2.7.5 The DISCLAIMER AND RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES provisions in Article 11 of Part 2 of Exhibit C of this AGTA apply. 2.8 Additional Services. Boeing may, at Customer's request, provide additional services for an aircraft after delivery, which may include, but B 2-2 not be limited to, retrofit kit changes (kits and/or information), training, flight services, maintenance and repair of aircraft. Such additional services will be subject to a mutually acceptable price, schedule, scope of work and other applicable terms and conditions. The DISCLAIMER AND RELEASE and the EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES provisions in Article 11 of Part 2 of Exhibit C of this AGTA and the insurance provisions in Article 8.2 of this AGTA will apply to any such work. Title to and risk of loss of any such aircraft will always remain with Customer. B 2-3 CUSTOMER SUPPORT DOCUMENT PART 3: TECHNICAL INFORMATION AND MATERIALS 1. General. MATERIALS are defined as any and all items that are created by Boeing or a third party, which are provided directly or indirectly from Boeing and serve primarily to contain, convey or embody information. Materials may include either tangible embodiments (for example, documents or drawings), or intangible embodiments (for example, software and other electronic forms) of information but excludes Aircraft Software. AIRCRAFT SOFTWARE is defined as software that is installed on and used in the operation of the aircraft. Boeing will furnish to Customer certain Materials to support the maintenance and operation of the aircraft at no additional charge to Customer, except as otherwise provided herein and will, include each of the following: airplane maintenance manual, system schematic manual, illustrated parts catalog, wiring diagram manual, fault isolation manual, and service letters. Such Materials will, if applicable, be prepared generally in accordance with Air Transport Association of America (ATA) Specification No. 100, entitled "Specification for Manufacturers' Technical Data". Materials will be in English and in the units of measure used by Boeing to manufacture an aircraft. Digitally-produced Materials will, if applicable, be prepared generally in accordance with ATA Specification No. 2100, dated January 1994, "Digital Data Standards for Aircraft Support." 2. Materials Planning Conferences. Customer and Boeing will conduct planning conferences approximately 12 months before the scheduled delivery month of the first aircraft of a model in order to mutually determine the proper format and quantity of Materials to be furnished to Customer in support of the aircraft. When available, Customer may select one Boeing digital format as the delivery medium. Should a Boeing digital format not be chosen, Customer may select a reasonable quantity of printed and 16mm microfilm formats, with the exception of the Illustrated Parts Catalog, which will be provided in one selected format only. 3. Information and Materials - Incremental Increase. Until one year after the month of delivery of the last aircraft covered by a specific purchase agreement, Customer may annually request in writing a reasonable increase in B 3-1 the quantity of Materials with the exception of microfilm master copies, digital formats, and others for which a specified number of copies are provided. Boeing will provide the additional quantity at no additional charge beginning with the next normal revision cycle. Customer may request a decrease in revision quantities at any time. 4. Advance Representative Copies. All advance representative copies of Materials will be selected by Boeing from available sources. Such advance copies will be for advance planning purposes only. 5. Customized Materials. All customized Materials will reflect the configuration of each aircraft as delivered. 6. Revisions. 6.1 Revision Service. Boeing will provide revisions free of charge to certain Materials to be identified in the planning conference conducted for a specific model of aircraft, reflecting changes developed by Boeing, as long as Customer operates an aircraft of that model. 6.2 Revisions Based on Boeing Service Bulletin Incorporation. If Boeing receives written notice that Customer intends to incorporate, or has incorporated, any Boeing service bulletin in an aircraft, Boeing will at no charge issue revisions to Materials with revision service reflecting the effects of such incorporation into such aircraft. 7. Supplier Technical Data. 7.1 For supplier-manufactured programmed airborne avionics components and equipment classified as Seller Furnished Equipment (SFE) or Seller Purchased Equipment (SPE) or Buyer Designated Equipment (BDE) which contain computer software designed and developed in accordance with Radio Technical Commission for Aeronautics Document No. RTCA/DO-178 dated January 1982, No. RTCA/DO-178A dated March 1985, or later as available, Boeing will request that each supplier of the components and equipment make software documentation available to Customer. 7.2 The provisions of this Article will not be applicable to items of BFE. 7.3 Boeing will furnish to Customer a document identifying the terms and conditions of the product support agreements between Boeing and its suppliers requiring the suppliers to fulfill Customer's requirements for information and services in support of the specific model of aircraft. B 3-2 8. Buyer Furnished Equipment Data. Boeing will incorporate BFE information into the customized Materials providing Customer makes the information available to Boeing at least nine months prior to the scheduled delivery month of Customer's first aircraft of a specific model. Customer agrees to furnish the information in Boeing standard digital format if Materials are to be delivered in Boeing standard digital format. 9. Materials Shipping Charges. Boeing will pay the reasonable transportation costs of the Materials. Customer is responsible for any customs clearance charges, duties, and taxes. 10. Customer's Shipping Address. The Materials furnished to Customer hereunder are to be sent to a single address to be specified. Customer will promptly notify Boeing of any change to the address. B 3-3 CUSTOMER SUPPORT DOCUMENT PART 4: ALLEVIATION OR CESSATION OF PERFORMANCE Boeing will not be required to provide any Materials, services, training or other things at a facility designated by Customer if any of the following conditions exist: 1. a labor stoppage or dispute in progress involving Customer; 2. wars or warlike operations, riots or insurrections in the country where the facility is located; 3. any condition at the facility which, in the opinion of Boeing, is detrimental to the general health, welfare or safety of its personnel or their families; 4. the United States Government refuses permission to Boeing personnel or their families to enter into the country where the facility is located, or recommends that Boeing personnel or their families leave the country; or 5. the United States Government refuses permission to Boeing to deliver Materials, services, training or other things to the country where the facility is located. After the location of Boeing personnel at the facility, Boeing further reserves the right, upon the occurrence of any of such events, to immediately and without prior notice to Customer relocate its personnel and their families. Boeing will coordinate with Customer for provision of Materials, Services, Training or other things as provided for in this Exhibit B, at another facility as Customer and Boeing have agreed upon, so as not to interrupt or in any other way interfere with Customer's operation of an aircraft. B 4-1 CUSTOMER SUPPORT DOCUMENT PART 5: PROTECTION OF PROPRIETARY INFORMATION AND PROPRIETARY MATERIALS 1. General. All Materials provided by Boeing to Customer and not covered by a Boeing CSGTA or other agreement between Boeing and Customer defining Customer's right to use and disclose the Materials and included information will be covered by, and subject to the terms of this AGTA. Title to all Materials containing, conveying or embodying confidential, proprietary or trade secret information (Proprietary Information) belonging to Boeing or a third party (Proprietary Materials), will at all times remain with Boeing or such third party. Customer will treat all Proprietary Materials and all Proprietary Information in confidence and use and disclose the same only as specifically authorized in this AGTA. 2. License Grant. Boeing grants to Customer a worldwide, non-exclusive, non-transferable license to use and disclose Proprietary Materials in accordance with the terms and conditions of this AGTA. Customer is authorized to make copies of Materials (except for Materials bearing the copyright legend of a third party), and all copies of Proprietary Materials will belong to Boeing and be treated as Proprietary Materials under this AGTA. Customer will preserve all proprietary legends, and all copyright notices on all Materials and insure the inclusion of those legends and notices on all copies. 3. Use of Proprietary Materials and Proprietary Information. Customer is authorized to use Proprietary Materials and Proprietary Information for the purpose of: (a) operation, maintenance, repair, or modification of Customer's aircraft for which the Proprietary Materials and Proprietary Information have been specified by Boeing and (b) development and manufacture of training devices and maintenance tools for use by Customer. 4. Providing of Proprietary Materials to Contractors. Customer is authorized to provide Proprietary Materials to Customer's contractors for the sole purpose of maintenance, repair, or modification of Customer's aircraft for which the Proprietary Materials have been specified by Boeing. In addition, Customer may provide Proprietary Materials to Customer's contractors for the sole purpose of developing and manufacturing training devices and maintenance tools for Customer's use. Before providing Proprietary Materials to its contractor, Customer will first obtain a B 5-1 written agreement from the contractor by which the contractor agrees (a) to use the Proprietary Materials only on behalf of Customer, (b) to be bound by all of the restrictions and limitations of this Part 5, and (c) that Boeing is a third party beneficiary under the written agreement. Customer agrees to provide copies of all such written agreements to Boeing upon request and be liable to Boeing for any breach of those agreements by a contractor. A sample agreement acceptable to Boeing is attached as Appendix VII. 5. Providing of Proprietary Materials and Proprietary Information to Regulatory Agencies. When and to the extent required by a government regulatory agency having jurisdiction over Customer or an aircraft, Customer is authorized to provide Proprietary Materials and to disclose Proprietary Information to the agency for use in connection with Customer's operation, maintenance, repair, or modification of such aircraft. Customer agrees to take all reasonable steps to prevent the agency from making any distribution, disclosure, or additional use of the Proprietary Materials and Proprietary Information provided or disclosed. Customer further agrees to notify Boeing immediately upon learning of any (a) distribution, disclosure, or additional use by the agency, (b) request to the agency for distribution, disclosure, or additional use, or (c) intention on the part of the agency to distribute, disclose, or make additional use of Proprietary Materials or Proprietary Information. B 5-2 EXHIBIT C TO AIRCRAFT GENERAL TERMS AGREEMENT AGTA-GOT BETWEEN THE BOEING COMPANY AND GOL TRANSPORTES AEREOS SA 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 C i 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. SPECIFICATION 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. C 1-1 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 inappropriate 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, -900 or new aircraft models designed and manufactured with similar, new technology; or, (ii) after 36 months for any other Boeing aircraft model. C 2-1 3.2 Warranty on Corrected Boeing Products. The warranty period applicable to a Corrected Boeing Product shall begin 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 and shall be for the period specified immediately below: (i) For Corrected Boeing Products which have been Corrected because of a defect in material, the applicable warranty period is the remainder of the initial warranty period for the defective Boeing Product. (ii) For Corrected Boeing Products which have been Corrected because of defect in workmanship, the applicable warranty period is the remainder of the initial warranty or 12 months following the date of delivery of the Corrected Boeing Product, whichever is longer. (iii) For Corrected Boeing Products which have been Corrected because of a defect in design, the applicable warranty period is 18 months or the remainder of the initial warranty period, whichever is longer. 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 C 2-2 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 in writing, the maximum reimbursement for Direct Labor and Direct materials for repair of a defective Boeing Product will not exceed 65% of Boeing's then-current sales price for a new replacement Boeing Product. Inspection, removal, reinstallation labor, final testing, inspection and transportation costs are separate and are not to be included in the cost elements used to determine the 65% limit. By mutual agreement between Customer and Boeing, Boeing may provide a replacement. 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, C 2-3 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, if applicable; (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 reasonably 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. C 2-4 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 Customer or its Authorized Agent will pre-pay freight charges to return a Boeing Product to Boeing. If during the period of the applicable warranty Boeing determines the Boeing Product to be defective, Boeing will pre-pay shipping charges to return the Corrected Boeing Product. Boeing will reimburse Customer or its Authorized Agent for freight charges for Boeing Products returned to Boeing for Correction and determined to be defective. 7.4 Disposition of Defective Boeing Products Beyond Economical Repair. 7.4.1 A defective Boeing Product found to be beyond economical repair (see Article 4.5, Maximum Reimbursement) will be retained for a period of 30 days from the date Boeing receives Customer's claim. During the 30 day period, Boeing may request return of such Boeing Products for inspection and confirmation of a defect. Boeing will reimburse inbound freight charges if the Condition is confirmed to be a defect. C 2-5 7.4.2 After the 30 day period, a defective Boeing Product with a value of U.S. $4000 or less may be scrapped without notification to Boeing. If such Boeing Product has a value greater than U.S. $4000, 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 pre-pay freight charges to return a Boeing Product to Boeing. If during the period of the applicable warranty Boeing determines the Boeing Product to be defective, Boeing will pre-pay shipping charges to return the Corrected Boeing Product. Boeing will reimburse Customer or its Authorized Agent for freight charges for Boeing Products returned to Boeing for Correction and determined to be defective. Comment: Boeing will not be liable for government charges, import export fees, VAT or other government regulated charges. 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. C 2-6 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. Boeing will also reimburse Customer for the reasonable direct labor cost to Customer of the pilot's actual flight hours associated with the ferrying of the aircraft to Boeing and back to the Customer's facilities. 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. C 2-7 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. C 2-8 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. C 3-1 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 inappropriate 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. C 3-2 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, or from time to time as applicable for the deliveries thereafter. 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 In such case, and 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. C 4-1 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 of a Supplier Product, Boeing will assist Customer in processing a warranty claim against the Supplier. If Boeing determines that the Interface Problem is primarily attributable to Boeing installation of a Supplier Product, Boeing will Correct the workmanship under the provisions of the applicable Boeing Warranty or Boeing Service Life Policy. 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. C 5-1 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. 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. C 5-2 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. 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 C 6-1 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 non-infringing 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. C 6-2 PURCHASE AGREEMENT NUMBER 2910 between THE BOEING COMPANY and GOL TRANSPORTES AEREOS SA Relating to Boeing Model 737-8EH Aircraft P.A. No. 2910 TABLE OF CONTENTS
SA ARTICLES NUMBER - -------- ------ 1. Quantity, Model and Description 2. Delivery Schedule 3. Price 4. Payment 5. Miscellaneous TABLE 1. Aircraft Information Table EXHIBIT A. Aircraft Configuration B. Aircraft Delivery Requirements and Responsibilities SUPPLEMENTAL EXHIBITS AE1. Escalation Adjustment/Airframe and Optional Features BFE1. BFE Variables CS1. Customer Support Variables EE1. Engine Escalation/Engine Warranty and Patent Indemnity SLP1. Service Life Policy Components
P.A. No. 2910 i GOT
SA LETTER AGREEMENTS NUMBER - ----------------- ------ 2910-01 Customer Software 2910-02 Spares - Flight Crew Training Spare Parts Support 2910-03 Spares - Initial Provisioning 6-1162-DME-0706 Purchase Right Aircraft 6-1162-DME-0707 Advance Payment Matters 6-1162-DME-0708 Technical Matters 6-1162-DME-0710 Performance Guarantees 6-1162-DME-0711 Promotional Support 6-1162-DME-0712 Special Matters 6-1162-DME-0713 Tailored Weight Program 6-1162-DME-0714 Demonstration Flight Waiver
P.A. No. 2910 ii GOT Purchase Agreement No. 2910 between The Boeing Company and GOL Transportes Aereos SA ------------------------------ This Purchase Agreement No. 2910 dated as of 2004 between The Boeing Company (BOEING) and GOL Transportes Aereos SA (CUSTOMER) relating to the purchase and sale of Model 737-8EH aircraft incorporates the terms and conditions of the Aircraft General Terms Agreement dated as of 2004 between the parties, identified as AGTA-GOT (AGTA). Article 1. Quantity, Model and Description. The aircraft to be delivered to Customer will be designated as Model 737-8EH aircraft (the AIRCRAFT). Boeing will manufacture and sell to Customer Aircraft conforming to the configuration described in Exhibit A, which is part of this Purchase Agreement, in the quantities listed in Table 1 to the Purchase Agreement. Article 2. Delivery Schedule. In that the scheduled months of delivery of the Aircraft, as listed in the attached Table 1, which is part of this Purchase Agreement, do not begin until July of 2007, Boeing and Customer agree that, on or before 17 December 2004, mutually agreed upon changes to the Aircraft delivery schedule will be accommodated, with the understanding that the total number of Aircraft will not be reduced and that the last delivery date of any such Aircraft will not be later than September of 2009, and that any such agreed upon changes to the Table 1 Aircraft delivery schedule will be the subject of a Supplemental Agreement to this Purchase Agreement to be signed and dated not later than 17 December 2004. Exhibit B, which is part of this Purchase Agreement, P.A. No. 2910 1 GOT describes certain responsibilities for both Customer and Boeing in order to accomplish the delivery of the Aircraft. Article 3. Price. 3.1 Aircraft Basic Price. The Aircraft Basic Price is listed in Table 1 and is subject to escalation dollars. 3.2 Advance Payment Base Prices. The Advance Payment Base Prices listed in Table 1 were calculated utilizing the latest escalation factors available to Boeing on the date of this Purchase Agreement projected to the month of scheduled delivery. 3.3 Boeing has not yet established the Aircraft Basic Price for Aircraft scheduled to be delivered after December 31, 2008. The prices listed in Table 1 for any such Aircraft are only to provide Customer with an estimate of the applicable Advance Payment Base Prices. Accordingly, the Aircraft Basic Price for such Aircraft will be the sum of the Airframe Price and Optional Features Prices first published by Boeing for the same model of aircraft to be delivered after December 31, 2008. Article 4. Payment. 4.1 Boeing acknowledges receipt of a deposit in the amount shown in Table 1 for each Aircraft (DEPOSIT). 4.2 The standard advance payment schedule for the Model 737-8EH aircraft requires Customer to make certain advance payments, expressed in a percentage of the Advance Payment Base Price of each Aircraft beginning with a payment of 1%, less the Deposit, on the effective date of the Purchase Agreement for the Aircraft. Additional advance payments for each Aircraft are due on the first business day of the months listed in the attached Table 1. 4.3 For any Aircraft whose scheduled month of delivery is less than 24 months from the date of this Purchase Agreement, the total amount of advance payments due for payment upon signing of this Purchase Agreement will include all advance payments which are past due in accordance with the standard advance payment schedule set forth in paragraph 4.2 above. 4.4 Customer will pay the balance of the Aircraft Price of each Aircraft at delivery. P.A. No. 2910 2 GOT Article 5. Miscellaneous. 5.1 Aircraft Information Table. Table 1 consolidates information contained in Articles 1, 2, 3 and 4 with respect to (i) quantity of Aircraft, (ii) applicable Detail Specification, (iii) month and year of scheduled deliveries, (iv) Aircraft Basic Price, (v) applicable escalation factors and (vi) Advance Payment Base Prices and advance payments and their schedules. 5.2 Escalation Adjustment/Airframe and Optional Features. Supplemental Exhibit AE1 contains the applicable airframe and optional features escalation formula. 5.3 Buyer Furnished Equipment Variables. Supplemental Exhibit BFE1 contains vendor selection dates, on dock dates and other variables applicable to the Aircraft. 5.4 Customer Support Variables. Information, training, services and other things furnished by Boeing in support of introduction of the Aircraft into Customer's fleet are described in Supplemental Exhibit CS1. The level of support to be provided under Supplemental Exhibit CS1 (the Entitlements) assumes that at the time of delivery of Customer's first Aircraft under the Purchase Agreement, Customer has taken possession of a Model 737-800 aircraft whether such Model 737-800 aircraft was purchased, leased or otherwise obtained by Customer from Boeing or another party. Under no circumstances under the Purchase Agreement or any other agreement will Boeing provide the Entitlements more than once to support Customer's operation of Model 737-800 aircraft. 5.5 Engine Escalation Variables. Supplemental Exhibit EE1 describes the applicable engine escalation formula and contains the engine warranty and the engine patent indemnity for the Aircraft. 5.6 Service Life Policy Component Variables. Supplemental Exhibit SLP1 lists the airframe and landing gear components covered by the Service Life Policy for the Aircraft. 5.7 Public Announcement. Boeing reserves the right to make a public announcement regarding Customer's purchase of the Aircraft upon approval of Boeing's press release by Customer's public relations department or other authorized representative and agreement upon a mutually acceptable date. 5.8 Negotiated Agreement; Entire Agreement. This Purchase Agreement, including the provisions of Article 8.2 of the AGTA relating to insurance, and Article 11 of Part 2 of Exhibit C of the AGTA relating to DISCLAIMER AND P.A. No. 2910 3 GOT RELEASE and EXCLUSION OF CONSEQUENTIAL AND OTHER DAMAGES, has been the subject of discussion and negotiation and is understood by the parties; and that the Aircraft Price and other agreements of the parties stated in this Purchase Agreement were arrived at in consideration of such provisions. This Purchase Agreement, including the AGTA, contains the entire agreement between the parties and supersedes all previous proposals, understandings, commitments or representations whatsoever, oral or written, and may be changed only in writing signed by authorized representatives of the parties. DATED AS OF 2004 ----------------------- GOL Transportes Aereos SA THE BOEING COMPANY By By ------------------------------------ ------------------------------------- Its Its ----------------------------------- ------------------------------------ Witness: - -------------------------------------- - -------------------------------------- P.A. No. 2910 4 GOT TABLE 1 TO PURCHASE AGREEMENT NO. 2910 AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS (REPLACE THIS SHEET WITH THE RELEVANT PAGE(S) FROM THE PA-2910_DATA.XLS WORKBOOK.) P.A. No. 2910 Page 1 GOT TABLE 1 TO PURCHASE AGREEMENT NO. 2910 AIRCRAFT DELIVERY, DESCRIPTION, PRICE AND ADVANCE PAYMENTS AIRFRAME MODEL/MTGW: 737-800 155,500 ENGINE MODEL: CFM56-7B27/B1 AIRFRAME PRICE: $56,806,000 OPTIONAL FEATURES: $562,200 ----------- SUB-TOTAL OF AIRFRAME AND FEATURES: $57,368,200 ENGINE PRICE (PER AIRCRAFT): $0 AIRCRAFT BASIC PRICE (EXCLUDING BFE/SPE): $57,368,200 =========== BUYER FURNISHED EQUIPMENT (BFE) ESTIMATE: $1,250,000 SELLER PURCHASED EQUIPMENT (SPE) ESTIMATE: $0 REFUNDABLE DEPOSIT PER AIRCRAFT AT PROPOSAL ACCEPTANCE: $85,000

DETAIL SPECIFICATION: D019A001-F (8/29/2003) AIRFRAME PRICE BASE YEAR: Jul-03 ~~AIRFRAME ESCALATION DATA: BASE YEAR INDEX (ECI): 165.00 BASE YEAR INDEX (ICI): 136.80~~

ADVANCE PAYMENT PER AIRCRAFT (AMTS. DUE/MOS. PRIOR TO DELIVERY): ESCALATION ESCALATION ESTIMATE ------------------------------------------------------ DELIVERY NUMBER OF FACTOR ADV PAYMENT BASE AT SIGNING 24 MOS. 21/18/12/9/6 MOS. TOTAL DATE AIRCRAFT (AIRFRAME) PRICE PER A/P 1% 4% 5% 30% - -------- --------- ---------- ----------- --------- ------------------- ---------- ---------- ----------------- ----------- Jul-2007 1 1.1297 $64,809,000 $563,090 $2,592,360 $3,240,450 $19,442,700 Oct-2007 1 1.1409 $65,451,000 $569,510 $2,618,040 $3,272,550 $19,635,300 Nov-2007 2 1.1447 $65,669,000 $571,690 $2,626,760 $3,283,450 $19,700,700 Dec-2007 2 1.1477 $65,841,000 $573,410 $2,633,640 $3,292,050 $19,752,300 Jan-2008 2 1.151 $66,031,000 $575,310 $2,641,240 $3,301,550 $19,809,300 Apr-2008 1 1.1598 $66,536,000 $580,360 $2,661,440 $3,326,800 $19,960,800 Aug-2008 1 1.1732 $67,304,000 $588,040 $2,692,160 $3,365,200 $20,191,200 Oct-2008 1 1.182 $67,809,000 $593,090 $2,712,360 $3,390,450 $20,342,700 Feb-2009 2 1.1958 $68,601,000 $601,010 $2,744,040 $3,430,050 $20,580,300 Aug-2009 1 1.2157 $69,743,000 $612,430 $2,789,720 $3,487,150 $20,922,900 Sep-2009 1 1.2198 $69,978,000 $614,780 $2,799,120 $3,498,900 $20,993,400
P.A. No. 2910 Page 1 26521-1F.TXT AIRCRAFT CONFIGURATION between THE BOEING COMPANY and GOL TRANSPORTES AEREOS SA Exhibit A to Purchase Agreement Number 2910 P.A. No. 2910 A AIRCRAFT CONFIGURATION Dated _____________ 2004 relating to BOEING MODEL 737-8EH AIRCRAFT The Detail Specification is D019A001GOT38P-1, dated _____ TBD_________ 2004, approximately 90 days after completion of Exhibit A and signature to Definitive Purchase Agreement No. 2910. Such Detail Specification will be comprised of Boeing Configuration Specification D019A001, dated 29 August 2003 as amended to incorporate the Options listed below, including the effects on Manufacturer's Empty Weight (MEW) and Operating Empty Weight (OEW). Such Options are set forth in Boeing Document D019ACR1GOT38P-1. As soon as practicable, Boeing will furnish to Buyer copies of the Detail Specification, which copies will reflect such Options. The Aircraft Basic Price reflects and includes all effects of such Options, except such Aircraft Basic Price does not include the price effects of any Buyer Furnished Equipment or Seller Purchased Equipment. NOTE: THE ATTACHED LISTING OF OPTIONAL FEATURES IS THE MOST ACCURATE ESTIMATE AVAILABLE AT THIS TIME AND IS TO BE REVISED BY SUPPLEMENTAL AGREEMENT IN THE NEAR FUTURE, AFTER SIGNING OF THIS DEFINITIVE AGREEMENT, TO REFLECT CUSTOMER'S FINAL DECISIONS REGARDING THE AIRCRAFT CONFIGURATION SPECIAL FEATURES. P.A. No. 2910 A-1 Exhibit A to Purchase Agreement No. 2910 Page 2
July 2003 STE Price CR Title Per A/C -- ----- ------- 0110-000029 MINOR MODEL 737-800 PASSENGER AIRPLANE IB 0110-000030 MAJOR MODEL 737 AIRPLANE IB 0170A213B33 FLIGHT DECK - 2 OBSERVERS $29,800 0170A244C58 SERVICING FEATURES - BASIC -$2,900 0170A541A17 AIRFRAME - 737-800 IB 0170A541A20 CERTIFICATION - FAA IB 0170A935A26 COMMUNICATIONS - BASIC COMMUNICATIONS CONFIGURATION WITH HF $143,900 0170B401A73 CLIMATE - NORMAL WEATHER OPERATIONS -$2,900 0170B873A78 FORWARD COMPLEX - MINIMUM GALLEY CAPACITY $233,700 0170B873A82 AFT COMPLEX - TWO LAVATORIES WITH TWO DOUBLE ATTENDANT SEATS $367,700 0170C204A96 CARGO - HEAVY DUTY - FORWARD -$2,900 0170C204A99 CARGO - HEAVY DUTY- AFT -$2,900 0224-000036 EXTENDED RANGE TWIN ENGINE OPERATIONS (ETOPS) $6,000 0228A229A17 BRAZILIAN CTA SUPPLEMENT TO THE FAA APPROVED AIRPLANE FLIGHT MANUAL $2,100 0252A541A02 ENGLISH UNITS FOR FLIGHT AND OPERATIONS MANUALS, CDS INDICATIONS, AND FMCS PARAMETERS - CELSIUS NC TEMPERATURE 0252A541A03 METRIC UNITS FOR FLIGHT AND OPERATIONS MANUALS, CDS INDICATIONS, AND FMCS PARAMETERS NC 0254-000003 USPHS CERTIFICATE OF SANITARY CONSTRUCTION NC 0315B393A35 CERTIFIED OPERATIONAL AND STRUCTURAL DESIGN WEIGHTS 737-800 NC 0351B523A03 TAKEOFF PERFORMANCE IMPROVEMENT - ALTERNATE FORWARD CENTER OF GRAVITY LIMITS $13,500 0360C028D96 MISCELLANEOUS WEIGHT COLLECTOR - GOT 737-800 NC 1110B637K75 EXTERIOR COLOR SCHEME AND MARKINGS - GOT - 737-800 NC 1130A079K40 LOWER LOBE CARGO COMPARTMENT LOADING PLACARDS - KILOGRAMS PER SQUARE METER - BILINGUAL NC (PORTUGUESE/ENGLISH) 1130B637K93 INTERIOR PASSENGER COMPARTMENT PLACARDS AND MARKINGS (PORTUGUESE/ENGLISH) NC 2130-000010 600 FPM CABIN PRESSURE ASCENT RATE NC 2130-000012 350 FPM CABIN PRESSURE DESCENT RATE NC 2160-000024 CABIN TEMPERATURE INDICATION - DEGREES CELSIUS NC 2170-000021 OZONE CONTROL - SPACE PROVISIONS FOR CATALYTIC CONVERTERS NC 2210-000003 AUTOFLIGHT - INHIBIT GLIDE SLOPE CAPTURE PRIOR TO LOCALIZER CAPTURE NC 2210-000121 AUTOFLIGHT - ACTIVATION OF CONTROL WHEEL STEERING REVERSION IN APPROACH MODE NC 2210-000123 AUTOFLIGHT - FLIGHT DIRECTOR TAKEOFF MODE WINGS LEVEL NC 2210-000128 AUTOFLIGHT - CONTROL WHEEL STEERING WARNING NC 2210-000130 AUTOFLIGHT - AIRSPEED DEVIATION WARNING NC 2210-000142 AUTOFLIGHT - ALTITUDE ALERT - 300/900 FEET NC 2210-000220 AUTOFLIGHT - MODE CONTROL PANEL WITHOUT SPEED AND ALTITUDE INTERVENTION NC 2230-000137 AUTOTHROTTLE - FMCS - TAKEOFF PROFILE THRUST REDUCTION ALTITUDE NC
P.A. No. 2910 A-2 Exhibit A to Purchase Agreement No. 2910 Page 3
July 2003 STE Price CR Title Per A/C -- ----- ------- 2310B401A33 COMMUNICATIONS CONTROL PANELS - TRIPLE GABLES RADIO TUNING PANELS CAPABLE OF TWO HF SYSTEMS AND NC THREE VHF SYSTEMS (8.33 KHZ CAPABLE) - P/N G7404-124 - BFE/SPE 2311A589A25 HF COMMUNICATIONS - INSTALLATION OF DUAL ROCKWELL HF TRANSCEIVERS - P/N 822-0330-001 AND NC DIGITAL HF COUPLERS - P/N 822-0987-003 - BFE/SPE 2312A637C67 VHF COMMUNICATIONS - TRIPLE ROCKWELL ARINC 716/750 VHF-900B FM IMMUNE TRANSCEIVERS WITH 8.33 NC KHZ CHANNEL SPACING AND CMC INTERFACE CAPABILITY - P/N 822-1047-003 - BFE/SPE 2312B401A06 VHF COMMUNICATIONS - COMPLETE PROVISIONS FOR THIRD (CENTER) VHF TRANSCEIVER $800 2321B401A04 SELCAL - AVTECH FIVE CHANNEL DECODER - P/N NA138-714C - BFE/SPE NC 2324A218A52 EMERGENCY LOCATOR TRANSMITTER (ELT) - ARTEX 3-FREQUENCY AUTOMATIC - FIXED, P/N 453-5004 - $21,000 BFE/SPE 2331B754B15 PASSENGER ADDRESS (PA) SYSTEM - ARINC 715 - ROCKWELL COLLINS AMPLIFIER - BFE/SPE NC 2331B754B17 PASSENGER ADDRESS (PA) SYSTEM - PA-IN-USE INDICATOR IN THE FLIGHT DECK - BFE/SPE $4,300 2331B754B21 PRAM/BMM SYSTEM - MATSUSHITA - 80MB - FASTEN SEAT BELT/DECOMPRESSION DISCRETES ACTIVATED - NC BFE/SPE 2350C174A16 AUDIO CONTROL PANEL INSTALLATION - 3VHF/2HF - AVTECH CORPORATION NC 2351-000034 HAND HELD MICROPHONE - CAPTAIN AND FIRST OFFICER - ELECTROVOICE - P/N 903-1341 - BFE/SPE NC 2351-000036 HAND HELD MICROPHONE - FIRST OBSERVER - ELECTROVOICE - P/N 903-1341 - BFE/SPE NC 2351A213B77 BOOM MICROPHONE HEADSETS - CAPTAIN AND FIRST OFFICER - TELEX AIRMAN 750 - P/N 64300-200 - NC BFE/SPE 2351A213B80 HEADPHONE - FIRST OBSERVER - TELEX - P/N 64400-200 - BFE/SPE NC 2351A213B81 HEADPHONE - SECOND OBSERVER - TELEX - P/N 64400-200 - BFE/SPE NC 2371-000009 NO MONITOR JACK IN THE WHEEL WELL NC 2371-000053 SOLID STATE VOICE RECORDER ED56A AND SOLID STATE MICROPHONE/MONITOR ED56A - ALLIEDSIGNAL- 2 NC HOUR RECORDING TIME - P/N 980-6022-001 & P/N 980-6116-001 - BFE/SPE 2433-000008 STANDBY BUS - CONNECTION OF AIR TRAFFIC CONTROL (ATC) NO. 1 NC 2433-000042 STANDBY POWER - 30-MINUTE CAPABILITY - SINGLE 48 AMP HOUR BATTERY $42,400 2433-000093 STANDBY BUS - LOADS ADDITION - FMCS, CDS & DME NC 2513-000433 CUPHOLDER - INSTALLATION - FIRST OFFICER'S SIDEWALL WITHOUT PRINTER OR AUDIO SELECTOR PANEL NC 2520B637K80 INTERIOR COLOR AND MATERIAL - STANDARD OFFERING - GOL NC 2523B637K79 PASSENGER SERVICE UNITS - 189 PAX $188,200 2524B637K92 FORWARD RIGHT HAND FULL HEIGHT WINDSCREEN/STOWAGE UNIT SELECTABLES $500 2525B637K97 ECONOMY CLASS SEATS - 737-800 - 189 PAX NC 2527C006A05 FLOOR COVERING - CARPET, SERGED EDGES NC 2528B637K98 OVERHEAD STOWAGE BINS $600 2528B637K99 LITERATURE POCKETS $2,400 2530B637L04 GALLEY PART NUMBERS - BFE NC 2530B637L05 GALLEY INSERT PART NUMBERS - G1 AND G4B GALLEY - BFE NC 2540B637L00 LA LAVATORY SELECTABLES $1,700
P.A. No. 2910 A-3 Exhibit A to Purchase Agreement No. 2910 Page 4
July 2003 STE Price CR Title Per A/C -- ----- ------- 2540B637L01 LD LAVATORY SELECTABLES NC 2540B637L02 LE LAVATORY SELECTABLES NC 2560-000178 PROTECTIVE BREATHING EQUIPMENT - FLIGHT DECK - SCOTT AVIATION - BFE/SPE $600 2562B637K73 OVERWATER EMERGENCY EQUIPMENT - GOT NC 2564B637K74 DETACHABLE EMERGENCY EQUIPMENT - PASSENGER COMPARTMENT $15,700 2622-000047 APU FIRE EXTINGUISHER BOTTLE - COMMON WITH ENGINES NC 2841-000004 STANDARD FUEL SYSTEM ACCURACY - NO FUEL DENSITOMETERS NC 2844-000004 FUEL MEASURING STICKS IN LINEAR UNITS WITH CONVERSION TABLES IN KILOGRAMS NC 2911-000041 ENGINE-DRIVEN HYDRAULIC PUMPS WITH VESPEL SPLINE - ABEX (10-62167) NC 2911-000043 AC MOTOR-DRIVEN HYDRAULIC PUMPS - ABEX (10-60556) NC 3131-000143 ACCELEROMETER - Honeywell P/N 971-4193-001 - BFE/SPE NC 3131-000187 DIGITAL FLIGHT DATA RECORDER - ALLIEDSIGNAL - 256 WORDS PER SECOND MAXIMUM DATA RATE - P/N NC 980-4700-042 BFE/SPE 3131A218A64 DIGITAL FLIGHT DATA ACQUISITION UNIT (DFDAU) WITH ACMS CAPABILITY AND INTEGRATED PCMCIA MEDIA NC INTERFACE - SFIM - P/N ED47B109 -BFE/SPE 3132C174A01 AIRBORNE DATA LOADER/RECORDER - ARINC 615 - HONEYWELL - 964-0401-017 - BFE/SPE NC 3162-000006 CDS DISPLAY - EFIS/MAP DISPLAY FORMAT - SIDE BY SIDE ENGINE PRESENTATION NC 3162-000022 FLIGHT DIRECTOR COMMAND DISPLAY - SPLIT AXIS - ADI NC 3162-000028 RADIO ALTITUDE - BELOW ADI NC 3162-000030 RISING RUNWAY - DISPLAYED ON THE ADI NC 3162-000032 RADIO ALTITUDE HEIGHT ALERT DISPLAY - 1000 FEET - ADI NC 3162-000042 TCAS RESOLUTION ADVISORY - ADI NC 3162-000044 TCAS RESOLUTION ADVISORY - VSI NC 3162-000046 SINGLE CHANNEL AUTOPILOT ANNUNCIATION - ABOVE ADI NC 3162-000047 LOCALIZER BACKCOURSE POLARITY - REVERSAL - ADI NC 3162-000050 ILS FAILURE FLAGS - DISPLAYED FOR NCD NC 3162-000051 ILS LOCALIZER DEVIATION EXPANDED SCALE - AUTOPILOT OR FLIGHT DIRECTOR MODE NC 3162-000059 MAP MODE ORIENTATION - TRACK UP - NAVIGATION DISPLAY NC 3162-000064 RANGE ARCS - NAVIGATION DISPLAY NC 3162-000079 MANUALLY TUNED VOR SELECTED COURSE LINES DISPLAYED - NAVIGATION DISPLAY NC 3162-000081 ADF POINTER(S) - NAVIGATION DISPLAY NC 3162-000084 TCAS 3 NM RANGE RING - NAVIGATION DISPLAY NC 3162-000085 FMC AND ADIRU POSITION DIFFERENCE - DIFFERENCE EXCEEDANCE DISPLAYED NC 3162-000288 APPROACH MINIMUMS - RADIO AND BARO BASED NC 3244-000008 SERVICE INTERPHONE CONNECTOR - EXTERNAL POWER PANEL NC 3245-000048 BRAKES - STEEL - HIGH CAPACITY - ALLIEDSIGNAL NC 3245-000093 WHEELS AND TIRES - MAIN LANDING GEAR - HIGH GROSS WEIGHT WHEELS - ALLIEDSIGNAL - INSTALLATION NC WITH SFE 28 PR, 225 MPH TIRES 3245-000097 WHEELS AND TIRES - NOSE LANDING GEAR - WHEELS - ALLIEDSIGNAL - INSTALLATION WITH SFE 12 PR, 225 NC MPH RADIAL TIRES 3321-000001 PASSENGER CABIN LIGHTING - SINGLE-ZONE CONTROL NC 3324-000017 NO SMOKING SIGN - PERMANENT ILLUMINATION NC
P.A. No. 2910 A-4 Exhibit A to Purchase Agreement No. 2910 Page 5
July 2003 STE Price CR Title Per A/C -- ----- ------- 3342-000035 NOSE GEAR TAXI LIGHT - 250-WATT NC 3350A164A15 EMERGENCY ESCAPE PATH LIGHTING - SEAT/MONUMENT MOUNTED - SFE NC 3350A704A19 EMERGENCY ESCAPE PATH LIGHTING - FLOOR MOUNTED - PHOTOLUMINESCENT $18,400 3412-000022 DUAL ELEMENT NON-ASPIRATED TAT PROBE NC 3414-000035 STANDBY ALTIMETER/AIRSPEED INDICATOR - FLIGHT DECK NC 3423-000023 STANDBY ATTITUDE INDICATOR - SEXTANT AVIONIQUE - SFE NC 3430-000112 ILS/GPS MULTI-MODE RECEIVER(MMR) - ALLIEDSIGNAL - P/N 066-50029-1101 - BFE/SPE NC 3431A065B03 VHF NAV/DME CONTROL PANEL - GABLES ENGINEERING - P/N G7500-03 - BFE/SPE NC 3433A732A13 RADIO ALTIMETER (RA) - CAT IIIB CAPABLE - HONEYWELL INTERNATIONAL INC - P/N 066-50007-0111 - NC BFE/SPE 3443A065B13 SINGLE WEATHER RADAR SYSTEM - WITH PREDICTIVE WINDSHEAR AND MULTISCAN CAPABILITY - ROCKWELL NC COLLINS TRANSCEIVER P/N 822-1710-001 - BFE/SPE 3443B691B64 SINGLE WXR-2100 MULTISCAN WEATHER RADAR SYSTEM CONTROL PANEL - ROCKWELL COLLINS P/N $11,900 622-5129-802 - BFE 3445B866A10 TCAS SYSTEM - HONEYWELL INTERNATIONAL INC TCAS COMPUTER P/N 940-0300-001 - TCAS CHANGE 7 NC COMPLIANT - BFE/SPE 3446-000045 STANDARD VOLUME FOR ALTITUDE CALLOUTS NC 3446-000050 500 SMART CALLOUT NC 3446-000085 GROUND PROXIMITY WARNING SYSTEM ALTITUDE CALLOUTS - 2500, 1000, 500, 400, 300, 200, 100, 50, NC 40, 30, 20, 10, APPROACHING MINIMUMS, MINIMUMS 3451-000023 VOR/MARKER BEACON - ALLIEDSIGNAL RECEIVER P/N 066-50012-0101 - BFE/SPE NC 3453B866A17 ATC SYSTEM - HONEYWELL INTERNATIONAL INC ATC TRANSPONDER P/N 066-01127-1602 - ELS/EHS/ES AND NC TCAS CHANGE 7 COMPLIANT - HONEYWELL INTERNATIONAL INC CONTROL PANEL P/N 071-01503-2601 - BFE/SPE 3455-000020 DISTANCE MEASURING EQUIPMENT (DME) - ALLIEDSIGNAL INTERROGATOR P/N 066-50013-0101 - BFE/SPE NC 3457A065A61 AUTOMATIC DIRECTION FINDER - SINGLE SYSTEM NC 3457A065A62 AUTOMATIC DIRECTION FINDER (ADF) - SINGLE SYSTEM - ALLIEDSIGNAL DFA-75B - ADF RECEIVER P/N NC 066-50014-0101; ADF ANTENNA P/N 2041683-7507 - BFE/SPE 3457A065A65 SINGLE ADF CONTROL PANEL - GABLES - G7402-05 - WITH TONE SWITCH - BFE/SPE NC 3461-000127 FMCS - BUILT-IN TEST EQUIPMENT PRINTER RECEPTACLES NC 3461A425A10 FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS) - NAVIGATION DATABASE - CUSTOMER SUPPLIED NC 3461B692B52 FLIGHT MANAGEMENT COMPUTER SYSTEM (FMCS) - FMC (SINGLE) WITH CAPTAIN'S CDU AND FIRST OFFICER'S $15,300 MCDU - INSTALLATION - SFE 3511-000011 NO REMOTE CREW OXYGEN FILL STATION NC 3511B873B95 CREW OXYGEN MASKS - FULL FACE MASK WITH BUILT-IN SMOKE GOGGLES - CAPTAIN AND FIRST OFFICER - $6,700 EROS - BFE/SPE 3511B899B49 CREW OXYGEN MASKS - AUTOMATIC PRESSURE BREATHING TYPE - FIRST OBSERVER - EROS - BFE/SPE NC 3511B899B50 CREW OXYGEN MASKS - AUTOMATIC PRESSURE BREATHING TYPE - SECOND OBSERVER - EROS/SCOTT AVIATION - NC BFE/SPE 3520-000254 CHEMICAL OXYGEN GENERATORS - PASSENGER OXYGEN SYSTEM - 22 MINUTES CAPABILITY $37,800 3811-000019 POTABLE WATER - SERVICEABLE TO 60 GALLONS $1,700
P.A. No. 2910 A-5 Exhibit A to Purchase Agreement No. 2910 Page 6
July 2003 STE Price CR Title Per A/C -- ----- ------- 3832-000032 VACUUM WASTE SYSTEM - MONOGRAM TOILET ASSEMBLIES NC 3910C028D97 AFT ELECTRONICS PANEL ARRANGEMENT - GOT NC 5200-000036 HOLD-OPEN LOCK (DOWN-TO-RELEASE) - ENTRY AND SERVICE DOORS NC 5231A561C54 CARGO DOOR - SOLID SKIN NC 5300-000027 UNDERSEAT FLOOR PANELS, LOW TRAFFIC CAPABILITY NC 7200-000224 SINGLE ANNULAR COMBUSTOR - CFM56-7 ENGINES NC 7200A251A03 CFM56-7 ENGINES - 7B27/B1 FULL RATING SIDE LTR 7900-000116 LUBRICATING OIL - MOBIL JET II NC MISC INTERIOR ALLOWANCE -$845,300 TBD TWO POSITION TAIL SKID - 737-800 $252,400 ---------- OPTIONS: 144 TOTALS: $562,200
P.A. No. 2910 A-6 AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES between THE BOEING COMPANY and GOL TRANSPORTES AEREOS SA Exhibit B to Purchase Agreement Number 2910 P.A. No. 2910 B AIRCRAFT DELIVERY REQUIREMENTS AND RESPONSIBILITIES relating to BOEING MODEL 737-8EH AIRCRAFT Both Boeing and Customer have certain documentation and approval responsibilities at various times during the construction cycle of Customer's Aircraft that are critical to making the delivery of each Aircraft a positive experience for both parties. This Exhibit B documents those responsibilities and indicates recommended completion deadlines for the actions to be accomplished. 1. GOVERNMENT DOCUMENTATION REQUIREMENTS. Certain actions are required to be taken by Customer in advance of the scheduled delivery month of each Aircraft with respect to obtaining certain government issued documentation. 1.1 Airworthiness and Registration Documents. Not later than 6 MONTHS PRIOR TO DELIVERY of each Aircraft, Customer will notify Boeing of the registration number to be painted on the side of the Aircraft. In addition, and not later than 3 MONTHS PRIOR TO DELIVERY of each Aircraft, Customer will, by letter to the regulatory authority having jurisdiction, authorize the temporary use of such registration numbers by Boeing during the pre-delivery testing of the Aircraft. Customer is responsible for furnishing any Temporary or Permanent Registration Certificates required by any governmental authority having jurisdiction to be displayed aboard the Aircraft after delivery. 1.2 Certificate of Sanitary Construction. 1.2.1 U.S. Registered Aircraft. Boeing will obtain from the United States Public Health Service, a United States Certificate of Sanitary Construction to be displayed aboard each Aircraft after delivery to Customer. 1.2.2 Non-U.S. Registered Aircraft. If Customer requires a United States Certificate of Sanitary Construction at the time of delivery of the Aircraft, Customer will give written notice thereof to Boeing at least 3 MONTHS PRIOR TO DELIVERY. Boeing will then obtain the Certificate from the United States Public Health Service and present it to Customer at the time of Aircraft delivery. P.A. No. 2910 B-1 1.3 Customs Documentation. 1.3.1 Import Documentation. If the Aircraft is intended to be exported from the United States, Customer must notify Boeing not later than 3 MONTHS PRIOR TO DELIVERY of each Aircraft of any documentation required by the customs authorities or by any other agency of the country of import. 1.3.2 General Declaration - U.S. If the Aircraft is intended to be exported from the United States, Boeing will prepare Customs Form 7507, General Declaration, for execution by U.S. Customs immediately prior to the ferry flight of the Aircraft. For this purpose, Customer will furnish to Boeing not later than 20 DAYS PRIOR TO DELIVERY all information required by U.S. Customs or U.S. Immigration and Naturalization Service, including without limitation (i) a complete crew and passenger list identifying the names, birth dates, passport numbers and passport expiration dates of all crew and passengers and (ii) a complete ferry flight itinerary, including point of exit from the United States for the Aircraft. If Customer intends, during the ferry flight of an Aircraft, to land at a U.S. airport after clearing Customs at delivery, Customer must notify Boeing not later than 20 DAYS PRIOR TO DELIVERY of such intention. If Boeing receives such notification, Boeing will provide to Customer the documents constituting a Customs permit to proceed, allowing such Aircraft to depart after any such landing. Sufficient copies of completed Form 7507, along with passenger manifest, will be furnished to Customer to cover U.S. stops scheduled for the ferry flight. 1.3.3 Export Declaration - U.S. If the Aircraft is intended to be exported from the United States, Boeing will prepare Form 7525V and, IMMEDIATELY PRIOR TO THE FERRY FLIGHT, will submit such Form to U.S. Customs in Seattle in order to obtain clearance for the departure of the Aircraft, including any cargo, from the United States. U.S. Customs will deliver the Export Declaration to the U.S. Department of Commerce after export. 2. INSURANCE CERTIFICATES. Unless provided earlier, Customer will provide to Boeing not later than 30 DAYS PRIOR TO DELIVERY of the first Aircraft, a copy of the requisite annual insurance certificate in accordance with the requirements of Article 8 of the AGTA. P.A. No. 2910 B-2 3. NOTICE OF FLYAWAY CONFIGURATION. Not later than 20 DAYS PRIOR TO DELIVERY of the Aircraft, Customer will provide to Boeing a configuration letter stating the requested "flyaway configuration" of the Aircraft for its ferry flight. This configuration letter should include: (i) the name of the company which is to furnish fuel for the ferry flight and any scheduled post-delivery flight training, the method of payment for such fuel, and fuel load for the ferry flight; (ii) the cargo to be loaded and where it is to be stowed on board the Aircraft, the address where cargo is to be shipped after flyaway and notification of any hazardous materials requiring special handling; (iii) any BFE equipment to be removed prior to flyaway and returned to Boeing BFE stores for installation on Customer's subsequent Aircraft; (iv) a complete list of names and citizenship of each crew member and non-revenue passenger who will be aboard the ferry flight; and (v) a complete ferry flight itinerary. 4. DELIVERY ACTIONS BY BOEING. 4.1 Schedule of Inspections. All FAA, Boeing, Customer and, if required, U.S. Customs Bureau inspections will be scheduled by Boeing for completion prior to delivery or departure of the Aircraft. Customer will be informed of such schedules. 4.2 Schedule of Demonstration Flights. All FAA and Customer demonstration flights will be scheduled by Boeing for completion prior to delivery of the Aircraft. 4.3 Schedule for Customer's Flight Crew. Boeing will inform Customer of the date that a flight crew is required for acceptance routines associated with delivery of the Aircraft. P.A. No. 2910 B-3 4.4 Fuel Provided by Boeing. Boeing will provide to Customer, without charge, the amount of fuel shown in U.S. gallons in the table below for the model of Aircraft being delivered and full capacity of engine oil at the time of delivery or prior to the ferry flight of the Aircraft.
AIRCRAFT MODEL FUEL PROVIDED - -------------- ------------- 737 1,000 747 4,000 757 1,600 767 2,000 777 3,000
4.5 Flight Crew and Passenger Consumables. Boeing will provide, at no charge to Customer, reasonable quantities of food, coat hangers, towels, toilet tissue, drinking cups and soap for the first segment of the ferry flight for the Aircraft. 4.6 Delivery Papers, Documents and Data. Boeing will have available at the time of delivery of the Aircraft certain delivery papers, documents and data for execution and delivery. If title for the Aircraft will be transferred to Customer through a Boeing sales subsidiary and if the Aircraft will be registered with the FAA, Boeing will pre-position in Oklahoma City, Oklahoma, for filing with the FAA at the time of delivery of the Aircraft an executed original Form 8050-2, Aircraft Bill of Sale, indicating transfer of title to the Aircraft from Boeing's sales subsidiary to Customer. 4.7 Delegation of Authority. If specifically requested in advance by Customer, Boeing will present a certified copy of a Resolution of Boeing's Board of Directors, designating and authorizing certain persons to act on its behalf in connection with delivery of the Aircraft. 5. DELIVERY ACTIONS BY CUSTOMER. 5.1 Aircraft Radio Station License. At delivery Customer will provide its Aircraft Radio Station License to be placed on board the Aircraft following delivery. 5.2. Aircraft Flight Log. At delivery Customer will provide the Aircraft Flight Log for the Aircraft. 5.3 Delegation of Authority. Customer will present to Boeing at delivery of the Aircraft an original or certified copy of Customer's Delegation of Authority designating and authorizing certain persons to act on its behalf in connection with delivery of the specified Aircraft. P.A. No. 2910 B-4 ESCALATION ADJUSTMENT AIRFRAME AND OPTIONAL FEATURES between THE BOEING COMPANY and GOL TRANSPORTES AEREOS SA Supplemental Exhibit AE1 to Purchase Agreement Number 2910 (For Model 717-200, 737-600, 737-700, 737-800, 737-900, 777-200LR and 777-300ER the Airframe Price Includes the Engine Price at its basic thrust level.) P.A. No. 2910 AE1 - 1 ESCALATION ADJUSTMENT AIRFRAME AND OPTIONAL FEATURES 1. Formula. Airframe and Optional Features price adjustments (Airframe Price Adjustment) are used to allow prices to be stated in current year dollars at the signing of this Purchase Agreement and to adjust the amount to be paid by Customer at delivery for the effects of economic fluctuation. The Airframe Price Adjustment will be determined at the time of Aircraft delivery in accordance with the following formula: P(a) = (P+B)(L + M) - P Where: P(a)= Airframe Price Adjustment. (For Models 717-200, 737-600, 737-700, 737-800, 737-900, 777-200X and 777-300X the Airframe Price includes the Engine Price at its basic thrust level.) L = .65 x (ECI ----- ECI(b) where ECI(b) is the base year index (as set forth in Table 1 of this Purchase Agreement) M = .35 x (ICI ---- ICI(b) where ICI(b) is the base year index (as set forth in Table 1 of this Purchase Agreement) P = Airframe Price plus Optional Features Price (as set forth in Table 1 of this Purchase Agreement). P.A. No. 2910 AE1 - 1 B = 0.005 x (N/12) x (P) where N is the number of calendar months which have elapsed from the Airframe Price Base Year and Month up to and including the month of delivery, both as shown in Table 1 of the Purchase Agreement. The entire calculation of 0.005 X (N/12) will be rounded to 4 places, and the final value of B will be rounded to the nearest dollar. ECI is a value determined using the U.S. Department of Labor, Bureau of Labor Statistics "Employment Cost Index for workers in aircraft manufacturing - Wages and Salaries" (ECI code 3721), calculated by establishing a three-month arithmetic average value (expressed as a decimal and rounded to the nearest tenth) using the values for the fifth, sixth and seventh months prior to the month of scheduled delivery of the applicable Aircraft. As the Employment Cost Index values are only released on a quarterly basis, the value released for the month of March will be used for the months of January and February; the value for June used for April and May; the value for September used for July and August; and the value for December used for October and November. ICI is a value determined using the U.S. Department of Labor, Bureau of Labor Statistics "Producer Prices and Price Index - Industrial Commodities Index ", calculated as a 3-month arithmetic average of the released monthly values (expressed as a decimal and rounded to the nearest tenth) using the values for the 5th, 6th and 7th months prior to the month of scheduled delivery of the applicable Aircraft. As an example, for an Aircraft scheduled to be delivered in the month of January, the months June, July and August of the preceding year will be utilized in determining the value of ECI and ICI. Note: i. In determining the values of L and M, all calculations and resulting values will be expressed as a decimal rounded to the nearest ten-thousandth. ii. .65 is the numeric ratio attributed to labor in the Airframe Price Adjustment formula. iii. .35 is the numeric ratio attributed to materials in the Airframe Price Adjustment formula. iv. The denominators (base year indices) are the actual average values reported by the U.S. Department of Labor, Bureau of Labor Statistics (base P.A. No. 2910 AE1 - 2 year June 1989 = 100). The applicable base year and corresponding denominator is provided by Boeing in Table 1 of this Purchase Agreement. v. The final value of P(a) will be rounded to the nearest dollar. vi. The Airframe Price Adjustment will not be made if it will result in a decrease in the Aircraft Basic Price. 2. Values to be Utilized in the Event of Unavailability. 2.1 If the Bureau of Labor Statistics substantially revises the methodology used for the determination of the values to be used to determine the ECI and ICI values (in contrast to benchmark adjustments or other corrections of previously released values), or for any reason has not released values needed to determine the applicable Airframe Price Adjustment, the parties will, prior to the delivery of any such Aircraft, select a substitute from other Bureau of Labor Statistics data or similar data reported by non-governmental organizations. Such substitute will result in the same adjustment, insofar as possible, as would have been calculated utilizing the original values adjusted for fluctuation during the applicable time period. However, if within 12 months after delivery of the Aircraft, the Bureau of Labor Statistics should resume releasing values for the months needed to determine the Airframe Price Adjustment, such values will be used to determine any increase or decrease in the Airframe Price Adjustment for the Aircraft from that determined at the time of delivery of the Aircraft. 2.2 Notwithstanding Article 2.1 above, if prior to the scheduled delivery month of an Aircraft the Bureau of Labor Statistics changes the base year for determination of the ECI and ICI values as defined above, such re-based values will be incorporated in the Airframe Price Adjustment calculation. 2.3 In the event escalation provisions are made non-enforceable or otherwise rendered void by any agency of the United States Government, the parties agree, to the extent they may lawfully do so, to equitably adjust the Aircraft Price of any affected Aircraft to reflect an allowance for increases or decreases in labor compensation and material costs occurring since February of the price base year shown in the Purchase Agreement which is consistent with the applicable provisions of paragraph 1 of this Supplemental Exhibit AE1. 2.4 If within 12 months of Aircraft delivery, the published index values are revised due to an acknowledged error by the Bureau of Labor Statistics, the Airframe Price Adjustment will be re-calculated using the revised index values (this does not include those values noted as preliminary by the Bureau of Labor Statistics). A credit memorandum or supplemental invoice will be issued for the Airframe Price Adjustment difference. Interest charges will not apply for the period of original invoice to issuance of credit memorandum or supplemental invoice. P.A. No. 2910 AE1 - 3 Note: i. The values released by the Bureau of Labor Statistics and available to Boeing 30 days prior to the first day of the scheduled delivery month of an Aircraft will be used to determine the ECI and ICI values for the applicable months (including those noted as preliminary by the Bureau of Labor Statistics) to calculate the Airframe Price Adjustment for the Aircraft invoice at the time of delivery. The values will be considered final and no Airframe Price Adjustments will be made after Aircraft delivery for any subsequent changes in published Index values, subject always to paragraph 2.4 above. ii. The maximum number of digits to the right of the decimal after rounding utilized in any part of the Airframe Price Adjustment equation will be 4, where rounding of the fourth digit will be increased to the next highest digit when the 5th digit is equal to 5 or greater. P.A. No. 2910 AE1 - 4 BUYER FURNISHED EQUIPMENT VARIABLES between THE BOEING COMPANY and GOL TRANSPORTES AEREOS SA Supplemental Exhibit BFE1 to Purchase Agreement Number 2910 P.A. No. 2910 BFE1 BUYER FURNISHED EQUIPMENT VARIABLES relating to BOEING MODEL 737-8EH AIRCRAFT This Supplemental Exhibit BFE1 contains vendor selection dates, on-dock dates and other variables applicable to the Aircraft. 1. Supplier Selection. Customer will: 1.1 Select and notify Boeing of the suppliers and part numbers of the following BFE items by the following dates: Galley System July 19, 2006 ---------------- Galley Inserts July 19, 2006 ---------------- Seats (passenger) July 19, 2006 ---------------- Cabin Systems Equipment July 19, 2006 ---------------- Miscellaneous Emergency Equipment July 19, 2006 ---------------- Cargo Handling Systems November 6, 2006 ---------------- P.A. No. 2910 BFE1-1 2. On-dock Dates On or about 17 December 2004, Boeing will provide to Customer a BFE Requirements On-Dock/Inventory Document (BFE Document) or an electronically transmitted BFE Report which may be periodically revised, setting forth the items, quantities, on-dock dates and shipping instructions relating to the in-sequence installation of BFE. For planning purposes, a preliminary BFE on-dock schedule is set forth below:
Item Preliminary On-Dock Dates JULY 2007 Aircraft Aircraft -------- -------- Seats 5/19/07 Galleys/Furnishings 5/12/07 Miscellaneous Emergency Equipment 5/12/07 Electronics 3/19/07 Textiles/Raw Material 2/8/07 Cargo Systems 5/4/07 Provision Kits 1/4/07 Radomes 4/12/07

Item Preliminary On-Dock Dates OCTOBER 2007 Aircraft Aircraft -------- -------- Seats 8/27/07 Galleys/Furnishings 8/20/07 Miscellaneous Emergency Equipment 8/20/07 Electronics 6/27/07 Textiles/Raw Material 5/10/07 Cargo Systems 8/6/07 Provision Kits 4/6/07 Radomes 7/20/07
P.A. No. 2910 BFE1-2
Item Preliminary On-Dock Dates NOVEMBER 2007 (1) Aircraft Aircraft -------- -------- Seats 9/21/07 Galleys/Furnishings 9/14/07 Miscellaneous Emergency Equipment 9/14/07 Electronics 7/21/07 Textiles/Raw Material 6/11/07 Cargo Systems 8/31/07 Provision Kits 4/30/07 Radomes 8/14/07

Item Preliminary On-Dock Dates NOVEMBER 2007 (2) Aircraft Aircraft -------- -------- Seats 9/23/07 Galleys/Furnishings 9/16/07 Miscellaneous Emergency Equipment 9/16/07 Electronics 7/23/07 Textiles/Raw Material 6/12/07 Cargo Systems 9/4/07 Provision Kits 5/4/07 Radomes 8/16/07
P.A. No. 2910 BFE1-3
Item Preliminary On-Dock Dates DECEMBER 2007 (1) Aircraft Aircraft -------- -------- Seats 10/21/07 Galleys/Furnishings 10/14/07 Miscellaneous Emergency Equipment 10/14/07 Electronics 8/21/07 Textiles/Raw Material 7/11/07 Cargo Systems 10/1/07 Provision Kits 6/1/07 Radomes 9/14/07

Item Preliminary On-Dock Dates DECEMBER 2007 (2) Aircraft Aircraft -------- -------- Seats 10/24/07 Galleys/Furnishings 10/17/07 Miscellaneous Emergency Equipment 10/17/07 Electronics 8/24/07 Textiles/Raw Material 7/12/07 Cargo Systems 10/3/07 Provision Kits 6/3/07 Radomes 9/17/07
P.A. No. 2910 BFE1-4
Item Preliminary On-Dock Dates JANUARY 2008 (1) Aircraft Aircraft -------- -------- Seats 11/18/07 Galleys/Furnishings 11/11/07 Miscellaneous Emergency Equipment 11/11/07 Electronics 9/18/07 Textiles/Raw Material 8/8/07 Cargo Systems 10/28/07 Provision Kits 6/28/07 Radomes 10/11/07

Item Preliminary On-Dock Dates JANUARY 2008 (2) Aircraft Aircraft -------- -------- Seats 11/21/07 Galleys/Furnishings 11/14/07 Miscellaneous Emergency Equipment 11/14/07 Electronics 9/21/07 Textiles/Raw Material 8/9/07 Cargo Systems 10/29/07 Provision Kits 6/29/07 Radomes 10/14/07
P.A. No. 2910 BFE1-5
Item Preliminary On-Dock Dates APRIL 2008 Aircraft Aircraft -------- -------- Seats 2/17/08 Galleys/Furnishings 2/10/08 Miscellaneous Emergency Equipment 2/10/08 Electronics 12/17/07 Textiles/Raw Material 10/27/07 Cargo Systems 1/29/07 Provision Kits 9/26/07 Radomes 1/10/08

Item Preliminary On-Dock Dates AUGUST 2008 Aircraft Aircraft -------- -------- Seats 6/21/08 Galleys/Furnishings 6/14/08 Miscellaneous Emergency Equipment 6/21/08 Electronics 4/21/08 Textiles/Raw Material 3/9/08 Cargo Systems 5/31/08 Provision Kits 1/31/08 Radomes 5/14/08
P.A. No. 2910 BFE1-6
Item Preliminary On-Dock Dates OCTOBER 2008 Aircraft Aircraft -------- -------- Seats 8/22/08 Galleys/Furnishings 8/15/08 Miscellaneous Emergency Equipment 8/15/08 Electronics 6/22/08 Textiles/Raw Material 5/10/08 Cargo Systems 8/1/08 Provision Kits 4/1/08 Radomes 7/15/08

Item Preliminary On-Dock Dates FEBRUARY 2009 (1) Aircraft Aircraft -------- -------- Seats 12/13/08 Galleys/Furnishings 12/6/08 Miscellaneous Emergency Equipment 12/6/08 Electronics 9/13/08 Textiles/Raw Material 8/29/08 Cargo Systems 11/14/08 Provision Kits 7/14/08 Radomes 11/6/08
P.A. No. 2910 BFE1-7
Item Preliminary On-Dock Dates FEBRUARY 2009 (2) Aircraft Aircraft -------- -------- Seats 12/14/08 Galleys/Furnishings 12/7/08 Miscellaneous Emergency Equipment 12/14/08 Electronics 9/14/08 Textiles/Raw Material 8/30/08 Cargo Systems 11/15/08 Provision Kits 7/17/08 Radomes 11/7/08

Item Preliminary On-Dock Dates AUGUST 2009 Aircraft Aircraft -------- -------- Seats 6/21/09 Galleys/Furnishings 6/14/09 Miscellaneous Emergency Equipment 6/21/09 Electronics 4/21/09 Textiles/Raw Material 3/9/09 Cargo Systems 5/31/09 Provision Kits 1/31/09 Radomes 5/14/09
P.A. No. 2910 BFE1-8
Item Preliminary On-Dock Dates SEPTEMBER 2009 Aircraft Aircraft -------- -------- Seats 7/20/09 Galleys/Furnishings 7/13/09 Miscellaneous Emergency Equipment 7/13/09 Electronics 5/20/09 Textiles/Raw Material 4/9/09 Cargo Systems 6/20/09 Provision Kits 2/20/09 Radomes 6/13/09
P.A. No. 2910 BFE1-9 CUSTOMER SUPPORT VARIABLES between THE BOEING COMPANY and GOL TRANSPORTES AEREOS SA Supplemental Exhibit CS1 to Purchase Agreement Number 2910 P.A. No. 2910 CS1 CUSTOMER SUPPORT VARIABLES relating to BOEING MODEL 737-800 AIRCRAFT Customer currently operates an aircraft of the same model as the Aircraft. Upon Customer's request, Boeing will develop and schedule a customized Customer Support Program to be furnished in support of the Aircraft. The customized program will be based upon and equivalent to the entitlements summarized below, without additional charges to Customer. 1. Maintenance Training. 1.1 Maintenance Training Minor Model Differences Course, if required, covering operational, structural or systems differences between Customer's newly-purchased Aircraft and an aircraft of the same model currently operated by Customer; 1 class of 15 students; 1.2 Training materials, if applicable, will be provided to each student. In addition, one set of training materials as used in Boeing's training program, including visual aids, text and graphics will be provided for use in Customer's own training program. 2. Flight Training. Boeing will provide, if required, one classroom course to acquaint up to 15 students with operational, systems and performance differences between Customer's newly-purchased Aircraft and an aircraft of the same model currently operated by Customer. Any training materials used in Flight Training, if required, will be provided for use in Customer's own training program. P.A. No. 2910 CS1-1 3. Planning Assistance. 3.1 Maintenance and Ground Operations. Upon request, Boeing will provide planning assistance regarding Minor Model Differences requirements for facilities, tools and equipment. 3.2 Spares. Boeing will revise, as applicable, the customized Recommended Spares Parts List (RSPL) and Illustrated Parts Catalog (IPC). 4. Technical Data and Documents. Boeing will revise, as applicable, technical data and documents provided with previously delivered aircraft. P.A. No. 2910 CS1-2 ENGINE ESCALATION, ENGINE WARRANTY AND PATENT INDEMNITY between THE BOEING COMPANY and GOL TRANSPORTES AEREOS SA Supplemental Exhibit EE1 to Purchase Agreement Number 2910 P.A. No. 2910 EE1 ENGINE ESCALATION, ENGINE WARRANTY AND PATENT INDEMNITY relating to BOEING MODEL 737-8EH AIRCRAFT 1. ENGINE ESCALATION. No separate engine escalation methodology is defined for the 737-600, -700, -800 or -900 Aircraft. Pursuant to the AGTA, the engine prices for these Aircraft are included in and will be escalated in the same manner as the Airframe. 2. ENGINE WARRANTY AND PRODUCT SUPPORT PLAN. Boeing has obtained from CFM International, Inc. (or CFM International, S.A., as the case may be) (CFM) the right to extend to Customer the provisions of CFM's warranty as set forth below (herein referred to as the "Warranty"); subject, however, to Customer's acceptance of the conditions set forth herein. Accordingly, Boeing hereby extends to Customer and Customer hereby accepts the provisions of CFM's Warranty as hereinafter set forth, and such Warranty shall apply to all CFM56-7 type Engines (including all Modules and Parts thereof) installed in the Aircraft at the time of delivery or purchased from Boeing by Customer for support of the Aircraft except that, if Customer and CFM have executed, or hereafter execute, a General Terms Agreement, then the terms of that Agreement shall be substituted for and supersede the provisions of Paragraphs 1 through 10 below and Paragraphs 1 through 10 below shall be of no force or effect and neither Boeing nor CFM shall have any obligation arising therefrom. In consideration for Boeing's extension of the CFM Warranty to Customer, Customer hereby releases and discharges Boeing from any and all claims, obligations and liabilities whatsoever arising out of the purchase or use of such CFM56-7 type Engines and Customer hereby waives, releases and renounces all its rights in all such claims, obligations and liabilities. In addition, Customer hereby releases and discharges CFM from any and all claims, obligations and liabilities whatsoever arising out of the purchase or use of such CFM56-7 type Engines except as otherwise expressly assumed by CFM in such CFM Warranty or General Terms Agreement between Customer and CFM and Customer hereby waives, releases and renounces all its rights in all such claims, obligations and liabilities. 2.1. Title. CFM warrants that at the date of delivery, CFM has legal title to and good and lawful right to sell its CFM56-7 type Engine and Products and furthermore warrants that such title is free and clear of all claims, liens and encumbrances of any nature whatsoever. P.A. No. 2910 EE1-1 2.2. Patents. 2.2.1 CFM shall handle all claims and defend any suit or proceeding brought against Customer insofar as based on a claim that any product or part furnished under this Agreement constitutes an infringement of any patent of the United States, and shall pay all damages and costs awarded therein against Customer. This paragraph shall not apply to any product or any part manufactured to Customer's design or to the aircraft manufacturer's design. As to such product or part, CFM assumes no liability for patent infringement. 2.2.2 CFM's liability hereunder is conditioned upon Customer promptly notifying CFM in writing and giving CFM authority, information and assistance (at CFM's expense) for the defense of any suit. In case said equipment or part is held in such suit to constitute infringement and the use of said equipment or part is enjoined, CFM shall expeditiously, at its own expense and at its option, either (i) procure for Customer the rights to continue using said product or part; (ii) replace the same with a satisfactory and noninfringing product or part; or (iii) modify the same so it becomes satisfactory and noninfringing. The foregoing shall constitute the sole remedy of Customer and the sole liability of CFM for patent infringement. 2.2.3 The above provisions also apply to products which are the same as those covered by this Agreement and are delivered to Customer as part of the installed equipment on CFM56-7 powered Aircraft. 2.3. Initial Warranty. CFM warrants that CFM56-7 Engine products will conform to CFM's applicable specifications and will be free from defects in material and workmanship prior to Customer's initial use of such products. 2.4. Warranty Pass-On. 2.4.1 If requested by Customer and agreed to by CFM in writing, CFM will extend warranty support for Engines sold by Customer to commercial airline operators, or to other aircraft operators. Such warranty support will be limited to the New Engine Warranty, New Parts Warranty, Ultimate Life Warranty and Campaign Change Warranty and will require such operator(s) to agree in writing to be bound by and comply with all the terms and conditions, including the limitations, applicable to such warranties. P.A. No. 2910 EE1-2 2.4.2 Any warranties set forth herein shall not be transferable to a third party, merging company or an acquiring entity of Customer. 2.4.3 In the event Customer is merged with, or acquired by, another aircraft operator which has a general terms agreement with CFM, the Warranties as set forth herein shall apply to the Engines, Modules, and Parts. 2.5. New Engine Warranty. 2.5.1. CFM warrants each new Engine and Module against Failure for the initial 3000 Flight Hours as follows: (i) Parts Credit Allowance will be granted for any Failed Parts. (ii) Labor Allowance for disassembly, reassembly, test and Parts repair of any new Engine Part will be granted for replacement of Failed Parts. (iii) Such Parts Credit Allowance, test and Labor Allowance will be: 100% from new to 2500 Flight Hours and decreasing pro rata from 100% at 2500 Flight Hours to zero percent at 3000 Flight Hours. 2.5.2 As an alternative to the above allowances, CFM shall, upon request of Customer: (i) Arrange to have the failed Engines and Modules repaired, as appropriate, at a facility designated by CFM at no charge to Customer for the first 2500 Flight Hours and at a charge to Customer increasing pro rata from zero percent of CFM's repair cost at 2500 Flight Hours to 100% of such CFM repair costs at 3000 Flight Hours. (ii) Transportation to and from the designated facility shall be at Customer's expense. 2.6. New Parts Warranty. In addition to the warranty granted for new Engines and new Modules, CFM warrants Engine and Module Parts as follows: 2.6.1. During the first 1000 Flight Hours for such Parts and Expendable Parts, CFM will grant 100% Parts Credit Allowance or Labor Allowance for repair labor for failed Parts. P.A. No. 2910 EE1-3 2.6.2. CFM will grant a pro rata Parts Credit Allowance for Scrapped Parts decreasing from 100% at 1000 Flight Hours Part Time to zero percent at the applicable hours designated in Table 1. 2.7. Ultimate Life Warranty. 2.7.1. CFM warrants Ultimate Life limits on the following Parts: (i) Fan and Compressor Disks/Drums (ii) Fan and Compressor Shafts (iii) Compressor Discharge Pressure Seal (CDP) (iv) Turbine Disks (v) HPT Forward and Stub Shaft (vi) LPT Driving Cone (vii) LPT Shaft and Stub Shaft 2.7.2. CFM will grant a pro rata Parts Credit Allowance decreasing from 100% when new to zero percent at 25,000 Flight Hours or 15,000 Flight Cycles, whichever comes earlier. Credit will be granted only when such Parts are permanently removed from service by a CFM or a U.S. and/or French Government imposed Ultimate Life limitation of less than 25,000 Flight Hours or 15,000 Flight Cycles. 2.8. Campaign Change Warranty. 2.8.1. A campaign change will be declared by CFM when a new Part design introduction, Part modification, Part Inspection, or premature replacement of an Engine or Module is required by a mandatory time compliance CFM Service Bulletin or FAA Airworthiness Directive. Campaign change may also be declared for CFM Service Bulletins requesting new Part introduction no later than the next Engine or Module shop visit. CFM will grant following Parts Credit Allowances: Engines and Modules (i) 100% for Parts in inventory or removed from service when new or with 2500 Flight Hours or less total Part Time. (ii) 50% for Parts in inventory or removed from service with over 2500 Flight Hours since new, regardless of warranty status. P.A. No. 2910 EE1-4 2.8.2. Labor Allowance - CFM will grant 100% Labor Allowance for disassembly, reassembly, modification, testing, or Inspection of CFM supplied Engines, Modules, or Parts therefor when such action is required to comply with a mandatory time compliance CFM Service Bulletin or FAA Airworthiness Directive. A Labor Allowance will be granted by CFM for other CFM issued Service Bulletins if so specified in such Service Bulletins. 2.8.3. Life Controlled Rotating Parts retired by Ultimate Life limits including FAA and/or DGAC Airworthiness Directive, are excluded from Campaign Change Warranty. 2.9. Limitations. THE PROVISIONS SET FORTH HEREIN ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES WHETHER WRITTEN, ORAL OR IMPLIED. THERE ARE NO IMPLIED WARRANTIES OF FITNESS OR MERCHANTABILITY. SAID PROVISIONS SET FORTH THE MAXIMUM LIABILITY OF CFM WITH RESPECT TO CLAIMS OF ANY KIND, INCLUDING NEGLIGENCE, ARISING OUT OF MANUFACTURE, SALE, POSSESSION, USE OR HANDLING OF THE PRODUCTS OR PARTS THEREOF OR THEREFOR, AND IN NO EVENT SHALL CFM'S LIABILITY TO CUSTOMER EXCEED THE PURCHASE PRICE OF THE PRODUCT GIVING RISE TO CUSTOMER'S CLAIM OR INCLUDE INCIDENTAL OR CONSEQUENTIAL DAMAGES. 2.10. Indemnity and Contribution. 2.10.1. IN THE EVENT CUSTOMER ASSERTS A CLAIM AGAINST A THIRD PARTY FOR DAMAGES OF THE TYPE LIMITED OR EXCLUDED IN LIMITATIONS, PARAGRAPH 2.9. ABOVE, CUSTOMER SHALL INDEMNIFY AND HOLD CFM HARMLESS FROM AND AGAINST ANY CLAIM BY OR LIABILITY TO SUCH THIRD PARTY FOR CONTRIBUTION OR INDEMNITY, INCLUDING COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES) INCIDENT THERETO OR INCIDENT TO ESTABLISHING SUCCESSFULLY THE RIGHT TO INDEMNIFICATION UNDER THIS PROVISION. THIS INDEMNITY SHALL APPLY WHETHER OR NOT SUCH DAMAGES WERE OCCASIONED IN WHOLE OR IN PART BY THE FAULT OR NEGLIGENCE OF CFM, WHETHER ACTIVE, PASSIVE OR IMPUTED. 2.10.2. CUSTOMER SHALL INDEMNIFY AND HOLD CFM HARMLESS FROM ANY DAMAGE, LOSS, CLAIM, AND P.A. No. 2910 EE1-5 LIABILITY OF ANY KIND (INCLUDING EXPENSES OF LITIGATION AND ATTORNEYS' FEES) FOR PHYSICAL INJURY TO OR DEATH OF ANY PERSON, OR FOR PROPERTY DAMAGE OF ANY TYPE, ARISING OUT OF THE ALLEGED DEFECTIVE NATURE OF ANY PRODUCT OR SERVICE FURNISHED UNDER THIS AGREEMENT, TO THE EXTENT THAT THE PAYMENTS MADE OR REQUIRED TO BE MADE BY CFM EXCEED ITS ALLOCATED SHARE OF THE TOTAL FAULT OR LEGAL RESPONSIBILITY OF ALL PERSONS ALLEGED TO HAVE CAUSED SUCH DAMAGE, LOSS, CLAIM, OR LIABILITY BECAUSE OF A LIMITATION OF LIABILITY ASSERTED BY CUSTOMER OR BECAUSE CUSTOMER DID NOT APPEAR IN AN ACTION BROUGHT AGAINST CFM. CUSTOMER'S OBLIGATION TO INDEMNIFY CFM HEREUNDER SHALL BE APPLICABLE AT SUCH TIME AS CFM IS REQUIRED TO MAKE PAYMENT PURSUANT TO A FINAL JUDGEMENT IN AN ACTION OR PROCEEDING IN WHICH CFM WAS A PARTY, PERSONALLY APPEARED, AND HAD THE OPPORTUNITY TO DEFEND ITSELF. THIS INDEMNITY SHALL APPLY WHETHER OR NOT CUSTOMER'S LIABILITY IS OTHERWISE LIMITED. P.A. No. 2910 EE1-6 TABLE 1 737X CFM56 WARRANTY PARTS LIST FLIGHT HOURS
Flight Hours -------------------------------------------- 2000 3000 4000 6000 8000 12000 ---- ---- ---- ---- ---- ----- Fan Rotor/Booster Blades X Disk, Drum X Spinner X Fan Frame Casing X Hub & Struts X Fairings X Splitter (Mid Ring) X Vanes X Engine Mount X No. 1 & No. 2 Bearing Support Bearings X Shaft X Support (Case) X Inlet Gearbox & No. 3 Bearing Bearings X Gear X Case X Compressor Rotor Blades X Disk & Drums X Shaft X Compressor Stator Casing X Shrouds X Vanes X Variable Stator Actuating X Rings Combustor Diffuser Nozzle (CDN) Casings X Combustor Liners X Fuel Atomizer X HPT Nozzle X HPT Nozzle Support X HPT Shroud X
P.A. No. 2910 EE1-7 TABLE 1 737X CFM56 WARRANTY PARTS LIST (continued)
Flight Hours -------------------------------------------- 2000 3000 4000 6000 8000 12000 ---- ---- ---- ---- ---- ----- HPT Rotor Blades X Disks X Shafts X Retaining Ring X LP Turbine Casing X Vane Assemblies X Interstage Seals X Shrouds X Disks X Shaft X Bearings X Blades X Turbine Frame Casing & Struts X Hub X Sump X Accessory & Transfer Gearboxes Case X Shafts X Gears X Bearings X Air-Oil Seals X Controls & Accessories Engine X Condition Monitoring Equipment X
P.A. No. 2910 EE1-8 SERVICE LIFE POLICY COMPONENTS between THE BOEING COMPANY and GOL TRANSPORTES AEREOS SA Supplemental Exhibit SLP1 to Purchase Agreement Number 2910 P.A. No. 2910 SLP1 SERVICE LIFE POLICY COMPONENTS relating to BOEING MODEL 737-8EH AIRCRAFT This is the listing of SLP Components for the Aircraft which relate to Part 3, Boeing Service Life Policy of Exhibit C, Product Assurance Document to the AGTA and is a part of Purchase Agreement No. 2910. 1. Wing. (a) Upper and lower skins and stiffeners between the forward and rear wing spars. (b) Wing spar webs, chords and stiffeners. (c) Inspar wing ribs. (d) Inspar splice plates and fittings. (e) Main landing gear support structure. (f) Wing center section floor beams, lower beams and spanwise beams, but not the seat tracks attached to floor beams. (g) Engine strut support fittings attached directly to wing primary structure. (h) Wing-to-body structural attachments. (i) Support structure in the wing for spoilers and spoiler actuators; for aileron hinges and reaction links; and for leading edge devices and trailing edge flaps. (j) Trailing edge flap tracks and carriages. (k) Aileron leading edge device and trailing edge flap internal, fixed attachment and actuator support structure. P.A. No. 2910 SLP1-1 2. Body. (a) External surface skins and doublers, longitudinal stiffeners, longerons and circumferential rings and frames between the forward pressure bulkhead and the vertical stabilizer rear spar bulkhead and structural support and enclosure for the APU but excluding all system components and related installation and connecting devices, insulation, lining, and decorative panels and related installation and connecting devices. (b) Window and windshield structure but excluding the windows and windshields. (c) Fixed attachment structure of the passenger doors, cargo doors and emergency exits, excluding door mechanisms and movable hinge components. Sills and frames around the body openings for the passenger doors, cargo doors and emergency exits, excluding scuff plates and pressure seals. (d) Nose wheel well structure, including the wheel well walls, pressure deck, bulkheads, and gear support structure. (e) Main gear wheel well structure including pressure deck and landing gear beam support structure. (f) Floor beams and support posts in the control cab and passenger cabin area, but excluding seat tracks. (g) Forward and aft pressure bulkheads. (h) Keel structure between the wing front spar bulkhead and the main gear wheel well aft bulkhead including splices. (i) Wing front and rear spar support bulkheads, and vertical and horizontal stabilizer front and rear spar support bulkheads including terminal fittings but excluding all system components and related installation and connecting devices, insulation, lining, decorative panels and related installation and connecting devices. (j) Support structure in the body for the stabilizer pivot and stabilizer screw. P.A. No. 2910 SLP1-2 3. Vertical Stabilizer. (a) External skins between front and rear spars. (b) Front, rear and auxiliary spar chords, webs and stiffeners and attachment fittings. (c) Inspar ribs. (d) Rudder hinges and supporting ribs, excluding bearings. (e) Support structure in the vertical stabilizer for rudder hinges, reaction links and actuators. (f) Rudder internal, fixed attachment and actuator support structure. 4. Horizontal Stabilizer. (a) External skins between front and rear spars. (b) Front and rear spar chords, webs and stiffeners. (c) Inspar ribs. (d) Stabilizer center section including hinge and screw support structure. (e) Support structure in the horizontal stabilizer for the elevator hinges, reaction links and actuators. (f) Elevator internal, fixed attachment and actuator support structure. 5. Engine Strut. (a) Strut external surface skin and doublers and stiffeners. (b) Internal strut chords, frames and bulkheads. (c) Strut to wing fittings and diagonal brace. (d) Engine mount support fittings attached directly to strut structure and including the engine-mounted support fittings. P.A. No. 2910 SLP1-3 6. Main Landing Gear. (a) Outer cylinder. (b) Inner cylinder, including axles. (c) Upper and lower side struts, including spindles, universals and reaction links. (d) Drag strut. (e) Bell crank. (f) Orifice support tube. (g) Trunnion link. (h) Downlock links including spindles and universals. (i) Torsion links. (j) Actuator beam, support link and beam arm. 7. Nose Landing Gear. (a) Outer cylinder. (b) Inner cylinder, including axles. (c) Orifice support tube. (d) Upper and lower drag strut, including lock links. (e) Steering plates and steering collars. (f) Torsion links. NOTE: The Service Life Policy does not cover any bearings, bolts, bushings, clamps, brackets, actuating mechanisms or latching mechanisms used in or on the Covered Components. P.A. No. 2910 SLP1-4 2910-01 GOL Transportes Aereos SA Rua Tamoios 246 Jardim Aeroporto Sao Paulo, SP 04630 Brazil Subject: Loading of Software Owned by or Licensed to Customer Reference: Purchase Agreement No. 2910 (the Purchase Agreement) between The Boeing Company (Boeing) and GOL Transportes Aereos SA (Customer) relating to Model 737-8EH aircraft (the Aircraft) This Letter Agreement amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the Purchase Agreement. Prior to delivery of an Aircraft to Customer, Customer may request Boeing to install software owned by or licensed to Customer (Software) in the following systems in the Aircraft: i) aircraft communications addressing and reporting system (ACARS), ii) digital flight data acquisition unit (DFDAU), iii) flight management system (FMS), iv) cabin management system (CMS), v) satellite communications system (SATCOM), vi) engine indication and crew alerting system (EICAS) and vii) airplane information management system (AIMS). The Software is not part of the configuration of the Aircraft certified by the FAA. If requested by Customer, Boeing will install the Software after the FAA has issued the standard airworthiness certificate or the export certificate of airworthiness, whichever is applicable, but before delivery of the Aircraft on the following conditions: 1. Customer and Boeing agree that the Software is deemed to be BFE for the purposes of Articles 3.1.3, 3.2, 3.4, 3.5, 3.10, 9, 10 and 11 of Exhibit A, Buyer Furnished Equipment Provisions Document, to the AGTA and such articles apply to the installation of the Software. P.A. No. 2910 GOT GOL Transportes Aereos SA Letter Agreement No. 2910-01 Page 2 Customer and Boeing further agree that the installation of the Software is deemed to be a service under Exhibit B, Customer Support Document, to the AGTA. Boeing makes no warranty as to the performance of such installation and Article 11 of Part 2 of Exhibit C of the AGTA, Disclaimer and Release; Exclusion of Liabilities and Article 8.2, Insurance, of the AGTA apply to the installation of the Software. Very truly yours, THE BOEING COMPANY By -------------------------------------- Its Attorney-In-Fact ------------------------------------- ACCEPTED AND AGREED TO this Date: , 2004 ---------------------------- GOL TRANSPORTES AEREOS SA By -------------------------------------- Its ------------------------------------- Witness: - ---------------------------------------- - ---------------------------------------- P.A. No. 2910 GOT 6-1162-DME-0714 GOL Transportes Aereos SA Rua Tamoios 246 Jardim Aeroporto Sao Paulo, SP 04630 Brazil Subject: Demonstration Flight Waiver Reference: Purchase Agreement No. 2910 (the Purchase Agreement) between The Boeing Company (Boeing) and GOL Transportes Aereos SA (Customer) relating to Model 737-8EH aircraft (the Aircraft) This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement shall have the same meaning as in the Purchase Agreement. Definition of Terms: CORRECTION COSTS: Customer's direct labor costs and the cost of any material required to correct a Flight Discrepancy where direct labor costs are equal to the warranty labor rate in effect between the parties at the time such labor is expended. FLIGHT DISCREPANCY: A failure or malfunction of an Aircraft, or the accessories, equipment or parts installed on the Aircraft which results from a defect in the Aircraft, Boeing Product, engine or Supplier Product or a nonconformance to the Detail Specification for the Aircraft. P.A. No. 2910 BOEING PROPRIETARY GOL Transportes Aereos SA Letter Agreement No. 6-1162-DME-0714 Page 2 The AGTA provides that each aircraft will be test flown prior to delivery for the purpose of demonstrating the functioning of such Aircraft and its equipment to Customer; however, Customer may elect to waive this test flight. For each test flight waived, Boeing agrees to provide Customer an amount of jet fuel at delivery that, including the standard fuel entitlement, totals the following amount of fuel:
TOTAL FUEL ENTITLEMENT AIRCRAFT MODEL (U.S. GALLONS) -------------- -------------- 737 Full tanks (approx. 5,300 to 6,800, depending on model) 747 26,000 757 9,600 767 11,000 777 10,300
Further, Boeing agrees to reimburse Customer for any Correction Costs incurred as a result of the discovery of a Flight Discrepancy during the first flight of the aircraft by Customer following delivery to the extent such Correction Costs are not covered under a warranty provided by Boeing, the engine manufacturer or any of Boeing's suppliers. Should a Flight Discrepancy be detected by Customer which requires the return of the Aircraft to Boeing's facilities at Seattle, Washington, so that Boeing may correct such Flight Discrepancy, Boeing and Customer agree that title to and risk of loss of such Aircraft will remain with Customer. In addition, it is agreed that Boeing will have responsibility for the Aircraft while it is on the ground at Boeing's facilities in Seattle, Washington, as is chargeable by law to a bailee for mutual benefit, but Boeing shall not be chargeable for loss of use. To be reimbursed for Correction Costs, Customer shall submit a written itemized statement describing any flight discrepancies and indicating the Correction Cost incurred by Customer for each discrepancy. This request must be submitted to Boeing's Contracts Regional Director at Renton, Washington, within ninety (90) days after the first flight by Customer. Very truly yours, P.A. No. 2910 BOEING PROPRIETARY GOL Transportes Aereos SA Letter Agreement No. 6-1162-DME-0714 Page 3 THE BOEING COMPANY By --------------------------------------- Its Attorney-In-Fact -------------------------------------- ACCEPTED AND AGREED TO this Date: , 2004 ----------------------------- GOL TRANSPORTES AEREOS SA By --------------------------------------- Its -------------------------------------- Witness: - ----------------------------------------- - ----------------------------------------- P.A. No. 2910 BOEING PROPRIETARY 2910-02 GOL Transportes Aereos SA Rua Tamoios 246 Jardim Aeroporto Sao Paulo, SP 04630 Brazil Subject: Flight Crew Training Spare Parts Support Reference: Purchase Agreement No. 2910 (the Agreement) between The Boeing Company (Boeing) and GOL Transportes Aereos SA (Customer) relating to Model 737-8EH aircraft (the Aircraft) This Letter Agreement is entered into on the date below, and amends and supplements the Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the Agreement. Definition of Terms: FLIGHT CREW TRAINING: Flight training conducted by Boeing and occurring immediately following delivery of the Aircraft. REMOVED PARTS: Parts removed from an Aircraft during Flight Crew Training. REPLACEMENT PARTS: Parts taken from Boeing inventory and installed in an Aircraft because no Standby Parts are available. STANDBY PARTS: Parts which are owned by Customer and located at Customer's designated storage area at Boeing to support Flight Crew Training. TRAINING AIRCRAFT: The Aircraft delivered to Customer and used for Flight Crew Training. P. A. No. 2910 GOT 2910-02 GOL Transportes Aereos SA Page 2 1. Provisioning of Spare Parts To support Flight Crew Training, Boeing agrees to provide normal line maintenance and expendable spare parts at no charge on the Training Aircraft; and, Customer agrees to provide Standby Parts for the Training Aircraft. The Standby Parts list, including part numbers, exact quantities and on-dock dates, will be established during the provisioning meeting. If parts other than those discussed above fail on the Training Aircraft during Flight Crew Training, Boeing will attempt to provide Replacement Parts for those failed parts. If Boeing is unable to provide Replacement Parts, Customer will be responsible for providing those parts. 2. Disposition of Removed Parts With respect to Removed Parts, Boeing may: (i) repair such Removed Parts, at no charge to Customer, and either retain such parts as Standby Spare Parts or return the Removed Parts to Customer, at Customer expense; (ii) return the Removed Parts to Customer at Customer's expense; or (iii) return the Removed Parts to the manufacturer for repair or replacement under such manufacturer's warranty. Upon Boeing's receipt of the repaired Removed Parts or their replacements, Boeing may retain such Removed Parts or their replacements as Standby Parts or return such Removed Parts or their replacements to Customer, at Customer's expense. Any Removed Parts returned to Customer, or replacements, will be accomplished in accordance with any written instructions from Customer received by Boeing prior to such return. 3. Redelivery of Standby Parts Standby Parts not installed in the Training Aircraft will be redelivered to Customer on board the last aircraft used for Flight Crew Training. P. A. No. 2910 GOT 2910-02 GOL Transportes Aereos SA Page 3 4. Non-performance by Customer If Customer's non-performance of obligations in this Letter Agreement causes a delay in the Flight Crew Training, Customer will be deemed to have agreed to any such delay in Flight Crew Training. In addition, Boeing will have the right to: (i) purchase Standby Spare Parts and invoice Customer for the price of such Parts and for any necessary adjustment and calibration of such Parts; (ii) cancel or reschedule the Flight Crew Training. (iii) invoice Customer for any expenses, including but not limited to ground handling expenses, maintenance costs and storage costs, that are directly attributable to the delay in the Flight Crew Training. 5. Customer Warranty Customer warrants that the Standby Parts will meet the requirements of the Detail Specification and be in a condition to pass Boeing's receiving inspection and functional test, and if not in a new condition, will have an attached FAA Serviceable Parts Tag. 6. Title and Risk of Loss Title to and risk of loss of any Standby Parts or Removed Parts will remain with Customer. Boeing will have only such liability for Standby Parts and Removed Parts as a bailee for mutual benefit would have, but will not be liable for loss of use. For Replacement Parts, title will transfer to Customer at the time such part is installed on the Training Aircraft. P. A. No. 2910 GOT 2910-02 GOL Transportes Aereos SA Page 4 Very truly yours, THE BOEING COMPANY By ----------------------------------------------- Its Attorney-In-Fact ------------------------------------- ACCEPTED AND AGREED TO this Date: , 2004 ------------------------------------- GOL TRANSPORTES AEREOS SA By ----------------------------------------------- Its ---------------------------------------------- Witness: - ------------------------------- - ------------------------------- P. A. No. 2910 GOT 2910-03 GOL Transportes Aereos SA Rua Tamoios 246 Jardim Aeroporto Sao Paulo, SP 04630 Brazil Subject: Spares Initial Provisioning Reference: Purchase Agreement No. 2910 (the Purchase Agreement) between The Boeing Company (Boeing) and GOL Transportes Aereos SA(Customer) relating to Model 737-8EH aircraft (the Aircraft) This letter agreement (Letter Agreement) is entered into on the date below, and amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the Purchase Agreement. 1. Applicability. This letter will apply to initial provisioning for the Model 737-8EH Aircraft purchased by Customer under the Purchase Agreement. 2. Initial Provisioning Meeting. Boeing will conduct a meeting with Customer to establish mutually agreed procedures to accomplish Customer's initial provisioning of spare parts for the Aircraft (Initial Provisioning Meeting). The time and location for such Initial Provisioning Meeting will be mutually agreed upon between the parties; however, Boeing and Customer will use their best efforts to convene such meeting within 30 days after execution of the Purchase Agreement. Prior to the Initial Provisioning Meeting Boeing will furnish to Customer Boeing Manual D6-81834, entitled "Spares Provisioning Products Guide" (Boeing Spares Provisioning Products Guide), and at the Initial Provisioning Meeting Customer P.A. No. 2910 GOL Transportes Aereos SA Letter Agreement No. 2910-03 Page 2 will provide to Boeing the data described in Chapter 6 thereof (Customer Data). After review and acceptance by Boeing of the Customer Data provided, Boeing will use the Customer Data to prepare Boeing's quantity recommendations for initial provisioning of spare parts for the Aircraft, exclusive of special tools, ground support equipment, engines and engine parts (Provisioning Items). At the Initial Provisioning Meeting the parties will also agree on the provisioning documentation to be provided by Boeing (Provisioning Data) as described in Boeing Spares Provisioning Products Guide, and Boeing will provide instruction in the use of such Provisioning Data. In addition, the parties will discuss spares ordering procedures and other matters related to the provisioning for the Aircraft. 3. Initial Provisioning Documentation. Boeing will furnish Provisioning Data to Customer on or about 90 days after aircraft implementation. The Provisioning Data will be as complete as possible and will cover Provisioning Items selected by Boeing for review by Customer for initial provisioning for the Aircraft. The Provisioning Data will set forth the prices for Provisioning Items which are Boeing Spare Parts and such prices will be firm and remain in effect until the date or dates set forth below in Paragraph 4.1, Boeing Spare Parts, by which orders must be placed with Boeing. Boeing will, from time to time, until a date approximately 90 days following delivery of the last Aircraft or until the delivery configuration of each of the Aircraft is reflected in the Provisioning Data, whichever is later, furnish to Customer revisions to the Provisioning Data. 3.2 Buyer Furnished Equipment (BFE) Provisioning Data. 3.2.1 Boeing's Responsibility. Boeing will include BFE end items in the Provisioning Data for BFE installed on Customer's Aircraft provided such equipment has been installed on other Aircraft by Boeing and Boeing has data on the BFE. 3.2.2 Customer's Responsibility. Customer will be responsible for ensuring BFE data is provided to Boeing by the BFE supplier in a format acceptable to Boeing for BFE not covered by 3.2.1 above. If the data is not provided to Boeing in a timely manner and in a format acceptable to Boeing, such BFE equipment will not be included in the Provisioning Data. 3.3 Other Data. Boeing will submit to Customer listings of Raw Materials, Standard Parts and Bulk Materials to be used by Customer in the maintenance and repair of the Aircraft. P.A. No. 2910 GOL Transportes Aereos SA Letter Agreement No. 2910-03 Page 3 4. Purchase from Boeing of Spare Parts as Initial Provisioning for the Aircraft. 4.1 Boeing Spare Parts. Customer will place orders for Provisioning Items by 60 days after receipt of Initial Provisioning data; provided, however, that in those instances where Boeing submits any revision to the Provisioning Data, Customer will place orders for Boeing Spare Parts covered by such revision within 60 days following the date of such submittal. At Customer's request, Boeing will process "controlled shipments" by shipping full or partial quantities of an order on a schedule specified by Customer, provided the final shipment is made no later than 24 months after receipt of the order. 4.2 Supplier Provisioning Items. Customer may place orders with Boeing for Provisioning Items which are manufactured by suppliers or to their detailed design and are covered by the Provisioning Data as initial provisioning for the Aircraft. The price to Customer for any such supplier Provisioning Item will be 112% of the supplier's quoted price to Boeing therefore. If Customer elects to purchase such supplier Provisioning Items from Boeing, Customer will place its orders therefore in accordance with the provisions of Paragraph 4.1, Boeing Spare Parts. 4.3 Ground Support Equipment and Special Tools. Customer may place orders with Boeing for ground support equipment (GSE) and special tools manufactured by suppliers which Customer determines it will initially require for maintenance, overhaul and servicing of the Aircraft and/or engines. The price to Customer for such GSE or special tools will be one hundred twelve percent (112%) of the supplier's quoted price to Boeing therefore. If Customer elects to purchase such GSE and special tools from Boeing, Customer will place its orders therefore by the date set forth in Paragraph 4.1, Boeing Spare Parts or such later date as the parties may mutually agree. 4.4 Spare Engines and Engine Spare Parts. Customer may place orders with Boeing for spare engines and/or engine spare parts which Customer determines it will initially require for support of the Aircraft or for maintenance and overhaul of the engines. The price to Customer for such spare engines or such engine spare parts will be 105% of the engine manufacturer's quoted price to Boeing for the engine, and 112% of the engine manufacturer's quoted price to Boeing for the engine spare parts. If Customer elects to purchase such spare engines or engine spare parts through Boeing, Customer will place its orders on a date to be mutually agreed upon during the Initial Provisioning Meeting. 4.5 QEC Kits. Boeing will, on or about 30 days after aircraft implementation, furnish to Customer a listing of all components which could be included in the Quick Engine Change (QEC) kits which may be purchased by P.A. No. 2910 GOL Transportes Aereos SA Letter Agreement No. 2910-03 Page 4 Customer from Boeing. Customer agrees to review such listing and indicate by marking on one copy of such listing those components that Customer desires included in its QEC kits. Customer will return such marked copy to Boeing within 30 days after Customer's receipt of such listing. Within 30 days after Boeing's receipt of such marked copy, Boeing will republish such listing to reflect only those components selected by Customer and will provide copies of such republished listing to Customer. Boeing will from time to time furnish revisions to such republished listing until a date approximately 90 days after delivery of the last QEC kit ordered by Customer for the Aircraft. Boeing will furnish to Customer as soon as practicable a statement setting forth a firm price for the QEC kit configuration selected by Customer. Customer agrees to place orders with Boeing for the QEC kits for the Aircraft by 30 days after receipt of QEC kit configuration with part number and quoted kit price. 4.6 Payment for Provisioning Items. The payment provisions of the Customer Services General Terms Agreement (CSGTA) between Boeing and Customer will be applicable to Provisioning Items ordered by Customer from Boeing for the Aircraft. 5. Delivery. Boeing will, insofar as reasonably possible, deliver to Customer the Spare Parts ordered by Customer in accordance with the provisions of this letter on dates reasonably calculated to conform to Customer's anticipated needs in view of the scheduled deliveries of the Aircraft. Customer and Boeing will agree upon the date to begin delivery of the Provisioning Spare Parts ordered in accordance with this letter. Where appropriate, Boeing will arrange for shipment of such Spare Parts, which are manufactured by suppliers, directly to Customer from the applicable supplier's facility. The routing and method of shipment for initial deliveries and all subsequent deliveries of such Spare Parts will be as mutually agreed between Boeing and Customer. 6. Substitution for Obsolete Spare Parts. 6.1 Obligation to Substitute. In the event that, prior to delivery of the first Aircraft pursuant to the Purchase Agreement, any Spare Part purchased by Customer from Boeing in accordance with this letter is rendered obsolete or unusable due to the redesign of the Aircraft or of any accessory, equipment or part therefore, (other than a redesign at Customer's request), Boeing will deliver to Customer new and usable Spare Parts in substitution for such obsolete or unusable Spare Parts and Customer will return the obsolete or unusable Spare Parts to Boeing. Boeing will credit Customer's account with Boeing with the price paid by Customer for any such obsolete or unusable Spare Part and will invoice Customer for the purchase price of any such substitute Spare Part delivered to Customer. P.A. No. 2910 GOL Transportes Aereos SA Letter Agreement No. 2910-03 Page 5 6.2 Delivery of Obsolete Spare Parts and Substitutes Therefore. Obsolete or unusable Spare Parts returned by Customer pursuant to this Item will be delivered to Boeing at its Seattle Distribution Center, or such other destination as Boeing may reasonably designate. Spare Parts substituted for such returned obsolete or unusable Spare Parts will be delivered to Customer at Boeing's Seattle Distribution Center, or such other Boeing shipping point as Boeing may reasonably designate. Boeing will pay the freight charges for the shipment from Customer to Boeing of any such obsolete or unusable Spare Part and for the shipment from Boeing to Customer of any such substitute Spare Part. 7. Repurchase of Provisioning Items. 7.1 Obligation to Repurchase Peculiar Provisioning Items. During a period commencing 1 year after delivery of the first Aircraft under the Purchase Agreement, and ending 5 years after such delivery, Boeing will, upon receipt of Customer's written request and subject to the exceptions in Paragraph 7.2, Exceptions, repurchase unused and undamaged Provisioning Items which were peculiar to the Aircraft as compared to the delivery configuration of Model * Aircraft previously purchased by Customer from Boeing, and (i) were recommended by Boeing in the Provisioning Data as initial provisioning for the Aircraft, (ii) were purchased by Customer from Boeing, and (iii) are surplus to Customer's needs. 7.2 Exceptions. Boeing will not be obligated under Paragraph 7.1, Obligation to Repurchase, to repurchase any of the following: (i) quantities of Provisioning Items in excess of those quantities recommended by Boeing in the Provisioning Data for the Aircraft, (ii) QEC Kits, Bulk Material Kits, Raw Material Kits, Service Bulletin Kits, Standards Kits and components thereof (except those components listed separately in the Provisioning Data), (iii) Provisioning Items for which an order was received by Boeing more than 5 months after delivery of the last Aircraft, (iv) Provisioning Items which have become obsolete or have been replaced by other Provisioning Items as a result of (a) Customer's modification of the Aircraft or (b) design improvements by Boeing or the supplier (other than Provisioning Items which have become obsolete because of a defect in design if such defect has not been remedied by an offer by Boeing or the supplier to provide no charge retrofit kits or replacement parts which correct such defect), and (v) Provisioning Items which become excess as a result of a change in Customer's operating parameters, provided to Boeing pursuant to the Initial Provisioning meeting in Paragraph 2, which were the basis of Boeing's initial provisioning recommendations for the Aircraft. 7.3 Notification and Format. Customer will notify Boeing, in writing, when Customer desires to return Provisioning Items which Customer's P.A. No. 2910 GOL Transportes Aereos SA Letter Agreement No. 2910-03 Page 6 review indicates are eligible for repurchase by Boeing under the provisions of this Repurchase of Provisioning Items paragraph. Customer's notification will include a detailed summary, in part number sequence, of the Provisioning Items Customer desires to return. Such summary will be in the form of listings, tapes, diskettes or other media as may be mutually agreed between Boeing and Customer, and will include part number, nomenclature, purchase order number, purchase order date and quantity to be returned. Within 5 business days after receipt of Customer's notification, Boeing will advise Customer, in writing, when Boeing's review of such summary will be completed. 7.4 Review and Acceptance by Boeing. Upon completion of Boeing's review of any detailed summary submitted by Customer pursuant to Paragraph 7.3, Boeing will issue to Customer a Material Return Authorization (MRA) for those Provisioning Items Boeing agrees are eligible for repurchase in accordance with this Repurchase of Provisioning Items paragraph. Boeing will advise Customer of the reason that any spare part included in Customer's detailed summary is not eligible for return. Boeing's MRA will state the date by which Provisioning Items listed in the MRA must be redelivered to Boeing and Customer will arrange for shipment of such Provisioning Items accordingly. 7.5 Price and Payment. The price of each Provisioning Item repurchased by Boeing pursuant to this Repurchase of Provisioning Items paragraph will be an amount equal to 100% of the original invoice price thereof. In the case of Provisioning Items manufactured by a supplier which were purchased pursuant to Paragraph 4, Purchase from Boeing of Spare Parts as Initial Provisioning for the Aircraft, hereof the repurchase price will not include Boeing's 12% handling charge. Boeing will pay the repurchase price by issuing a credit memorandum in favor of Customer which may be applied against amounts due Boeing for the purchase of aircraft, Spare Parts, services or data. 7.6 Delivery of Provisioning Items. Provisioning Items repurchased by Boeing pursuant to this Repurchase of Provisioning Items paragraph will be delivered to Boeing F.O.B. at its Seattle Distribution Center, or such other destination as Boeing may reasonably designate. Customer will pay the freight charges for the shipment from Customer to Boeing of any such Provisioning Items. 8. Obsolete Spare Parts and Surplus Provisioning Items - Title and Risk of Loss. Title to and risk of loss of any obsolete or unusable Spare Parts returned to Boeing pursuant to Paragraph 6, Substitution for Obsolete Spare Parts, will pass to Boeing upon delivery thereof to Boeing. Title to and risk of loss of any Spare Part substituted for an obsolete or unusable Spare Part pursuant to P.A. No. 2910 GOL Transportes Aereos SA Letter Agreement No. 2910-03 Page 7 Paragraph 6, Substitution for Obsolete Spare Parts, will pass to Customer upon delivery thereof to Customer. Title to and risk of loss of any Provisioning Item repurchased by Boeing pursuant to Paragraph 7, Repurchase of Provisioning Items, will pass to Boeing upon delivery thereof to Boeing. With respect to the obsolete or unusable Spare Parts which may be returned to Boeing and the Spare Parts substituted therefore, pursuant to Paragraph 6, and the Provisioning Items which may be repurchased by Boeing, pursuant to Paragraph 7, the party which has risk of loss of any such Spare Part or Provisioning Item will have the responsibility of providing any insurance coverage for it desired by such party. 9. Supplier Support. Boeing has entered, or anticipates entering, into product support agreements with suppliers (Boeing Suppliers) of major system components manufactured by such Suppliers to be installed on the Aircraft (Supplier Components). Such product support agreements commit, or are expected to commit, the Boeing Suppliers to provide to Boeing's customers and/or such customer's designees support services with respect to the Supplier Components which can be reasonably expected to be required during the course of normal operation. This support includes but is not limited to shelf-stock of certain spare parts, emergency spare parts, timely delivery of spare parts, and technical data related to the Supplier Components. Copies of such product support agreements will be provided to Customer on or about 90 days after aircraft implementation in Boeing Document D6-56115, Volumes 1 and 2. In the event Customer has used due diligence in attempting to resolve any difficulty arising in normal business transactions between Customer and a Boeing Supplier with respect to product support for a Supplier Component manufactured by such Supplier and if such difficulty remains unresolved, Boeing will, if requested by Customer, assist Customer in resolving such difficulty. Assistance will be provided by the Customer Supplier Services organization. 10. Termination for Excusable Delay. In the event of termination of the Purchase Agreement with respect to any Aircraft pursuant to Article 7 of the AGTA, such termination will, if Customer so requests by written notice received by Boeing within 15 days after such termination, also discharge and terminate all obligations and liabilities of the parties as to any Spare Parts which Customer had ordered pursuant to the provisions of this letter as initial provisioning for such Aircraft and which are undelivered on the date Boeing receives such written notice. P.A. No. 2910 GOL Transportes Aereos SA Letter Agreement No. 2910-03 Page 8 Very truly yours, THE BOEING COMPANY By -------------------------------------- Its Attorney-In-Fact ---------------------------- ACCEPTED AND AGREED TO this Date: 2004 ----------------------------------------- GOL TRANSPORTES AEREOS SA By -------------------------------------- Its -------------------------------------- Witness: - ------------------- - ------------------- P.A. No. 2910 6-1162-DME-0706 GOL Transportes Aereos SA Rua Tamoios, 246 Jardim Aeroporto Sao Paulo - SP 04630-000 - Brazil Subject: Purchase Right Aircraft Reference: Purchase Agreement No. 2910 (the Purchase Agreement) between The Boeing Company (Boeing) and GOL Transportes Aereos SA (Customer) relating to Model 737-8EH aircraft (the Aircraft) This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the Purchase Agreement. In accommodation of Customer's expressed desires for aircraft delivery flexibility, Customer and Boeing have reached agreement regarding certain modifications to the Agreement as set forth below: 1. Purchase Right Aircraft Delivery Timing Boeing offers Customer twenty (20) model 737-8EH purchase right aircraft; with delivery of all such purchase right aircraft to occur not later than 31 December 2010 at a rate of not more than five (5) per year, with firm purchase exercise requirements as follows:
Number Exercise Number Exercise of aircraft Date of aircraft Date - ----------- -------- ----------- -------- ~~4 June 2007 5 June 2005 5 June 2008 4 June 2006 2 June 2009~~
P.A. No. 2910 AMX Letter Agreement NO. 6-1162-DME-0706 GOL Transportes Aereos SA Page 2 All purchase right aircraft are offered on a subject-to-availability-of-position (STAP) basis, and will retain the same Model 737-8EH configuration and detail specification as that described in Exhibit A to the Purchase Agreement, with the exception of any detail special feature changes as may be mutually agreed. With the firm exercise of each purchase right, Boeing offers Customer the ability to add a one-for-one additional purchase right aircraft, to a maximum of eight (8) such additional purchase right aircraft, with any such additional purchase right aircraft to also be STAP and exercised not later than 01 June 2009 for delivery not later than 31 December 2010. Should Customer choose not to exercise some or all of the offered purchase right aircraft in any given calendar year, such un-exercised purchase right aircraft will be cancelled and not be available for later exercise. 2. Purchase Right Aircraft Exercise and Business Terms. Customer may exercise a purchase right aircraft by providing Boeing with written notice not later than the first business day of the exercise month above described, which will be not less than fifteen (15) months prior to the requested aircraft delivery position, with not more than two (2) requested aircraft to be delivered in any one month. Boeing will, within thirty (30) days of Customer's notice to exercise a purchase right aircraft, notify Customer of the availability of such requested delivery position as well as alternative delivery positions, and within such thirty (30) day period the Purchase Agreement will be amended to incorporate the agreed upon additional firm purchased aircraft. The same base price and business terms as those described in the reference Purchase Agreement will apply to any such model 737-8EH purchase right aircraft delivering before 31 December 2010. However, Boeing does retain the right to increase the basic aircraft price to accommodate any mandated government or other changes made necessary for reasons of improving safety-of-flight and/or retention of the aircraft certificate of airworthiness. At the time of Customer's exercise of a purchase right aircraft, such aircraft will then become a firmly contracted aircraft and will require Customer's payment within 5 business days any advance payments due at time of exercise, per the terms of the Purchase Agreement and/or Letter Agreement No, 6-1162-DME-0707 as well as any further advance payments as may be due per the terms of the advance payment schedule described therein. 3. Firm Aircraft Termination - Excusable Delay. If any firm Aircraft are terminated by Boeing from this Purchase Agreement under Article 7, Excusable Delay, the number of Purchase Right Aircraft available to Customer under this Letter Agreement shall remain unchanged. If any firm Aircraft are terminated by Customer from this Purchase Agreement under Article P.A. No. 2910 AMX Letter Agreement NO. 6-1162-DME-0706 GOL Transportes Aereos SA Page 2 7 for reasons other than a labor strike or labor slowdown the number of Purchase Right Aircraft shall be reduced by the same number as firm Aircraft terminated. 4. Confidential Treatment. Customer understands that certain commercial and financial information contained in this Letter Agreement and any attachment(s) hereto are considered by Boeing as confidential. Customer agrees that it will treat this Letter Agreement and the information contained herein as confidential and will not, without the prior written consent of Boeing, disclose this Letter Agreement or any information contained herein to any other person or entity. Very truly yours, THE BOEING COMPANY By ----------------------------------- Its Attorney-In-Fact ---------------------------------- ACCEPTED AND AGREED TO this Date: 2004 ------------------------------- GOL TRANSPORTES AEREOS SA By ----------------------------------- Its ---------------------------------- Witness: - ------------------------------------- - ------------------------------------- P.A. No. 2910 AMX 6-1162-DME-0708 GOL Transportes Aereos SA Rua Tamoios 246 Jardim Aeroporto Sao Paulo, SP 04630 Brazil Subject: Technical Matters Reference: Purchase Agreement No. 2910 (the Purchase Agreement) between The Boeing Company (Boeing) and GOL Transportes Aereos SA (Customer) relating to Model 737-8EH aircraft (the Aircraft) This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the Purchase Agreement. 1. SHORT FIELD PERFORMANCE IMPROVEMENTS - MODEL 737-8EH In response to Customer's operational requirements at certain commercial airfield locations, Boeing has developed a short field performance improvement package. Boeing will develop, test, certify, and provide, as solely determined by Boeing, such reasonable performance improvements with the delivery of each Aircraft, or as necessary, on a post-delivery basis through a certified modification kit. It is currently expected and understood that such improvements will be available to support the delivery of each of Customer's Aircraft. Additionally, Boeing will, with reasonable efforts, plan to make such improvements to also be available to support Customer's potential exercise of a purchase right aircraft that may deliver as early as April of calendar year 2006. Boeing does not expect that such improvements will be available prior to April of 2006. The availability of such P.A. No. 2910 GOT GOL Transportes Aereos SA Letter Agreement NO. 6-1162-DME-0708 Page 2 improvements, to support a potential purchase right aircraft delivery as early as April 2006, requires that Customer and Boeing have achieved a firm, signed definitive Purchase Agreement for the Aircraft on or before 28 May 2004, and that the availability of such improvements will be subject to Boeing's re-evaluation if such definitive Purchase Agreement has not been reached by such date. Such short field performance improvements for the Model 737-8EH Aircraft are contingent upon Customer's acceptance of Boeing's two-position tail skid optional feature. Such two-position optional feature is priced in the amount of $252,400 (in July 2003 $'s, subject to escalation to time of delivery of each Aircraft). If, during the course of Boeing's development, certification, and other efforts, required to provide such performance improvements it becomes necessary for such improvements to be either ground or flight tested on an aircraft, Customer agrees that Boeing may utilize Customer's Aircraft to accomplish such testing. Customer further agrees to take delivery of any such Aircraft utilized to accomplish such test requirements, without adjustment to the delivery price of such Aircraft. 2. SPECIAL FEATURE - HEAD-UP DISPLAY (HUD) Customer wishes, and Boeing agrees, to delay its decision regarding the addition of the optional special feature Head-Up Display until not later than 01 July 2005, and for Boeing to hold the current pricing, in July 2003 Dollars, as follows: Change no. 3436A218A66 Partial Provisions $80,500 (STE) Change no. 3436A218A67 Installation - BFE equipment No Charge 3. CONFIDENTIAL TREATMENT The Parties understand that certain commercial and financial information contained in this Letter Agreement are considered by Boeing as confidential. The Parties agree that it will treat this Letter Agreement and the information contained herein as confidential and will not, without the prior written consent of Boeing, disclose this Letter Agreement or any information contained herein to any other person or entity. P.A. No. 2910 GOT GOL Transportes Aereos SA Letter Agreement NO. 6-1162-DME-0708 Page 3 Very truly yours, THE BOEING COMPANY By ----------------------------------- Its Attorney-In-Fact ---------------------------------- ACCEPTED AND AGREED TO this Date: , 2004 ------------------------------- GOL TRANSPORTES AEREOS SA By ----------------------------------- Its ---------------------------------- Witness: - ------------------------------------- - ------------------------------------- P.A. No. 2910 GOT 6-1162-DME-0710 GOL Transportes Aereos SA Rua Tamoios 246 Jardim Aeroporto Sao Paulo, SP 04630 Brazil Subject: Aircraft Performance Guarantees Reference: Purchase Agreement No. 2910 (the Purchase Agreement) between The Boeing Company (Boeing) and GOL Transportes Aereos SA (Customer) relating to Model 737-8EH aircraft (the Aircraft) This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the Purchase Agreement. Boeing agrees to provide Customer with the performance guarantees in the Attachment. These guarantees are exclusive and expire upon delivery of the Aircraft to Customer. Confidential Treatment. The Parties understand and agrees that certain commercial and financial information contained in this Letter Agreement, any attachment(s) hereto, or any other information related to this Letter Agreement, are considered by Boeing as confidential. The Parties agree that it will treat this Letter Agreement and the information contained herein as confidential and will not, without the prior written consent of Boeing, disclose this Letter Agreement or any information contained herein to any other person or entity. P.A. No. 2910 GOL Transportes Aereos SA Letter Agreement NO. 6-1162-DME-0710 Page 2 Very truly yours, THE BOEING COMPANY By ----------------------------------- Its Attorney-In-Fact ---------------------------------- ACCEPTED AND AGREED TO this Date: , 2004 ------------------------------- GOL TRANSPORTES AEREOS SA By ----------------------------------- Its ---------------------------------- Witness: - ------------------------------------- - ------------------------------------- P.A. No. 2910 Attachment A to 6-1162-DME-0713 GOL Transportes Aereos SA
Aircraft Delivery Month & Year MTOW - ------------ ---- July 2007 155,500 October 2007 155,500 November 2007 155,500 November 2007 155,500 December 2007 155,500 December 2007 155,500 January 2008 155,500 January 2008 155,500 April 2008 155,500 August 2008 155,500 October 2008 155,500 February 2009 155,500 February 2009 155,500 August 2009 155,500 September 2009 155,500
1 737 Tailored Weight Program Subfleet Utilization Example Dispatch Data
BH per Subfleet Flight No. Date From To BH 147K 140K 133K 147K 140K 133K - ---------- ---- ---- -- -- ---- ---- ---- ---- ---- ---- 1 12/1/2004 ATL LAX 5.3 143.2 5.3 2 12/1/2004 ATL LAS 4.8 140.5 4.8 3 12/1/2004 ATL DEN 3.5 133.5 3.5 4 12/1/2004 BWI MCO 2.4 128.4 2.4 5 12/1/2004 BWI BOS 1.4 125.4 1.4 6 12/1/2004 LAX ATL 4.4 138.4 4.4 7 12/1/2004 LAS ATL 4.0 136.3 4.0 8 12/1/2004 DEN ATL 2.9 130.8 2.9 9 12/1/2004 MCO BWI 2.2 127.6 2.2 10 12/1/2004 BOS BWI 1.5 125.7 1.5 1 12/2/2004 ATL LAX 5.3 142.9 5.3 2 12/2/2004 ATL LAS 4.8 139.6 4.8 3 12/2/2004 ATL DEN 3.5 133.2 3.5 4 12/2/2004 BWI MCO 2.4 126.2 2.4 5 12/2/2004 BWI BOS 1.4 125.0 1.4 6 12/2/2004 LAX ATL 4.4 137.9 4.4 7 12/2/2004 LAS ATL 4.0 135.8 4.0 8 12/2/2004 DEN ATL 2.9 130.5 2.9 9 12/2/2004 MCO BWI 2.2 126.2 2.2 10 12/2/2004 BOS BWI 1.5 124.3 1.5 1 12/3/2004 ATL LAX 5.3 143.1 5.3 2 12/3/2004 ATL LAS 4.8 139.5 4.8 3 12/3/2004 ATL DEN 3.5 130.2 3.5 4 12/3/2004 BWI MCO 2.4 127.6 2.4 5 12/3/2004 BWI BOS 1.4 122.5 1.4 6 12/3/2004 LAX ATL 4.4 137.0 4.4 7 12/3/2004 LAS ATL 4.0 136.1 4.0 8 12/3/2004 DEN ATL 2.9 130.8 2.9 9 12/3/2004 MCO BWI 2.2 128.0 2.2 10 12/3/2004 BOS BWI 1.5 126.2 1.5 1 12/4/2004 ATL LAX 5.3 142.6 5.3 2 12/4/2004 ATL LAS 4.8 140.4 4.8 3 12/4/2004 ATL DEN 3.5 135.6 3.5 4 12/4/2004 BWI MCO 2.4 124.6 2.4 5 12/4/2004 BWI BOS 1.4 122.0 1.4 6 12/4/2004 LAX ATL 4.4 131.2 4.4 7 12/4/2004 LAS ATL 4.0 135.4 4.0 8 12/4/2004 DEN ATL 2.9 129.6 2.9 9 12/4/2004 MCO BWI 2.2 124.5 2.2 10 12/4/2004 BOS BWI 1.5 117.8 1.5 1 12/5/2004 ATL LAX 5.3 138.9 5.3 2 12/5/2004 ATL LAS 4.8 137.6 4.8 3 12/5/2004 ATL DEN 3.5 130.2 3.5 4 12/5/2004 BWI MCO 2.4 127.8 2.4 5 12/5/2004 BWI BOS 1.4 123.6 1.4 6 12/5/2004 LAX ATL 4.4 136.6 4.4 7 12/5/2004 LAS ATL 4.0 134.1 4.0 8 12/5/2004 DEN ATL 2.9 126.5 2.9 9 12/5/2004 MCO BWI 2.2 126.6 2.2 10 12/5/2004 BOS BWI 1.5 122.1 1.5 1 12/6/2004 ATL LAX 5.3 141.6 5.3 2 12/6/2004 ATL LAS 4.8 140.1 4.8 3 12/6/2004 ATL DEN 3.5 133.4 3.5 4 12/6/2004 BWI MCO 2.4 121.2 2.4
737 Tailored Weight Program Subfleet Utilization Example
BH per Subfleet Flight No. Date From To BH 147K 140K 133K 147K 140K 133K - ---------- ---- ---- -- -- ---- ---- ---- ---- ---- ---- 5 12/6/2004 BWI BOS 1.4 119.3 1.4 6 12/6/2004 LAX ATL 4.4 135.2 4.4 7 12/6/2004 LAS ATL 4.0 127.9 4.0 8 12/6/2004 DEN ATL 2.9 129.0 2.9 9 12/6/2004 MCO BWI 2.2 120.4 2.2 10 12/6/2004 BOS BWI 1.5 119.6 1.5 1 12/7/2004 ATL LAX 5.3 136.5 5.3 2 12/7/2004 ATL LAS 4.8 140.5 4.8 3 12/7/2004 ATL DEN 3.5 130.7 3.5 4 12/7/2004 BWI MCO 2.4 128.0 2.4 5 12/7/2004 BWI BOS 1.4 118.6 1.4 6 12/7/2004 LAX ATL 4.4 129.8 4.4 7 12/7/2004 LAS ATL 4.0 128.7 4.0 8 12/7/2004 DEN ATL 2.9 137.6 2.9 9 12/7/2004 MCO BWI 2.2 125.6 2.2 10 12/7/2004 BOS BWI 1.5 123.7 1.5 Total BH 227.2 45.7 86.8 94.7 Percentage of Fleet Utilization 100.0% 20.1% 38.2% 41.7% Total Fleet Size 8 Equivalent Aircraft Utilized 1.6 3.1 3.3
737 Tailored Weight Program Subfleet Utilization Example Subfleet Weights Revised to Accommodate Increased Utilization
BH per Subfleet Flight No. Date From To BH 147K 142K 136K 147K 140K 133K - ---------- ---- ---- -- -- ---- ---- ---- ---- ---- ---- 1 12/1/2004 ATL LAX 5.3 143.2 5.3 2 12/1/2004 ATL LAS 4.8 140.5 4.8 3 12/1/2004 ATL DEN 3.5 133.5 3.5 4 12/1/2004 BWI MCO 2.4 128.4 2.4 5 12/1/2004 BWI BOS 1.4 125.4 1.4 6 12/1/2004 LAX ATL 4.4 138.4 4.4 7 12/1/2004 LAS ATL 4.0 136.3 4.0 8 12/1/2004 DEN ATL 2.9 130.8 2.9 9 12/1/2004 MCO BWI 2.2 127.6 2.2 10 12/1/2004 BOS BWI 1.5 125.7 1.5 1 12/2/2004 ATL LAX 5.3 142.9 5.3 2 12/2/2004 ATL LAS 4.8 139.6 4.8 3 12/2/2004 ATL DEN 3.5 133.2 3.5 4 12/2/2004 BWI MCO 2.4 126.2 2.4 5 12/2/2004 BWI BOS 1.4 125.0 1.4 6 12/2/2004 LAX ATL 4.4 137.9 4.4 7 12/2/2004 LAS ATL 4.0 135.8 4.0 8 12/2/2004 DEN ATL 2.9 130.5 2.9 9 12/2/2004 MCO BWI 2.2 126.2 2.2 10 12/2/2004 BOS BWI 1.5 124.3 1.5 1 12/3/2004 ATL LAX 5.3 143.1 5.3 2 12/3/2004 ATL LAS 4.8 139.5 4.8 3 12/3/2004 ATL DEN 3.5 130.2 3.5 4 12/3/2004 BWI MCO 2.4 127.6 2.4 5 12/3/2004 BWI BOS 1.4 122.5 1.4 6 12/3/2004 LAX ATL 4.4 137.0 4.4 7 12/3/2004 LAS ATL 4.0 136.1 4.0 8 12/3/2004 DEN ATL 2.9 130.8 2.9 9 12/3/2004 MCO BWI 2.2 128.0 2.2 10 12/3/2004 BOS BWI 1.5 126.2 1.5 1 12/4/2004 ATL LAX 5.3 142.6 5.3 2 12/4/2004 ATL LAS 4.8 140.4 4.8 3 12/4/2004 ATL DEN 3.5 135.6 3.5 4 12/4/2004 BWI MCO 2.4 124.6 2.4 5 12/4/2004 BWI BOS 1.4 122.0 1.4 6 12/4/2004 LAX ATL 4.4 131.2 4.4 7 12/4/2004 LAS ATL 4.0 135.4 4.0 8 12/4/2004 DEN ATL 2.9 129.6 2.9 9 12/4/2004 MCO BWI 2.2 124.5 2.2 10 12/4/2004 BOS BWI 1.5 117.8 1.5 1 12/5/2004 ATL LAX 5.3 138.9 5.3 2 12/5/2004 ATL LAS 4.8 137.6 4.8 3 12/5/2004 ATL DEN 3.5 130.2 3.5 4 12/5/2004 BWI MCO 2.4 127.8 2.4 5 12/5/2004 BWI BOS 1.4 123.6 1.4 6 12/5/2004 LAX ATL 4.4 136.6 4.4 7 12/5/2004 LAS ATL 4.0 134.1 4.0 8 12/5/2004 DEN ATL 2.9 126.5 2.9 9 12/5/2004 MCO BWI 2.2 126.6 2.2 10 12/5/2004 BOS BWI 1.5 122.1 1.5 1 12/6/2004 ATL LAX 5.3 141.6 5.3 2 12/6/2004 ATL LAS 4.8 140.1 4.8
737 Tailored Weight Program Subfleet Utilization Example
BH per Subfleet Flight No. Date From To BH 147K 142K 136K 147K 140K 133K - ---------- ---- ---- -- -- ---- ---- ---- ---- ---- ---- 3 12/6/2004 ATL DEN 3.5 133.4 3.5 4 12/6/2004 BWI MCO 2.4 121.2 2.4 5 12/6/2004 BWI BOS 1.4 119.3 1.4 6 12/6/2004 LAX ATL 4.4 135.2 4.4 7 12/6/2004 LAS ATL 4.0 127.9 4.0 8 12/6/2004 DEN ATL 2.9 129.0 2.9 9 12/6/2004 MCO BWI 2.2 120.4 2.2 10 12/6/2004 BOS BWI 1.5 119.6 1.5 1 12/7/2004 ATL LAX 5.3 136.5 5.3 2 12/7/2004 ATL LAS 4.8 140.5 4.8 3 12/7/2004 ATL DEN 3.5 130.7 3.5 4 12/7/2004 BWI MCO 2.4 128.0 2.4 5 12/7/2004 BWI BOS 1.4 118.6 1.4 6 12/7/2004 LAX ATL 4.4 129.8 4.4 7 12/7/2004 LAS ATL 4.0 128.7 4.0 8 12/7/2004 DEN ATL 2.9 137.6 2.9 9 12/7/2004 MCO BWI 2.2 125.6 2.2 10 12/7/2004 BOS BWI 1.5 123.7 1.5 Total BH 227.2 21.2 78.0 127.9 Percentage of Fleet Utilization 100.0% 9.3% 34.3% 56.3% Total Fleet Size 8 Equivalent Aircraft Utilized 0.7 2.7 4.5
737-800 TAILORED WEIGHT PROGRAM Audit Examples Weight Categories 155,500 172,500 Subfleet plan during audit period 13 2 CASE 1 Equivalent Aircraft Utilized (as calculated by audit) 13.2 1.8 Required Subfleet Changes 0 0 Resulting Subfleet 13 2 Explanation: No change required. CASE 2 Equivalent Aircraft Utilized (as calculated by audit) 12.6 2.4 Required Subfleet Changes -1 1 Resulting Subfleet 12 3 Explanation: Must purchase one additional aircraft at highest MTOW category. Possibly, a third MTOW category could be added, such as 163,000, to which one aircraft would be attached, rather than one additional in the maximum category. Higher weight category must round up to the next whole a/c and the lower wight categoy adjusts downward by one a/c. CASE 3 Equivalent Aircraft Utilized (as calculated by audit) 14.1 0.9 Required Subfleet Changes 0 0 Resulting Subfleet 13 2 Explanation: No change required. Note that MTOW that has been purchased cannot be credited or returned, although the AFM/placard designations may be reduced.

GOL Transportes Aereos SA Attachment B to Letter Agreement No. 6-1162-DME-0713 6-1162-DME-0707 GOL Transportes Aereos SA Rua Tamoios, 246 Jardim Aeroporto Sao Paulo - SP 04630-000 - Brazil Subject: Advance Payment Matters Reference: Purchase Agreement No. 2910 (the Purchase Agreement) between The Boeing Company (Boeing) and GOL Transportes Aereos SA (Customer) relating to Model 737-8EH aircraft (the Aircraft) This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the Purchase Agreement. Customer and Boeing have reached agreement regarding certain modifications to the Agreement as set forth below: 1. Advance Payment Schedule: ------------------------- Notwithstanding the advance payment schedule set forth in Table 1 of the Purchase Agreement, Boeing agrees that Customer may make Advance Payments for the Aircraft, in accordance with the schedule below described, subject to the terms and conditions further described herein:
Months Prior to Amount Due per Aircraft Aircraft Delivery (Percent times - ----------------- Advance Payment Base Price) --------------------------- Definitive Agreement * * * * * * * * ----- *
Letter Agreement No. 6-1162-DME-0707 GOL Transportes Aereos SA Page 2 2. DEFERRAL CHARGES ON DEFERRED ADVANCE PAYMENTS: --------------------------------------------- The foregoing advance payment schedule constitutes a deferral of certain amounts due Boeing pursuant to the advance payment schedule as set forth in Table 1 of the Purchase Agreement. Accordingly, Customer shall pay deferral charges to Boeing on all such deferred amounts of the advance payments for the Aircraft, as described herein. Interest will be calculated and paid on the deferred advance payments. Interest on the deferred advance payments will accrue at an annual rate equal to the 90-day LIBOR rate as published in the Wall Street Journal, U.S. Edition, and reset quarterly, calculated in arrears, plus 3.0%. This deferral charge will be calculated on a 365/366 day year. Deferral charge payments will be due on the first business day of each calendar quarter, for the previous calendar quarter, and will be computed on the basis of the actual number of elapsed days for the period commencing on the date such deferred amounts would have been due and terminating on the date of delivery of the designated Aircraft. Further to the above, following the calculation method stated above, all such calendar quarter deferral charge payments shall be further deferred such that all deferral charge payments for all of the designated Aircraft will be made at the time of each such designated Aircraft delivery. Any remaining unpaid deferral charge payments for such Aircraft are due and payable at the delivery of the designated Aircraft. 3. RE-SCHEDULING OF AIRCRAFT: -------------------------- In the event of a re-schedule, to a later delivery position, of any of the Aircraft under the terms of the Agreement, Boeing will recalculate the amount of advance payments and deferral charges due from Customer under the above described deferred Advance Payment Schedule after giving effect to such re-scheduling and, without interest, refund to Customer within 5 business days any amounts held by Boeing in excess of such recalculated amounts. In the event of a re-schedule, except as provided for in Article 2 of the Purchase Agreement, to an earlier delivery position, of any of the Aircraft under the terms of the Agreement, Boeing will recalculate the amount of advance payments due from Customer under the above described deferred Advance Payment Schedule after giving effect to such re-scheduling and Customer will make immediate payment to Boeing of any amounts due within 5 business days, without any additional interest or other charges, as a result of such recalculated amounts applicable to such accelerated delivery position. In the event that previously paid advance payments are to be returned to Customer pursuant to the contract termination terms and conditions of the Aircraft General Terms Agreement or Purchase Agreement, any accrued but unpaid advance payment deferral charges will be removed and cancelled. Letter Agreement No. 6-1162-DME-0707 GOL Transportes Aereos SA Page 3 4. CONFIDENTIAL TREATMENT: The Parties understand that certain commercial and financial information contained in this Letter Agreement and attachments hereto are considered by Boeing as confidential. The Parties agree that it will treat this Letter Agreement and the information contained herein as confidential and, except as otherwise required by law, will not, without the prior written consent of Boeing, disclose this Letter Agreement or any information contained herein to any other person or entity. If the foregoing correctly sets forth your understanding of our agreement with respect to the matters treated above, please indicate your acceptance and approval below. Very truly yours, THE BOEING COMPANY By /s/ [ILLEGIBLE] --------------------------------- Its Attorney-In-Fact -------------------------------- ACCEPTED AND AGREED TO this Date: 17 May 2004 ------------------- GOL TRANSPORTES AEREOS SA By /s/ [ILLEGIBLE] --------------------------------- Its President -------------------------------- Witness: /s/ [ILLEGIBLE] - ----------------------------------- [ILLEGIBLE] - ----------------------------------- P.A. No. 2910 GOT [S A O G Legal Dept. Approved GOL SEAL] 6-1162-DME-0712 GOL Transportes Aereos SA Rua Tamoios 246 Jardim Aeroporto Sao Paulo, SP 04630 Brazil Subject: Special Matters Reference: Purchase Agreement No. 2910 (the Purchase Agreement) between The Boeing Company (Boeing) and GOL Transportes Aereos SA (Customer) relating to Model 737-8EH aircraft (Aircraft) This letter agreement (Letter Agreement) amends and supplements the Purchase Agreement. All terms used but not defined in this Letter Agreement have the same meaning as in the Purchase Agreement. 1. BASIC CREDIT MEMORANDUM Boeing will provide Customer with a Basic Credit Memoranda associated with the purchase of the reference proposed Model 737-8EH Aircraft, or Model 737-8EH purchase right aircraft. Such Basic Credit Memoranda will be * ($ * ), per Aircraft and purchase right aircraft, subject to escalation to the time of delivery of each such Aircraft and purchase right aircraft. Such Basic Credit Memoranda will be issued concurrently with the delivery of each of the Aircraft and/or purchase right aircraft, may not be assigned without Boeing's expressed consent, and may be used for the final delivery purchase payment, or for other Boeing goods and services, but not for advance payments. GOL Transportes Aereos SA Letter Agreement No. 6-1162-DME-0712 Page 2 2. SPECIAL PROMOTION & COMMUNICATION SUPPORT In addition to the Promotion Support Boeing will provide per the terms of Letter Agreement No. 6-1162-DME-0711, Boeing offers Buyer additional special promotional and communication support as a credit memoranda in the amount of * ($*) per Aircraft and purchase right aircraft, subject to escalation to the time of each such Aircraft and purchase right aircraft delivery. Such credit memoranda will be issued concurrently with the delivery of each of the proposed reference Aircraft and purchase right aircraft, may not be assigned without Boeing's expressed consent, and may be used for the final delivery purchase payment, or for other Boeing goods and services, but not for advance payments. 3. CUSTOMER SUPPORT - TRAINING Boeing will provide Buyer with a special customer support credit memoranda in the amount of * (*) per Aircraft and purchase right aircraft, subject to escalation to the time of delivery of each such Aircraft and purchase right aircraft. Such special customer support credit memoranda will be issued concurrently with the delivery of each of the Aircraft and purchase right aircraft, may not be assigned without Boeing's expressed consent, and may be used for the final delivery purchase payment, or for other Boeing goods and services, but not for advance payments. 4. MODEL 737-8EH PERFORMANCE IMPROVEMENTS In direct support of Customer's requirements for improvements to the Model 737-8EH performance in specific missions, Boeing will develop, test, certify, and provide, per the terms of Letter Agreement No. 6-1162-DME-0708 to the Purchase Agreement, and as solely determined by Boeing, all such reasonable performance improvements with the delivery of each Aircraft, and purchase right aircraft, or as necessary, on a post-delivery basis through a certified modification kit. Such performance improvements will be provided in the form of a priced optional feature to the basic Aircraft and purchase right aircraft, for which Customer agrees such optional feature will be included in Exhibit A to the Purchase Agreement. Boeing will provide Customer a special Model 737-8EH performance improvement credit memoranda, to offset such Exhibit A priced special feature, in GOL Transportes Aereos SA Letter Agreement No. 6-1162-DME-0712 Page 3 the amount of * ($ * ) per Aircraft, and purchase right aircraft, subject to escalation to the time of delivery of each such Aircraft and purchase right aircraft. Such credit memoranda will be issued concurrently with the delivery of each of the proposed reference Aircraft and purchase right aircraft, may not be assigned without Boeing's expressed consent, and may be used for the final delivery purchase payment, or for other Boeing goods and services, but not for advance payments. 5. LEASED BCC AIRCRAFT RESERVE REQUIREMENTS Buyer has four (4) Model 737 aircraft that are under lease arrangements from the Boeing Capital Corporation (BCC). Such lease agreements include a requirement for airframe maintenance reserve payments by Buyer to BCC. With Buyer's firm purchase of the Aircraft such airframe maintenance reserve payments will be reduced, per the terms and conditions described in a letter agreement between Customer and BCC, which BCC will provide under separate cover, to become * ($ * ) per flight hour. 6. SPECIAL FLEET GROWTH ACKNOWLEDGMENT As a special fleet growth acknowledgement for Customer's purchase of fifteen (15) Model 737-8EH Aircraft, Boeing will provide Customer with a special credit memoranda in the amount of * ($ * ) per Aircraft and purchase right aircraft, subject to escalation to the time of delivery of each such Aircraft and purchase right aircraft. Such special fleet growth credit memoranda will be issued concurrently with the delivery of each of the proposed reference Aircraft and purchase right aircraft, may not be assigned without Boeing's expressed consent, and may be used for the final delivery purchase payment, or for other Boeing goods and services, but not for advance payments. 7. ASSIGNMENT The Credit Memoranda described in this Letter Agreement are provided only as a special financial accommodation to Customer in consideration of Customer's becoming the operator of the Aircraft, and cannot be assigned, in whole or in part, without the prior written consent of The Boeing Company. GOL Transportes Aereos SA Letter Agreement No. 6-1162-DME-0712 Page 4 8. CONFIDENTIAL TREATMENT Customer and Boeing each understands that certain commercial and financial information contained in this Letter Agreement are considered by both Customer and Boeing as confidential. Customer and Boeing agree that each will treat this Letter Agreement and the information contained herein as confidential and, except as otherwise required by law, will not, without the prior written consent of the other party, disclose this Letter Agreement or any information contained herein to any other person or entity. Very truly yours, THE BOEING COMPANY By /s/ ILLEGIBLE ----------------------------- Its Attorney-In-Fact ---------------------------- ACCEPTED AND AGREED TO this Date: 17 May, 2004 GOL TRANSPORTES AEREOS SA By /s/ ILLEGIBLE ----------------------------- Its President ---------------------------- Witness: /s/ ILLEGIBLE - ------------------------------- /s/ ILLEGIBLE - ------------------------------- EX-23.1 9 y97722a2exv23w1.txt CONSENT OF ERNST & YOUNG EXHIBIT 23.1 CONSENT OF ERNST & YOUNG AUDITORES INDEPENDENTES S.S., REGISTERED PUBLIC ACCOUNTING FIRM We consent to the references to our firm under the caption "Experts" and to the use of our report dated March 5, 2004 except for Notes 1 and 8, as to which the date is May 25, 2004, in the Registration Statement (Form F-1) and related Prospectus of Gol Linhas Aereas Inteligentes S.A. (formerly known as Gol Transportes Aereos S.A.), for the registration of its non-voting preferred shares. 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Federative Republic of Brazil	4512	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)


Andrew B. Jánszky, Esq		Leslie N. Silverman, Esq.
Shearman & Sterling LLP		Cleary, Gottlieb, Steen & Hamilton
599 Lexington Avenue		1 Liberty Plaza
New York, New York 10022		New York, New York 10006



															First quarter

	1997		1998		1999		2000		2001		2002		2003		2003		2004


	(in millions, except percentages)
Available Seat Kilometers		31,146		38,121		40,323		41,436		45,008		47,116		41,885		11,113		10,744
Available Seat Kilometers Growth		8.7%		22.4%		5.8%		2.8%		8.6%		4.7%		(11.2)%		(1.0)%		(3.3)%
Revenue Passenger Kilometers		17,824		22,539		22,204		24,284		26,296		26,784		25,125		6,267		6,703
Revenue Passenger Kilometers Growth		7.5%		26.5%		(1.5)%		9.4%		8.3%		1.9%		(6.2)%		(5.8)%		7.0%
Load Factor		57.2%		59.1%		55.1%		58.6%		58.4%		56.8%		60.0%		56.4%		62.4%


Preferred shares offered in the global offering		33,050,000 non-voting preferred shares, of which 18,750,000 preferred shares are being offered by us, 10,900,000 preferred shares are being offered by BSSF Air Holdings LLC and 3,400,000 preferred shares are being offered by Comporte Participações S.A.

The global offering		The global offering consists of the international offering and the Brazilian offering.

International offering		ADSs, representing preferred shares, are being offered through the international underwriters in the United States and in other countries outside Brazil.

Brazilian offering		Concurrently with the international offering, preferred shares are being offered in a public offering in Brazil.

Over-allotment option		We and Comporte Participações S.A. have granted the international underwriters the right for a period of 30 days to purchase up to an additional 4,957,500 preferred shares (of which 1,605,725 preferred shares are being offered by us and 3,351,775 preferred shares are being offered by Comporte Participações S.A.), in the form of ADSs, to cover over-allotments, if any.

The ADSs		Each ADS will represent two preferred shares. The ADSs will be evidenced by American Depositary Receipts, or ADRs. The ADSs will be issued under a deposit agreement among us, The Bank of New York, as depositary, and the registered holders and beneficial owners from time to time of ADSs issued thereunder.

Selling shareholders		BSSF Air Holdings LLC Comporte Participações S.A.

Total shares outstanding after the offering		189,118,977 shares, consisting of 109,448,497 common shares and 79,670,480 preferred shares, not including preferred shares reserved for issuance under stock options. We have outstanding options to purchase up to 937,412 of our preferred shares at an exercise price of R$3.04, and we expect to reserve up to 16,000,000 preferred shares for issuance under stock option plans.

Depositary		The Bank of New York.

Voting rights		Holders of the ADSs and our preferred shares have no voting rights except in connection with certain matters. See “Description of Capital Stock—Voting Rights” and “Description of American Depositary Shares—Voting Rights.”

Liquidation preference		Upon liquidation, holders of preferred shares are entitled to receive a return of capital prior to any distribution to the holders of our common shares.

Tag-along rights		Unlike holders of preferred shares of companies incorporated under the laws of the State of Delaware, which typically do not have the benefit of tag-along rights, holders of our preferred shares are entitled to be included in a public tender offer in case our controlling shareholder sells its controlling stake in us, and the minimum price to be offered for each preferred share is 100% of the price paid per share of the controlling stake.


Lock-up agreements		We, BSSF Air Holdings LLC, our directors and executive officers (other than those directors and executive officers who are also shareholders of Aeropar Participações S.A. and Comporte Participações S.A.) and certain of our other shareholders have agreed with the international underwriters that, subject to certain exceptions, we and they will not issue or transfer, until 180 days after the date of this prospectus, any ADSs or preferred shares or any options or warrants to purchase ADSs or preferred shares, or any securities convertible into, or exchangeable for, or that represent rights to receive, ADSs or preferred shares. Aeropar Participações S.A. and Comporte Participações S.A., including their respective shareholders, have agreed to the same restrictions, except in their case the applicable restricted period is 365 days instead of 180 days. See “Underwriters.”

		In addition, BSSF Air Holdings LLC has agreed with us that, subject to certain exceptions, it will not issue or transfer any ADSs or preferred shares or any options or warrants to purchase ADSs or preferred shares or securities convertible into, or exchangeable for, or that represent rights to receive, ADSs or preferred shares after the expiration of the 180-day lock-up, unless in an organized sales process. See “Related Party Transactions — Shareholders’ Agreement.”

Risk factors		See “Risk Factors” beginning on page 11 and the other information included in this prospectus for a discussion of factors you should consider before deciding to invest in the ADSs or our preferred shares.

Use of proceeds		We intend to use the majority of the net proceeds from this offering for the purchase and lease of the additional Boeing 737 aircraft. We intend to use the remainder of the net proceeds for working capital purposes and general capital expenditures. We will not receive any proceeds from the sale of preferred shares (including preferred shares in the form of ADSs) by the selling shareholders.

Dividends		Brazilian corporation law requires us to distribute at least 25% of our annual adjusted net income, as calculated under Brazilian GAAP and adjusted under the Brazilian corporation law (which differs significantly from net income as calculated under U.S. GAAP). The holders of ADSs will be entitled to receive dividends to the same extent as the owners of our preferred shares, subject to the deduction of any charges of the depositary with respect to foreign exchange conversion. Unlike preferred shares of companies incorporated under the laws of the State of Delaware, which are typically entitled to a fixed dividend established pursuant to the company’s articles of incorporation, our preferred shares are not entitled to fixed dividends but are instead entitled to receive dividends per share in the same amount of the dividends per share paid to holders of our common shares. See “Dividends and Dividend Payments.”

Listing		We have applied to list the ADSs on the NYSE under the symbol “GOL” and to list our preferred shares on the BOVESPA under the symbol “GOLL4.”


Special Note About Forward-Looking Statements			iv
Prospectus Summary			1
Risk Factors			11
Use of Proceeds			22
Exchange Rates			23
Market Information			24
Capitalization			29
Dilution			30
Selected Financial and Operating Data			31
Management’s Discussion and Analysis of Financial Condition and Results of Operations			35
Industry Overview			50
Business			54
Regulation of the Brazilian Civil Aviation Market			70
Management and Corporate Governance			75
Principal and Selling Shareholders			81
Related Party Transactions			82
Description of Capital Stock			84
Dividends and Dividend Policy			90
Description of American Depositary Shares			94
Taxation			100
Underwriters			108
Expenses of the Global Offering			111
Validity of Securities			112
Experts			112
Where You Can Find More Information			112
Enforcement of Judgments Against Foreign Persons			113
Index to Consolidated Financial Statements			F-1
INTERNATIONAL UNDERWRITING AGREEMENT
OPINION OF MATTOS,FILHO,VEIGA FILHO, MARREY JR.
OPINION OF MATTOS, FILHO, VEIGA, FILHO, MARREY JR.
AGREEMENT
SERVICE AGREEMENT
OPEN SKIES RESERVATION SERVICES AGREEMENT
AIRCRAFT PURCHASE AGREEMENT
CONSENT OF ERNST & YOUNG


Expected offering timetable (subject to change):
	Commencement of marketing of the offering	June 1, 2004
	Announcement of offer price and allocation of ADSs and preferred shares	Week of June 21, 2004
	Commencement of trading of ADSs on the NYSE	Week of June 21, 2004
	Settlement and delivery of ADSs and preferred shares	Week of June 28, 2004



			Year Ended December 31,								Three Months Ended March 31,

			2001		2002		2003		2003		2003		2004		2004


											(unaudited)

			(in thousands, except per share data)
Net operating revenues:
	Passenger		R$	223,384	R$	643,549	R$	1,339,191	US$	460,425	R$	249,325	R$	414,869	US$	142,635
	Cargo and other			7,089		34,330		61,399		21,109		11,314		18,223		6,265

		Total net operating revenues		230,473		677,879		1,400,590		481,534		260,639		433,092		148,900



	As of March 31, 2004


	Actual				As Adjusted



	(unaudited)

	(in thousands)
Balance Sheet Data:
Cash and cash equivalents	R$	191,642	US$	65,888	R$	605,967	US$	208,336
Accounts receivable⁽²⁾		216,887		74,567		216,887		74,567
Deposits for aircraft leases and aircraft and engine maintenance contracts		206,683		71,060		206,683		71,060
Total assets		752,483		258,710		1,166,808		401,158
Short term debt		58,512		20,117		58,512		20,117
Long term debt		—		—		—		—
Shareholders’ equity		434,583		149,413		848,908		291,861


	The Brazilian government has exercised, and continues to exercise, significant influence over the Brazilian economy. Brazilian political and economic conditions could adversely affect our business and the trading price of the ADSs and our preferred shares.


	*Exchange rate instability may adversely affect our financial condition and results of operations and the market price of the ADSs and our preferred shares.*


	Inflation and government efforts to combat inflation may contribute significantly to economic uncertainty in Brazil and could harm our business and the market value of the ADSs and our preferred shares.


	Developments and the perception of risk in other countries, especially emerging market countries, may adversely affect the market price of Brazilian securities, including the ADSs and our preferred shares.


	The Brazilian aviation regulatory framework is undergoing changes and we cannot yet assess the effect these changes will have on our business and results of operations. The growth of our operating capacity requires us to first obtain regulatory authorizations.


	*Because we have a limited operating history, it is difficult to evaluate an investment in the ADSs and our preferred shares.*


MORGAN STANLEY	MERRILL LYNCH & CO.


Source:	DAC



			Year Ended December 31,												Three Months Ended March 31,

			2001			2002			2003			2003			2003			2004			2004


															(unaudited)

			(in thousands, except per share data)
Operating expenses:
	Salaries, wages and benefits			33,263			77,855			137,638			47,321			26,989			38,445			13,218
	Aircraft fuel			45,769			160,537			308,244			105,977			84,248			93,545			32,162
	Aircraft rent			58,816			130,755			188,841			64,925			50,799			47,330			16,272
	Aircraft insurance			7,556			23,186			25,850			8,887			6,016			5,923			2,036
	Sales and marketing			35,299			96,626			191,280			65,764			39,009			54,091			18,597
	Landing fees			14,602			32,758			47,924			16,477			11,191			13,640			4,690
	Aircraft and traffic servicing			18,563			47,381			58,710			20,185			10,614			13,485			4,636
	Maintenance, materials and repairs			4,773			16,160			42,039			14,453			12,308			16,287			5,600
	Depreciation			2,383			7,885			13,844			4,760			2,230			4,526			1,556
	Other operating expenses			7,741			22,654			44,494			15,297			8,421			10,205			3,508

		Total operating expenses		228,765			615,797			1,058,864			364,046			251,825			297,477			102,275
Operating income:				1,708			62,082			341,726			117,488			8,814			135,615			46,625
Other expenses:
	Interest expense			(3,350	)		(16,530	)		(20,910	)		(7,189	)		(7,252	)		(1,432	)		(492	)
	Financial income (expense), net			(1,997	)		7,447			(56,681	)		(19,487	)		(7,513	)		3,214			1,105

Income (loss) before income taxes:				(3,639	)		52,999			264,135			90,812			(5,951	)		137,397			47,238
	Income taxes current			—			(1,396	)		(60,747	)		(20,886	)		—			(36,192	)		(12,443	)
	Income taxes deferred			—			(16,246	)		(27,929	)		(9,602	)		(1,934	)		(10,549	)		(3,627	)

Net income (loss):			R$	(3,639	)	R$	35,357		R$	175,459		US$	60,324		R$	(7,885	)	R$	90,656		US$	31,168

Earnings (loss) per share, basic and diluted⁽¹⁾			R$	(0.06	)	R$	0.36		R$	1.07		US$	0.37		R$	(0.05	)	R$	0.54		US$	0.18
Weighted average shares used in computing earnings (loss) per share, basic and diluted (in thousands)⁽¹⁾				56,000			98,268			164,410						151,262			168,793
Earnings (loss) per ADS, basic and diluted			R$	(0.12	)	R$	0.72		R$	2.14		US$	0.74		R$	(0.10	)	R$	1.08		US$	0.36



	Year Ended December 31,									Three Months Ended March 31,

	2001			2002		2003		2003		2003			2004			2004

EBITDA Reconciliation:
	(in thousands)
Net income (loss)	R$	(3,639	)	R$	35,357	R$	175,459	US$	60,324	R$	(7,885	)	R$	90,656		US$	31,168
Plus (minus)
Income taxes		—			17,642		88,676		30,488		1,934			46,741			16,070
Net interest and financial expense		5,347			9,083		77,591		26,676		14,765			(1,782	)		(613	)
Depreciation		2,383			7,885		13,844		4,760		2,230			4,526			1,556

EBITDA	R$	4,091		R$	69,967	R$	355,570	US$	122,248	R$	11,044		R$	140,141		US$	48,181


	*Our failure to successfully implement our growth strategy would harm the market value of the ADSs and our preferred shares.*


	*We have significant fixed costs and we will incur significantly more fixed costs that could hinder our ability to meet our strategic goals.*


	*Inability to obtain financing for additional aircraft would impair our growth strategy and adversely affect our business.*


	*Substantial increases in fuel costs or the unavailability of sufficient quantities of fuel would harm our business.*


	*Insurance costs for airlines increased substantially as a result of the September 11 terrorist attacks in the United States, and further increases would harm our business.*


	*We have only a limited number of suppliers for our aircraft and engines.*


	*We may be unable to maintain our company culture as our business grows.*


	*We rely on third parties to provide our customers and us with facilities and services that are integral to our business.*


	*We rely heavily on automated systems to operate our business, and any failure of these systems could harm our business.*


	*We rely on maintaining a high daily aircraft utilization rate to increase our revenues. High aircraft utilization also makes us vulnerable to delays.*


	*Our reputation and financial results could be harmed in the event of an accident or incident involving our aircraft.*


	*Our lack of a marketing alliance or customer loyalty program could harm our business and competitive ability.*


	*Our controlling shareholder has the ability to direct our business and affairs and its interests could conflict with yours.*


	*We have historically faced significant fluctuations in our results of operations, and the trading price of the ADSs and our preferred shares may be affected by such variations.*


	*You may not be able to sell the ADSs or preferred shares at the price or time you desire because an active or liquid market for the ADSs or preferred shares may not develop.*


	The relative volatility and illiquidity of the Brazilian securities markets may substantially limit your ability to sell the preferred shares underlying the ADSs at the price and time you desire.


	*Holders of the ADSs and the preferred shares may not receive any dividends.*


	*If you surrender your ADSs and withdraw preferred shares, you risk losing the ability to remit foreign currency abroad and certain Brazilian tax advantages.*


	*You will likely suffer dilution in the book value of your investment.*


	*The protections afforded to minority shareholders in Brazil are different from those in the United States, and may be more difficult to enforce.*