FeedbackofMOUAccordingtoourdiscussionsandtheregulationsofforeigninvestmentlaw,weraisethefollowingopinionsaboutMOUthatSATprovided.Investment6.“SATrequirespre-paymentofthequarterlyleasefeestobepaidinEuro’stoSAT’saccountintheNetherlands.”Thisitemshouldbechangedas“SAT’sleasefeewillbepaidinEuro’stoSAT’saccountintheNetherlandsquarterly,orinitsRMBequivalentasdeterminedinaccordancewiththeofficialexchangerateannouncedbyPBConthedateofthepayment.”Reason:WethinkthatleasefeeshouldbepaidinthelightofJ.Voperation,wedon’tacceptprepayment.ThetreatmenttoHNAandSATshouldbeequal.Theriskofoperationandexchangerateshouldbebornebybothparties.7.”IncaseofanyleaseconstructionHNAwillprovidethelessorwithacontinuousBankguaranteeensuringpaymentswithabankofthelessors’choice.Theguaranteeshallatleastguaranteepaymentoffourconsecutiveleaseterms.”Wecannotacceptthisitem.ItisnotreasonabletoHNA,sowesuggestthatdeleteitfromMOU.Do328JETTHIRDPARTYTRAININGAddition:“J.VwillaccesstoauthorizationofDo328jetthirdpartytrainingfromSAT,whenSATremainsapartyintheJV.”2.”AllDo328JETtrainingdevicesshallbethepropertyofSAT.”Changedas:”SATremainsthepropertyofDo328JETtrainingdevicesthatJ.VwillleasefromSAT.”Wethinkthemeaningof“devices”is“Do328JETsimulators”.Hasthiswordtheothermeanings?Forexample,software.Ifyouhavethedifferentparaphraseaboutthatword,pleaseletusknow.SHAREOFREVENUESANDPROFITS2.”SATwillnotallowanylosses.SATwillnotmakeanypaymentstotheTVtocompensateforanylossesgeneratedbytheJV.NorshallSATallowanycompensationonleasepaymentstocompensateforanylossesgeneratedbytheJV.”Changedas:”SATandHNAwillbearthelossesandsharethebenefitsofJ.Vaccordingtoeachparty’scontribution.”Reason:WethinkthatthisitemSATofferedcannotaccordwiththeequitablecooperationprinciple.3.SATrequiresitsshareintherevenuesandprofitstobepaidinEuro’stoSAT’saccountintheNetherlands.Thisitemshouldbechangedas“SAT’srevenuesandprofitswillbepaidinEuro’stoSAT’saccountintheNetherlands,orinitsRMBequivalentasdeterminedinaccordancewiththeofficialexchangerateannouncedbyPBConthedateofthepayment.”Reasonissamewithclause“Investment”.P.1PREFERDCUSTOMERSTATUSHAINANAIRLINES3.”HainanAirlineswillreceiveafavorablepricingcondition,i.e.forthefirstyearofoperation:adryleaserateof500USD(excludingtaxes)perhouronaFFSadryleaserateof250USD(excludingtaxes)perhouronaFTDadryleaserateof250USD(excludingtaxes)perdayonaCBTstationDuringanyconsecutiveyearofoperationHainanAirlineswillpayapriceincreasedbyaninflationindex.”WethinkitisnotveryavailabletosetdowntheconcretepricingpolicyinMOU.Weproposetochangethisitemas“J.VwillenterintoaserviceagreementandconfirmthepreferredpricingpolicywithHNAafterJ.Vwouldhavebeenestablished.”SIMULATORFLEET3.”AllDorniertrainingdevicesshallbeacquiredthroughSATandshallremainthepropertyofSAT.”Changedas:”AllDorniertrainingdevicesshallbeacquirethroughSATandHNA.ThesedevicesshallremainthepropertyofSATandHNA.”WehavelearnedthattwoDO328JETsimulatorsthatSATorderedfromCAEwillputintooperationonJuly,2001.J.VwillleasethesimulatorsfromSATfirst,butHNAshallremaintherightofleasingsimulatorstoJ.V.Thereisasamequestionaboutmeaningof“devices”justlikeclause“Do328JETthirdpartytraining”.Language(Addition)MOUshouldbedraftedinEnglishandChinese.Ifthereisdifferentparaphrasebetweentwoversions,Chineseversionhaspriority.Suggestion:SATshouldtranslatetheEnglishversionofMOUintoChinesebythirdpartythatSATcantrust,andtransmittwofinalversionstousassoonaspossible.TheItemsthatwedon’tmentionshouldnotbeamended.P.2