LAW OFFICES 

PIERRE MURPHY 

SUITE 590 

1200 NEW HAMPSHIRE AVENUE, NW 

WASHINGTON, D.C. 20036 

TELEPHONE: (202) 776-3980 

TELECOPIER: (202) 776-3975 

August 19, 2014 

VIA EMAIL (ORIGINAL VIA OVERNIGHT DELIVERY) 

Attn: Lauralyn Remo 

Chief 

Attn: Catherine O'Toole 

Analyst 

Air Carrier Fitness Division, X-56 

US Department of Transportation 

1200 New Jersey Avenue, SE 

Room W86-307 

Washington, DC 20590 

E-MAIL: pmurphy@lopmu,hy.com 

Re: National Air Cargo Group, Inc., d/b/a National Airlines 

Dear Ms. Remo & Ms. O'Toole: 

Pursuant to your office's letter dated July 8, 2014 requesting additional and/or clarifying 

information regarding National Air Cargo Group, Inc., d/b/a National Airlines' ("National") 

pending application to amend its certificate to conduct foreign scheduled operations, National 

hereby submits the following: 

MANAGEMENT 

1. Please identify the citizenship of Messrs. Matthew McKnight and Steven N S~ith, 

and provide the compliance information required by sections 204.3(1), (m), (0), and (P) of 

our rules for Messrs. McKnight, Smith and Joseph Batten. 

National's Response: 

Messrs. McKnight and Smith are U.S. citizens. Executed Compliance Questionnaires 

for Messrs. McKnight, Smith and Batten together with U.S. Citizenship affidavits are attached 

at Tab 1 hereto. 
OPERATIONS AND FINANCIAL CONDITIONS 

t 

1. In its initial application for scheduled authority, National noted it would be leasing a 

B-757 aircraft from its parent company. Please provide the financing plans and a copy of the 

Letter of Intent or Executed Lease Agreement outlining the terms and conditions of such 

agreement for the lease of the aircraft National intends to operate between the U.S. and 

United Arab Emirates. 

National's Response: 

See: Aircraft Lease Agreement dated August 29, 2013 copy attached at Tab 2 hfreto. 

2. Please provide a summary of any additional hiring National will undertake as a 

result of its proposed scheduled operations. 

National's Response: 

No additional hiring will be necessary for National's proposed scheduled operatipns. 

3. Please provide a detailed 12-month cost forecast which breaks out the air carrier's 

proposed scheduled operations from its current charter operations, so that we can accurately 

assess National's ability to meet our financial fitness test. Additionally, such forecast should 

conform to the criteria outlined in 14 CFR 204.3(t)(2). Please include the appropriate 

footnotes explaining how the expense forecast were derived. 

National's Response: 

The 12-month cost forecast Exhibit provided herein on June 10, 2014 was broken out 

and reflected Applicant's proposed scheduled operations. A detailed scheduled service cost 

forecast together with footnotes indicating forecast expenses derivation is re-submitted hereto 

at Tab 3. These scheduled service cost projections are broken out from National's charter 

service costs which are as regularly submitted by National in its Form 41 Reports. 

4. National's balance sheet dated April 30, 2014 includes Notes Payable of $29~ 

million. Please provide more information regarding this liability. I 

National's Response: 

$26.7MM is debt related to long-term financing on 2 B-747J400BCF's. The remaining 

amount is a net payable balance comprised of balances with various related National Air Cargo 
entities. These balances are classified as long-term in nature as there is no expectation o£ 

repayment from the related entities in the next 12 months. 

5. In its initial application for scheduled authority National A,irlines provided a lerer 

from its parent company, National Air Cargo Holdings, Inc., ("NAC Holdings''), confirming 

that it would make funds available to National Airlines to support its proposed passenger 

operations. Furthermore, NAC Holdings provided third-party verification from Wells Fargo I 

Capital Finance evidencing that it had extended National Airlines a $60 million revolving 

credit facility with $31.3 million currently remaining for disbursement. Please confirm the 

status ofNAC Holdings' financial support for National and the current amount available 

in the revolving credit facility. 

National's Response: 

(i) Revolving Credit Facility: NAC Holdings no longer has the Wells Fargo perm,ent 

line of credit facility referenced. 1 

(ii) NAC Holdings Support: As has always been the case, Applicant continues to h, ve the 

full financial support of its parent, NAC Holdings, as well as that of its sole shareholder. 

(iii) Funds Available: Substantial cash funds in the amount of approximately $4M remain 

available to satisfy the Department's financial fitness test in Applicant's Wells Fargo Bank 

account. See: Exhibit NA-1 02 previously submitted. The 12-month scheduled service 

projection shows a three-month average operating cost of the schedtiled operations of$1.43 

which is more than covered by the company's approximately $4M ih cash available in the 

Wells Fargo bank account. 

6. Please accompany your response to this request with the certification required by 

Title 18 United States Code Section 1001. 

See: Tab 4 hereto. 

cc: Glen G. Joerger (National) 

BrianT. Conaway (National) 

tfullysub~ 

I 

I 
Tab 1 
NATIONAL AIRLINES 

DOT Questionnaire (Key Personnel) 

NB: The information you provide in response to this Questionnaire will be used in 

National Airline's DOT Application for Certificate Authority. All questions should be 

answered fully and completely. Where more detailed responses are required or requested, 

please use the attached "Detailed Responses" sheet. 

1. Please state your name and residence address: 

Matthew McKnight 

1006 Brielle Ave. 

Oviedo, FL. 32765 

2. ·Title of Position with National Airlines: 

Director of Quality Control 

3. Are you a citizen of the United States? 

Yes _-=X~- No ___ _ 

(If you are not a U.S. citizen, please indicate nationality and current immigration status 

on the attached "Detailed Response".) 

4. Are you or any company in which you have a substantial interest (beneficial control qf 

10% or more of the outstanding voting stock) the subject of any legal action or outstanding 

judgment in excess of $5,000? 

Yes __ _ No __ x __ 

(If "yes", please provide date and amount of each claim or judgment, the name of each 

claimant or judgment creditor, and how long outstanding on the attached "Detailed 

Response.") 
5. Are you or any company in which you have a substantial interest the subject of any action 

or outstanding judgment of less than $5,000? 

Yes __ _ No_X __ 

(If "yes", please supply the total number and aggregate amount of all claims and/or 

judgments outstanding against you on the attached "Detailed Response.") 

6. Are you or any company in which you have a substantial interest now, or have you been, 

the subject of a pending investigation, formal complaint or enforcement action by the DOT or the 

FAA during the past five (5) years regarding compliance with the Federal Aviation Act of 1958, 

as amended, or any order, rule, regulation or other requirement issued pursuant to the Act? 

Yes __ _ No __ x_ 

(If "yes", describe each complaint, and indicate the current status or final 

disposition of each complaint on the attached "Detailed Response.") 

7. Have you or any company in which you have a substantial interest ever been charged 

with any unfair, deceptive or anticompetitive business practices, or of any fraud, felony or 

antitrust violation during the past ten ( 1 0) years? 

Yes __ _ No X 

(If "yes", please describe, and indicate the disposition or current status of each 

proceeding on the attached "Detailed Response.") 

Signature 

Matthew McKnight 

N arne (Printed) 
NATIONAL AIRLINES 

Detailed Response (if applicable). 
NATIONAL AIRLINES 

Affidavit of Citizenship . 

STATE OF: Florida =-=..=..;;:..::::;=----

COUNTY OF: _Seminole _____ _ 

=M=a=tt=h:..=..e....:.;.w--=M:..;..::...=;.c=Kn~ig~h~t ______ , ~eing first duly sworn, deposes and says: 

That he is a citizen of the United States of America. 

Subscribed and sworn to before me this 1. \ 

[SEAL] 

My commission expires: C<utney Deondra Dangerfield 

-

NOTARY PUBLIC 

STATE OF FLORIDA 

. Cc3mrnil FF114759 

Expires 4121/2018 
NATIONAL AIRLINES 

DOT Questionnaire (Key Personnel) 

NB: The information you provide in response to this Questionnaire will be used in 

National Airline's DOT Application for Certificate Authority. All questions should be 

answered fully and completely. Where more detailed responses are required or requested, 

please use the attached "Detailed Responses" sheet. 

1. Please state your name and residence address: 

2. Title of Position with National Airlines: 

3. Are you a citizen of the United States? 

Yes _ ___:_:X=---- No~---

(If you are not a U.S. citizen, please indicate nationality and current immigration status 

on the attached "Detailed Response".) 

4. Are you or any company in which you have a substantial interest (beneficial control of 

1 Oo/o or more of the outstanding voting stock) the subject of any legal action or outstanding 

judgment in excess of $5,000? 

Yes __ _ No )Q 

(If"yes", please provide date and amount of each claim or judgment, the name of each 

claimant or judgment creditor, and how long outstanding on the attached "Detailed 

Response.") 
5. Are you or any company in which you have a substantial interest the subject of any action 

or outstandingjudgment of less than $5,000? 

Yes __ _ No _ --:,..._ )I __ 

(If "yes", please supply the total number and aggregate amount of all claims and/or 

judgments outstanding against you on the attached "Detailed Response.") 

6. Are you or any company in which you have a substantial interest now, or have you been, 

the subject of a pending investigation, formal complaint or enforcement action by the DOT or the 

FAA during the past five (5) years regarding compliance with the Federal Aviation Act of 1958, 

as amended, or any order, rule, regulation or other requirement issued pursuant to the Act? 

Yes __ _ No ----

(If "yes", describe each complaint, and indicate the current status or final 

disposition of each complaint on the attached "Detailed Response.") 

7. Have you or any company in which you have a substantial interest ever been charged 

with any unfair, deceptive or anticompetitive business practices, or of any fraud, felony or 

antitrust violation during the past ten ( 1 0) years? 

Yes _ _ _ No ----

(If "yes", please describe, and indicate the disposition or current status of each 

proceeding on the attached "Detailed Response.") 

Name (Printed) 
NATIONAL AIRLINES 

Detailed Response (if applicable). 
NATIONAL AIRLINES 

Affidavit of Citizenship 

STATEOF: El. 

COUNTY OF: 0 t01)1.Q.__. 

Si"- IIG"...l N. ~Mrrl-l , being first duly sworn, deposes and says: 

That he is a citizen of the United States of America. 

~g_ 

Signature 

Subscribed and sworn to before me this J ~ day of J ~ 

[SEAL] 

My commission expires: 

\ 

Signature ~ of Notary Public 

COII1ney Deon<h Dangerfield 

NOTARY PUBLIC 

STATE OF FLORIDA 

Ccrnml¥ FF114759 

ExpirM 4/21/2018 

'2014. 
NATIONAL AIRLINES 

DOT Questionnaire (Key Personnel) 

NB: The information you provide in response to this Questionnaire will be used in 

National Airline's DOT Application for Certificate Authority. All questions should be 

answered fully and completely. Where more detailed responses are required or requested, 

please use the attached ''Detailed Responses" sheet. 

1. Please state your name and residence address: 

2. Title of Position with National Airlines: 

3. Are you a citizen of the United States? 

Yes _ _..::X:..:..___ No __ _ 

(If you are not a U.S. citizen, please indicate nationality and current immigration status 

on the attached "Detailed Response".) 

4. Are you or any company in which you have a substantial interest (beneficial control of 

10% or more of the outstanding voting stock) the subject of any legal action or outstanding 

judgment in excess of $5,000? 

Yes __ _ 

· (If."yes", please provide date and amount of each claim or judgment, the name of each 

claimant or judgment creditor, and how long outstanding on the attached "Detailed 

Response.") 
5. Are you or any company in which you have a substantial interest the subject of any action 

or outstanding judgment of less than $5,000? 

Y~s No )c 

(If "yes", please supply the total number and aggregate amount of all claims and/or 

judgments outstanding against you on the attached "Detailed Response.") 

6. Are you or any company in which you have a substantial interest now, or have you been, 

the subject of a pending investigation, formal complaint or enforcement action by the DOT or the 

FAA during the past five (5) years regarding compliance with the Federal Aviation Act of 1958, 

as amended, or any order, rule, regulation or other requirement issued pursuant to the Act? 

Yes __ _ No X~-

(If "yes", describe each complaint, and indicate the current status or final 

disposition of each complaint on the attached "Detailed Response.") 

7. Have you or any company in which you have a substantial interest ever been charged 

with any unfair, deceptive or anticompetitive business practices, or of any fraud, felony or 

antitrust violation during the past ten (10) years? 

Yes __ _ No )( 

(If "yes", please describe, and indicate the disposition or current status of each 

proceeding on the attached "Detailed Response.") 

Name (Printed) 
NATIONAL AIRLINES 

I Detailed Response (if applicable). 
NATIONAL AIRLINES 

Affidavit of Cjtizenship 

STATEOF:f\Dn oto1 

COUNTY OF: 0 (OlD~~ 

J DtS p h f2xl-t±rubeing first duly sworn, deposes and says: 

That he is a citizen of the United States of America. 

Subscribed and sworn to before me this l D day of~, 2014. 

[SEAL] 

My commission expires: 

Signat~Notary ~ Public 

-

Courtney DeondlaDangertiekl 

NOTARY PUBLIC 

STATE OF FLORIDA 

Cclnm# FF114759 

Expires 412112018 
Tab2 
' ~-

ORIGINAL 

TO BE RETURNED TO M&i AIRCRAFT LEASE AGREEMENT 

dated as of 

f\~~.t5t d'1, 2013 

between 

WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, acting as Owner 

Trustee, 

as Lessor 

and 

NATIONAL AIR CARGO GROUP, INC., d/b/a National Airlines, 

as Lessee 

One (1) Boeing Company 757 -28A Airframe 

U.S. Registration Mark N176CA 

Manufacturer's Serial Number 24543 

(i) 

. ASCOAOEO BV 

fitadetal Avfl tlon Administration 

CMI Aviation Registry 

Date Gt.- ~- (? 11me (0: 32-

C<lhveyanee Number .S Foe <io<§J 
'1~0\-\'tl1)\0 

kl\O -v~o\-\'11'1\0 

~o ; ... li~\liS\()3\l U-4\l~'t!W ~'V d \\l.\M Q3l\j 
Section 1. 

Section 2. 

Section 3. 

Section 4. 

Section 5. 

Section 6. 

Section 7. 

Section 8. 

Section 9. 

Section 10. 

Section 11. 

Section 12. 

Section 13. 

Section 14. 

Section 15. 

Section 16. 

Section 17. 

Section 18. 

Section 19. 

EXHIBITS 

EXHIBIT A 

EXHIBIT 8 

EXHIBITC 

EXHIBITD 

EXHIBIT DO 

EXHIBITE 

EXHIBIT F 

TABLE OF CONTENTS 

Definitions .................................................................................................. 1 

Lease and Conditions ................................................................................ 7 

Delivery and Acceptance; Effective Date; Term ......................................... 7 

Rent ........................................................................................................... 8 

Representations and Warranties ................................................................ 8 

Possession and Use ................................................................................ 12 

Blank ........... : ............................................................................................ 13 

Covenants of Lessee ............................................................................... 13 

Replacement of Parts; Alterations, Modifications and Additions ............ 134 

General Tax Indemnity ........................................................................... 155 

Casualty Occurrences .............................................................................. 15 

Insurance ................................................................................................. 16 

Indemnification ......................................................................................... 17 

Liens ........................................................................................................ 19 

Perfection of Title and Further Assurances .............................................. 19 

Return of Aircraft and Records ................................................................. 19 

Events of Default: ............ I ........................................................................ 19 

Remedies ................................................................................................. 20 

Miscellaneous .............................................. I ........................................... 20 

Aircraft Specifications 

[Reserved] 

Definitions and Values 

Form of Lease Supplement 

Delivery Condition Requirements 

Return Condition Requirements 

Maintenance Recording Requirements 
AIRCRAFT LEASE AGREEMENT 

THIS AGREEMENT, dated as of s± J9, 2013, is by and between 

Wells Fargo Bank Northwest, National Associa . n, acting as Owner Trustee (under the 

Trust Agreement defined below) with its offices located at 299 S .. Main S~reet , 12th Floor, 

Salt Lake City, Utah 84111 (hereinafter, the "Lessor'), and National A1r Cargo Group, 

Inc. d/b/a National Airlines, a Michigan corporation with its office located at Citadel U 

Building, 5955 T.G. Lee Boulevard, Orlando, Florida 32822 (hereinafter, the "Lesseetl). 

WITNESSETH 

WHEREAS, Lessee desires to lease from Lessor, and Lessor is willing to lease 

to Lessee, the Aircraft described herein, upon and subject to the fol1owing terms and 

conditions. 

NOW THEREFORE, for and in consideration of the premises, and other good 

and valuable consideration, the receipt and sufficiency of which is hereby 

acknowledged, Lessor and Lessee hereby agree as follows: 

Section 1 - Definitions. 

Unless the context otherwise requires, the following terms shall have the 

following respective meanings for all purposes of this Agreement and shall be equally 

applicable to both the singular and the plural forms of the terms herein defined: 

Aircraft shall mean the Airframe, together with: (i) Engines installed thereon or 

associated therewith as described in Exhibit A; (ii) all Parts and all components thereof; 

(iii) all ancillary equipment or devices furnished with the Aircraft under this Lease; (iv) aJI 

Aircraft Documents, and (iv) all substitutions, replacements and renewals of any and all 

thereof. 

Aircraft Documents shall mean the maintenance and inspection records and all other 

current and historical records, documentation and mass storage media pertaining to the 

Aircraft, including, those generated by or on behalf of Lessee during the Term, and a11 

such documents and records required to be maintained under this Lease and in 

accordance with Applicable Law and the requirements of Exhibit F hereto. 

Airframe shall mean: (a) the aircraft (excluding Engines or engines from time to time 

installed thereon) described in Exhibit A; and (b) any and all Parts which are from time 

to time incorporated or installed on or attached thereto or which have been removed 

therefrom so long as title thereto remains vested in Lessor in accordance herewith, 

including the terms of Section 9 hereof. 
Applicable Law shall mean: (i) any law, statute, decree, constitution, regulation, ord_er, 

judgment, rule, license, permit, injunction or other directive of any Governmental .En~1ty; 

(ii) any treaty, pact, compact or other agreement to which any Government~! En~~~ 1s a 

signatory or party including, but not limited to, the Cape Town Convention! (111). any 

judicial interpretation with binding characteristics or application of those descnbed 1n (1) 

or (ii) above; (iv) any administrative interpretation with binding characteristics or 

application of those described in (i) or (ii) above; and (v) any amendment or revision of 

any of those described in (i), (ii), (iii) or (iv) above, and in each case, which is applicable 

to the Aircraft and its use and operation, the Lessee, any Sublessee, or the transactions 

contemplated by this Lease and the other Operative Agreements. 

Approved Insurance Broker shall mean any insurance/reinsurance broker of 

internationally recognized responsibility and standing specializing in aircraft insurance 

as is reasonably acceptable to and approved by Lessor. 

Approved Insurer shall mean each insurer and reinsurer of internationally recognized 

responsibility and standing effecting aircraft insurance as is reasonably acceptable to 

and approved by Lessor with respect to all policies of insurance and reinsurance 

required hereunder. 

Aooroved Maintenance Provider shall mean with respect to any major scheduled 

maintenance, modification or alteration to the Aircraft, Lessee, or such other Aviation 

Authority approved maintenance facility which is approved in advance in writing by 

Lessor to perform maintenance on the Aircraft. 

Aviation Authority shall mean the United States FAA or any Governmental Entity which 

under the laws of the State of Registration has control over civil aviation or the 

registration, airworthiness or operation of aircraft in the State of Registration. 

Basic Rent shalf mean the rent for the Aircraft specified on Exhibit C and payable 

throughout the Term for the Aircraft pursuant to Section 4(a) hereof. 

Basic Rent Payment Date s~all mean the day for payment of Basic Rent determined in 

accordance with Exhibit C. 

Business Day shall mean any day other than a Saturday, Sunday or other day on which 

banking institutions in New York, New York are authorized or required by law to be 

closed. 

Cape Town Convention means the Convention on International Interests in Mobile 

Equipment (referred to in this definition as the "Convention") and the Protocol to the 

Convention on International Interests in Mobile Equipment on Matters Specific to 

Aircraft Equipment (referred to in this definition and elsewhere in this Agreement as the 

"Protocol"), both signed in Cape Town, South Africa on 16 November 2001, together 

with any protocols, regulations, rules, orders, agreements, instruments, amendments, 

supplements, revisions or otherwise that have been or will subsequently be made in 

-2-
connection with the Convention and/or Protocol by the "Supervisory Authority" (as 

defined in the Protocol), the "International Registry" or "Registrar" (as defined in the 

Convention) or an appropriate "registry authority" (as defined in the Protocol) or any 

other international or national body or authority. 

Casualty Occurrence shall mean any of the following events with respect to the Aircraft, 

Airframe or any Engine: (a) loss of such property or its ·use due to theft, hijacking or 

disappearance for a period in excess of sixty (60) consecutive days (or for such shorter 

period ending on the Termination Date), or destruction, damage beyond economic 

repair, or rendition of such property permanently unfit for normal use by Lessee for any 

reason whatsoever; (b) any damage to such property which results in an insurance 

settlement with respect to such property on the basis of a total loss or on the basis of a 

compromised or constructive total loss as determined by the Approved Insurer; (c) the 

condemnation, confiscation, appropriation or seizure of, or requisition of title to, such 

property; (d) or the use of such property by any Governmental Entity or purported 

Governmental Entity, resulting in the loss of possession thereof by Lessee for a period 

in excess of sixty (60) consecutive days (or for such shorter period ending on the 

Termination Date); or (e) the disposal of such property by an administrator of Lessee 

(including a receiver, manager, liquidator or provisional liquidator) or any official 

exercising similar powers pursuant to applicable bankruptcy law, or any similar statute, 

or any disposal of such property by an administrator of Lessee or any person exercising 

similar powers pursuant to any security interest over the assets of Lessee. A Casualty 

Occurrence with respect to the Airframe shall constitute a Casualty Occurrence with 

respect to the Aircraft. 

Casualty Value shall mean the amount specified in Exhibit C hereto. 

Commencement Date shall mean the date of Lease Supplement No. 1. 

Default shall mean an Event of Default or an event which would constitute an Event of 

Default but for the lapse of time or the giving of notice or both. 

Delivery Location shall mean the location specified in Exhibit C hereto for the delivery of 

the Aircraft by Lessor to Lessee. 

Dollars shall mean lawful currency of the United States of America. 

Engine shall mean any Engine installed on or furnished for use on the Aircraft during the 

Lease Term, together with any and all Parts incorporated or installed in or attached 

thereto and any and all Parts removed therefrom. 

Estimated Delivery Date shall mean the date specified in Exhibit C hereto. 

Event of Default shall mean any of the events specified in Section 17 hereof. 

Expiration Date shall mean the date specified in Exhibit C hereto. 

-3-
FAA shall mean the Federal Aviation Administration of the United States Department of 

Transportation or any successor thereto. 

FAR shall mean the Federal Aviation Regulations promulgated under the Federal 

Aviation Act, as amended and supplemented from time to time. 

Federal Aviation Act shall mean 49 U.S.C. §40101 et. seq., as amended and as in effect 

on the date of this Lease, or any successor or substituted U.S. legislation at the time in 

effect and applicable. 

Final Inspection shall have the meaning provided in Section 16(c)(ii). 

Governmental Entity shall mean and include: (i) the Aviation Authority and the FAA; (ii) 

any national, federal, state, or local government (whether domestic or foreign), any 

political subdivision thereof or local jurisdiction therein; (iii) any board, commission, 

department, division, organ, administrative authority, instrumentality, court or agency of 

any entity described in (ii) above, however constituted, and (iv) any association, 

organization or institution of which any entity described in (ii) or (iii) above is a member 

or to whose jurisdiction any such entity is subject or in whose activities any such entity 

is a participant but only (except for purposes of defining ~~Applicable Law" above) to the 

extent that any entity described in (i) through (iv) above has jurisdiction over this Lease, 

the Operative Agreements or the Aircraft and its operations, or any of the parties hereto. 

lndemnitees shall mean, collectively, the Lessor, and each Lessor Lender and their 

respective successors and assigns and their respective officers, directors, shareholders, 

controlling persons, agents, and employees; provided, however, that in no event shall a 

manufacturer, repairer or service provider of the Aircraft, any Engine or Part be deemed 

an Indemnitee hereunder. 

International Registry shall mean the international registry established pursuant to the 

Cape Town Convention. 

Lease Supplement shall mean Lease Supplement No. 1, substantially in the form of 

Exhibit D hereto, and/or any subsequent Lease Supplement. 

Lessor's Liens shall mean Liens on the Aircraft arising as a result of: (i) claims against 

Lessor not related to the transactions contemplated by this Lease; or (ii) acts or 

omissions of Lessor, not contemplated and expressly permitted under this Lease; or (iii) 

Liens for Taxes imposed against Lessor, or the Aircraft which are not indemnified 

against by Lessee pursuant to Section 10 hereof; or (iv) Liens granted by the Lessor. 

Lien shall mean any mortgage, pledge, lien, charge, encumbrance, hypothecation, 

lease, exercise of rights, security interest or claim (including any imposed with respect 

to any Taxes, or any airport or landing fees or related charges). 

-4-
Maintenance Program shall mean the Lessee's Aviation Authority approved 

maintenance program for Boeing model 757-200 aircraft, any Manufacturer's Service 

Program ("MSP"), or such other Aviation Authority approved manufacturer's 

maintenance program as in effect from time to time for the Aircraft encompassing inter 

alia scheduled maintenance, condition-monitored maintenance and on condition 

maintenance of the Airframe, Engines and components of the Aircraft as shall be 

approved by Lessor, which approval shall not be unreasonably withheld, delayed or 

conditioned. Lessee's Maintenance Program shall not deviate materially from the MPD. 

Manufacturer shall mean The Boeing Company. 

MPD shall mean the Maintenance Planning Document published by the Manufacturer 

and applicable to the Aircraft. 

Operative Agreements shall mean this Lease, any Lease Supplement, any Permitted 

Sublease, and any other documents and agreements executed and delivered by 

Lessor, Lessee and any Sublessee, or any other Person in furtherance of the 

transactions contemplated hereby and thereby. 

Parts shall mean all appliances, components, parts, instruments, appurtenances, 

avionics, accessories, furnishings, auxiliary power units and other equipment of 

whatever nature (other than complete Engines or engines), which may now or from time 

to time be incorporated or installed in or attached to the Airframe or any Engine. Except 

as otherwise set forth herein, only at such time as a replacement part shall be 

substituted for a Part in accordance with Section 9 hereof, shall the Part so replaced 

cease to be a Part hereunder. 

Permitted Lien shall mean: (i) any Lien for Taxes which are either not assessed or, if 

assessed, are not yet due and payable or are being contested in good faith by 

appropriate proceedings so long as such proceedings shall not involve any danger of 

the sale, forfeiture or loss of the Aircraft; or (ii) any undetermined or inchoate Lien of a 

repairer, carrier, hangarkeeper, material supplier or other similar Lien arising in the 

ordinary course of business in respect of obligations which are not overdue or which 

have been adequately bonded or are being contested in good faith by appropriate 

proceedings; provided that such proceedings, or the continued existence of such Lien, 

do not involve any danger of the sale, forfeiture or loss of or loss of use of the Aircraft; 

or (iii) any Lessor Liens; or any liens created by Lessee pursuant to original purchase of 

Aircraft, if any. 

Permitted Sublease shall mean any sublease that has been agreed to by Lessor. 

Permitted Sublessee shall mean any Person in possession of the Aircraft or any Engine 

pursuant to a Permitted Sublease. 

-5-
Person shall mean and include any individual, corporation, company, limited liability 

company, partnership, firm, joint stock company, joint venture, trust, estate, 

unincorporated organization, association or Governmental Entity. 

Redelivery Location shall have the meaning provided in Exhibit C. 

Rent shall mean Basic Rent and Supplemental Rent, collectively. 

Return Occasion shall mean the return of possession of the Aircraft from Lessee to 

Lessor at the end of the Term of this Lease, or upon Lessor demanding that Lessee 

return or upon Lessor taking possession of the Aircraft pursuant to Section 18 hereof. 

Security shall mean the amount specified in Exhibit C hereto. 

State of Registration shall mean the United States of America. 

Supplemental Rent shall mean any and all amounts, liabilities and obligations (other 

than Basic Rent) which Lessee assumes or agrees to pay hereunder to Lessor, or any 

Lessor Lender, including without limitation: (i) any payment of Casualty Value; (ii) any 

payment of indemnity required by Sections 10 and 13 hereof; (iii) to the extent permitted 

by any Applicable Law, interest at the Interest Rate (all computations of interest under 

this Lease to be made on the basis of a 365 day year for the actual number of days 

elapsed) calculated on any part of any installment of Basic Rent not paid on the due 

date thereof for the period the same remains unpaid, and on any other amounts not 

paid when due hereunder until the same is paid; and (iv) the Security. 

Taxes shall mean any and all taxes (including, but not limited to, sales, use, business, 

gross income, net income, personal property, transfer, fuel, leasing, occupational, value 

added, goods and services, excess profits, excise, gross receipts, franchise, stamp, ad 

valorem, documentation, import and export taxes), fees (including, but not limited to, 

registration, recording and license fees) levies, imposts, duties, assessments, 

withholdings and other charges of any nature whatsoever imposed by any 

Governmental Entity, together with any penalties, fines, charges or interest thereon (but 

excluding taxes on the overall net income or capital gains of Lessor imposed on Lessor 

by the United States of America). 

Term shall mean the term of this Lease which shall commence on the Commencement 

Date and which shall end on the Termination Date. 

Termination Date shall have the meaning provided in Section 3(d). 

Trust Agreement shall mean the Trust Agreement (National Air Cargo 757 Trust) dated 

December 30, 2010 between the Trustor and the Lessor, as supplemented by 

Supplement _ N 24543 to Trust Agreement (National Air Cargo 757 Trust) dated 

,Pu~ ~ , 2013 between the Trustor and the Lessor. 

-6-
Trustor shall mean National Air Cargo Middle East FZE. 

Section 2 - Lease and Conditions. 

(a) Lessor hereby agrees to lease the Aircraft to Lessee, and Lessee hereby 

agrees to lease the Aircraft from Lessor, subject to and in accordance with the terms 

hereof, as supplemented by the Lease Supplement. 

(b) Lessor shall deliver the Aircraft hereunder to Lessee upon the receipt by 

Lessor of the following items on or before the Commencement Date (or such other later 

date as may be designated by Lessor), all of which shall be in form and substance 

reasonably satisfactory to Lessor: 

(i) this Lease and the Lease Supplement duly authorized and 

executed by Lessee and counterparts of each of the other Operative Agreements to 

which Lessee is or will be a party as of the Commencement Date, duly authorized and 

executed by each party thereto other than Lessor; 

(ii) certificates of the Approved Insurance Brokers evidencing the 

insurance and reinsurance as required by Section 12 hereof in form and substance 

reasonably satisfactory to Lessor and Lessor Lender, as contemplated in Section 12(g); 

(iii) such other documents and matters incident to any of the foregoing 

as Lessor may reasonably request. 

Section 3 -Delivery and Acceptance; Effective Date; Term. 

(a) Deliverv. The Aircraft will become available for delivery on or about the 

Estimated Delivery Date. 

(b) Place of Delivery and Acceptance. The Aircraft shall be delivered to and 

accepted by Lessee at the Delivery Location. 

(c) Acceptance of Aircraft. The Aircraft to be leased hereunder shall be 

delivered to Lessee in compliance with Exhibit A and Exhibit DO, including the Aircraft 

Documents and manuals, but otherwise "AS IS, WHERE IS" and SUBJECT TO EACH 

AND EVERY DISCLAIMER OF WARRANTY AND REPRESENTATION AS SET 

FORTH IN SECTIONS 5 HEREOF. Upon tender of delivery pursuant to this Lease, 

Lessee shall immediately accept delivery of the Aircraft, and shall indicate and confirm 

its acceptance of the Aircraft by executing and delivering the Lease Supplement. 

(d) Effective Date and Term of Lease. The Term of the leasing of the Aircraft 

under this Lease shall commence on the Commencement Date and shall continue until 

the Expiration Date; provided that the leasing of the Aircraft under this Lease may be 

earlier terminated by Lessor pursuant to the provisions of Section 18 hereof, or 

-7-
extended by Lessor pursuant to the provisions hereof (the last such day of the term, the 

"Termination Date"). 

Section 4 - Rent. 

(a) Rent. Lessee covenants and agrees to pay to Lessor, or its assigns 

(including but not limited to any Lessor Lender), the following as Rent: 

(i) Basic Rent payable in consecutive monthly installments and due on 

each Basic Rent Payment Date; and 

(ii) any and all Supplemental Rent as the same becomes due. 

(b) Place. Method and Timing of Payment. All Basic Rent and Supplemental 

Rent payable under this Lease shall be paid in U.S. Dollars, by wire transfer of 

immediately available funds at the Payment Location, or by other means and at such 

other location as Lessor shall designate in writing. 

(c) Prohibition Against Setoff. Counterclaim. Etc. This Lease is a net lease. 

Lessee's obligation to pay all Rent hereunder shall be absolute and unconditional and 

shall not be affected or reduced by any circumstances, it being the express intention of 

Lessor and Lessee that all Rent payable hereunder shall be payable in all events, 

unless the obligation to pay the same shall be terminated pursuant to the express 

provisions of this Lease. 

Lessor expressly acknowledges and agrees that nothing contained in this 

Section in any way modifies, limits or diminishes any covenant or obligation of Lessor 

under this Lease or in any way restricts any other rights of Lessee to pursue any 

remedies which it may have (at law or in equity or any combination thereof) against 

Lessor to seek damages, specific performance or a recovery of any payment of Rent or 

any other amount which is not due and payable. hereunder or, subject to the provisions 

of the second paragraph of this Section to pursue any rights or remedies it may possess 

in the event of a failure by Lessor or any other Person to perform its covenants and 

obligations under this Lease. 

Section 5 - Representations and Warranties. 

(a) Lessor's Representations and Warranties. In reliance on Lessee's 

representations, warranties and covenants contained in this Agreement, LESSOR HAS 

NOT AND SHALL NOT BE DEEMED TO HAVE MADE (WHETHER BY VIRTUE OF 

HAVING LEASED THE AIRCRAFT UNDER THIS LEASE, OR HAVING ACQUIRED 

THE AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING 

ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO 

THIS LEASE OR OTHERWISE) AND LESSOR HEREBY SPECIFICALLY DISCLAIMS 

ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED (EXCEPT AS 

HEREIN BELOW PROVIDED IN THIS SECTION 5(a)), AS TO AIRWORTHINESS, 

-8-
CONDITION, DESIGN, OPERATION, MERCHANTABILITY, FREEDOM FROM 

CLAIMS OF INFRINGEMENT OR THE LIKE, OR FITNESS FOR USE FOR A 

PARTICULAR PURPOSE OF THE AIRCRAFT, OR AS TO THE QUALITY OF THE 

MATERIAL OR WORKMANSHIP OF THE AIRCRAFT, THE ABSENCE THEREFROM 

OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS 

TO ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS 

OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE 

OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO 

THE AIRCRAFT; AND LESSEE HEREBY WAIVES, RELEASES, RENOUNCES AND 

DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH WARRANTY OR 

WARRANTIES. LESSOR SHALL HAVE NO RESPONSIBILITY OR LIABILITY 

WHATSOEVER TO LESSEE OR ANY OTHER PERSON, WHETHER ARISING IN 

CONTRACT OR TORT, OUT OF ANY NEGLIGENCE OR STRICT LIABILITY OF 

LESSOR OR OTHERWISE, FOR: (i) ANY LIABILITY, LOSS OR DAMAGE CAUSED 

OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR 

ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT 

THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH; (ii) 

THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY ENGINE 

OR ANY RISKS RELATING THERETO; (iii) ANY INTERRUPTION OF SERVICE, 

LOSS OF BUSINESS OR ANTICIPATED PROFITS OR CONSEQUENTIAL 

DAMAGES; OR (iv) THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, 

REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT. THE 

WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS SECTION 5(a) ARE 

EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES 

WHATSOEVER, EXPRESS OR IMPLIED, AND LESSOR SHALL NOT BE DEEMED 

TO HAVE MADE ANY OTHER WARRANTIES, EXCEPT THAT AS OF THE DATE 

HEREOF AND AT ALL TIMES DURING THE TERM: 

(i) Lessor is a national banking association organized and existing 

under the laws of the United States of America, and it has the full power and authority to 

carry on its business as presently conducted and to perform its obligations under this 

Lease; 

(ii) on the Commencement Date, the Aircraft shall be free and clear of 

any and all Liens, except for Lessor's Liens; 

(iii) this Lease, the Lease Supplement and each Operative Agreement 

executed by Lessor have been duly authorized by all necessary action on the part of 

Lessor, do not require any approval of stockholders of Lessor that have not been 

obtained, and neither the execution and delivery hereof nor the consummation of the 

transactions contemplated hereby and thereby nor compliance by Lessor with any of the 

terms and provisions hereof or thereof will, contravene (x) Lessor's organizational 

documents, (y) any agreement to which Lessor or any of its properties or assets are 

bound or affected, or (z) Applicable Law; 

-9-
(iv) this Lease has been duly authorized, executed and delivered by 

Lessor, and that this Lease, the Lease Supplement and each of the Operative 

Agreements to which Lessor is a party when executed and delivered hereunder 

constitute legal, valid and binding obligations of Lessor, enforceable in accordance with 

their respective terms except as may be limited by bankruptcy, insolvency, 

reorganization, moratorium or other similar laws affecting the enforcement of creditors' 

rights generally, and, to the extent that certain remedies require or may require 

enforcement by a court of equity, by such principles of equity (regardless of whether 

such enforceability is considered in a proceeding in equity or at law) as a court having 

jurisdiction may impose and by laws which may affect some of such remedies; and 

(v) no consent, approval or authorization of, or notice to any U.S. 

Governmental Entity having jurisdiction with respect to the execution, delivery or 

performance by Lessor of this Lease and the Lease Supplement is required for Lessor 

to execute and deliver this Lease and the Lease Supplement, and to perform the 

transactions contemplated hereby. 

(b) Manufacturers' Warranties. Lessor hereby assigns to Lessee such rights 

as Lessor may have under any warranty, express or implied, with respect to the Aircraft 

made by the Manufacturer, or any other Person (including any Approved Maintenance 

Provider), to the extent that the same exist or may be assigned or otherwise made 

available to Lessee; and any monies recovered pursuant to such warranties which are 

suffered during the Term shall be applied to correct or cure any defect or deficiency of 

the Aircraft, and the balance of any such monies shall be paid over to Lessor, or to 

Lessee to reimburse it for any amounts paid by it to correct or cure such defect or 

deficiency during the Term which were properly reimbursable under such warranty; 

provided, however, that upon the occurrence of an Event of Default, all such rights shall 

immediately revert to Lessor including all claims thereunder, whether or not perfected. 

(c) Lessee's Representations and Warranties. Lessee hereby represents and 

warrants as of the date hereof, and as of each Basic Rent Payment Date and at all 

times during the Term, as follows: 

(i) Lessee is a corporation duly organized and validly existing and in 

good standing under the laws of the State of Michigan, is duly qualified to conduct 

business in each jurisdiction in which failure to so qualify may have a material adverse 

effect on its financial condition or an adverse effect on its ability to perform its 

obligations under any of the Lessee Agreements, and has the full power and authority to 

carry on its business as presently conducted., and to perform its obligations under this 

Lease and the other Lessee Agreements; 

(ii) this Lease and the Lessee Agreements and the other Operative 

Agreements to which Lessee is a party have been duly authorized by all necessary 

action on the part of Lessee, do not require any approval of stockholders of Lessee that 

has not been obtained, and neither the execution and delivery hereof or thereof nor the 

consummation of the transactions contemplated hereby or thereby nor compliance by 

-10-
Lessee with any of the terms and provisions hereof or thereof will, contravene any 

Applicable Law or result in any breach of, or constitute any default under, or result in the 

creation of any Lien upon any property of Lessee under Lessee's corporate charter 

documents or any credit agreement or instrument or other agreement or instrument to 

which Lessee is a party or by which Lessee or its properties or assets are bound or 

affected; 

(iii) unless otherwise specifically provided for in this Agreement. no 

consent. approval or authorization of, or notice to, any Governmental Entity having 

jurisdiction with respect to the execution, delivery or performance by Lessee of this 

Lease, and each of the Lessee Agreements (including all monetary and other 

obligations hereunder or thereunder} is required for Lessee to execute and deliver this 

Lease, and to perform the transactions contemplated hereby; 

. (iv) this Lease, the Lease Supplement and each Operative Agreement 

executed by Lessee have been duly executed and delivered by Lessee, and this Lease, 

and the Lease Supplement and each of the other Lessee Agreements and Operative 

Agreements when executed and delivered by Lessee will constitute, a legal, valid and 

binding obligation of Lessee, enforceable in accordance with its terms except as their 

enforceability may be limited by bankruptcy, insolvency, reorganization and other laws 

of general application affecting the enforcement of creditors' rights and general 

principles of equity regardless of whether such proceeding is considered a proceeding 

in equity or at law; 

(v} there are no claims, suits or proceedings pending or, to the 

knowledge of Lessee, threatened in any court or before any Governmental Entity 

against or affecting Lessee which, if adversely determined, could reasonably be 

expected to have a materially adverse effect on the current business or financial 

condition of Lessee or an adverse effect on Lessee's ability to perform its obligations 

under any of the Lessee Agreements; 

(vi) the choice of New York law to govern this Lease in the manner 

specified in Section 19(b) is a valid choice of law and such choice will be upheld in the 

courts of New York; 

(vii) there are no present restrictions on Lessee making the payments 

required by the terms of this Lease; 

(viii) Lessee is not required to deduct any withholding or other Tax from 

any payments required by the terms of this Lease; and 

(ix} the registered office of the Lessee is at Citadel II Building, 5955 

T.G. Lee Boulevard, Orlando, Florida 32822. 

-11-
Section 6 - Possession and Use. 

Possession. 

(a) Sublease. Assignment and Transfer. Lessee hereby covenants and 

agrees that it will not, and hereby acknowledges and confirms that it has no right to, 

without the prior written consent of Lessor (which consent Lessor may withhold in its 

reasonable sole discretion), assign this Lease or sublet or transfer possession of the 

Aircraft. 

(b) Lawful Insured Operations. Lessee will not permit the Aircraft to be 

maintained, used or operated in violation of any Applicable Law or law of any 

Governmental Entity, or in violation of any airworthiness certificate, or license or 

registration issued by any such authority, or contrary to the Manufacturer's operating 

manuals or instructions for the Aircraft. Lessee agrees not to operate the Aircraft, or 

permit the Aircraft to be operated: (i) unless the Aircraft is covered by insurance as 

required by the provisions hereof, (ii) contrary to the terms of such insurance. Lessee 

also agrees not to operate or locate the Aircraft or suffer or permit the Aircraft to be 

operated or located in any area excluded from coverage by any insurance policy issued 

pursuant to the requirements of this Lease. 

(c) Maintenance. Lessee, at its own cost and expense, shall: 

Perform or cause an Approved Maintenance Provider to perform all 

airworthiness directives, mandatory manufacturer's service bulletins, and all other 

mandatory service, inspections, repair, maintenance, overhaul and testing: (A) as may 

be required under applicable Aviation Authority rules and regulations and in compliance 

with the Maintenance Program, (B) in the same manner and with the same care as shall 

be the case with similar aircraft and engines owned by or operated on behalf of Lessee 

without discrimination, (C) so as to keep the Aircraft in as good operating condition as 

when delivered to the Lessee, ordinary wear and tear excepted, with all systems in 

good operating condition, (D) keep the Aircraft in such operating condition as is 

necessary to enable all certificates, licenses, permits and authorizations required for the 

use and operation of the Aircraft (E) maintain, in the English language (or provide 

English translations at the Return Occasion), all records, logs and other materials 

required by, and in accordance with the requirements of Exhibit F hereto, and in a 

manner acceptable to the Aviation Authority and FAA and any other Governmental 

Entity having jurisdiction over the Aircraft and its operation. 

(d) Registration. At all times during the Term, Lessee shall, at its sole cost 

and expense (i) maintain the registration of the Aircraft with the Aviation Authority in the 

name of Lessee or Permitted Lessee as operator or Lessor as owner hereunder. 

-12-
Section 7 - [RESERVED] 

Section 8 - Covenants of Lessee. 

In addition to and not in limitation of Lessee's other representations, warranties, 

covenants and agreements set forth elsewhere in this Lease, Lessee covenants and 

agrees that: 

· (a) Maintenance of Corporate Existence. During the Term of this Lease, 

Lessee will preserve and maintain its corporate existence and such of its rights, 

privileges, licenses and franchises in any jurisdiction where failure to obtain such 

licensing or qualification would have a material adverse effect upon Lessee and its 

business and its ability to perform hereunder. 

(b) Maintenance of Status. Lessee is, and shall remain so long as it shall be 

the Lessee under this Lease, or require a Permitted Sublessee to be, duly qualified to 

operate and maintain the Aircraft under Applicable Law and in accordance with the 

requirements of this Agreement. 

(c) Payment of Taxes. Lessee will pay or cause to be paid all Taxes arising 

or resulting from events during the Term, including assessments and governmental 

charges or levies imposed upon it and the Aircraft and its use and operation (including 

all landing fees, customs duties, airport fees and the like), or upon Lessee's income or 

profits, or upon any property belonging to it, prior to the date on which the same, if not 

paid, would give rise to a Lien (other than a Permitted Lien) upon the Aircraft, including 

the Airframe, the Engines or any of the Parts thereof. Lessee shall promptly pay any 

and all such Taxes as and when the same are due. 

(d) Principal Place of Business. Lessee shall not transfer or change, nor shall 

it permit to be transferred or changed, its principal place of business without prior written 

notice to Lessor. 

(e) Notice of Default. Immediately after Lessee or any of its corporate officers 

obtains knowledge of a Default hereunder or under any other Operative Agreement to 

which Lessee is a party, Lessee shall notify Lessor in writing of such Default. 

(f) Governmental Consents. Lessee, at its sole cost and expense, shall 

maintain in full force and effect all governmental consents, licenses, authorizations, 

approvals, declarations, filings and registrations obtained or effected in connection with 

this Lease, each Lessee Agreement, and/or required by any Applicable Law or by any 

other Governmental Entity from time to time during the Term. 

(g) No Liens. Lessee, at its sole cost and expense, shall at all times keep the 

Aircraft free and clear of Liens (excluding, however, any Permitted Liens). 

-13-
(h) Licenses. Lessee will maintain in full force and effect during the Term of 

this Lease, and cause any Sublessee to maintain to the reasonable satisfaction of 

Lessor, a current operating certificate, air transport license and a current certificate of 

airworthiness for the type of freighter operations conducted by Lessee or Sublessee, as 

the case may be, in accordance with Applicable Law. 

(i) No Merger. Lessee shall not merge into any other corporation, or convey, 

transfer or lease in one or more transactions substantially all of its assets to any Person 

(a "Merger Transaction") unless the Lessee shall have caused the successor entity (the 

"Successor'') to execute and deliver to Lessor and any Lessor Lender a duly authorized, 

valid, binding and enforceable agreement in form and substance reasonably satisfactory 

to Lessor containing an assumption by the Successor of the due and punctual 

performance and observance of all terms, covenants, agreements and conditions of this 

Lease and the other Lessee Agreements to be performed or observed by Lessee. 

Section 9 - Replacement of Parts; Alterations, Modifications and Additions. 

(a) Replacement of Parts. Lessee, at its own cost and expense, will promptly 

replace or cause to be replaced by the Approved Maintenance Provider, or applicable 

vendor of the same, all Parts which may from time to time become worn out, lost, 

stolen, destroyed, seized, confiscated, damaged beyond repair or permanently 

rendered unfit for use for any reason whatsoever. 

All replacement Parts shall be (i) free and clear of all Liens, other than Permitted 

Liens, (ii) in at least the same modification status and service bulletin accomplishment 

status, (iii) interchangeable as to form, fit and function, and subject to Section 16 hereof, 

shall have been overhauled, repaired and inspected by an FAA approved agency and 

shall bear FAA 8130 tags, (iv) in as good an operating condition as, and have a value, 

utility and remaining useful life at least equal to, the Parts replaced (assuming such 

replaced Parts were serviceable and in the condition and repair in which they were 

required to be maintained by the terms hereof), and (v) all historical records relating to 

such replacement Parts shall be maintained by Lessee in English (or accompanied by 

English translations at the Return Occasion), and in compliance with the requirements 

of the Aviation Authority, the FAA. 

All Parts which are at any time removed from the Aircraft shall remain the 

property of Lessor and subject to this Lease, no matter where located, until such time as 

such Parts shall be replaced by Parts which have been incorporated or installed in or 

attached to the Aircraft and which ,meet the requirements for replacement Parts 

specified above. Immediately upon any replacement Part becoming incorporated or 

installed in or attached to the Aircraft as above provided, (i) title to the removed Part 

shall thereupon vest in Lessee, free and clear of Lessor' Liens and rights of Lessor 

hereunder, (ii) title to such replacement Part shall thereupon vest solely in Lessor, free 

and clear of any and all liens other than Permitted Liens and rights of Lessee 

hereunder, and (iii) such replacement Part shall become subject to this Lease and be 

-14-
deemed a Part for all purposes hereof to the same extent as the Part which it has 

replaced. 

In no event shall Lessor bear any liability or cost for any alteration, modification 

or addition to, or for any grounding or suspension of certification of the Aircraft, or for 

any loss of revenue arising therefrom. 

(b) Airworthiness Directives. The costs of complying with, terminating, and 

otherwise accomplishing: (i) any airworthiness directive or (ii) any regulatory order or 

directive of the FAA or other Governmental Entity having jurisdiction over Lessee or the 

Aircraft not issued as an airworthiness directive but requiring the alteration and 

modification of Boeing model 757-200 aircraft, including the Aircraft (any of items (i) or 

(ii) hereinafter an "AD") shall be paid by, and such compliance shall be the sole 

responsibility of, Lessee. 

Section 10- General Tax Indemnity. 

(a) Lessee shall pay when due, and indemnify and hold each Indemnitee 

harmless on demand on an After-Tax Basis from and against, any and all Taxes 

(whether imposed against any Indemnitee, Lessee, the Aircraft or any part thereof or 

interest therein, or otherwise) arising directly or indirectly out of this Lease or any other 

Operative Agreement or any one or more of the transactions and activities 

contemplated hereby or thereby, including but not limited to Taxes based on or 

measured by the payments of Rent and other amounts due hereunder or thereunder. 

Section 11 -Casualty Occurrences. 

(a) Casualty Occurrence with respect to the Airframe. Immediately after a 

Casualty Occurrence with respect to the Airframe, Lessee shall give Lessor written 

notice of such occurrence. Within three (3) days following receipt of insurance proceeds 

in respect of such Casualty Occurrence, Lessee shall pay to Lessor in immediately 

available funds the Casualty Value. Upon such payment, and the payment of all other 

amounts then due and payable under this Lease and the performance of all obligations 

of Lessee hereunder: (i) the obligation of Lessee to make further payments of Basic 

Rent hereunder shall terminate, (ii) this Lease shall terminate with respect to the 

Aircraft, and (iii) Lessor will transfer to Lessee, ·without recourse or warranty, all of 

Lessor's right, title and interest, in and to the Airframe and Engines (if any) suffering the 

Casualty Occurrence, free and clear of Lessor's Liens, as well as all of Lessor's right, 

title and interest in and to any Engine constituting part of the Aircraft but not installed 

thereon at the time of the Casualty Occurrence, and (iv) provided no Default or Event of 

Default shall have occurred and be continuing, Lessor shall pay to Lessee in 

immediately available funds an amount equal to the daily equivalent of Basic Rent 

(computed on the basis of a 365-day year) previously paid by Lessee to Lessor for each 

day during the period commencing with the day after receipt by Lessor of such Casualty 

Value and continuing to, but excluding, the Basic Rent Payment Date immediately 

following Lessor's receipt of such Casualty Value, plus the balance of the Security (if 

-15-
any) and the balance of the Maintenance Payments (if any). No Casualty Occurrence 

shall result in any abatement of Rent until receipt by Lessor of the Casualty Value. 

Section 12 - Insurance. 

(a) LESSEE represents and warrants that it has in effect, and promises that it 

will throughout the Term maintain in effect, at LESSEE's sole expense, with insurers 

and under policies satisfactory to LESSOR: 

(i) comprehensive airline liability insurance (including without limitation 

coverage of third party, baggage, cargo, contractual liability to cover LESSEE's 

indemnity obligations under ~3.1 0 of this Lease), and property-damage insurance with 

respect to the Aircraft; in an amount not less than $550,000,000 per occurrence. 

(ii) all-risk hull, ground and flight aircraft insurance on the Aircraft (with 

flight, taxiing and foreign-object damage coverages) in an amount not less than the 

Casualty Value/Agreed Value for the Aircraft and a deductible of not more than 

$500,000.00, with no deductible to apply in case of an actual or constructive total loss; 

and fire, transit and extended all-risk coverage with respect to engines and parts while 

not installed on the Aircraft; 

(b) LESSEE represents warrants and covenants that: 

(i) each policy of insurance maintained by LESSEE does and will 

designate LESSOR as owner and designate LESSOR as loss payee thereunder as 

LESSEE'S interest may appear (without imposing upon either of them any obligation 

imposed on the insured, including without limitation any obligation to pay premiums); 

(ii) each policy of insurance maintained by LESSEE does and will 

designate LESSOR and its respective members, officers, and representatives as 

additional insureds (collectively, the "Additional Insureds") (without imposing upon any 

of them any obligation imposed on the insured, including without limitation any 

obligation to pay premiums); 

(iii) each policy of insurance maintained by LESSEE does and will: 

(A) expressly provide that in respect of the interests of LESSOR, 

the coverage shall not be invalidated by any action or inaction of LESSEE and 

shall insure LESSOR and the Additional Insureds regardless of any condition 

contained in such policies by LESSEE; 

(B) provide that, if such insurance is canceled for any reason 

whatsoever, or is adversely changed in any way with respect to the interests of 

LESSOR or the Additional Insureds, or if such insurance is allowed to lapse for 

nonpayment of premium, such cancellation, adverse change or lapse will not be 

-16-
effective as to LESSOR. or the Additional Insureds for at least thirty days (except 

seven days in the case of war-risk and allied perils coverage) after issuance by 

the insurer to LESSOR of written notice of such prospective cancellation, change 

or lapse; 

(C) including coverage for the territorial limits of every country in 

which the Aircraft may at any time be located or over which it may be operated; 

(D) provide that, as against LESSOR and the Additional 

Insureds, the insurer waives all rights of setoff, counterclaim or other deduction, 

whether by attachment or otherwise, and waives all rights it may have to be · 

subrogated to any right of any insured with respect to the Aircraft; 

(E) provide that the policy shall be primary and without right of 

contribution from any other insurance that may be carried by LESSOR or any 

Additional Insured; and 

(F) contain a cut-through provision allowing claims to be 

adjusted directly with the reinsurers if risks covered by the policy are reinsured. 

(c) LESSEE will, upon execution of this Lease, deliver to LESSOR one or 

more certificates of insurance in form and substance reasonably acceptable to LESSOR 

evidencing that the insurance required herein. 

Section 13 - Indemnification. 

(a) Lessee hereby agrees and undertakes to indemnify, reimburse and hold 

harmless each Indemnitee from and against any and all claims, damages, losses, 

liabilities, demands, suits, judgments, settlements, causes of action, legal proceedings 

(whether civil or criminal), penalties, fines, other actions, and any attorneys' fees and all 

other costs and expenses in connection therewith, including any of the foregoing arising 

or imposed with or without any such Indemnitee's fault or negligence or under the 

doctrine of strict liability or any other theory of liability (any and all of which are hereafter 

referred to as "Claims") which arise or occur (regardless of when such Claim is made) 

during the Term, and which in any way may result from, pertain to, or arise in any 

manner out of, or are in any manner related to: (i) the Aircraft or this Lease or the 

enforcement of any of the terms hereof and thereof, including but not limited to the 

breach of any representation, warranty, covenant, obligation or duty .of Lessee 

hereunder or under any Operative Agreement or any other document of agreement 

executed and delivered in connection herewith or with respect to any Indemnitee; or (ii) 

the condition, ownership, manufacture, delivery, lease, acceptance, possession, 

repossession, return, disposition, use, registration, import, export, maintenance, storage 

or operation of the Aircraft either in the air or on the ground; or (iii) any defect in the 

Aircraft (whether or not discovered or discoverable by Lessee or Lessor) arising from 

-17-
any material or articles or Parts used therein or from the design, testing, or use thereof 

or from any maintenance, service, repair, overhaul, or testing of the Aircraft, whether or 

not the Aircraft is in the possession of Lessee, and regardless of where the Aircraft may 

then be located; or (iv) any transaction, approval, or document contemplated by this 

Lease or any Operative Agreement, or given or entered into in connection herewith or 

therewith; provided, however, that Lessee shall be subrogated to all rights and remedies 

which Lessor may have against the Manufacturer, the Engine Manufacturer, the 

Approved Maintenance Provider, or the manufacturer of any Part, or any of their 

subcontractors. In the event Lessee is required to indemnify any Indemnitee hereunder, 

Lessee shall pay to such Indemnitee an amount which, after deduction of all Taxes and 

like charges required to be paid by such Indemnitee in respect of such payment, is 

equal to the amount of the indemnification required, provided, however, that all· of the 

provisions of Section 1 0 hereof shall apply to such payment; and provided further, 

however, that Lessee shall not be required to indemnify any Indemnitee against Claims 

arising out of such Indemnitee's gross negligence or willful misconduct. 

(b) Lessee hereby waives, and releases each Indemnitee from any Claims 

(whether now existing or hereafter arising) for or on account of or arising or in any way 

connected with injury to or death of personnel or any agent of Lessee or loss or damage 

to property of Lessee or the loss of use of any property which may result from or arise in 

any manner out of or in relation to the ownership, manufacture, purchase, delivery, 

leasing, condition, use, maintenance, storage, repossession or operation of the Aircraft, 

either in the air or on the ground, or which may be caused by any defect in the Aircraft 

from the material or any article or Part used therein or from the design or testing thereof, 

or use thereof or from any maintenance, service, repair, overhaul, or testing of the 

Aircraft regardless of when such defect may be discovered, whether or not the Aircraft 

is at the time in the possession of Lessee, and regardless of the location of the Aircraft 

at any such time. 

(c) Lessor agrees that it shall, promptly after it has actual knowledge of a 

Claim, give written notice (providing reasonable details) of such claim to Lessee, 

whereupon provided no Default or Event of Default shall have occurred and be 

continuing, Lessee shall have the right, upon receipt of Lessor's prior written consent, to 

assume and conduct promptly and diligently the defense of the relevant Indemnitee with 

respect to such Claim. 

(d) Upon payment in full of indemnification amounts due and payable 

pursuant to this Section 13, Lessee shall be subrogated to any Claims the Indemnitee 

may have relating thereto. The Indemnitee agrees to give such further assurances or 

agreements and to reasonably cooperate with Lessee to permit Lessee to pursue such 

claims, at Lessee's sole cost and expense. 

(e) The indemnities contained in this Section 13 shall survive the execution 

and delivery of this Lease and the other Operative Agreements, and shall continue in 

full force and effect notwithstanding the expiration or other termination of this Lease or 

-18-
other Operative Agreement and are expressly made for the benefit of and shall be 

enforceable by each Indemnitee. 

Section 14 - Liens. 

(a) Lessee shall not directly or indirectly create, incur, assume or suffer to 

exist any Lien on or with respect to the Aircraft, title thereto or any interest therein, 

except Permitted Liens. For the avoidance of doubt, Lessee shall discharge promptly, at 

its own cost and expense, any Lien that may arise on or with respect to the Aircraft, title 

thereto or any interest therein that is not permitted pursuant to this Section 14. 

Section 15 - Perfection of Title and Further Assurances. 

(a) Recordation of Lease. Lessee shall, at its sole cost and expense cause 

this Lease, the Lease Supplement, all exhibits hereto, any amendments or supplements 

hereto, and any and all additional instruments which shall be executed pursuant to the 

terms hereof to be kept, filed and recorded, and to be re-executed, re-filed and rerecorded at all times during the Term with the Aviation Authority and each other 

Governmental Entity having jurisdiction over the Aircraft, including the International 

Registry pursuant to the Cape Town Convention. 

Section 16 - Return of Aircraft and Records. 

(a) Return Condition Requirements. Upon return to LESSOR, the Aircraft 

shall comply with the requirements of LESSEE'S Maintenance Program, shall be free 

and clear of all Liens (except Permitted Liens created by LESSOR) and shall be in as 

good an operating condition as when delivered hereunder, ordinary wear and tear 

excepted. The Aircraft also shall have at such time the configuration that such Aircraft 

had when delivered on the delivery date. Without limiting the generality of the foregoing, 

the Aircraft: 

(i) shall be clean (interior and exterior) by airline standards. 

(ii) shall have all emergency equipment on board in accordance with 

the FAA-approved specifications under which the Aircraft has been operated; and 

(iii) shall meet the manufacturer's published operating and structural 

limits for the Aircraft. 

Section 17- Events of Default. 

(a) Lessee Default. Lessee fails timely and materially to comply with any of 

its obligations under this Lease, and except in the case of a breach of an obligation 

under the insurance provisions of this Agreement, for which there is no requirement of 

notice or opportunity to cure, if Lessee fails to remedy such breach within two business 

-19-
days of Lessor's giving notice of such breach; then Lessor may without prejudice to any 

claim against Lessee immediately terminate this Lease for cause. 

(b) Lessor Default. If Lessor materially fails to comply with any of its 

obligations under this Lease, and if Lessor fails to remedy such breach within two 

business days after Lessee gives Lessor notice of such failure, then Lessee may 

without prejudice to any claim against Lessor immediately terminate this Lease for 

cause. 

Section 18- Remedies. 

Upon the occurrence of any Event of Default and any time thereafter so long as 

the same shall be continuing, Lessor may, at its option and without notice to Lessee, 

declare this Lease to be in default and, at any time thereafter so long as Lessee shall 

not have remedied all outstanding Events of Default, Lessor may exercise, in addition to 

the enumerated remedies described in Section 17, above, any other available legal 

remedy. 

The exercise or beginning of exercise by Lessor of any one or more of such 

remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of 

such other remedies. No express or implied waiver by Lessor of any Default shall in 

any way be, or be construed to be, a waiver of any future or subsequent Default. 

LESSEE HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO 

THE REPOSSESSION, DEREGISTRATION, AND I OR EXPO.RT OF THE AI'RCRAFT 

BY LESSOR ON BEHALF OF THE LESSEE UPON THE OCCURRENCE OF AN 

EVENT OF DEFAULT. LESSEE HEREBY APPOINTS LESSOR AS ITS TRUE AND 

LAWFUL ATTORNEY, COUPLED WITH AN INTEREST AND WITH POWER OF 

SUBSTITUTION, WITH FULL POWER (IN THE NAME OF LESSEE OR 

OTHERWISE}, FOR THE PURPOSE OF ENFORCING LESSOR'S RIGHTS 

HEREUNDER, AND OTHERWISE WITH RESPECT TO ALL THIRD PARTIES (EACH 

OF WHOM MAY CONCLUSIVELY RELY WITHOUT FURTHER INQUIRY ON THE 

POWER GRANTED TO LESSOR HEREUNDER) AND WITH RESPECT TO ALL 

MATTERS BEFORE THE AVIATION AUTHORITY OR ANY OTHER 

GOVERNMENTAL ENTITY WHEREVER SITUATED. 

Section 19 - Miscellaneous. 

(a) Severability, Amendment and Construction. Any provision of this Lease 

which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be 

ineffective to the extent of such prohibition or unenforceability without invalidating the 

remaining provisions hereof; and any such prohibition or unenforceability in any 

jurisdiction shall not invalidate or render unenforceable such provision in any other 

jurisdiction. To the extent permitted by Applicable Law, Lessee hereby waives any 

provisions of Applicable Law which renders any provisions hereof prohibited or 

-20-
unenforceable in any respect. This Lease supersedes any prior or contemporaneous 

agreements, whether oral or in writing, of the parties hereto and shall constitute the 

entire agreement of the parties hereto. No term or provision of this Lease may be 

changed, waived, discharged or terminated orally, but only by an instrument in writing 

expressed to be a supplement to this Lease signed under hand by an officer of the party 

against which the enforcement of the change, waiver, discharge or termination is 

sought. This Lease shall constitute an agreement of lease, and nothing herein shall be 

construed as conveying to Lessee any right. title or interest in the Aircraft or any Engine 

or Part except as a lessee only, ·and subject in all events to the terms and conditions 

hereof. The headings in this Lease are for convenience of reference only and shall not 

define or limit any terms of the provisions hereof. Whenever required by the context 

hereof, the singular shall include the plural _ and vice versa. All Exhibits and Schedules 

attached hereto are incorporated herein by reference and are deemed to be a part 

hereof. Lessor and Lessee agree to additional amendments that may be requested or 

required after the Aircraft is approved on Lessee's operations specifications that do not 

adversely affect the interests and rights of Lessor Lender. 

(b) Governing Law: Jurisdiction. This Lease shall in all respects be governed 

by, and construed in accordance with, the laws of the State of New York, including all 

matters of construction, validity and performance. Lessor and Lessee hereby expressly 

submit to the non-exclusive jurisdiction of the U.S. federal courts situated in New York. 

Lessee further agrees that any legal action or proceeding against it or any of its assets 

may be brought in New York or in any jurisdiction where Lessee or any of its assets 

may be found. 

The foregoing submission to jurisdiction shall not be construed so as to limit the 

right of either party to take proceedings to enforce any judgment awarded pursuant to 

any such action against the other in whatsoever jurisdictions shall to it seem fit nor shall 

the taking of proceedings in any one or more jurisdiction, preclude the taking of 

proceedings in any other jurisdiction, whether concurrently or not. 

(c) Notices. All notices required under the terms and provisions hereof shall 

be in writing, shall be sent to Lessor or Lessee at their respective addresses or facsimile 

numbers set forth in Exhibit C hereto (or such other addresses or facsimile numbers as 

the parties may designate from time to time. 

(d) Counterparts. This Lease and each Lease Supplement may be executed 

simultaneously in two or more counterparts, each of which shall be deemed an original, 

but all. 

(e) Translation. In the event that this Lease is translated into a language 

other than English for purposes of registering or recording the same with another 

Governmental Entity, the English language version shall control, and the alternate 

language version shall so provide. 

-21-
(f) Expenses. Lessee shall be responsible for the fees of and shall pay the 

costs and expenses of filing this Lease with the Aviation Authority, including, without 

limitation, any Cape Town registrations. 

[Remainder of Page Intentionally Left Blank; Signature Page Follows.] 

-22-
IN WITNESS WHEREOF, Lessor and Lessee, each pursuant to due authority, 

have each caused this Lease to be executed by their duly authorized officers as of the 

day and year first above written. 

LESSOR: 

WELLS FARGO BANK NORTHWEST, NATIONAL 

ASSOCIATION, acting as Owner Trustee 

LESSEE: 

NATIONAL AIR CARGO GROUP, INC., d/b/a 

National Airlines 

By: ------------------~-------------

Name: 

------~----------------------

Title: --------------------------------

-s-
IN WITNESS WHEREOF, Lessor and Lessee, each pursuant to due authority, 

have each caused this Lease to be executed by their duly authorized officers as of the 

day and year first above written. 

LESSOR: 

WELLS FARGO BANK NORTHWEST, NATIONAL 

ASSOCIATION, acting as Owner Trustee 

By: ______________________________ _ 

Name: ____________________________ _ 

Title:---------------------------

LESSEE: 

NATIONAL AIR CARGO GROUP, INC., d/b/a 

National Airlines 

By:~ Name: Goe1.f Y 

Title: ft1:12~clent 

-S-
The Aircraft 

Aircraft 

Manufacturer: 

Model: 

Serial Number: 

EXHIBIT A 

AIRCRAFT SPECIFICATIONS 

The Boeing Company (described on the International Registry 

Manufacturer's List as BOEING) 

757-28A (described on the International 

Registry Manufacturer's List as 757 -200) 

24543 . 

United States Registration Number: N176CA 

Engines 

Manufacturer: 

Model: 

Serial Numbers: 

Rolls Royce (described on the International 

Registry Manufacturer's List as ROLLS 

ROYCE) 

RB211-535E4 (described on the International 

Registry Manufacturer's List as RB211 535) 

30732 and 30736 

(each of which Engines has 550 or more rated takeoff horsepower, or 1750 pounds of 

thrust, or the equivalent thereof) 

Exhibit A-1 
EXHIBIT B 

[RESERVED] 

Exhibit B-1 
EXHIBIT C 

DEFINITIONS AND VALUES 

Basic Rent shall mean the rent for the Aircraft during the Term of the Lease payable in advance, in 

consecutive monthly installments on each monthly Basic Rent Payment Date, in the amount of 

US$[intentionally omitted, as confidential and proprietary information) or other amount to be mutually 

agreed upon between Lessor and Lessee per month to the following account: 

[intentionally omitted, as confidential and proprietary information] 

Basic Rent Payment Date shall mean, during the Term, the Commencement Date of the Lease and the 

dasl numerically corresponding to the Commencement Date each month thereafter (starting in the first 

(1 ) month of the Lease Term) prior to the Expiration Date, and if such day does not occur in a calendar 

month, then on the last Business Day in that month. 

Casualty Value shall mean US$[intentionally omitted, as confidential information] (Agreed Value). 

Delivery Location shall mean Anchorage, Alaska. 

Estimated Delivery Date shall mean on or about August 29, 2013. 

Expiration Date shall mean the day before the date numerically corresponding to the Commencement 

Date in the twelfth (12th) calendar month after the Commencement Date, unless extended by mutual 

consent of Lessor and Lessee. 

Lessor's Address: Lessee's Address: 

Wells Fargo Bank Northwest, National Association National Air Cargo Group, Inc., 

Acting as Owner Trustee d/b/a National Airlines 

299 S. Main Street Citadel II Building 

MAC-U1228-120 5955 T.G. Lee Boulevard 

Salt Lake City, UT 48111 Orlando, FL 32822 

Attention: Corporate Trust Services Attention: Glen Joerger 

Telephone: · 801-246-6000 Telephone: 407-283-6228 

Facsimile: (801) 246-5053-Att: Corp Trust Lease Group Facsimile: 407-313-2255 

E-Mail: ctsfeasegroup@wellsfarqo.com E-Mail: gjoerger@nationalaircargo.com 

With a copy to: 

National Air Cargo, Inc. 

350 Windward Drive 

Orchard Park, NY 14086 

Attention: Brian Conaway 

Tel: 716-580-6952 

Fax: 716-677-2657 

Email: bconaway@natioinalaircargo.com 

Redelivery Location shall mean Ypsilanti, Michigan or other mutually agreeable locations. 

Exhibit C-1 
EXHIBIT D 

LEASE SUPPLEMENT NO. 1 

LEASE SUPPLEMENT NO. 1, dated , 2013, between 

Wells Fargo Bank Northwest, National Association, acting as Owner Trustee, a national 

banking association organized and existing under the laws of the United States of 

America ("Lessor"), and National Air Cargo Group, Inc., d/b/a National Airlines, a 

Michigan corporation ("Lessee"). 

WITNESSETH 

WHEREAS, Lessor and Lessee have previously entered into that certain Aircraft 

Lease Agreement dated as of August __ , 2013 (herein called the "Lease" and the 

defined terms therein being hereinafter used with the same meaning). The Lease 

provides for the execution and delivery of a Lease Supplement substantially in the form 

hereof for the purpose of leasing the Aircraft described below under the Lease as and 

when delivered by Lessor to Lessee in accordance with the terms thereof. 

WHEREAS, the Lease relates to the Aircraft as more precisely described below. 

A counterpart of the Lease is attached hereto and this Lease Supplement and the 

Lease shall form one document. 

NOW THEREFORE, for and in consideration of the premises and other good and 

valuable consideration, the receipt and sufficiency of which is hereby acknowledged, 

Lessor and Lessee hereby agree as follows. 

1. Lessor hereby delivers and leases to Lessee under the Lease, and Lessee 

hereby accepts and leases from Lessor under the Lease, that certain The Boeing 

Company model 757 -28A aircraft {described on the International Registry 

Manufacturer's List as BOEING model 757-200), manufacturer's serial. number 24543, 

and United States Registration Number N176CA with two {2) Rolls Royce model 

RB211-535E4 Engines {described on the International Registry Manufacturer's List as 

ROLLS ROYCE model RB211 535) with manufacturers serial numbers 30732 and 

30736 {and as further described and defined in the Lease, the ~~Delivered Aircraft"). 

2. The Commencement Date for the lease of the Delivered Aircraft is the date of 

this Lease Supplement set forth in the opening paragraph hereof. 

3. The term for the Delivered Aircraft shall commence on the Commencement Date 

and shall end on the Expiration Date, unless sooner terminated, or extended, as 

provided or permitted in accordance with the terms of the Lease. 

4. Lessee hereby confirms to Lessor that: (i) Lessee has accepted the Delivered 

Aircraft for all purposes hereof and of the Lease, and (ii) Lessee has inspected the 

Exhibit D-1 
Delivered Aircraft and the Delivered Aircraft satisfies all of the conditions set forth in the 

Lease without exception. 

5. All of the terms and provisions of the Lease are hereby incorporated by reference 

in the Lease Supplement to the same extent as if fully set forth herein. 

6. This Lease Supplement may be executed in any number of counterparts, each of 

which counterparts, except as provided in Section 19(e) of the Lease, shall for all 

purposes be deemed to be an original, and all such counterparts shall together 

constitute but one and the same Lease Supplement. 

[Remainder of Page Intentionally Left Blank.] 

Exhibit D-2 
IN WITNESS WHEREOF~ Lessor and Lessee have caused this Lease 

Supplement to be duly executed as of the day and year first above written. 

LESSOR: 

WELLS FARGO BANK NORTHWEST, 

NATIONAL ASSOCIATION, acting as Owner 

Trustee 

By: ________________________ __ 

Name: ______________________ ___ 

Title:-----------------------

LESSEE: 

NATIONAL AIR CARGO GROUP, INC., d/b/a 

National Airlines 

By: ______________ -------------

Name:-------------------------

Title:---------------------

Exhibit D-3 
EXHIBIT DD 

DELIVERY CONDITION REQUIREMENTS 

1 On Delivery, the Aircraft will, in addition to meeting the specifications set forth in 

Schedule 1, be in the following condition (the Delivery Condition): 

1.1 General Condition 

The Aircraft shall: 

1.2 be clean by international commercial airline standards; 

1.3 [RESERVED]; 

1.4 have installed the full complement of Engines and other equipment, Parts and 

accessories; 

1.5 be configured in an "as is, where is" configuration; 

1.6 [RESERVED]; 

1. 7 [RESERVED]; 

1.8 be delivered with complete and up to date Manuals and Technical Records. 

2 The Manuals and Technical Records, including all back-to-birth traceability 

evidences as required by the Aviation Authority, as specified in Schedule 4 and all 

pilot log book reports shall have been completed and closed t9 reflect the status of 

the Aircraft on the date of Delivery and shall be current. Any records for life limited 

parts shall be in original hard copy, "back to birth." 

3 Upon the delivery conditions of paragraph 2 above being met, the Lessee and 

Lessor shall execute and deliver an Acceptance Certificate, at which time the 

Lessee shall have complied with the registration and insurance provisions of the 

Lease. 

4 Prior to Delivery the Lessor at its expense shall procure that an Approved 

Maintenance Provider shall: 

4.1 correct any discrepancies from the Delivery Condition: and 

4.2 correct any discrepancies to the Manuals and Technical Records. 

Exhibit DD-1 
EXHIBIT E 

RETURN CONDITION REQUIREMENTS 

1 On the Expiry Date (or earlier return of the Aircraft), the Lessee shall (unless a 

Total Loss has occurred) redeliver the Aircraft and Manuals and Technical 

Records to the Lessor at the Lessor's expense at the Redelivery Location. 

2 On Redelivery, the Aircraft will, be in the following condition (the Redelivery 

Condition): 

2.1 free and clear of all Security (other than any Lessor Lender's Security); 

2.2 [RESERVED]; 

2.3 be zero time since a A 1-Check including all lower checks performed in accordance 

with the Approved Maintenance Program, with all maintenance to the Aircraft due 

for performance on or before Redelivery having been completed in accordance 

with the Approved Maintenance Program, and with no outstanding deferred 

maintenance; 

2.4 with all outstanding Airworthiness Directives that must be complied with in order to 

register the Aircraft in any jurisdiction and which have a compliance date during 

the Lease Term having been accomplished; 

2.5 with all damage to the Aircraft arising during the Lease Term repaired and certified 

in accordance with the requirements of the Manufacturer's or Engine 

Manufacturer's SRM, the Aviation Authority; 

2.6 [RESERVED]; 

2.7 [RESERVED]; 

2.8 in the same condition and configuration as at Delivery, normal wear and tear 

excepted; 

2.9 [RESERVED]; and 

2.10 at Lessor's cost, have Lessee's markings removed. 

3 The Manuals and Technical Records and all pilot log book reports shall have been 

completed to reflect the status of the Aircraft on the date of Redelivery and shall be 

current and in compliance with FAA regulations. Any records for life limited parts 

shall be in original hard copy, "back to birth." 

Exhibit E-1 
. . . 

4 Inspection 

4.1 Lessor may observe performance of the A 1-Check accomplished prior to 

Redelivery. 

4.2 Prior to Redelivery, Lessee at Lessor's expense shall perform for Lessor's 

observation and benefit (i) a power assurance run of the Aircraft, performed in 

accordance with Manufacturer specifications, (ii) a borescope of each Engine 

performed in accordance with Engine Manufacturer specifications. 

4.3 Lessor shall commence its inspections in a timely manner so as to complete its 

inspections of the Aircraft and the Manuals and Technical Records on or before 

the contemplated completion of the A 1-Check (including items to be performed 

under clause 4.2 of this Schedule) to be accomplished prior to Redelivery and 

Lessor will advise Lessee and Lessor and Lessee shall agree (each party acting 

reasonably) as to any discrepancies to the Aircraft or the Manuals and Technical 

Records by such time ("Final Discrepancy List"). For the avoidance of doubt, such 

Final Discrepancy List shall · not include defects or discrepancies normally carried 

over or dealt with during an A4-Check, C-Check or 0-Check and can only be such 

items falling outside of the Manufacturer's Aircraft Maintenance Manual's limits 

and not considered normal wear and tear. Lessor's Final Discrepancy List shall be 

final and no additional items may be added to or amended to the agreed Final 

Discrepancy List. Lessee will at its cost cause for the satisfactory closure of the 

items listed on the Final Discrepancy List in conjunction with the Lessor (acting 

reasonably). Following satisfactory completion and closure of the items on, the 

Final Discrepancy List as provided herein, the Lessee and Lessor shall execute 

and deliver a Redelivery Receipt in the form attached hereto. 

5 At Redelivery the Lessee shall ensure that the quantity of fuel on board the Aircraft 

shall be no less than there was at Delivery, failing which Lessee shall pay Lessor 

for the fuel deficit at the price then prevailing at the Redelivery Location. 

Exhibit E-2 
.. ,, . 

EXHIBIT F 

MAINTENANCE RECORDING REQUIREMENTS 

Lessee shall maintain all Aircraft Documents in accordance with 

Applicable Law and FAA standards, including but not limited to the requirements under 

U.S. FAR Part 121.380, and Lessee shall in all events keep all records for the entire 

Term of the Lease. 

1. All the records necessary to show that all requirements for the issuance of 

an airworthiness release under Sec. 121.709 of the FAR's have been met. 

2. Records containing the following information: 

i. The total time in service of the Airframe. 

ii. The current status of Life Limited Parts of the Airframe and each 

appliance. 

iii. The time since last overhaul of all items installed on the Aircraft 

which are required to be overhauled on a specified time basis. 

iv. The identification of the current inspection status of the Aircraft, 

including the times since the last inspections required by the inspection program 

under which the Aircraft and its appliances are maintained. 

v. The current status of applicable airworthiness directives, including 

the method of compliance. 

vi. A list of current major alterations to the Airframe and each 

appliance. 

3. These records shall be retained and transferred with the Aircraft at the 

time the Aircraft is returned to Lessor. 

g:\n\nationol air cargo group, inc\n176ca-wells fargo-nocme jze-purchose of a·c msn 24543-2013-comp\a·c lease ogree and supplementnew\olrcraft lease ogreement-v4-revlsed exhibit c-082913-gwk.doc 

Exhibit E-3 
ATTACHMENT NUMBER~­

to 

LEASE SUPPLEMENT NO. 1 

LEASE SUPPLEMENT NO.1, dated ~JDt )j , 2013, between Wells 

Fargo Bank Northwest, National Associati~ting as Owner Trustee, a national 

banking association organized and existing under the laws of the United States of 

America ("Lessor"), and National Air Cargo Group, Inc., d/b/a National Airlines, a 

Michigan corporation (

11 Lessee"). 

WITNESSETH 

WHEREAS, Lessor and Lessee have previous! ntered into that certain Aircraft 

Lease Agreement dated as of , 2013 (herein called the 

"Lease" and the defined terms therein ing hereinafte used with the same meaning). 

The Lease provides for the execution and delivery of a Lease Supplement substantially 

in the form hereof for the purpose of leasing the Aircraft described below under the 

Lease as and when delivered by Lessor to Lessee in accordance with the terms thereof. 

WHEREAS, the Lease relates to the Aircraft as more precisely described below. 

A counterpart of the Lease is attached hereto and this Lease Supplement and the 

Lease shall form one document. 

NOW THEREFORE. for and in consideration of the premises and other good and 

valuable consideration, the receipt and sufficiency of which is hereby acknowledged, 

Lessor and Lessee hereby agree as follows. 

1. Lessor hereby delivers and leases to Lessee under the Lease, and Lessee 

hereby accepts and leases from Lessor under the Lease, that certain The Boeing 

Company model 757-28A aircraft (described on the International Registry 

Manufacturer's List as BOEING model 757-200), manufacturer's serial number 24543, 

and United States Registration Number N176CA with two (2) Rolls Royce model 

RB211-535E4 Engines (described on the International Registry Manufacturer's List as 

ROLLS ROYCE model RB211 535) with manufacturers serial numbers 30732 and 

30736 (and as further described and defined in the Lease, the "Delivered Aircraft"). 

2. The Commencement Date for the lease of the Delivered Aircraft is the date of 

this Lease Supplement set forth in the opening paragraph hereof. 

3. The term for the Delivered Aircraft shall commence on the Commencement Date 

and shall end on the Expiration Date, unless sooner terminated, or extended, as 

provided or permitted in accordance with the terms of the Lease. 

4. Lessee hereby confirms to Lessor that: (i) Lessee has accepted the Delivered 

Aircraft for all purposes hereof and of the Lease, and (ii) Lessee has inspected the 

Delivered Aircraft and the Delivered Aircraft satisfies all of the conditions set forth in the 

Lease without exception. 

5. All of the terms and provisions of the Lease are hereby incorporated by reference 

in the Lease Supplement to the same extent as if fully set forth herein. 
" ., . 

6. This Lease Supplement may be executed in any number of counterparts, each of 

which counterparts, except as provided in Section 19( e) of the lease, shall for all 

purposes be deemed to be an original, and all such counterparts shall together 

constitute but one and the same Lease Supplement. 

[Remainder of Page Intentionally Left Blank.] 
\. . ( .. 

IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease 

Supplement to be duly executed as of the day and year first above written. 

LESSOR: 

WELLS FARGO BANK NORTHWEST, 

NATIONAL ASSOCIATION, acting as Owner 

Trustee 

LESSEE: 

NATIONAL AIR CARGO GROUP, INC., d/b/a 

National Airlines 

By: ____________________________ _ 

Name: ------------------------------ Title: --------------------------------

g:\n \notional air cargo group, fnc\n176ca-wells jargo-nacme fze-purchase of a-c msn 24543-2013-comp\a-c lease agree and supplementnew\leose supplement no.l-vl-081413-mod.doc 
t. f t " 

IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease 

Supplement to be duly executed as of the day and year first above written. 

LESSOR: 

WELLS FARGO BANK NORTHWEST, 

NATIONAL ASSOCIATION, acting as Owner 

Trustee 

By: __________________________ __ 

Name: ____________________________ _ 

Title:--------------

LESSEE: 

NATIONAL AIR CARGO GROUP, INC., d/b/a 

National Airlines 

g:\n\national air cargo group, inc\n176ca·wells fargo-nocme fze-purchose of a-c msn 24543·2013-comp\o-c lease agree and supplemenrnew\leose supplement no. 1·v1·081413-mod.doc 
~ f f 

I: 

:\ : ~ ~.: 

l ' f 

·') 

,', 

,

1

• ; 'j 

.{ : . : ! ; \' -i :! 0 
Tab3 
National Air Cargo Group, Inc. 

12 Month Estimated Statement of Operations 

Sanford, FL to Dubai lnt'l UAE 

Two Round Trip Flight Per Month 

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 

Revenue $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,00

Cost of Sales 

Crew Wages $35,875 $35,875 $35,875 $35,875 $35,875 $35,875 $35,875 $35,875 $35,875 $35,87

Maintenance Wages $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,200 $8,20

Fuel Expense $138,375 $138,375 $138,375 $138,375 $138,375 $138,375 $138,375 $138,375 $138,375 $138,37

Insurance $23,575 $23,575 $23,575 $23,575 $23,575 $23.575 $23,575 $23,575 $23,575 $23,57

Lease Costs $27,675 $27,675 $27,675 $27,675 $27,675 $27,675 $27,675 $27,675 $27,675 $27,67

Overflight, Landing & Handling $30,750 $30,750 $30,750 $30,750 $30,750 $30,750 $30,750 $30,750 $30,750 $30,75

Maintenance Costs $15,375 $15,375 $15,375 $15,375 $15,375 $15,375 $15,375 $15,375 $15,375 $15,37

Catering $11,275 $11,275 $11,275 $11,275 $11,275 $11,275 $11,275 $11,275 $11,275 $11,27

Training $7,175 $7,175 $7,175 $7,175 $7,175 $7,175 $7,175 $7,175 $7,175 $7,17

Travel $41,000 $41,000 $41,000 $41,000 $41,000 $41,000 $41,000 $41,000 $41,000 $41,00

Other Direct Costs $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,500 $10,50

Total Direct Costs $349,775 $349,775 $349,775 $349,775 $349,775 $349,775 $349.775 $349,775 $349,775 $349,77

Gross Profit $250,225 $250,225 $250,225 $250,225 $250,225 $250,225 $250,225 $250,225 $250,225 $250,22

Selling $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,00

General and Administrative $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,00

TOTAL EXPENSE $449,775 $449,775 $449,775 $449,775 $449,775 $449,775 $449,775 $449,775 $449,775 $449,775 

NET INCOME $150,225 $150.225 $150,225 $150,225 $150,225 $150,225 $150,225 $150,225 $150,225 $150,225 

Noles to Estimated Statement of Operations 

1. Estimate based on full month of product1on 1n month 1 

2. Estimate based on 80% passenger load at an average (one way or round trip) cost of 5950 per Business Class t:Jcket and $1,530 Economy Class tlcket 

3. Insurance 1s comprised of aircraft insurance only. General corporate Insurance is included 1n G&A Expense 

4. Lease cost represents cost per block hour payable to related entity 

5. Maintenance costs are comprised of historical averages per cycle/hour for both scheduled and unscheduled maintenance 

6. Other Direct Costs represent costs for flight operations, a1rport fees, safety costs and in-flight entertainment costs 

7. Selling, General and Administrative costs Include corporate overhead, management costs. legal and professional fees and the l1ke 
Tab4 
Signed Certification 

Pursuant to Title 18 of the United States Code Section 1001, I, Glen G. Joerger, in 

my individual capacity and as the authorized representative of the applicant, have not in 

any manner knowingly and willfully falsified, concealed or covered up any material fact 

or made any false, fictitious, or fraudulent statement or knowingly used any documents 

which contain such statements in connection with the preparation, filing or prosecution of 

this application. I understand that an individual who is found to have violated the 

provisions of 18 U.S.C. §1001 shall be fined not more than $10,000 or imprisoned not 

more than five years, or both. 

August rr , 2014 

President 

National Air Cargo Group, Inc. 

d/b/a National Airlines