CONTRACT #308-99

SERVICE CONTRACT FOR AERONAUTICAL MAINTENANCE


ENTERED INTO ON FEBRUARY 26TH, 1999, BETWEEN:

1.	The Self-Managed Cooperative of Aero Industrial Services 
R.L., ("COOPESA"), an Aircraft Maintenance Repair 
Station, located in Alajuela, Costa Rica, duly 
authorized by the Aeronautical Authorities of the 
Government of Costa Rica (the Technical Council of Civil 
Aviation) and by the United States Federal Aviation 
Administration (FAA); represented by its Executive 
President, Mr. Bernardo Delgado, and

2. VANGUARD AIRLINES, INC ("The Customer"), a Delaware 
company; represented by Mr. J. B. Miller, Vice President 
of Engineering and Quality Assurance.

3.	Whereas The Customer contracts COOPESA for the rendering 
of maintenance services to the aircraft described in 
Article II, which the terms and conditions of this 
Contract refer to.

	Therefore:

4.	In consideration of the above established, The Parties 
agree to enter into the present Contract.

ARTICLE I. DEFINITIONS

SUBSEQUENTLY, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING 
MEANINGS:

I.1	AIRCRAFT: The Customer's Aircraft, as identified in 
Article II of the Contract.

I.2	APPENDIX: All documents incorporated in the present 
Contract, which the parties agree to be an integral part 
of the Contract, and which must be signed by both 
Parties.

I.3	SERVICE CENTER: COOPESA's facilities located at Juan 
Santamaria Airport, in Alajuela, Costa Rica.

I.4	MAINTENANCE MANUAL: Any Aircraft maintenance manual 
provided by The Customer to COOPESA, which is acceptable 
and abides by the regulations and guidelines of the 
Federal Aviation Administration "FAA" and of COOPESA.

I.5	SERVICE: Those tasks requested by The Customer and done 
by COOPESA, as will later be incorporated into Appendix 
"A", described in writing by The Customer and approved 
in writing by COOPESA.

I.6	REPRESENTATIVE: The Representative-technician of The 
Customer, designated by The Customer, having sufficient 
powers to issue and/or cancel work orders as well as to 
carry out the transactions related to the execution of 
the present Contract, except approval of invoices.

I.7	WORK ORDERS: The modifications to the initial Work 
Order, included in Appendix "A" to the present Contract, 
by which The Customer, through the Representative, shall 
instruct COOPESA about the services to be performed on 
the Aircraft.

ARTICLE II. IDENTIFICATION OF THE AIRCRAFT

II.1	COOPESA's service, described in the present Contract and 
its appendixes, refer to the Aircraft described below, 
as well as any other acquired or returned Aircraft by 
The Customer during the term of the contract:

		B737-200	N912MP	S/N 19607
		B737-200	N209US	S/N 19548
		B737-200	N208AU	S/N 19547
		B737-200	N603DJ	S/N 19955
		B737-200	N412CE	S/N 20412
		B737-200	N204AU	S/N 19603
		B737-200	N5WM 	S/N 22629
		B737-200	N620PC	S/N 19708
		B737-200	N219US	S/N 20414
			

ARTICLE III. DELIVERY AND REDELIVERY OF THE AIRCRAFT

III.1	The Customer, at its own expense, shall deliver the 
Aircraft to COOPESA, at its maintenance facilities.

III.2	The Aircraft shall be delivered to COOPESA in accordance 
with the Maintenance Planning Forecast.

III.3	If the delivery of the Aircraft by The Customer to 
COOPESA does not take place on the established date, The 
Customer may have to wait for COOPESA's next production 
opportunity. Customer shall provide COOPESA with thirty  
(30) days prior notice of any changes to anticipated 
delivery dates. 

III.4	COOPESA shall perform the services referred to in this 
Contract on the Aircraft, and shall return the Aircraft 
to The Customer, at the same maintenance facilities, for 
inspection and test flight, according to the pre-
determined time-table in article III.5 and the usual 
procedures accepted by The Parties.

III.5	COOPESA shall use its best efforts to redeliver the 
Aircraft to The Customer, at the Maintenance Facilities, 
on or before the agreed upon dates in each case as 
stated in the quotation for each service.  Nonetheless, 
COOPESA does not assume any responsibility for delays 
caused by circumstances attributable to The Customer, or 
by acts of God; war; rebellion; insurrection; fire; 
strikes; impossibility of obtaining any repairing parts 
and materials of the Aircraft, its engines and 
navigation equipment, or any other cause that is out of 
its control.

III.6	The redelivery to The Customer's satisfaction shall be 
certified in writing, by COOPESA through the signature 
of the Aircraft clearance and service acceptance 
certificate by The Customer when so satisfied.
III.7	COOPESA shall notify The Customer in writing promptly 
about any delay that may occur of the predetermined date 
of redelivery of the Aircraft.

III.8	The redelivery shall take place only if The Customer's 
payments to COOPESA are in accordance with Article XI.1.

III.9	All additional costs and expenses should be invoiced at 
redelivery and shall be paid within 30 days by The 
Customer, such as fuel in excess, and additional test 
flights or landing fees required by The Customer (if 
any), as long as it is not related to a warranty claim 
item.  Supportive documents will be furnished of 
requested additional costs.

III.10	At the time of the redelivery of the Aircraft, all 
spare parts and materials provided by The Customer or 
obtained on its behalf for the execution of the services 
shall be returned to The Customer under inventory. 
COOPESA will provide a secure storage area for 
Customers' parts and will be responsible for all missing 
parts from this inventory that are not used on The 
Customer's aircraft.

ARTICLE IV. DESCRIPTION OF THE SERVICE

IV.1	Subject to the terms and conditions of this Contract, 
COOPESA shall perform the services on the Aircraft 
described in each service quotation in Appendix "A".
 
IV.2	COOPESA shall provide the physical space to shelter the 
Aircraft during service, the skilled labor, as well as 
the standard tools, equipment and other facilities 
required in order to execute the work contracted.

IV.3	The necessary spare parts and components shall be 
provided directly by The Customer, or acquired by 
COOPESA, from certified agencies on The Customer's 
account.  Likewise, all reasonable expenses for the 
acquisition and transportation of such pieces or parts, 
shall be paid by The Customer.

IV.4	The repairs and service to the Aircraft parts and 
components, its engines and the navigation equipment 
(avionics), shall be on The Customer's account, 
including transportation, and transportation insurance.
 
IV.5	All Work Orders shall contain a detailed description of 
the requested service including labor and parts in as 
much as possible, and must be signed by The Customer or 
Representative and by COOPESA.

IV.6	If during the service process, there are circumstances 
related to the condition of the Aircraft, which, for 
airworthiness reasons make it imperative to be 
corrected, to such extent that if they are not,  
airworthiness of the same would be affected, COOPESA 
shall notify it to The Customer, who will evaluate and 
issue the corresponding Work Order, if necessary.

ARTICLE V. TERM

V.	The term of this agreement shall commence on January 1st, 
1999, or upon full ratification by both Parties and 
shall continue in effect until December 31st, 1999, or 
unless otherwise agreed to by The Parties.

ARTICLE VI. CERTIFICATION

VI.	The service contracted by The Customer shall be 
performed on the Aircraft in COOPESA's Maintenance 
Facilities, according to the standards established by 
the Civil Aviation Authorities of the Government of 
Costa Rica, and those of the FAA.

ARTICLE VII. COOPESA'S RESPONSIBILITIES 

VII.1	Under the provisions of this Contract, COOPESA's 
responsibilities are:

(a)	To service the Aircraft according to the highest quality 
standards , in accordance with The Customers' GMM, and 
following all other applicable manuals, Customer 
provided specifications and approved data.

(b)	To redeliver the Aircraft to The Customer on the 
predetermined date, except for as provided in clause 
III.5 above.

(c)	To provide all spare parts and materials not provided 
directly by The Customer, whose cost, as established in 
article IV.3 above, shall be covered by The Customer.

(d)	To keep strict confidentiality about all information 
related to The Customer, the Aircraft, the service, 
except for that requested by the Costa Rican DGAC, and 
the FAA. The Customer must be notified prior to release 
of any information.

(e)	To use skilled labor and properly trained for performing 
the services.

(f)	To provide The Customer's Representative with an office, 
phone and fax from the time of delivery of the Aircraft, 
and until five (5) days after its redelivery, and 
provide a secure place to store The Customers' manuals 
and other data. 

(g)	To perform an engine run-up at the beginning and at the 
end of each maintenance check, and those checks required 
by The Customers' Maintenance Program, all of which will 
be issued as Special Request items, and will be at 
Customers' expense.

(h)	To comply with all provisions of the Federal Aviation 
Regulations applicable thereto, including, but not 
limited to, Part 145, and shall maintain all required 
records and documents pursuant thereto.  Such records 
and documents shall be available for inspection at all 
times during COOPESA's normal business hours. The 
records will be given to The Customer per Article XI.7.

ARTICLE VIII. CUSTOMER'S RESPONSIBILITIES

VIII.1	Under the provisions of this Contract, The 
Customer's responsibilities are the following:

(a)	Pay COOPESA, at the time and according to the 
established conditions, all amounts charged to its 
account.

(b)	Deliver the Aircraft, together with the documentation 
referred to in clause f) hereunder, to COOPESA at the 
Maintenance Facilities, on the date established in 
clause III.2 above.

(c)	Keep an accredited Representative-technician, as defined 
in clause I.6 above.

(d)	Provide COOPESA or authorize COOPESA to procure as 
directed by The Customer, with all parts, spare parts, 
materials and kits, COOPESA has identified which are 
necessary but not available at COOPESA, related to the 
contracted service and within the agreed term.

(e)	Send COOPESA, at least fifteen days in advance, the task 
cards, Engineering Orders and Special Requests related 
to the parts, the Aircraft and the service.

(f)	Send COOPESA, together with the Aircraft, all applicable 
and necessary manuals and technical documents, as well 
as their modifications and amendments, including the 
M.M., I.P.C., SRM, W.D., MEL, Engineering Orders and the 
Operator's General Maintenance Manual.  The Customer 
shall present a letter which indicates all the manuals 
are in accordance with the latest revision of the 
manufacturer.

(g)	Fulfill all the material requirements of The Customer's 
General Maintenance Manual, with respect to the 
subcontracting of maintenance agencies; including the 
designation of COOPESA's personnel who shall sign the 
required inspection items and the Aircraft's return to 
service.

h)	Adjust the redelivery schedule if necessary in the event 
that the actual work package for the Aircraft has not 
arrived at least eight (8) days prior to Aircraft 
induction.

VIII.2 During the course of this contract, the parties must 
refrain from contracting each other's current employees.


ARTICLE IX. PARTS AND COMPONENTS

IX.1	The Customer must provide COOPESA with all spare parts, 
replacement parts and components of the Aircraft, which 
COOPESA has informed The Customer in advance are not 
available at COOPESA but required by them, unless The 
Customer authorizes COOPESA to secure (procure) the 
parts.

IX.2	Said materials must be supplied, within a reasonable 
time after the date COOPESA provides the corresponding 
list to The Customer, so as not to delay completion of 
the service.  The Customer shall be responsible for the 
delays incurred due to its non-fulfilment of the 
obligations hereby described, and The Customer may 
authorize COOPESA to procure the required material.

IX.3	All parts, spare parts and materials provided by The 
Customer or acquired on its account by COOPESA from 
third party suppliers, must be of appropriate quality 
and duly certified by the FAA.  COOPESA may refuse to 
use those parts and materials provided by The Customer, 
which do not meet the requirements.

	In the event that The Customer fails to supply the parts 
needed to complete the process of the Aircraft on 
schedule, according to the delivery estimation, COOPESA 
may decide to dedicate its man-power and hangar 
allocation to fulfilling commitments with other 
customers that may be affected by the late provision of 
parts until such parts are received and the work is re-
scheduled.

IX.4	Upon request, COOPESA must return all off units on BER 
(Beyond Economical Repair) or scrapped condition.


ARTICLE X. REPRESENTATION ON THE PART OF THE CUSTOMER

X.1	In order to be represented in issues related to 
execution of the contracted service, The Customer shall 
appoint The Representative in accordance with this 
article.

X.2	The designation and appearance of The Representative 
shall take place before, or concurrent with the delivery 
of the Aircraft and at the beginning of each service, in 
the form provided by COOPESA to The Customer, which 
should be incorporated in the present document as 
Appendix "B".
	
X.3	The Customer' Representative shall give instructions to 
COOPESA for the execution of the services.

X.4	Particularly, the following functions correspond to the 
Representative:

(a)	To review and approve the work done by COOPESA.

(b)	To request the execution of extraordinary work.

(c)	To approve the estimated man-hours for the carrying out 
of non-routine, special and extraordinary work.

(d)	To give his approval to COOPESA, within twenty four 
hours of request, for purchase of any required parts, 
components and materials, or, in lack of that, provide 
as soon as practicable all those parts The Customer 
decides to supply directly himself.

(e)	To cancel work orders, defer or cancel task cards 
related to the service, as well as defer extraordinary 
items.

(f) Sign work requests binding The Customer with respect to 
the service performed.

X.5	COOPESA shall provide the Representative, as indicated 
in clause VIII.If above, with space and facilities for 
the carrying out of his functions, in the same buildings 
as the Service Center.

XI. FINANCIAL STIPULATIONS

XI.1	The Customer shall make payments for each individual 
aircraft in accordance with Appendix A and individual 
aircraft addendums.

a.	30% at induction; 30% half way into the check and 40% 
plus any additional balance at re-delivery.

b.	Additional jobs to the initial workscope, exceeding the 
amount of US$20,000.00 in total requires at least 50% of 
downpayment when it is requested.  The Customer may make 
those payments within five working days following the 
receipt of COOPESA's request.

XI.2	All payments shall be made in United States of America 
dollars.

XI.3	The man-hour rate is [intentionally omitted].

XI.4	The Customer shall pay an additional management charge 
related to the supply of parts and materials, 
established as 10% of their CIF (cost, insurance, 
freight) cost with a cap of US $750.00 per line item.  
Customer supplied parts will not incur any mark ups.

XI.5	The costs of crew; fuel; airport duties, and any other 
charges to be paid to the Airport Authorities, for first 
test flight, shall be covered by The Customer.  In case 
a second test flight be necessary, due to the work 
performed by COOPESA, COOPESA shall pay for the fuel; 
airport duties and any other charges to be paid to 
Airport Authorities.

XI.6	With the exception established in section XI.11 below, 
all pending payments should be made within thirty days 
of their invoicing. The Parties establish a penalty 
interest rate of 18% per annum for the amounts due in 
dollars.

XI.7	COOPESA shall keep, available to The Customer, the 
records related to the service performed on the 
Aircraft, as well as the parts and materials used. The 
records will be given to The Customer at the conclusion 
of each service.

XI.8	The obligation of payment of the amounts charged by 
COOPESA to the Customer, shall not be interrupted by the 
formulation of any discrepancy on the part of The 
Customer.  If this occurs, The Customer shall pay the 
total amounts not in dispute, until the differences are 
settled.

XI.9	The claims for discrepancies with respect to the 
invoiced charges, must be lodged, at the latest, forty-
five (45) calendar days after the presentation of the 
invoice. COOPESA shall reply to those claims within 
fifteen (15) calendar days after they have been 
formulated, except for billing errors.

XI.10	Three days before the redelivery of each Aircraft, 
COOPESA shall make a preliminary invoice stipulating the 
amounts due by The Customer and an estimation for 
pending and unscheduled jobs and which must be paid off 
before receiving it back.  After the redelivery of each 
individual Aircraft, a final invoice containing all the 
charges derived from the service will be sent to The 
Customer.

XI.11	 If there were any unpaid bill in accordance with 
Article XI.1 on the part of The Customer, upon receipt 
of the Aircraft, he should grant COOPESA payment 
guarantees of immediate execution sufficient to cover 
said amounts.

XI.12	The payments and fund issuance, may be directly made by 
The Customer at the following bank address:

[INTENTIONALLY OMITTED]

XI.13	When a redelivery estimation (in days) is reached and 
the Aircraft is not ready due to Customer's failure to 
supplying parts, components and/or materials thus 
affecting the on-time performance of COOPESA, COOPESA 
may prepare a draft invoice stating the amount due so 
far.

XI.14	In the event that The Customer requests additional jobs 
totalling US $5,000.00(labor & materials) or more, after 
receiving the Draft Invoice, The Customer shall make 
payment of this balance before redelivery of the 
Aircraft except if it is not possible to transfer due to 
weekend, holidays, where The Customer will be able to 
make the transfer until next the business day.

ARTICLE XII. CONTRACTING

XII.1	During the aircraft service, any special jobs required 
that can not be accomplished by COOPESA will be 
contracted to an outside agency by The Customer 
directly.

ARTICLE XIII. INSURANCE

XIII.1	The Customer, at his own expense, must have the 
Aircraft duly insured against all applicable risks, from 
the time of delivery to its redelivery, including all 
the stages of service and test flights, provided however 
The Customer shall not be liable for any losses arising 
from the negligence or wilful default of COOPESA, its 
employees, servants, agents or sub-contractors.

XIII.2	The Customer shall obtain and keep effective, the 
necessary insurance to cover his representatives and 
employees' risks, while in the Maintenance Facilities or 
on board of the Aircraft, during the service or test 
flights.

XIII.3	COOPESA shall maintain its own insurance policies 
to cover its facilities, employees and civil 
responsibility towards third parties and any rights not 
covered by The Customer in Article XIII.1.

XIII.4	The Customer and COOPESA shall provide each other 
before the Aircraft's entry to the Maintenance 
Facilities, with the necessary documents supporting the 
validity of the related insurance policies, and COOPESA 
will present its hangar keeper insurance.

ARTICLE XIV. WARRANTY

XIV.1	COOPESA hereby warrants its workmanship for the 
Services/Additional Services performed on the Aircraft 
to be free from defects for a period of 1200 operating 
hours or 180 calendar days from the date of notification 
to The Customer under Article III.4 that the Aircraft is 
ready for redelivery, whichever first occurs.

XIV.2	COOPESA's obligations and liabilities under this 
warranty are applicable only to the Aircraft parts and 
components that are demonstrated to have malfunctioned 
due to defective workmanship by COOPESA.  This warranty 
does not extend, to any claim of malfunction, failure or 
damage attributable to, but not limited to the 
following:

a)  Defects in design or manufacture of Aircraft or its 
parts.

B)  Defects of the materials, the components or the spare 
parts, acquired directly by COOPESA from third party 
suppliers, or provided by The Customer.

C)  Normal wear and tear.

D)  Rust, corrosion or entry of any foreign materials 
which is not caused by or the result of previous work 
accomplished by COOPESA.

E)  The Customer's failure to operate, maintain, or care 
for the Aircraft in accordance with the manufacturer's 
specifications and recommendations or the applicable 
governmental Aviation Authority regulations and 
recommendations.

F)  The malfunctioning of any part or system which is 
either directly or indirectly caused by failure or 
malfunctioning of any Aircraft component or system not 
serviced by COOPESA.

G)  Operation of the Aircraft or any part thereupon after 
being involved in an accident.

h)  Faulty shipping, storage, handling or installation by 
anyone other than COOPESA.

XIV.3	COOPESA shall assign to The Customer any warranties 
received by COOPESA with respect to parts and materials 
transferred to The Customer by COOPESA or incorporated 
by COOPESA into the Aircraft.

XIV.4	The obligations and responsibilities of COOPESA pursuant 
to this warranty for the Services and Additional 
Services shall be limited to either the repair or 
overhaul of any part or components repaired or 
overhauled by COOPESA including freight, fuel and 
landing fees.  COOPESA shall provide all necessary parts 
and materials required for such repair or overhaul at no 
additional cost to The Customer.

XIV.5 COOPESA's cumulative liability under this warranty is 
hereby limited to an amount which shall not exceed the 
total price for all Services performed by COOPESA on the 
Aircraft, including all components parts or labor.

XIV.6The Customer shall provide COOPESA with written notice 
of any malfunction claimed to be within the scope of this 
warranty within fifteen (15) days of discovery.

XIV.7 All Aircraft parts or components must be properly 
preserved, packaged and shipped to avoid corrosion or 
damage in transit.

XIV.8 In the event that an investigation by COOPESA discloses 
no defects in workmanship performed by COOPESA, then The 
Customer, shall be responsible for all costs incurred by 
COOPESA in performing the investigation, including costs 
associated with tear-down investigation, re-assembly and 
testing, and any additional costs of shipment of any 
part to or from COOPESA's facility.  Likewise, if the 
investigation discloses defects in COOPESA's 
workmanship, then COOPESA shall be responsible for all 
costs incurred by COOPESA in performing the 
investigation including costs associated with tear-down 
investigation re-assembly and testing  and any 
additional costs of shipment of any part to or from 
COOPESA's facility.

XIV.9 The warranties, obligations and liability of COOPESA 
and remedies of The Customer set forth in Article XIV 
are exclusive and in substitutions for, and The Customer 
hereby waives, releases, and renounces all other 
warranties, obligations and liabilities of COOPESA and 
rights claims and remedies of The Customer against 
COOPESA, express or implied, arising by or otherwise, 
with respect to any defect in the Aircraft, including 
but not limited to (a) any implied warranty of 
mechantability or fitness for use, (b) any implied 
warranty arising from the course of performance, course 
of dealing or usage of trade and (c) any obligation, 
liability, right, claim, or remedy for loss of or damage 
with respect to the Aircraft, for loss of use, revenue 
or profit with  respect to the Aircraft, or for any 
other direct, incidental or consequential damages.

XIV.10 The Customer and COOPESA hereby agree that Article 
XIV.9 has been the subject of discussion and negotiation 
and is fully understood by the parties, and that the 
total price for the services to be performed by COOPESA 
and the other mutual agreements of the parties set forth 
in this agreement were arrived at in consideration of 
the provisions of this paragraph, specifically including 
the waiver, release and renunciation be The Customer set 
forth above.

ARTICLE XV. PARKING AND STORAGE CHARGES

XV.1	Once COOPESA has notified The Customer that the service 
has been completed and the Aircraft is in condition to 
be redelivered, The Customer has the obligation of 
removing the Aircraft, its engines, and any other 
component, part or material belonging to him which are 
in the Maintenance Facilities or in any other facilities 
belonging to or rented by COOPESA, at its own expense, 
for a period that cannot exceed two weeks, unless prior 
arrangements are agreed to between COOPESA and The 
Customer per III.10.

XV.2	If the indicated time is up, and the Aircraft, its 
engines, components or materials have not been removed 
by The Customer, COOPESA may charge a reasonable daily 
rate for parking and storing, according to the space 
used.  For such purposes, the following rates are 
established:
	
	(a)		$100.00 a day per Aircraft

XVI. ACTS OF GOD

XVI.1	None of the Parties shall be deemed responsible for the 
non-fulfilment of its Contract obligations, due to acts 
of God, war, rebellion, insurrection, turmoil, flood, 
strike, impossibility to obtain parts, materials and 
information, or other causes out of the non-performing 
parties' control. 

XVII. TAXES

XVII.1COOPESA shall be responsible and shall pay for all 
taxes and duties due to the Costa Rican Customs and tax 
Authorities, except those inherent to the importation of 
parts (if any) and materials, obtained or supplied by 
The Customer to be installed on the Aircraft, out of the 
work-scope of this contract. The Customer shall be 
responsible and shall pay for all taxes and duties other 
than those assessed by reference to COOPESA's gross 
revenue, imposed in relation to the Aircraft in the 
country where it is domiciled, or any other State. 
COOPESA shall notify in writing to The Customer about 
all payments COOPESA has to make or those COOPESA has 
made on behalf of The Customer to the tax, fiscal and 
customs authorities of Costa Rica and other States.

	Except as  otherwise provided herein, Airport 
Authorities charges like landing fees, etc, will be paid 
by The Customer additionally (approximately 
US$1,500.00).

XVIII. INDEMNIFICATION

XVIII.1	The Customer hereby agrees to defend, indemnify and 
hold harmless COOPESA, its directors, officers, 
employees, agents, servants and representatives, from 
any and all loss, damage, claim, injury to or death of 
persons, including employees of The Customer and of 
COOPESA (except for injuries to and the death of 
employees of COOPESA, which are covered by workers 
compensation insurance), including loss of or damage to 
property of The Customer, COOPESA or any other third 
parties, arising out of or in any manner connected with 
the Services/Additional Services by COOPESA pursuant to 
this Agreement, except for loss or damage resulting 
form the gross negligence or willful misconduct of 
COOPESA.

XVIII.2 COOPESA hereby agrees to defend, indemnify and hold 
harmless The Customer ,its directors, officers, 
employees, agents, servants and representatives, from 
any and all loss, damage, claim, injury to or death of 
persons, including employees of Customer and of COOPESA 
(except for injuries to and the death of employees of 
The Customer, which are covered by workers compensation 
insurance), including loss of or damage to property of 
COOPESA, The Customer or any other third parties, 
arising out of or in any manner connected with the 
Services/Additional Services by The Customer pursuant 
to this Agreement, except for loss or damage resulting 
form the gross negligence or willful misconduct of The 
Customer.

XVIII.3 Should there be any loss or damage to the property of 
The Customer, COOPESA reserves the discretionary right 
to elect to repair the property, if The Customer 
agrees.  This section shall not relieve COOPESA of any 
other obligations under this agreement.

XIX. LIENS

XIX.1	Any and all liens claimed by third parties may hold upon 
the property of The Customer or of COOPESA, shall not 
affect the rights of the parties secured herein.

XIX.2	Any lien or encumbrance placed upon the Aircraft, its 
components and parts, or any other of The Customer's 
property, as a result of any of COOPESA's obligations in 
favour of third parties, shall be immediately settled by 
COOPESA.

XIX.3	The Customer shall immediately settle any lien or 
encumbrance placed upon goods at the Service Center 
which belong to COOPESA, its clients, suppliers or any 
other third party, and which has been placed as a result 
of The Customer's outstanding obligations.

XX. ASSIGNMENT

XX.1	This agreement and its rights and duties may not be 
transferred or assigned by any of the Parties, without 
the previous written consent of the other Party.

XXI. NOTIFICATIONS

XXI.	All notifications required under the terms of this 
Contract shall be expressed in writing and directly 
addressed, forwarded and delivered, by hand, by fax, 
telex, or sent by courier or certified mail, with 
prepaid postage, as follows:

		TO COOPESA:
		300 mts West Aeropuerto Int'l Juan Santamaria
		Mr. Rodolfo Solis
		Phone:  (506) 442-9818 / 442-2022
		Fax:      (506) 441-2943 / 442-1009
		Sita:      SJOCZCR
		e-mail: coopesa@sol..racsa.co.cr

		TO VANGUARD AIRLINES
		533 Mexico City Ave.
		Kansas City International Airport
		Kansas City, Missouri, 64153
		Phone:  (816) 243-2103
		Fax:    (816) 243-2154
		Mr. J.B.Miller. Vice President Engineering & 
                    Quality Assurance 
		e-mail: jmiller@flyvanguard.com
XXII.  TERMINATION

XXII.1 Upon completion by COOPESA of all Service/Additional 
Services hereunder, and upon full payment by The 
Customer of all amounts due hereunder, this Agreement 
shall be deemed terminated and shall be binding upon the 
Parties, except as provided by Article XXII.4 herein.

XXII.2 This Agreement may be terminated at any time by either 
Party upon with thirty (30) days written notice to the 
other Party.

XXII.3 In the event that either Party fails to fulfill 
obligations contained herein, the other party shall, 
upon ten (10) days written notice, have deemed this 
Agreement terminated.

XXII.4 Regardless of any termination of this Agreement, The 
Customer shall remain liable to COOPESA for all amounts 
due hereunder.

XXII.5 Whenever The Customer or COOPESA executes their right 
to terminate the Contract, COOPESA will be granted and 
will take the necessary time to do the necessary work on 
the Aircraft to make it airworthy, and The Customer must 
pay COOPESA all due amounts to COOPESA prior to taking 
redelivery of the aircraft.

XXIII LAW AND APPLICABLE JURISDICTION

XXIII.1 The parties agree that any interpretation or dispute 
related to this contract and its execution, shall be 
settled in conformity with the Costa Rican laws and 
settled before the Costa Rican Courts.

In witness whereof, each party hereto has executed this 
agreement as of the day and year first written above.


COOPESA R.L.			            	VANGUARD AIRLINES

/s/Bernardo Delgado         /s/ J. B. Miller
Bernardo Delgado			         J.B. Miller
Executive President 			     Vice President, 
                            Engineering & Quality                        				
		                          Assurance