Exhibit 10.48


 


*** CERTAIN CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND


FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE


COMMISSION PURSUANT TO RULE
24B-2 OF THE


SECURITIES EXCHANGE ACT OF
1934, AS AMENDED


 


EXECUTION
VERSION


 


AIRCRAFT
LEASE AGREEMENT


 


Dated as of October 31,
2008


 


BETWEEN


 


C.I.T.
LEASING CORPORATION


as Lessor


 


and


 


HAWAIIAN
AIRLINES, INC.


as Lessee


 






 


One (1) Airbus A330-200
Aircraft


Manufacturer’s Serial Number
[    ]


Scheduled Delivery Date:  November 2010


 






 


This
Aircraft Lease Agreement may be executed in several counterparts.  To the extent, if any, that this Aircraft
Lease Agreement constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction) no
security interest in this Aircraft Lease Agreement may be created through the
transfer of possession of any counterpart other than the original counterpart
so marked “Chattel Paper Original” on the signature page thereof.


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 

















 


CONTACTS -
LESSOR


 


Primary
Business Contact:


 


Kathleen Park, Vice President


C.I.T.
Leasing Corporation


300 South Grand Avenue


10th Floor


Los Angeles, CA 90071, U.S.A.


Tel:  (213) 613-2532


Fax:  (213) 613-2566


e-mail:  kathleen.park@cit.com


 




	
  Payment Inquiries:

  	
  Technical Inquiries:

  
	
   

  	
   

  
	
  Carolle Sorel

  	
  Asset Manager

  
	
  C.I.T. Leasing Corporation

  	
  e-mail: aerospaceassetmgmt@cit.com

  
	
  11
  West 42nd Street, 12th Floor

  	
   

  
	
  New
  York, NY 10036

  	
   

  
	
  Tel:
  (212) 461-7837

  	
   

  
	
  Fax:
  (877) 525-9183

  	
   

  
	
  e-mail:
  carolle.sorel@cit.com

  	
   

  
	
   

  	
   

  
	
  Utilization Reporting:

  	
  Financial Reporting

  
	
   

  	
   

  
	
  Asset Manager

  	
  General Counsel

  
	
  e-mail:
  aerospaceassetmgmt@cit.com

  	
  C.I.T. Leasing Corporation

  
	
  with a copy to:  carolle.sorel@cit.com

  	
  11
  West 42nd Street, 12th Floor

  
	
   

  	
  New
  York, NY 10036

  
	
   

  	
  Tel:
  (321) 723-0002

  
	
   

  	
  Fax:
  (212) 461-5402

  
	
   

  	
  e-mail:
  jennifer.villa@cit.com

  
	
   

  	
   

  
	
  Insurance Reporting:

  	
  Legal Contact:

  
	
   

  	
   

  
	
  Insurance Administrator

  	
  Chief Counsel —
  Transportation Finance

  
	
  C.I.T. Leasing Corporation

  	
  C.I.T. Leasing Corporation

  
	
  Operations Department

  	
  11
  West 42nd Street, 12th Floor

  
	
  11 West 42nd Street, 13th Floor

  	
  New
  York, NY 10036

  
	
  New York, New York 10036

  	
  Tel:
  (212) 461-5507

  
	
  U.S.A.

  	
  Fax:
  (212) 461-5402

  
	
  Tel: (212) 461-7830 or
  7834

  	
   

  
	
  Fax: (877) 525-9183

  	
   

  
	
  e-mail:
  michelle.lynn@cit.com

  	
   

  






 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 

















 


CONTACTS -
LESSEE


 


Primary
Business Contact


 


Russell Ryan, Senior Director —
Fleet Planning and Financial Products


Hawaiian
Airlines, Inc.


3375
Koapaka Street, Suite G-350


Honolulu,
Hawaii 96819


Tel:  +808-835-3022


Fax:  +808-835-3699


e-mail: 
russell.ryan@hawaiianair.com


 




	
  Payment Inquiries:

  	
  Technical Inquiries:

  
	
   

  	
   

  
	
  Phyllis Freund

  	
  Yesso Tekerian

  
	
  Director, Financial
  Service

  	
  Senior Director -
  Engineering

  
	
  Tel: +808-835-3014

  	
  Tel: +808-835-3375

  
	
  Fax: +808-836-4795

  	
  Fax: +808-834-4860

  
	
  e-mail:
  phyllis.freund@hawaiianair.com

  	
  e-mail:
  yesso.tekerian@hawaiianair.com

  
	
   

  	
   

  
	
  Utilization Reporting:

  	
  Financial Reporting:

  
	
   

  	
   

  
	
  Mark Balakrishnan

  	
  Shan Hiraoka

  
	
  Manager Maintenance
  Systems & Reliability

  	
  Director — Corporate
  Reporting

  
	
  Tel: +808-835-3375

  	
  Tel: +808-838-5518

  
	
  Fax: +808-835-3460

  	
  Fax: +808-835-3015

  
	
  e-mail:
  mark.balakrishnan@hawaiianair.com

  	
  e-mail:
  shan.hiraoka@hawaiianair.com

  
	
   

  	
   

  
	
  Insurance/Risk Management
  Contact:

  	
  Legal Contact:

  
	
   

  	
   

  
	
  Phyllis Freund

  	
  Hoyt H. Zia

  
	
  Director, Financial
  Service

  	
  Senior Vice President,
  General Counsel

  
	
  Tel: +808-835-3014

  	
  and Corporate Secretary

  
	
  Fax: +808-836-4795

  	
  Tel: +808-835-3613

  
	
  e-mail: phyllis.freund@hawaiianair.com

  	
  Fax: +808-835-3690

  
	
   

  	
  e-mail:
  hoyt.zia@hawaiianair.com

  






 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 

















 


CONTENTS


 


	
  Article

  	
   

  	
  Page

  
	
  1.

  	
  DEFINITIONS AND INTERPRETATION

  	
  1

  
	
  2.

  	
  LEASE TERM; NATURE OF LEASE

  	
  2

  
	
   

  	
  2.1.

  	
  Lease Term

  	
  2

  
	
   

  	
  2.2.

  	
  Nature of Lease

  	
  2

  
	
  3.

  	
  RENT

  	
  3

  
	
   

  	
  3.1.

  	
  Agreement to Pay Rent

  	
  3

  
	
   

  	
  3.2.

  	
  Basic Rent at Delivery

  	
  3

  
	
   

  	
  3.3.

  	
  Supplemental Rent

  	
  3

  
	
   

  	
  3.4.

  	
  Obligation to Perform Unconditional

  	
  3

  
	
  4.

  	
  SECURITY DEPOSIT

  	
  4

  
	
   

  	
  4.1.

  	
  Security Deposit Amount

  	
  4

  
	
   

  	
  4.2.

  	
  Nature of Security Deposit

  	
  4

  
	
   

  	
  4.3.

  	
  Application of Security Deposit

  	
  4

  
	
   

  	
  4.4.

  	
  [Reserved]

  	
  4

  
	
   

  	
  4.5.

  	
  Repayment of Security Deposit

  	
  4

  
	
  5.

  	
  PAYMENTS

  	
  5

  
	
   

  	
  5.1.

  	
  Lessor’s Account

  	
  5

  
	
   

  	
  5.2.

  	
  Payments on Non-Business Days

  	
  5

  
	
   

  	
  5.3.

  	
  Timing of Payments

  	
  5

  
	
   

  	
  5.4.

  	
  Late Payment

  	
  5

  
	
   

  	
  5.5.

  	
  Calculation of Interest and Prorating of other Payments

  	
  5

  
	
   

  	
  5.6.

  	
  Payments in United States Dollars

  	
  5

  
	
   

  	
  5.7.

  	
  Retention of Certain Payments

  	
  5

  
	
   

  	
  5.8.

  	
  Application of Payments

  	
  6

  
	
  6.

  	
  AIRCRAFT SPECIFICATION; LESSEE INVOLVEMENT WITH SELLER

  	
  7

  
	
   

  	
  6.1.

  	
  Aircraft Specification

  	
  7

  
	
   

  	
  6.2.

  	
  Lessee Involvement with Seller

  	
  7

  
	
  7.

  	
  CONDITIONS PRECEDENT TO DELIVERY

  	
  9

  
	
   

  	
  7.1.

  	
  Conditions Precedent to Lessor’s Performance

  	
  9

  
	
   

  	
  7.2.

  	
  Conditions Precedent to Lessee’s Performance

  	
  9

  
	
  8.

  	
  DELIVERY; TERMINATION FOR DELAY; EVENT OF LOSS PRIOR TO DELIVERY;
  RISK OF LOSS 

  	
  11

  
	
  FOLLOWING DELIVERY

  	
   

  
	
   

  	
  8.1.

  	
  Delivery Location and Timing

  	
  11

  
	
   

  	
  8.2.

  	
  Delivery Subject to Seller Delivery

  	
  11

  
	
   

  	
  8.3.

  	
  Termination for Delay

  	
  11

  
	
   

  	
  8.4.

  	
  Seller’s Right to Terminate

  	
  12

  
	
   

  	
  8.5.

  	
  Event of Loss to Aircraft Prior to Delivery

  	
  12

  
	
   

  	
  8.6.

  	
  Lessee Acceptance of Aircraft

  	
  12

  
	
   

  	
  8.7.

  	
  Risk of Loss to Aircraft following Delivery

  	
  12

  
	
   

  	
  8.8.

  	
  Waiver of Remedies for Delay in Delivery

  	
  12

  
	
   

  	
  8.9.

  	
  Seller Compensation for Delay

  	
  12

  
	
  9.

  	
  LESSEE’S REPRESENTATIONS, WARRANTIES AND COVENANTS

  	
  13

  
	
   

  	
  9.1.

  	
  Lessee’s Representations and Warranties

  	
  13

  
	
   

  	
  9.2.

  	
  Application of Representations and
  Warranties; Survival

  	
  14

  
	
   

  	
  9.3.

  	
  Lessee’s General Covenants

  	
  14

  
	
  10.

  	
  LESSOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS

  	
  16

  
	
   

  	
  10.1.

  	
  General Representations and Warranties of
  Lessor

  	
  16

  
	
   

  	
  10.2.

  	
  Covenant of Quiet Enjoyment

  	
  16

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 

















 


	
   

  	
  10.3.

  	
  Disclaimer; Waiver of Warranties; Waiver of
  Remedies

  	
  16

  
	
   

  	
  10.4.

  	
  Disclaimer and Waiver of Incidental,
  Consequential, Special and Punitive Damages

  	
  18

  
	
   

  	
  10.5.

  	
  No Duty of Indemnitees To  Inspect,
  Etc.

  	
  19

  
	
  11.

  	
  GENERAL OPERATION OF THE AIRCRAFT

  	
  20

  
	
   

  	
  11.1.

  	
  General Operation

  	
  20

  
	
   

  	
  11.2.

  	
  Insured Operations

  	
  20

  
	
   

  	
  11.3.

  	
  Carriage of Goods

  	
  20

  
	
   

  	
  11.4.

  	
  Operational Expenses

  	
  21

  
	
   

  	
  11.5.

  	
  Compliance with Laws

  	
  21

  
	
   

  	
  11.6.

  	
  [Reserved]

  	
  22

  
	
  12.

  	
  MAINTENANCE, MODIFICATION AND OPERATION OF THE AIRCRAFT

  	
  23

  
	
   

  	
  12.1.

  	
  General

  	
  23

  
	
   

  	
  12.2.

  	
  Accomplishment of Tasks, Repairs and Related Items

  	
  23

  
	
   

  	
  12.3.

  	
  Information on Maintenance

  	
  23

  
	
   

  	
  12.4.

  	
  Aircraft Documents in English Language

  	
  24

  
	
   

  	
  12.5.

  	
  Originals

  	
  24

  
	
   

  	
  12.6.

  	
  Performance of Maintenance

  	
  24

  
	
   

  	
  12.7.

  	
  Alterations, Modifications and Additions

  	
  24

  
	
   

  	
  12.8.

  	
  Replacement of Parts

  	
  26

  
	
   

  	
  12.9.

  	
  Title to Parts

  	
  27

  
	
   

  	
  12.10.

  	
  Temporary Replacement of Parts

  	
  28

  
	
   

  	
  12.11.

  	
  Exchanging Parts

  	
  28

  
	
   

  	
  12.12.

  	
  Temporary Attachment and Removal of Engines

  	
  28

  
	
   

  	
  12.13.

  	
  Installation of Items of Equipment on Other Aircraft

  	
  30

  
	
   

  	
  12.14.

  	
  Failure to Reinstall Engines and Items of Equipment on the Aircraft

  	
  30

  
	
  13.

  	
  MAINTENANCE RESERVES

  	
  31

  
	
   

  	
  13.1.

  	
  Maintenance Reserves

  	
  31

  
	
   

  	
  13.2.

  	
  Discrepancies

  	
  31

  
	
   

  	
  13.3.

  	
  Rights in Maintenance Reserves

  	
  31

  
	
   

  	
  13.4.

  	
  Claims for Reimbursement - Timing

  	
  31

  
	
  14.

  	
  SELLER’S AND MANUFACTURER’S WARRANTIES AND SUPPORT

  	
  33

  
	
   

  	
  14.1.

  	
  Assignable Warranties

  	
  33

  
	
   

  	
  14.2.

  	
  Reassignment; Assignment of Lessee Warranties

  	
  33

  
	
   

  	
  14.3.

  	
  Warranty Claims

  	
  33

  
	
   

  	
  14.4.

  	
  Assignment of Training, Product Support and Technical Assistance

  	
  33

  
	
  15.

  	
  SUBLEASING AND WET LEASING

  	
  34

  
	
   

  	
  15.1.

  	
  Subleasing

  	
  34

  
	
   

  	
  15.2.

  	
  Wet Leasing

  	
  35

  
	
   

  	
  15.3.

  	
  No Independent Subleasing of Items of Equipment

  	
  36

  
	
   

  	
  15.4.

  	
  Expenses

  	
  36

  
	
   

  	
  15.5.

  	
  Lessee Remains Liable

  	
  36

  
	
  16.

  	
  REPORTING AND INSPECTIONS

  	
  37

  
	
   

  	
  16.1.

  	
  Financial Reporting

  	
  37

  
	
   

  	
  16.2.

  	
  Aircraft Utilisation and Other Reporting/Information

  	
  37

  
	
   

  	
  16.3.

  	
  Further Information; Inspections

  	
  38

  
	
   

  	
  16.4.

  	
  Technical Report Prior to Return of Aircraft

  	
  39

  
	
  17.

  	
  REGISTRATION; PERFECTION OF OWNER’S TITLE; LIENS

  	
  40

  
	
   

  	
  17.1.

  	
  Registration

  	
  40

  
	
   

  	
  17.2.

  	
  Identification Plates

  	
  40

  
	
   

  	
  17.3.

  	
  Aviation Authority Acknowledgment

  	
  40

  
	
   

  	
  17.4.

  	
  Authorisation to Make Perfection Filings

  	
  40

  
	
   

  	
  17.5.

  	
  Perfection of Title

  	
  40

  
	
   

  	
  17.6.

  	
  Cape Town Convention

  	
  41

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 

















 


	
   

  	
  17.7.

  	
  Permitted Liens

  	
  43

  
	
  18.

  	
  GENERAL INDEMNITY

  	
  44

  
	
   

  	
  18.1.

  	
  Scope

  	
  44

  
	
   

  	
  18.2.

  	
  Lessee’s Release

  	
  44

  
	
   

  	
  18.3.

  	
  Repayment

  	
  45

  
	
   

  	
  18.4.

  	
  Payment

  	
  45

  
	
   

  	
  18.5.

  	
  Exclusion

  	
  45

  
	
   

  	
  18.6.

  	
  After-Tax Nature of Indemnity

  	
  45

  
	
   

  	
  18.7.

  	
  Survival

  	
  45

  
	
  19.

  	
  INSURANCE

  	
  46

  
	
   

  	
  19.1.

  	
  Obligation to Insure

  	
  46

  
	
   

  	
  19.2.

  	
  Liability Insurance

  	
  46

  
	
   

  	
  19.3.

  	
  Contractual Liability Tail Coverage for Liability Insurance

  	
  46

  
	
   

  	
  19.4.

  	
  Insurance Against Loss or Damage to the Items of Equipment

  	
  46

  
	
   

  	
  19.6.

  	
  Requirements for All Insurance

  	
  47

  
	
   

  	
  19.7.

  	
  Reports

  	
  48

  
	
   

  	
  19.8.

  	
  Assignee of Lessor’s Interests

  	
  49

  
	
   

  	
  19.9.

  	
  Failure to Insure

  	
  49

  
	
   

  	
  19.10.

  	
  Lessor’s Right to Insure

  	
  49

  
	
   

  	
  19.11.

  	
  Changes to Insurance Practices

  	
  49

  
	
   

  	
  19.12.

  	
  AVN 67B

  	
  49

  
	
  20.

  	
  LOSS AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT

  	
  51

  
	
   

  	
  20.1.

  	
  Risk of Loss and Damage

  	
  51

  
	
   

  	
  20.2.

  	
  Notification of Loss and Damage

  	
  51

  
	
   

  	
  20.3.

  	
  Event of Loss — Aircraft/Airframe

  	
  51

  
	
   

  	
  20.4.

  	
  Event of Loss — Engine or APU

  	
  52

  
	
   

  	
  20.5.

  	
  Event of Loss — Landing Gear

  	
  53

  
	
   

  	
  20.6.

  	
  Repairable Damage

  	
  54

  
	
   

  	
  20.7.

  	
  Documents Loss

  	
  54

  
	
   

  	
  20.8.

  	
  Application of Payments from Governmental Authorities

  	
  55

  
	
   

  	
  20.9.

  	
  No Lessor Liability to Repair or Replace Following Delivery

  	
  55

  
	
  21.

  	
  TAXES; TAX INDEMNITY

  	
  56

  
	
   

  	
  21.1.

  	
  Indemnity

  	
  56

  
	
   

  	
  21.2.

  	
  Tax Filings; Information

  	
  57

  
	
   

  	
  21.3.

  	
  Payment of Taxes and Indemnities

  	
  57

  
	
   

  	
  21.4.

  	
  Contest

  	
  58

  
	
   

  	
  21.5.

  	
  Refunds; Tax Savings

  	
  59

  
	
   

  	
  21.6.

  	
  Effect of Event of Default on Indemnitee Payment Obligations

  	
  60

  
	
   

  	
  21.7.

  	
  Withholding Tax Exemption Documentation

  	
  60

  
	
   

  	
  21.8.

  	
  Non-Party Indemnitees

  	
  60

  
	
   

  	
  21.9.

  	
  Survival

  	
  60

  
	
  22.

  	
  RETURN OF AIRCRAFT

  	
  61

  
	
   

  	
  22.1.

  	
  Time and Place

  	
  61

  
	
   

  	
  22.2

  	
  Condition

  	
  61

  
	
   

  	
  22.3

  	
  Lessee’s Continuing Obligations

  	
  61

  
	
   

  	
  22.4.

  	
  Legal Status Upon Return

  	
  62

  
	
   

  	
  22.5.

  	
  Airport and Navigation Charges

  	
  62

  
	
  23.

  	
  EVENTS OF DEFAULT

  	
  63

  
	
  24.

  	
  LESSOR’S RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT

  	
  65

  
	
   

  	
  24.1.

  	
  Lessor’s Rights Following an Event of Default

  	
  65

  
	
   

  	
  24.2.

  	
  De-Registration

  	
  68

  
	
   

  	
  24.3.

  	
  Present Value of Payments

  	
  68

  
	
   

  	
  24.4.

  	
  Damages After Re-Lease or Sale

  	
  68

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 

















 


	
   

  	
  24.5.

  	
  Remedies Cumulative

  	
  69

  
	
   

  	
  24.6.

  	
  Lessor’s Exercise of Remedies

  	
  69

  
	
   

  	
  24.7.

  	
  Application of Payments Following Default or Event of Default

  	
  69

  
	
   

  	
  24.8.

  	
  Use of Termination Date

  	
  69

  
	
  25.

  	
  ASSIGNMENT AND TRANSFER

  	
  70

  
	
   

  	
  25.1.

  	
  No Assignment by Lessee

  	
  70

  
	
   

  	
  25.2.

  	
  Transfer of Lessor’s Interests

  	
  70

  
	
   

  	
  25.3.

  	
  Cooperation with Transfers

  	
  70

  
	
   

  	
  25.4.

  	
  Financings

  	
  70

  
	
   

  	
  25.5.

  	
  Cooperation with Financings

  	
  71

  
	
  26.

  	
  LAW AND JURISDICTION

  	
  72

  
	
   

  	
  26.1.

  	
  Governing Law

  	
  72

  
	
   

  	
  26.2.

  	
  Consent to Jurisdiction

  	
  72

  
	
   

  	
  26.3.

  	
  Process Agent and Service of Process

  	
  72

  
	
   

  	
  26.4.

  	
  Jurisdiction and Forum

  	
  72

  
	
   

  	
  26.5.

  	
  Waiver of Jury Trial

  	
  72

  
	
   

  	
  26.6.

  	
  Waiver of Immunity

  	
  73

  
	
  27.

  	
  MISCELLANEOUS

  	
  74

  
	
   

  	
  27.1.

  	
  Severability and Illegality

  	
  74

  
	
   

  	
  27.2.

  	
  Amendments

  	
  74

  
	
   

  	
  27.3.

  	
  Lessor’s Right to Perform; Lessor’s Right to Delegate and Servicer

  	
  74

  
	
   

  	
  27.4.

  	
  Counterparts

  	
  74

  
	
   

  	
  27.5.

  	
  Delivery of Documents by Electronic Means

  	
  74

  
	
   

  	
  27.6.

  	
  Survival

  	
  74

  
	
   

  	
  27.7.

  	
  Entire Lease

  	
  74

  
	
   

  	
  27.8.

  	
  Successors and Assigns

  	
  75

  
	
   

  	
  27.9.

  	
  Brokers

  	
  75

  
	
   

  	
  27.10.

  	
  Transaction Costs

  	
  75

  
	
   

  	
  27.11.

  	
  Time is of the Essence

  	
  75

  
	
   

  	
  27.12.

  	
  Language

  	
  75

  
	
   

  	
  27.13.

  	
  No Rights of Third Parties

  	
  75

  
	
   

  	
  27.14.

  	
  Delegation

  	
  75

  
	
   

  	
  27.15.

  	
  Further Assurances

  	
  76

  
	
   

  	
  27.16.

  	
  Rights at Law

  	
  76

  
	
   

  	
  27.17.

  	
  Confidentiality

  	
  76

  
	
   

  	
  27.18.

  	
  Notices

  	
  77

  
	
   

  	
  27.19.

  	
  Section 1110

  	
  77

  
	
   

  	
  27.20.

  	
  No Future Documentation Fee

  	
  77

  
	
  28.

  	
  CRAF PROGRAM

  	
  78

  
	
   

  	
  28.1.

  	
  Commitment to CRAF

  	
  78

  
	
   

  	
  28.2.

  	
  Indemnification by United States Government

  	
  78

  
	
   

  	
  28.3.

  	
  No Geographical Limits

  	
  78

  
	
   

  	
  28.4.

  	
  Notice of Default

  	
  78

  
	
   

  	
  28.5.

  	
  Receipt of Payments

  	
  79

  



 


	
  Appendices

  	
   

  
	
   

  	
   

  
	
  1

  	
  Definitions

  	
   

  
	
  2

  	
  Commercial Terms

  	
   

  
	
   

  	
  A.

  	
  Lease Term

  	
   

  
	
   

  	
  B.

  	
  Rent, Security Deposit, Insurance and other
  Financial Matters

  	
   

  
	
   

  	
  C.

  	
  Escalation

  	
   

  
	
   

  	
  D.

  	
  Maintenance Reserves

  	
   

  



 






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  E.

  	
  Return Conditions

  	
   

  
	
  3

  	
  Acceptance Certificate

  	
   

  
	
  4

  	
  Lease Supplement

  	
   

  
	
  5

  	
  Participation Agreement

  	
   

  
	
  6

  	
  Conditions Precedent/Post-Delivery Items

  	
   

  
	
  7

  	
  Return Acceptance Certificate

  	
   

  
	
  8

  	
  Forms

  	
   

  



 






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THIS AIRCRAFT LEASE AGREEMENT is made
as of October 31, 2008 by and between:


 


1.                                       C.I.T. LEASING CORPORATION, a company organized and existing
under the applicable laws of the State of Delaware and having its principal
place of business at 505 Fifth Avenue, New York, New York, 10017 (“Lessor”); and,


 


2.                                       HAWAIIAN AIRLINES, INC., a company organized and existing
under the applicable laws of Delaware and having its principal place of
business at 3375 Koapaka Street, Suite G-350, Honolulu, Hawaii 96819,
U.S.A. (“Lessee”).


 


WHEREAS:


 


Lessee wishes to lease from Lessor and Lessor wishes to lease to Lessee
the Aircraft on the terms and subject to the conditions of this Lease.


 


NOW THEREFORE IT IS AGREED
as follows:


 


1.                                      DEFINITIONS
AND INTERPRETATION


 


1.1.                              Unless the context
otherwise requires, all capitalized terms used in this Lease shall have the
meanings given such terms in Appendix 1 or as may otherwise be defined in this
Lease.


 


1.2.                              References to Articles, Sections and
Appendices are to be construed as references to the articles, sections and
appendices of and to this Lease and references to this Lease include the
Appendices.


 


1.3.                              Words importing the plural shall
include the singular and vice versa.


 


1.4.                              Reference
to “Lessee”, “Lessor”, “Financing Party” or any other Person shall include the
successors, assigns and transferees of such Person.


 


1.5.                              The headings in this
Lease are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.


 


1.6.                              References to (or to any
specified provision of) this Lease or any Operative Document shall mean this
Lease or such Operative Documents as in force for the time being and as
amended, novated, substituted or supplemented from time to time in accordance
with this Lease or such Operative Document.


 


1.7.                              References to “hereby”, “herein”,
“hereof”, “hereunder”, and other like words shall refer to this Lease
including, without limitation, as supplemented by the Lease Supplement.


 






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2.                                      LEASE
TERM; NATURE OF LEASE


 


2.1.                              Lease Term.


 


(a)                                  Lessor
shall lease the Aircraft to Lessee for the period stated in Appendix 2A.


 


(b)                                 The
Lease Term shall commence at Delivery and shall end on the Termination Date and
shall include, if applicable, the Extension Term.


 


2.2.                              Nature of
Lease.  At all times during
the Lease Term, full legal title to the Aircraft and each Item of Equipment
shall remain vested in Lessor to the exclusion of Lessee, notwithstanding the
delivery of the Aircraft to, and the possession and use thereof by,
Lessee.  This Lease and the Lease
Supplement, together, transfer to Lessee with respect to the Aircraft a
leasehold interest only and Lessor is the owner and lessor of the Aircraft, and
Lessee is the lessee of the Aircraft, for all purposes, including for purposes
of the application of all relevant laws, regulations, rules, administrative
practices and policies, and all relevant financial accounting principles.


 






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3.                                      RENT


 


3.1.                              Agreement to
Pay Rent.  As rental for the
Aircraft, Lessee shall pay to Lessor Basic Rent, in advance, on each Rent
Payment Date in respect of each Rent Period. 
Basic Rent during any Extension Term shall be the Fair Market Rental
Value of the Aircraft, as set forth in Appendix 2A, Section 4.


 


3.2.                              Basic Rent
at Delivery.  The amount of
Basic Rent due and payable by Lessee for each Rent Period, including
adjustments calculated in accordance with Appendix 2B, Section 1, shall be
set forth in the Acceptance Certificate. 
If the Delivery Date is on or after the 15th day of the calendar month, Lessee’s first
payment of Basic Rent due at Delivery shall include Lessee’s payment of Basic
Rent due and payable for the second Rent Period of the Lease Term


 


3.3.                              Supplemental
Rent.  Lessee shall pay to
Lessor, or to whomsoever shall be entitled thereto, any and all Supplemental
Rent within ten (10) days after demand or such other relevant period as
may be provided herein.


 


3.4.                              Obligation
to Perform Unconditional. 
This Lease is a net lease and Lessee’s obligation to pay Rent and to
perform its other Obligations shall be absolute and unconditional and shall not
be affected by any circumstance, including, without limitation:


 


(a)                                  any
withholding, set-off, counterclaim, recoupment, defense or other right which
Lessee may have against Lessor or any other Person for any reason whatsoever
(whether in connection with the transactions contemplated hereby or any other
transactions), including, without limitation, any breach by Lessor of its
warranties, agreements or covenants contained herein or in any of the other
Operative Documents;


 


(b)                                 any
defect in the title, registration, airworthiness, condition, design, operation,
or fitness for use of, or any damage to or loss or destruction of, the
Aircraft, or any interruption or cessation in the use or possession thereof by
Lessee or any other Person for any reason whatsoever;


 


(c)                                  any
Liens with respect to the Aircraft;


 


(d)                                 an
Event of Loss with respect to the Aircraft or any Item of Equipment;


 


(e)                                  the
invalidity or unenforceability or lack of due authorization or other infirmity
of this Lease or any absence of right, power or authority of Lessor or Lessee
to enter into this Lease;


 


(f)                                    any
insolvency, bankruptcy, examinership, reorganization, administration,
liquidation or similar proceedings affecting the enforcement of creditor’s
rights generally by or against Lessor or Lessee;


 


(g)                                 any
other circumstance or happening of any nature whatsoever, whether or not
similar to any of the foregoing; or


 


(h)                                 any
imposition of Taxes.


 






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4.                                      SECURITY
DEPOSIT


 


4.1.                              Security
Deposit Amount.  Lessee shall pay the Security
Deposit in cash into Lessor’s bank account in accordance with the provisions of
Appendix 2B, Section 2.


 


4.2.                              Nature of
Security Deposit.  Except as
otherwise expressly provided in this Lease, the Security Deposit shall be
non-refundable.  The Security Deposit shall be the sole,
absolute and unconditional property of Lessor, may be freely commingled by
Lessor with its general funds and dealt with by Lessor in such manner as Lessor
may see fit.  If and to the extent that,
under applicable law in any relevant jurisdiction, the Security Deposit is considered
to be the property of Lessee, the Security Deposit shall be held by Lessor as
security for the full, timely and faithful performance by Lessee of the
Obligations and Lessee hereby assigns and charges in favor of Lessor, and
hereby grants to Lessor a first priority security interest in, the Security
Deposit to secure such payment and such performance, and in such circumstances
Lessee shall not create or permit to exist any Lien in or otherwise dispose of
the Security Deposit.  Lessee
shall, from time to time, execute and file with the appropriate Governmental
Authorities any and all documents necessary or reasonably requested by Lessor
to evidence and perfect such security interest in favor of Lessor with respect
to the Security Deposit.


 


4.3.                              Application
of Security Deposit.  If an
Event of Default has occurred and is continuing hereunder, in addition to all
other rights Lessor has under this Lease or applicable Law, Lessor may set-off against, use, apply or
retain all or any part of the Security Deposit in full or partial payment of
amounts due and payable by Lessee or any Affiliate of Lessee, as applicable,
under any Operative Document and to compensate Lessor for any expense it may
incur as a result of, or to compensate Lessor for any loss suffered as a
consequence of, the occurrence of such Event of Default, or to apply
toward losses or expenses Lessor may suffer or incur as a result of the
occurrence of an Event of Default.


 


4.4.                              [Reserved.]


 


4.5.                              Repayment of
Security Deposit.  Provided no
Default or Event of Default has occurred and is continuing, the Security
Deposit, less any reasonable  costs incurred
by Lessor, or costs incurred by Lessor on behalf of Lessee for which Lessee or
any Affiliate of Lessee, as applicable, is responsible hereunder in connection
with the termination or cancellation of this Lease or return of the Aircraft,
shall be paid over to Lessee promptly after (i) the Termination Date, (ii) the
date of termination of this Lease as set forth in Section 8.5, or (iii) the
date of termination of this Lease as a result of Lessor’s failure or inability
to tender the Aircraft for delivery due to a breach of Lessor’s obligations
hereunder or due to the cancellation or termination of the Purchase Agreement,
and, in each case, the satisfaction by Lessee, in full, of its Obligations
(including any Obligations to pay Supplemental Rent specified in Section 22.3(c) and
to correct discrepancies identified in the Return Acceptance Certificate, but
excluding those other Obligations expressly provided herein to survive the
Termination Date and which are not due for performance on or as of such date).


 






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5.                                      PAYMENTS


 


5.1.                              Lessor’s
Account.  All payments of
Rent, Security Deposit and in respect of Maintenance Reserves shall be made by
Lessee to Lessor’s bank account identified in Appendix 2B, Section 3 or to
such other account designated in writing by Lessor.  Lessee shall, together with such payment,
identify the source of such payment and refer to the make, model and
Manufacturer’s serial number of the Aircraft.


 


5.2.                              Payments on Non-Business Days. 
When any payment under any Operative Document would otherwise be due to
Lessor on a day that is not a Business Day, the due date for payment shall be
the preceding Business Day.


 


5.3.                              Timing of Payments. 
Payments due under this Lease shall be made by Lessee for credit to
Lessor not later than 3:00 P.M. New York, New York time on the due date.


 


5.4.                              Late Payment. 
If Lessee fails to pay to Lessor any sum on its due date for payment
under this Lease or any other Operative Document, including any payment of
Supplemental Rent, Lessee shall pay to Lessor on demand interest on such sum
from the due date up to the date of actual payment (including non-payment
following the issuance of a judgment) at the Past Due Rate.


 


5.5.                              Calculation
of Interest and Prorating of other Payments.


 


(a)                                  All interest payable under this
Lease or any other Operative Document shall accrue from day to day and be
calculated on the basis of actual days elapsed and a 360 day year.


 


(b)                                 All payments of a monthly nature
under this Lease and any other Operative Document, including, but not limited
to payments of Basic Rent and in respect of Maintenance Reserves, that accrue
on a monthly basis and for which the payment due is for less than a complete
month shall be pro rated on a daily basis based on a month consisting of
thirty (30) days.


 


5.6.                              Payments in
United States Dollars.  All
amounts to be paid hereunder shall be paid in Dollars, in immediately available
funds.  The specification of Dollars in
this transaction is of the essence and Dollars shall be the currency of account
in any and all events.  The obligations
of Lessee hereunder shall not be discharged by an amount paid in another
currency, whether pursuant to a judgment or otherwise, to the extent that the
amount so paid on prompt conversion to Dollars and transfer to Lessor at Lessor’s
account under normal banking procedures does not yield the amount of Dollars
owing to Lessor.  If Lessor receives an
amount in respect of Lessee’s liability under this Lease, or if such liability
is converted into a claim, proof, judgment or order, in a currency other than
Dollars, Lessee will indemnify Lessor (on an After-Tax Basis if such Lessee
liability is payable on an After-Tax Basis) as an independent obligation
against any loss arising out of or as a result of such receipt or conversion.  If the amount received by Lessor, when
converted into Dollars (at the market rate at which Lessor is able on the
relevant date to purchase Dollars in New York with that other currency) is less
than the amount owed in Dollars Lessee will, forthwith on demand, pay to Lessor
(on an After-Tax Basis if such Lessee liability is payable on an After-Tax
Basis) an amount in Dollars equal to the deficit.  In addition, Lessee waives any right it may
have in any jurisdiction to pay any amount due or to become due hereunder in a
currency other than Dollars.


 


5.7.                              Retention of
Certain Payments.  Any amount referred to in any
Operative Document which is payable to or retainable by Lessee shall not be
paid to or retained by Lessee at any time when a Default or Event of Default
shall have occurred and be continuing, but instead such amount shall be paid to
or held by Lessor as security for Lessee’s Obligations to be held and applied
in 


 






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5

















 


accordance with the provisions of this Lease.  At such time as there shall not be continuing
any Default or Event of Default, such amount shall be paid to Lessee to the
extent not applied in accordance with the preceding sentence.  Where Lessor would, but for this Section 5.7
or any similar provision in any Operative Document, be obliged to make any
payment to Lessee pursuant to any Operative Document, Lessor may elect to make
such payment but shall be entitled to deduct or withhold from such payment any
amount then due and payable but unpaid by Lessee under or in respect of Lessee’s
Obligations.


 


5.8.                              Application
of Payments.  Following notice
to Lessee of any shortfall and an opportunity to cure the same within one (1) Business,
Day, Lessor may apply any
payment received from Lessee under any Operative Document which is less than
the full amount then due and owing to Lessor in respect of Lessee’s Obligations
in such proportions, order and manner as Lessor may, in its absolute
discretion, determine, notwithstanding any designation or instruction for
application that may have been made by Lessee.


 






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6.                                      AIRCRAFT
SPECIFICATION; LESSEE INVOLVEMENT WITH SELLER


 


6.1.                              Aircraft
Specification.  The Aircraft
shall be delivered to Lessee by Lessor on the Delivery Date in the configuration
set forth in the Detail Specification.


 


(a)                                  Following
execution of this Lease, Lessee may from time to time prior to Delivery request
Agreed Options be incorporated into the Aircraft.  Any Agreed Options are subject to Seller’s
and, if applicable, any BFE vendor’s lead-time, engineering and manufacturing
requirements and shall not cause a delay to the Scheduled Delivery Date.  All BFE selected by Lessee for installation
on the Aircraft shall first be approved by Lessor and must be from Seller’s
approved BFE vendors unless otherwise consented to by Lessor and Seller and
provided the same is in compliance with Seller’s lead-time, engineering and
manufacturing requirements and shall not cause a delay to the Scheduled
Delivery Date.  Lessee shall pay for the
costs associated with any such Agreed Options pursuant to Article 3 and
Appendix 2B, Section 1.


 


(b)                                 A
summary listing of all such Agreed Options shall be attached to the Acceptance
Certificate at Delivery.


 


6.2.                              Lessee
Involvement with Seller.


 


(a)                                  Lessee’s Inspection of Aircraft.  During the course of manufacture and final
assembly of the Aircraft and at Delivery, Lessee shall, at its own cost, risk
and expense, have its own representative present to inspect the Aircraft at the
Seller’s premises and to ensure its conformity with the Detail Specification
and the requirements of this Lease. 
Lessee shall participate in all ground inspections and
demonstration/acceptance flights conducted by or on behalf of Lessor with
respect to the delivery of the Aircraft to Lessor.  If Lessee’s inspections reveal that the
Aircraft does not comply with the Detail Specification, Lessor will (for its
own behalf and at Lessee’s request) promptly cause the Seller to correct any
such defects and make the Aircraft available for re-inspection to Lessee.  Lessee acknowledges that in accepting the
Aircraft it is relying on its own inspection and knowledge of the Aircraft in
determining whether it conforms with the Detail Specification and meets the
requirements of this Lease and specifically disclaims any reliance upon any
representation or assurance by any Indemnitee or any representative or agent
thereof in making such determination. Lessee further acknowledges that any
assumption that Lessor will cure any nonconformity of the Aircraft, discovered,
difficult to discover, or undiscovered, is not reasonable unless both (x) the
nonconformity or possibility of nonconformity and (y) Lessor’s agreement
to cure or cause the cure of such nonconformity are expressed in a written
instrument signed by Lessor and Lessee delivered at or before the execution and
delivery of the Acceptance Certificate and Lease Supplement; provided, however,
Lessor shall use its best efforts to cause Seller, at the request of Lessee, to
cure such nonconformity.  Except for any express commitment by Lessor to cure
or cause the cure of any nonconformity evidenced by a written instrument of the
type described in (y) above, no Indemnitee will be liable for any failure of the Aircraft to conform with the
requirements of this Lease at the time of acceptance of the Aircraft by Lessee.


 


(b)                                 Participation Agreement. 
Lessee’s rights under the preceding clause (a) shall be exercised
pursuant to the terms of the Participation Agreement to be entered into as of
the date of this Lease.


 


(c)                                  Compliance.  Lessee’s
representative designated under this Section 6.2 shall comply with Seller’s
occupational health and safety and security requirements as the same are
advised by Lessor or any party acting by or through Lessor and shall not
unreasonably 


 






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interfere with Seller’s or Lessor’s
performance of their respective obligations in connection with the manufacture
and delivery of the Aircraft while at Seller’s premises.


 






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7.                                      CONDITIONS
PRECEDENT TO DELIVERY


 


7.1.                              Conditions
Precedent to Lessor’s Performance. 
Lessor’s obligation to deliver and lease the Aircraft to Lessee
hereunder shall be subject to the following conditions precedent being complied
with to Lessor’s satisfaction or being waived by Lessor in its discretion:


 


(a)                                  the
Aircraft being in compliance with the Detail Specification and otherwise in the
condition required for Delivery under this Lease;


 


(b)                                 no
Event of Loss having occurred with respect to the Aircraft;


 


(c)                                  no
Default or Event of Default having occurred and be continuing;


 


(d)                                 the
receipt by Lessor of each item identified in Appendix 6 by the date required
for such item appearing therein; and


 


(e)                                  Seller
having tendered the Aircraft for purchase by Lessor under the Purchase
Agreement in accordance with the Detail Specification and otherwise in the
condition required for delivery thereunder.


 


In the event of a disagreement between Lessor and Lessee as to whether
the Aircraft is in compliance with the Detail Specification and otherwise in
the condition required for Delivery under this Lease solely as a result of a
disagreement between Seller and Lessor as to whether the Aircraft is in
compliance with the Detail Specification under the Purchase Agreement, Lessor
and Lessee agree to promptly and reasonably cooperate with one another in good
faith to resolve such disagreement. 
Lessee acknowledges that there may be minor discrepancies from the
Detail Specification and that pursuant to the Purchase Agreement, Lessor may be
required to accept delivery of the Aircraft under such circumstances.  Lessee acknowledges that it will act promptly
and reasonably to consider such discrepancies and to determine whether such
discrepancies must be resolved prior to a Delivery or whether such
discrepancies may be resolved after Delivery (at no cost or expense to Lessee).


 


7.2.                              Conditions
Precedent to Lessee’s Performance Lessee’s obligation to lease the
Aircraft from Lessor hereunder shall be subject to the following conditions
precedent being complied with to Lessee’s satisfaction or being waived by
Lessee in its discretion.


 


Subject to compliance by Lessee with the
conditions precedent specified in this Section 7, Lessee shall have
received the following:


 


(a)                                  executed
copies of the Assignment of Warranties (Airframe), Consent to Assignment of
Warranties (Airframe), Assignment of Warranties and Product Support (Engines),
and the Consent to Assignment of Warranties and Product Support (Engines), each
substantially in form appearing in Appendix 8 attached hereto;


 


(b)                                 a
certificate from Lessor confirming that the representations and warranties
contained in Article 10.1 hereof are true and accurate on and as of such
date as though made on and as such date (except to the extent that such
representations and warranties relate solely to an earlier date);


 


(c)                                  a
copy of this Lease, the Participation Agreement and the Lease Supplement, each
duly executed by Lessor;


 


(d)                                 a
receipt for the Security Deposit; and


 






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(e)                                  the
Aircraft (i) shall be painted in Lessee’s livery, subject to (x) Lessee
providing all paint specifications, schematics and/or all other items required
by Seller with respect to such painting and (y) in the time period
required by Seller and (ii) shall be in compliance with the Detail
Specification (except as otherwise agreed to by and between the Lessor and
Lessee in writing pursuant to the Exceptions Letter attached to the Acceptance
Certificate) and otherwise in the condition required for Delivery under this
Lease.


 






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8.                                      DELIVERY;
TERMINATION FOR DELAY; EVENT OF LOSS PRIOR TO DELIVERY; RISK OF LOSS FOLLOWING
DELIVERY


 


8.1.                              Delivery
Location and Timing.  Lessor
shall deliver the Aircraft in the condition required by this Lease to Lessee
and Lessee shall accept the Aircraft under this Lease on the Scheduled Delivery
Date at the Delivery Location.  Delivery of the Aircraft to Lessee
under this Lease shall occur immediately upon delivery of the Aircraft to
Lessor by the Seller, whereupon the Lease Term shall commence. Lessor
will promptly notify Lessee from time to time as Lessor is notified by the
Seller of when the exact Scheduled Delivery Date is expected to occur, and in
any event, Lessor shall deliver to Lessee any notices it receives from Seller
within one (1) Business Day of the date Lessor receives such notices from
Seller of the date of the exact Scheduled Delivery Date, and shall promptly
advise Lessee if such Scheduled Delivery Date is required to be delayed (and,
if a delay is required, Lessor shall advise Lessee of the revised Scheduled
Delivery Date and shall keep Lessee reasonably fully advised of any
developments in respect thereof).


 


8.2.                              Delivery Subject to Seller Delivery. 
Delivery of the Aircraft is subject to and expressly conditioned
upon delivery of the Aircraft by Seller to Lessor.  Lessor
shall not be liable or responsible to Lessee for and Lessee hereby expressly
waives any right to any Claims arising or the exercise of any remedies from or
in connection with any delay by Seller in the delivery of, or failure to
deliver, the Aircraft to Lessee under this Lease, and Lessee shall not be
released from its Obligation to take delivery of the Aircraft under this Lease
as a result of any such delay except, in each case, in accordance with Section 8.3;
provided that the foregoing release and waiver by Lessee shall not apply with
respect to any Claims solely and directly attributable to (i) Lessor’s
wilful misconduct or gross negligence, (ii) in the event Delivery is
cancelled due to Lessor’s failure to comply with the terms of the Purchase
Agreement, or (iii) in the event Delivery does not occur due to Lessor’s
failure to comply with the terms of this Lease; provided however that in each
case above, Lessee’s liability for such Claims shall be governed by Section 10.3
(e).


 


8.3.                              Termination for Delay. 
If (w) the Scheduled Delivery Date is scheduled or rescheduled to a
date that will cause Delivery to be delayed after the Outside Delivery
Date, or (x) Lessor
notifies Lessee that Lessor has received written notice from Seller that
a delay is anticipated by Seller that will cause Delivery to be delayed to a
date after the Outside Delivery Date, or (y) the Outside Delivery Date has occurred and the Aircraft has
not been delivered to Lessee (irrespective of whether Lessor’s performance is
required under Section 7.1(a) or 7.1(e) of this Agreement) , or (z) Lessor
notifies Lessee that  the Purchase
Agreement has been terminated or cancelled then by written notice given
within fifteen (15) days after the first to occur of (i) Lessee’s receipt
of such Lessor notice or (ii) the Outside Delivery Date, either party may
by written notice to the other terminate this Lease and this Lease will
terminate on the date of receipt of such notice by the non-notifying
party.  In the event of such termination,
neither party will have any further liability to the other party except that
Lessor will return to Lessee the Security Deposit in accordance with Section 4.5
(but without any deduction) and shall pay the Airbus Damages (as defined and in
accordance with Section 8.9 below) to Lessee which shall be Lessee’s sole
and exclusive remedy for a termination due to a delay pursuant to this Section 8.3.  If such termination notice is not given within such fifteen
(15) day period, each of Lessor and Lessee shall have waived its right to
terminate this Lease for delay under this Section 8.3 (but in the case of
Lessee, not its right to receive the Airbus Damages) and, subject to Lessor’s
agreement with Seller to a revised Scheduled Delivery Date (which shall be
binding upon Lessee), this Lease shall remain in full force and effect, the
Aircraft shall be delivered to Lessee in accordance with the terms of this
Lease on the revised Scheduled Delivery Date and any further delay not occasioned by the fault or
negligence of Lessor shall be deemed an Excusable Delay.  Lessor agrees to promptly notify Lessee of
the events referred to in sub-clauses (x) and (z) of this Section 8.3.  After a termination of this Lease pursuant to
this Section 8.3, in the event Lessor renegotiates the Purchase Agreement
with Seller such that Lessor once again has the opportunity to take delivery of
the Aircraft, Lessor agrees to give written notice to Lessee that the Aircraft
is once again available for lease and 


 






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Lessee will provide written
notice within fifteen (15) Business Days of Lessor’s notice as to whether it
desires to lease the Aircraft; provided that any such lease of the Aircraft
would be in accordance with terms and conditions to be mutually agreed to by
and between Lessor and Lessee.


 


8.4.                              Seller’s
Right to Terminate.  Lessee’s
rights under Section 8.3 are subject and subordinate to any rights that
Seller may have under the Purchase Agreement with Lessor in connection with a
delay in delivery of the Aircraft to Lessor that occurs or is anticipated to
occur after the Outside Delivery Date. 
If Seller exercises any right it may have to terminate Lessor’s right to
purchase the Aircraft on account of any such delay, Lessor shall promptly
advise Lessee of such termination (and in any event within two (2) Business
Days of such termination) and this Lease shall automatically terminate and
Lessor will return to Lessee the Security Deposit in accordance with Section 4.5
(without deduction of any costs or expenses).


 


8.5.                              Event of
Loss to Aircraft Prior to Delivery. 
If an Event of Loss with respect to the Aircraft occurs prior to
Delivery, Lessor will notify Lessee promptly following receipt of notice from
the Seller and this Lease shall automatically terminate whereupon neither party
will have any further liability to the other except that Lessor will return to Lessee
the Security Deposit in accordance with Section 4.5 (without deduction of
any costs or expenses).


 


8.6.                              Lessee
Acceptance of Aircraft.  If Lessee
fails to (x) comply with the conditions contained in this Lease so as to
allow Delivery to take place immediately following delivery of the Aircraft by
Seller to Lessor or (y) take delivery of the Aircraft when properly
tendered for delivery by Lessor in the condition required under this Lease,
Lessee will be liable for and shall indemnify Lessor for all reasonable costs
and expenses incurred by Lessor as a result thereof including (but without
limitation) any payments (other than the purchase price) which Lessor becomes
obligated to make to Seller.  For the
avoidance of doubt, Lessor shall use commercially reasonable efforts to
mitigate such costs and expenses.


 


8.7.                              Risk of Loss to Aircraft
following Delivery.  Upon Delivery, risk of loss or damage
to the Aircraft shall pass to Lessee for the Lease Term.


 


8.8.                              Waiver of Remedies
for Delay in Delivery.  Lessor shall
not be liable to Lessee for any delay or failure in Delivery to Lessee which is
an Excusable Delay.  Pursuant to Section 10.3,
Lessee’s only rights or remedies for a delay in delivery, or anticipated delay
in delivery, of the Aircraft not caused or occasioned by an act or failure to
act by Lessor as provided for in Section 8.2 (i), (ii) or (iii) above,
are those rights and remedies provided for in this Article 8 and Section 10.3.


 


8.9.                              Seller
Compensation for Delay.   
Notwithstanding the foregoing Section 8.8, if Lessor receives
compensation from the Seller in respect of a delay in delivery of the Aircraft
under the Purchase Agreement with the Seller, Lessor will pay over to Lessee in
cash at Delivery (or, at Lessor’s option, as a credit against Lessee’s first
payment of Basic Rent due at Delivery) or on the Outside Delivery Date, if this
Lease is terminated, twenty-five percent (25%) of any cash compensation
actually received by Lessor or the value of any monetary credits actually
received by Lessor from the Seller, if any, in respect of such delay (the “Airbus Damages”).  The
foregoing agreement by Lessor is not nor shall it be deemed to be the
assumption by Lessor of any direct obligation to Lessee to pay any compensation
to Lessee on account of any such delay, but merely an agreement by Lessor to
pay over to (or credit, as applicable) Lessee (or to cause the same to be paid
or credited) any monies (or the value in cash of any monetary credits) actually
received by Lessor, if any are received, from the Seller with respect to any
such delay.


 






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9.                                      LESSEE’S
REPRESENTATIONS, WARRANTIES AND COVENANTS


 


9.1.                              Lessee’s Representations
and Warranties.  Lessee represents and warrants to Lessor
that:


 


(a)                                  Lessee is a company duly organized
and validly existing under the laws of its State of Organization and has the
corporate power and authority to carry on its business as it is being
conducted.


 


(b)                                 Lessee has the corporate power to
enter into and perform, and has taken all necessary corporate action to
authorize the entry into, performance and delivery of each Operative Document
and upon execution by the other parties thereto the Operative Documents will
constitute the valid and legally binding obligations of Lessee, enforceable
against Lessee in accordance with their respective terms, except where the
enforceability thereof may be limited by applicable bankruptcy, insolvency or
other laws affecting creditors’ rights generally.


 


(c)                                  The execution and delivery of, the
performance of its Obligations under, and compliance by Lessee with the
provisions of, the Operative Documents will not (i) contravene any
existing applicable law of its State of Organization or the State of
Registration (or federal and other divisional governmental laws applicable
therein), (ii) conflict with, or result in any breach of any of the terms
of, or constitute a default under, any agreement or other instrument to which
Lessee is a party or is subject or by which it or any of its property is bound,
(iii) contravene or conflict with any provision of its constitutional
and/or organizational documents or (iv) result in the creation or
imposition of, or oblige it to create, any Lien over its undertaking or any of
its assets, rights or revenues.


 


(d)                                 Lessee is not in payment default or
other material breach of any material agreement to which it is a party or by
which it may be bound and no litigation, arbitration or administrative
proceeding is taking place or, to the best of its knowledge, pending or
threatened against Lessee which could have a material adverse effect on its
ability to perform its Obligations.


 


(e)                                  The audited financial statements of
Holdings for each financial year are certified by independent auditors and as
delivered to Lessor have been prepared in accordance with GAAP which have been
consistently applied and fairly present the financial position of Holdings and
its consolidated subsidiaries (including Lessee) as at such date and the
results of the operations of Lessee for the financial year ended on such date
and, as at such date, Holdings did not have any significant liabilities
(contingent or otherwise) or any unrealized or anticipated losses which are not
disclosed by, or reserved against in, such financial statements and there has
been no material adverse change in the business or financial condition of
Holdings or Lessee since publication of such financial statements.


 


(f)                                    Other than making a filing in
respect of this Lease in the State of Registration with the Aeronautics
Authority and with the IR, it is not necessary, in order to ensure the
legality, validity, enforceability or admissibility in evidence of any Operative
Document, that such Operative Document or any other instrument be notarised,
filed, recorded, registered or enrolled in any court, public office or
elsewhere or that any stamp, registration or similar tax or charge be paid in
relation to any of the Operative Documents.


 


(g)                                 Lessee has received and complied
with or will, prior to the Delivery Date, receive and comply with, each
authorization required for the valid authorization, execution, delivery and
performance of this Lease and each other Operative Document, the validity and 


 






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13

















 


enforceability
hereof and thereof and the compliance, satisfaction or performance by Lessee
with or of all monetary and other Obligations hereunder and thereunder and all
such authorizations are, or prior to the Delivery Date will be, valid and in
full force and effect.


 


(h)                                 The choice by Lessee of New York law
to govern the Operative Documents and the submission by Lessee to the
jurisdiction of the New York courts is valid and binding on Lessee.


 


(i)                                     In any proceedings taken in any
jurisdiction in relation to any of the Operative Documents, Lessee will not be
entitled to claim for itself or any of its assets immunity from suit,
execution, attachment or other legal process.


 


(j)                                     Lessee has paid or caused to be paid
all fees or charges assessed and due against it (or against any aircraft owned
by or leased to or operated by it) by any airport or air navigation authority
assessing landing or navigation fees or charges in respect of the Aircraft or
any other aircraft owned by or leased to or operated by it.


 


(k)                                  Holdings’ Annual Report on Form 10-K
for 2007 filed with the SEC and each of Holdings’ Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K subsequently filed by Holdings with the
SEC, as of the date it was filed with the SEC (or, if such report has been
amended, in each case as amended through the Delivery Date), did not contain
any untrue statement of material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.


 


(l)                                     No Default or Event of Default has
occurred and is continuing.


 


(m)                               Lessee is solvent and able to pay
its debts as the same fall due and the transactions contemplated by the
Operative Documents are of commercial benefit to it and in its commercial
interests.


 


(n)                                 Lessee
has duly filed all material Tax returns that it is required by applicable Laws
to file, has duly paid all material Taxes stated to be due and payable in such
Tax returns and has duly paid all Taxes stated to be due in any communication
issued by any taxing authority other than Taxes (i) which are being
contested in good faith by appropriate proceedings in accordance with
applicable Law, (ii) for which adequate reserves are maintained in
accordance with GAAP, and (iii) the contest of which does not involve any
risk of criminal penalty or any reasonable possibility of any sale, forfeiture,
confiscation, seizure or loss of, or the imposition of a Lien on, any Item of
Equipment or any interest therein.


 


9.2.                              Application of
Representations and Warranties; Survival.  Each
representation and warranty set out in Section 9.1 shall be deemed to be
repeated on the Delivery Date by reference to the facts and circumstances
existing on such date and shall survive the execution hereof and the delivery
of the Aircraft.


 


9.3.                              Lessee’s General Covenants.  Lessee covenants to Lessor that it will:


 


(a)                                  preserve
and maintain (i) its corporate existence and (ii) all of its rights,
privileges and franchises in every jurisdiction in which the character of the
property owned or the nature of the business transacted by it makes licensing
or qualification necessary;


 


(b)                                 pay
or cause to be paid (i) all Taxes required by applicable Laws to be paid
by it (whether such Taxes are imposed upon it or upon its income and profits or
upon any property belonging to it or otherwise) prior to the date on which any
penalty accrues, except 


 






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Taxes which it is contesting in good faith by
appropriate proceedings provided that such contest does not involve any risk of
criminal penalty or any reasonable possibility of sale, forfeiture,
confiscation, seizure or loss of, or the imposition of any Lien on, any Item of
Equipment or any interest therein, and (ii) all other lawful claims which,
if not paid, are reasonably likely to result in the imposition of a Lien upon
the Aircraft or any part thereof;


 


(c)                                  remain
duly qualified to operate the Aircraft under applicable Law;


 


(d)                                 maintain
in full force and effect all governmental consents, licenses, authorizations,
approvals, declarations, filings and registrations obtained or effected in
connection with this Lease and every document or instrument contemplated hereby
and to take all such additional action as may be necessary in connection
herewith or therewith.  Lessee further
undertakes to timely obtain or effect any new or additional governmental
consents, licenses, authorizations, approvals, declarations, filings or
registrations as may become necessary for Lessee’s performance of its
Obligations;


 


(e)                                  not
merge or consolidate with or into or be acquired by any Person or sell, lease
or otherwise dispose of all or substantially all of its properties, without the
prior written consent of Lessor, which consent will not be unreasonably
withheld;


 


(f)                                    notify
Lessor of any change to Lessee’s registered office for service of process or
any change in Lessee’s jurisdiction of incorporation not more than thirty (30)
days following such change;


 


(g)                                 not
(i) except as otherwise permitted in this Lease, voluntarily suspend its
certificated operation of the Aircraft or its fleet of Airbus A330’s or (ii) permit
to be revoked, canceled or otherwise terminated, whether by act or omission,
all or substantially all of the franchises, concessions, permits, rights or
privileges required for the conduct of business and operations of Lessee or the
free and continued use and exercise thereof;


 


(h)                                 pay
promptly when due all navigation and en-route charges and all other charges
payable by Lessee for the use of or services provided at any airport, whether
in respect of the Aircraft or any other aircraft in Lessee’s fleet;


 


(i)                                     not
represent or hold out Lessor, any Financing Party or any Affiliate of the
foregoing as carrying goods or passengers on the Aircraft or being in any way
connected to operation of the Aircraft; and


 


(j)                                     If any items delivered to Lessor by
Lessee in connection with this Lease are required by this Lease to have a
validity and effectiveness for the Lease Term, but have or are of a duration or
effectiveness that is for less than the Lease Term when originally delivered,
cause replacements, extensions or supplements thereof to be timely delivered to
Lessor during the Lease Term to ensure that Lessor maintains at all times
during the Lease Term the benefits initially afforded by such items and the
continued effectiveness and validity of the same for the Lease Term.


 






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10.                               LESSOR’S
REPRESENTATIONS, WARRANTIES AND COVENANTS; DISCLAIMERS


 


10.1.                        General Representations and
Warranties of Lessor.  Lessor represents and warrants to Lessee
that:


 


(a)                                  Lessor is a company duly organized
and validly existing under the laws of its State of Organization and has the
corporate power and authority to carry on its business as it is being
conducted;


 


(b)                                 Lessor has the corporate power to
enter into and perform, and has taken all necessary corporate action to
authorize the entry into, performance and delivery of each Operative Document
to which it is a party and upon execution by the other parties thereto the
Operative Documents to which it is a party will constitute its valid and
legally binding and enforceable obligations;


 


(c)                                  the execution and delivery of, the
performance of its obligations under, and compliance by Lessor with the
provisions of, the Operative Documents to which it is a party will not (i) contravene
any existing applicable law of its State of Organization (or federal and other
divisional governmental laws applicable therein), (ii) conflict with, or
result in any breach of any of the terms of, or constitute a default under, any
agreement or other instrument to which Lessor is a party or is subject or by
which it or any of its property is bound, or (iii) contravene or conflict
with any provision of its constitutional and/or organizational documents;


 


(d)                                 Lessor has received and complied
with or will, prior to the Delivery Date, receive and comply with, each
authorization required for the valid authorization, execution, delivery and
performance of this Lease and each other Operative Document, the validity and
enforceability hereof and thereof and the compliance, satisfaction or
performance by Lessor with or of all monetary and other Obligations hereunder
and thereunder and all such authorizations are, or prior to the Delivery Date
will be, valid and in full force and effect;


 


(e)                                  on
and as of Delivery, Lessor shall have the right to lease the Aircraft to
Lessee; and


 


(f)                                    Lessor
is a Citizen of the United States.


 


10.2.                        Covenant of Quiet
Enjoyment.


 


(a)                                  Lessor
covenants that so long as an Event of Default shall not have occurred and be
continuing, Lessee shall quietly enjoy the Aircraft without interference by
Lessor, any Financing Party or by any Person lawfully claiming by or through
Lessor.  The exercise by Lessor of its rights under any
Operative Document shall not constitute a breach of this Section 10.2.


 


(b)                                 Lessor shall procure that any
Financing Party granted a Lien on the Aircraft shall give an undertaking to
Lessee on terms substantially in the form set out in Appendix 8.


 


10.3.                        Disclaimer; Waiver of
Warranties; Waiver of Remedies.


 


(a)                                  LESSEE
AGREES THAT IT ACCEPTS DELIVERY OF THE AIRCRAFT AND EACH ITEM OF EQUIPMENT “AS-IS,
WHERE-IS”.  LESSEE ACKNOWLEDGES AND
AGREES THAT NO INDEMNITEE HAS, OR SHALL BE DEEMED TO HAVE 


 






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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, FOR ITSELF AND FOR EACH
INDEMNITEE, HEREBY SPECIFICALLY DISCLAIMS, ANY REPRESENTATION OR WARRANTY,
EXPRESS OR IMPLIED, AS TO THE TITLE (EXCEPT AS HEREIN BELOW PROVIDED),
AIRWORTHINESS, 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 CAPABLE OF DISCOVERY, 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.  NO INDEMNITEE SHALL HAVE ANY RESPONSIBILITY
OR LIABILITY 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 ITEM OF EQUIPMENT 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
RISKS RELATING THERETO, (iii) THE DELIVERY OR DELAY IN DELIVERY (WHERE ANY
SUCH DELAY IS NOT DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LESSOR)
OR EXCUSABLE DELAY, OR (iv) OPERATION, SERVICING, MAINTENANCE, REPAIR,
IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT OR ANY ITEM OF EQUIPMENT.  THE WARRANTIES AND REPRESENTATIONS SET FORTH
IN THIS SECTION 10.3 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND NO INDEMNITEE
SHALL BE DEEMED TO HAVE MADE ANY OTHER WARRANTIES.


 


(b)                                 LESSEE
ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE AND
ANY OPERATIVE DOCUMENTS IS BASED UPON INFORMATION SUPPLIED BY THE SELLER AND,
AS APPLICABLE, EACH MANUFACTURER.  LESSEE
REPRESENTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE
AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE.  LESSEE ACKNOWLEDGES THAT THE RENT AND OTHER
AMOUNTS HAVE BEEN CALCULATED HAVING DUE REGARD FOR THE PROVISIONS OF THIS SECTION 10.3.


 


(c)                                  IN
CONSIDERATION OF (i)  LESSEE’S RIGHTS HEREUNDER TO INSPECT THE
AIRCRAFT AND (ii) LESSOR’S ASSIGNMENT TO LESSEE OF ANY EXISTING AND
ASSIGNABLE WARRANTIES OF SELLER AND ANY MANUFACTURER, LESSEE HEREBY AGREES THAT
ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND DELIVERY OF
THE ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF
DESCRIPTION, ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE
FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL
RIGHTS IT MAY HAVE UNDER 


 






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APPLICABLE LAW.  EVEN IF AT ANY TIME THE FAILURE OF THE
AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE
AND UTILITY OF THE AIRCRAFT AND EITHER (1) LESSEE ACCEPTED THE AIRCRAFT
BASED ON A REASONABLE ASSUMPTION THAT THE NONCONFORMITY WOULD BE CURED AND IT
WAS NOT CURED WITHIN THE TIME PROVIDED OR, IF NOT PROVIDED, WITHIN A REASONABLE
PERIOD OF TIME OR (2) LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE
NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED
EITHER BY AN INDEMNITEE’S ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY
DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO ANY INDEMNITEE FOR
DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO
SUCH DESCRIPTION.


 


(d)                                 DELIVERY
BY LESSEE TO LESSOR OF THE ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS
BETWEEN LESSOR AND LESSEE THAT LESSEE HAS EXAMINED AND INVESTIGATED THE
AIRCRAFT, INCLUDING THE ENGINES AND THE AIRCRAFT DOCUMENTS AND THAT EACH IS IN
THE CONDITION REQUIRED HEREUNDER AND WITHOUT DEFECT, EXCEPT AS SPECIFICALLY SET
FORTH IN SUCH CERTIFICATE, (WHETHER OR NOT DISCOVERABLE OR DIFFICULT OF
DISCOVERY AT DELIVERY) AND OTHERWISE IN EVERY WAY SATISFACTORY TO LESSEE.


 


(e)                                  LESSEE
HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHTS
WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME HEREAFTER MAY BE CONFERRED
UPON IT, BY STATUTE OR OTHERWISE, TO SUSPEND ITS PERFORMANCE HEREUNDER OR TO
TERMINATE, CANCEL, QUIT OR SURRENDER THIS LEASE, INCLUDING, WITHOUT LIMITATION,
(X) ON ACCOUNT OF ANY GROUNDS OF INSECURITY WITH RESPECT TO LESSOR’S
PERFORMANCE OF ITS OBLIGATIONS UNDER THIS LEASE AND (Y) ON ACCOUNT OF ANY
REPUDIATION BY LESSOR OF ANY OF ITS OBLIGATIONS UNDER THIS LEASE, EXCEPT IN
ACCORDANCE WITH THE EXPRESS TERMS HEREOF. 
EACH PAYMENT OF RENT MADE BY LESSEE TO LESSOR SHALL BE FINAL AND LESSEE
WILL NOT SEEK TO RECOVER ANY PART OF SUCH PAYMENT FROM LESSOR FOR ANY
REASON WHATSOEVER, EXCEPT FOR NEGLIGENCE OR MANIFEST ERROR IN THE CALCULATION
OF THE AMOUNT OR REMITTANCE OF SUCH PAYMENT. 
LESSEE’S COVENANTS AND PROMISES IN THIS LEASE ARE IRREVOCABLE AND INDEPENDENT
UPON DELIVERY HEREUNDER, AND NONE OF SUCH COVENANTS OR PROMISES IS SUBJECT TO
CANCELLATION, TERMINATION, MODIFICATION, REPUDIATION, EXCUSE, OR SUBSTITUTION
WITHOUT LESSOR’S CONSENT OR THE CONSENT OF SUCH OTHER PERSON TO WHOM THE
COVENANT OR PROMISE RUNS.  LESSEE AGREES
THAT ITS ONLY RIGHT WITH RESPECT TO A DEFAULT BY LESSOR UNDER THIS LEASE IS,
AFTER COMPLYING WITH ITS OBLIGATIONS UNDER THIS LEASE, TO MAKE A CLAIM AGAINST
LESSOR FOR ACTUAL DAMAGES RESULTING DIRECTLY FROM SUCH DEFAULT OR EXCEPT AS
EXPRESSLY PERMITTED UNDER ARTICLE 8 OF THIS LEASE.


 


10.4.                        DISCLAIMER AND WAIVER OF
INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES. 
LESSEE AGREES THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND
HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO
RECOVER, (i) INCIDENTAL, CONSEQUENTIAL, SPECIAL AND PUNITIVE DAMAGES,
AND/OR (ii) DAMAGES IN CONNECTION WITH ANY INTERRUPTION OF SERVICE, LOSS
OF BUSINESS OR ANTICIPATED PROFITS AS A


 






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RESULT OF ANY BREACH OR ALLEGED
BREACH BY LESSOR OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES OF
LESSOR CONTAINED IN THIS LEASE OR ANY OPERATIVE DOCUMENTS, IN EACH CASE OTHER
THAN THE RETURN OF THE SECURITY DEPOSIT PAID BY THE LESSEE AND PAYMENT OF
AIRBUS DAMAGES PAYABLE PURSUANT TO SECTION 8.9.


 


10.5.                        NO DUTY OF
INDEMNITEES TO INSPECT, ETC. 
NO INDEMNITEE SHALL HAVE ANY DUTY OR OBLIGATION TO DETERMINE WHETHER ANY
ITEM OF EQUIPMENT IS REQUIRED TO BE OVERHAULED OR MAINTAINED, OR TO OBSERVE OR
INSPECT THE OVERHAUL OR MAINTENANCE OF ANY ITEM OF EQUIPMENT OR TO CONFIRM OR
VERIFY THE FITNESS OR QUALIFICATION OF LESSEE OR ANY APPROVED MAINTENANCE
ORGANIZATION TO PERFORM ANY MAINTENANCE TO ANY ITEM OF EQUIPMENT AND NO
INDEMNITEE SHALL INCUR ANY LIABILITY OR OBLIGATION IN CONNECTION WITH THE
FOREGOING OR BY REASON OF THE FAILURE OF ANY ITEM TO BE PROPERLY MAINTAINED OR
BY REASON OF ANY INDEMNITEE’S ELECTION TO OBSERVE OR INSPECT OR NOT TO OBSERVE
OR INSPECT ANY MAINTENANCE CHECK OR OTHER MAINTENANCE OF ANY ITEM OF EQUIPMENT
PERFORMED DURING THE LEASE TERM.


 






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11.                               GENERAL
OPERATION OF THE AIRCRAFT


 


11.1.                        General
Operation.  Lessee will:


 


(a)                                  comply
with the Law in any country or jurisdiction which may from time to time be
applicable to the Aircraft and its use, maintenance and operation, including
but not limited to the holding of all certificates, licenses, permits,
authorizations and regulations, and take all  commercially  reasonable steps to ensure that the Aircraft is not used
for any illegal purpose;


 


(b)                                 not
use any Item of Equipment in any manner contrary to:


 


(i)                                     any
Manufacturer’s operating manuals or instructions, or in violation of any
airworthiness certificate or registration relating thereto; or


 


(ii)                                  any
recommendation of the Manufacturer of such Item of Equipment, or regulation of
the Aeronautics Authority or for any purpose for which the Aircraft is not
designed or reasonably suitable;


 


(c)                                  ensure
that all personnel directly or indirectly employed by it in connection with the
operation and maintenance of the Aircraft have the qualifications and hold the
licenses required by the Aeronautics Authority and applicable Law;


 


(d)                                 use
the Aircraft solely in commercial passenger and cargo (provided such cargo is
carried exclusively in the cargo compartments of the Aircraft) operations for
which Lessee is duly authorized by the Aeronautics Authority and under
applicable Law and from a base located within the State of Registration or
Lessee’s State of Organization;


 


(e)                                  not
utilize the Aircraft for purposes of training, qualifying or re-confirming the
status of cockpit personnel except for the benefit of Lessee’s cockpit
personnel, and then only if the use of the Aircraft for such purpose is not
disproportionate to the use for such purpose of other similar model aircraft
within Lessee’s fleet of aircraft; and


 


(f)                                    obtain
and maintain in full force and effect all certificates, licenses, permits and
authorizations required for the making of payments required by, and the
compliance by Lessee with its other Obligations under, this Lease.


 


11.2.                        Insured
Operations.  Lessee will not
use or locate or permit the Aircraft or any Item of Equipment to be used or
located in any manner, for any purpose or at any location which is not covered
by the insurance policies and the scope of coverage Lessee is required to carry
and maintain as set forth in this Lease. 
Lessee will not carry any goods of any description excepted or exempted
from such policies or do any other act or permit to be done anything which
could reasonably be expected to invalidate or limit any such insurance policy
or coverage provided thereunder.


 


11.3.                        Carriage of Goods.  Lessee shall not knowingly, exercising due diligence, use the Aircraft
for the carriage of:


 


(a)                                  whole
animals living or dead except in compliance with I.A.T.A. regulations, except
domestic pet animals carried in a suitable container to prevent the escape of
any liquid and to ensure the welfare of the animal;


 


(b)                                 cargo
to the extent forbidden pursuant to Section 2 (Limitations) of the
I.A.T.A. Dangerous Goods Regulations, as revised, from time to time;


 






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(c)                                  nuclear
fuels or waste, illegal drugs,
or the like or any other goods, materials or items of cargo which are
prohibited by Law or regulation; or


 


(d)                                 any
other cargo which (i) could reasonably be expected to cause damage to the
Aircraft or (ii) the carriage of which might cause damage that would not
be adequately covered by insurance.


 


11.4.                        Operational Expenses. 
Lessee shall pay or procure payment of all expenses incurred in the
operation of the Aircraft during the Lease Term including, without limitation,
expenses of flight crews, cabin personnel, fuel, oil, lubricants, maintenance,
insurance, landing and navigation fees, airport charges, passenger service and
any and all other expenses or claims of any kind or nature incurred during the
Lease Term, arising directly or indirectly in connection with or related to the
use, movement, operation, storage or location of the Aircraft or any Item of
Equipment.  The obligations of Lessee
under this Section 11.4 arising prior to any cancellation, termination or
expiration of the Lease Term shall continue in full force and effect,
notwithstanding such cancellation or termination (whether arising out of an
Event of Default or otherwise) or expiration, and shall be enforceable by
Lessor.


 


11.5.                        Compliance with Laws. 
Lessee will:


 


(a)                                  not
cause or permit the Aircraft to proceed to, or remain at, any location to the
extent then prohibited by a prohibition order or restriction of applicable Law
(or any similar order, regulation or directive) by any Governmental Authority
of the State of Registration or Lessee’s or Lessor’s State of Organization or
any Governmental Authority of the country in which such location is situated;
and


 


(b)                                 not,
to Lessee’s best knowledge after reasonable and customary diligence, use or
permit the use of the Aircraft or any Item of Equipment with, for or on behalf
of any Person:


 


(i)                                     whose
property or interests in property are blocked or subject to blocking pursuant
to Section 1 of Executive Order 13224 of September 24, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)) (as the same is in
effect during the Lease Term);


 


(ii)                                  in
violation of the United States
Bank Secrecy Act, as amended, or any applicable regulations thereunder;


 


(iii)                               contrary to any of the sanctions programs administered by the Office of
Foreign Assets Control of the United States Department of Treasury (“OFAC”), any regulations promulgated
thereunder by OFAC or under any affiliated or successor governmental or
quasi-governmental office, bureau or agency, or any enabling legislation or
executive order relating thereto (ref:
www.ustreas.gov/offices/enforcement/ofac/);


 


(iv)                              on the list of “Specially
Designated Nationals” and “Blocked Persons” or subject to the limitations or
prohibitions under any OFAC regulation or executive order, as the same are
amended from time to time;


 






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(v)                                 who
is the subject of a United
Nations sanction or whose assets have been frozen by enabling legislation of
the same in the State of Registration or Lessee’s State of Organization; or


 


(vi)                              who is the subject of or which use
is contrary to any Laws similar to or consistent with the foregoing clauses (i) through
(v) as the same are enacted in the Lessee’s State of Organization or the
State of Registration;


 


as any
or all of the same are amended or supplemented from time to time, and including
any successor Laws as the same are enacted from time to time.


 


11.6.                        [Reserved.]


 






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12.                               MAINTENANCE,
MODIFICATION AND OPERATION OF THE AIRCRAFT


 


12.1.                        General.  Lessee, at its own expense, shall cause the
Aircraft and each Item of Equipment to be serviced, repaired, overhauled,
tested and maintained:


 


(a)                                  in
accordance with the Maintenance Program and the applicable Manufacturer’s
Repair Manuals including, without limitation, the Manufacturer’s recommended
corrosion prevention and control program for the Aircraft;


 


(b)                                 so
as to keep each such Item in as good operating condition and appearance as when
delivered to Lessee hereunder, ordinary and reasonable wear and tear excepted;


 


(c)                                  in
compliance with all Manufacturers’ service bulletins designated by such
Manufacturer as either (x) an alert service bulletin or (y) a
mandatory service bulletin, either of which by their terms (i) is
applicable to the respective Item of Equipment and (ii) specify compliance
during the Lease Term;


 


(d)                                 in
compliance with all other Manufacturer’s service bulletins which require
compliance in order to maintain the validity of warranties; and


 


(e)                                  in
compliance with all Airworthiness Directives which by the terms of each such AD
require compliance during the Lease Term and which shall be accomplished in
accordance with such AD and without application or utilization of any alternate method of compliance, provided,
however, solely to the extent compliance with any AD issued by the
Certificating Authority (an “EASA AD”)
will cause Lesee to be in violation of FAA Requirements, Lessee shall not be
required to comply with such EASA AD.


 


12.2.                        Accomplishment
of Tasks, Repairs and Related Items. 
Lessee shall cause, at its expense, all Tasks to be accomplished on the
Aircraft as they become due, with no discrimination toward the Aircraft with
respect to any maintenance accomplished on similar model aircraft within Lessee’s
fleet of aircraft.  To the extent that
the Maintenance Program permits certain Tasks to be accomplished on a sampling
basis, Lessee nevertheless shall accomplish on the Aircraft all such Tasks
that, by the terms of such Tasks, are applicable to the Aircraft. Any damage,
defects or corrosion discovered during the Lease Term shall be repaired in
accordance with the applicable Manufacturer’s Repair Manual approved procedures
at the sole expense of Lessee (except to the extent any such expense is
otherwise covered by a Manufacturer warranty, and in such an event Lessee shall
be solely responsible for any expense not covered by any such warranty), and
Lessee shall obtain Required Approval with respect to (i) any repairs, and
(ii) modifications to the Airframe structure, electrical system, Engines,
APU or Landing Gear, accomplished during the Lease Term which have not been
approved by the Manufacturer and the Certificating Authority in addition to any
approval received by Lessee from the Aeronautics Authority with respect to any
such repairs or modifications, provided, in the event Lessee does not obtain
Required Approval at the time any such repair or modification is accomplished,
Lessee shall nevertheless obtain such Required Approval upon the earlier to
occur of (x) an Event of Default having occurred, provided, that if Lessee
cures such Event of Default, then after obtaining each Required Approval that
was previously deferred, Lessee may resume such deferrals in the future,
provided further that, upon any subsequent Event of Default, Lessee shall be
required to obtain all other such Required Approvals that were deferred and
will not be entitled to any further such deferrals, or (y) the Termination
Date.


 


12.3.                        Information
on Maintenance.  Lessee, at
its cost and expense, shall furnish Lessor, at such times during the Lease Term
as Lessor shall reasonably request, copies of records maintained relating to
the Aircraft, with a certificate signed by an officer of Lessee affirming that
all the maintenance work represented by such records was accomplished by an
Approved Maintenance 


 






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Organization and that the
maintenance work represented by such records was performed in compliance with
the terms of this Lease.


 


12.4.                        Aircraft
Documents in English Language. 
Lessee, at its cost and expense, shall maintain all Aircraft Documents
in the English language, including Aircraft Documents required by the
applicable Aeronautics Authority to be maintained in respect of each Item of
Equipment, and promptly furnish to Lessor upon Lessor’s request such
information as may be required to enable Lessor to file any reports required to
be filed with any Governmental Authority because of Lessor’s ownership of the
Aircraft.


 


12.5.                        Originals.  All Aircraft Documents, including records and
documentation of maintenance accomplished on the Aircraft and any Item of
Equipment shall be retained by Lessee until the Termination Date, at which time
all records and Aircraft Documents shall be returned to Lessor in original (not
duplicate) form, except to the extent maintained electronically.  Any such Aircraft Documents and/or other
records and documentation maintained electronically must be maintained in
accordance with an FAA approved electronic record keeping system and upon
redelivery of the Aircraft to Lessor, Lessee shall, at Lessee’s expense,
provide Lessor with (i) a copy of such FAA approval, (ii) digital
(scanned) copies of the original records and (iii) any software necessary
to read and print such electronic documentation.


 


12.6.                        Performance of
Maintenance.  All Maintenance
Checks shall be accomplished only at Approved Maintenance Organizations which
shall be approved by Lessor in writing prior to the commencement of such
Maintenance Check, such approval not to be unreasonably withheld.  All other maintenance on the Aircraft will be
performed by Lessee using personnel that are approved and appropriately
certified by the Aeronautics Authority to perform such maintenance.


 


12.7.                        Alterations,
Modifications and Additions.


 


(a)                                  Required Alterations, Modifications and Additions.  Lessee, at its own cost and expense, shall
make such alterations, modifications and additions to the Aircraft and any
Items of Equipment as may be required from time to time to comply with:


 


(i)                                     all
Manufacturers’ service bulletins designated by such Manufacturer as either (x) an
alert service bulletin or (y) a mandatory service bulletin, either of which
by their terms (1) is applicable to the respective Item of Equipment and (2) specify
compliance during the Lease Term;


 


(ii)                                  Airworthiness
Directives which by the terms of each such AD require compliance during the
Lease Term and which shall be performed in accordance with such AD and
without application or utilization of any
alternate method of compliance; provided, however, that (i) Lessee
shall not be required to comply with any EASA AD until the earlier to occur of (x) an
Event of Default having occurred, provided, that if Lessee cures such Event of
Default, then after obtaining each Required Approval that was previously deferred,
Lessee may resume such deferrals in the future, provided further that, upon any
subsequent Event of Default, Lessee shall be required to obtain all other such
Required Approvals that were deferred and will not be entitled to any such
further deferrals, or (y) the Termination Date, and (ii) solely to
the extent compliance with any EASA AD will cause Lessee to be in violation of
FAA Requirements, Lessee shall not be required to comply with such EASA AD; and


 


(iii)                               all Laws
and regulations of the Aeronautics Authority which require compliance during
the Lease Term.


 






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(b)                                 Discretionary Alterations, Modifications and Additions.


 


(i)                                     Except
as set forth in the preceding clause (a) or the following clause (ii),
Lessee shall not make any alteration, modification or addition to (A) the
Airframe or any galleys, lavatories, avionics, APU or Engines without the prior
written consent of Lessor or (B) any other Item of Equipment unless in
accordance with the requirements of the Maintenance Program and the regulations
of the Certificating Authorities.


 


(ii)                                  Notwithstanding
the provisions of the preceding clause (i), Lessor’s consent shall not be
required for any discretionary alteration, modification or addition that Lessee
wishes to perform to the Aircraft or any Item of Equipment provided that any
such alteration, modification or addition does not require or result in a
modification to the Aircraft structure or electrical wiring system, and is:


 


(A)                              for the
installation of additional or enhanced Items of Equipment (and not in
substitution for the same); or


 


(B)                                is
cosmetic (and non-structural) in nature in order for Lessee to display its
name, logo or other identification or advertising; or


 


(C)                                to the
Aircraft interior configuration that (1) utilizes the existing seat track
system (without modification), (2) does not require the addition to,
removal of or modification of any Aircraft structure, (3) does not impair
the value or utility of the Aircraft or any Item of Equipment or adversely
affect compliance with the type certificate data sheet of the Aircraft, and (4) does
not cause any change in the category or status of the Aircraft as defined by
the Manufacturer.  Notwithstanding anything to the
contrary herein, Lessee may request Lessor’s written consent to return the
Aircraft in such modified configuration at the time of the request of such
modification or subsequent to that and prior to the Termination Date, and such
written consent shall be at Lessor’s sole discretion, and shall be nonrevocable
by Lessor.


 


(c)                                  Removed Items —
Title and Risk of Loss.  Except with respect to any Part that
has been replaced in accordance with the terms of this Article 12, and
where title to such replacement part has transferred to Lessor, title to any
and all Items of Equipment removed from the Aircraft in accordance with this Section 12.7
shall remain with
Lessor and risk of loss or damage to the same shall remain with Lessee during
the Lease Term and Lessee shall keep, store and maintain the same in accordance
with Manufacturer’s Repair Manual requirements and standard industry practice
for return to Lessor on the Termination Date if Lessor elects to have the
Aircraft de-modified in accordance with the following clause (d), and title to
any such Part that has been replaced in accordance with the terms of this Article 12
shall without further act, vest in Lessee, whereupon such Part shall
no longer be deemed a Part hereunder. 
Any Part not replaced by Lessee in accordance with the above shall
remain the property of Lessor.


 


(d)                                 De-Modification of
Aircraft.  At Lessor’s option Lessee
shall, in connection with Return, de-modify and restore the Aircraft to the
condition and configuration it was in prior to the accomplishment of any
alterations, modifications or additions performed in accordance with this Section 12.7,
assuming such condition was in compliance with the terms of this Lease,
notwithstanding the provision of Lessor’s consent under Section 12.7(b)(i),
if 


 






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the same is provided, or otherwise.  Notwithstanding anything to the contrary
herein, Lessee may request Lessor’s written consent to return the Aircraft in
such modified configuration at the time of the request of such modification or
subsequent to that and prior to the Termination Date.  Any such written consent shall be at Lessor’s
sole discretion, and shall be nonrevocable by Lessor.


 


12.8.                        Replacement
of Parts.  Lessee, at its own
cost and expense, shall promptly replace 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.  In addition, in the ordinary course of
maintenance, service, repair, overhaul or testing, Lessee may remove any Part,
whether or not worn out, lost, stolen, destroyed, seized, confiscated, damaged
beyond repair or permanently rendered unfit for use; provided that
Lessee shall as promptly as practicable either reinstall such Part or
replace such Part pursuant to the terms of this Article 12.  Each replacement part prior to installation
in the Aircraft or any Item of Equipment:


 


(a)                                  shall
be free and clear of all Liens;


 


(b)                                 shall
be in as good operating condition and shall have a value, utility, maintenance,
modification and repair status at least equal to the Part replaced,
assuming such replaced Part was in the condition and repair required to be
maintained by the terms hereof;


 


(c)                                  shall
have documentation certifying compliance with all applicable Certificating
Authority or Aeronautics
Authority requirements, including, without limitation, if applicable:


 


(i)                                     a
Certificating Authority Form and, if not indicated on such form, a
teardown report indicating time since Overhaul and a description of work accomplished
with respect to such part by  an
Approved Maintenance Organization;


 


(ii)                                  Overhaul
records;


 


(iii)                               documentation
of modification status and compliance with Airworthiness Directives; and


 


(iv)                              any
other appropriate documentation applicable to the maintenance and repair status
of such part; and


 


(d)                                 shall:


 


(i)                                     have
the same part number (except to the extent the Manufacturer has superseded the
part number of such Part, and in such an event the superseding part number
shall be an acceptable alternate pursuant to the Manufacturer’s Repair Manual
or a Required Approval) and be of the same Manufacturer as the replaced Part,
provided, however, such replacement part may be of a different Manufacturer
solely to the extent that such replacement part:


 


(A)                              is an expendable or
consumable part or is a part that has a line item price of less than One
Thousand Five Hundred Dollars ($1,500) in Base Year Dollars; provided that this
Section 12.8(d)(i)(A) shall not apply to rotable parts; and


 


(B)                                such
part is installed on the Airframe, and not on or in any Engine, Landing Gear,
or the APU.


 






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(ii)                                  with
respect to Time Controlled Parts, have not accumulated more time since new (and
time since Overhaul if such replaced Part has previously been Overhauled)
than that of the replaced Part.


 


12.9.                        Title to
Parts.


 


(a)                                  Parts Replacement in Connection with Maintenance.  Any Part removed from the Airframe or
any Item of Equipment shall remain the property of  Lessor
and subject to this Lease, no matter where located, until such time as such Part shall
be replaced by a part which has been incorporated or installed in or attached
to the Aircraft or an Item of Equipment pursuant to the requirements for
replacement parts specified in Section 12.8 and title to such replacement
part has been vested in Lessor.  Except
as set forth in Section 12.10, immediately upon any replacement part
becoming incorporated, installed or attached to the Aircraft or an Item of
Equipment as provided above, such part shall become the property of Lessor,
title to such replacement part shall immediately vest in Lessor and such
replacement part shall become subject to this Lease and be deemed a Part for
all purposes hereof to the same extent as the Part which it has
replaced.  Once the replacement part has
become subject to this Lease, title to the Part so replaced shall
immediately vest in Lessee, free and clear of all rights of Lessor and any
Financing Party.


 


(b)                                 Parts Replacement in Connection with Discretionary Alterations, etc.  So long as no Default or Event of Default
shall have occurred and be continuing, at any time during the Lease Term, Lessee
may remove any Part from an Item of Equipment that was installed pursuant
to Lessee’s accomplishment of an alteration, modification or addition pursuant
to Section 12.7(b), provided that:


 


(i)                                     such
Part is in addition to and not in replacement of or in substitution for,
any Part originally incorporated or installed in or attached to such Item
at the time of delivery thereof hereunder or any Part in replacement of,
or substitution for, any such original Part;


 


(ii)                                  such
Part is not required to be incorporated or installed in or attached or
added to such Item pursuant to the terms hereof;


 


(iii)                               such
Part can be removed from such Item without diminishing or impairing the
value, utility or airworthiness which such Item would have had at such time had
such alteration, modification or addition not occurred; and


 


(iv)                              such
Part is not required to be installed on or attached to such Item of
Equipment by the Aeronautics Authority in order to maintain the airworthiness
certification of the Aircraft for passenger operation.


 


Upon removal of any such Parts, Lessee shall
restore the area where such Part was removed so that it is in the
condition it would have been had such Part not been installed, assuming
such condition was in compliance with the terms of this Lease, and so that such
removal is undetectable.  Title to any Part removed
by Lessee in accordance with the provisions of this Section 12.9(b) shall,
without further act, vest in Lessee whereupon such Part shall no longer be
deemed a Part hereunder.  Any Part not
removed by Lessee in accordance with the above shall remain the property of
Lessor.


 






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12.10.                  Temporary Replacement of
Parts.  Provided no Event of
Default has occurred and is continuing, at any time during the Lease Term, any Part incorporated
or installed in or attached or added to any Item of Equipment may be replaced
temporarily with a part which does not satisfy the requirements of Section 12.8;
provided that


 


(a)                                  there
shall not have been available to Lessee at the time and in the place that such
substitute or replacement part was required to be installed on the Airframe or
Engine a replacement part complying with the requirements of Section 12.8;


 


(b)                                 it
would have resulted in an unreasonable disruption of the operation of the
Aircraft and/or the business of Lessee as an airline to have grounded the
Aircraft until such time as a replacement part complying with the requirements
of Section 12.8 became available for installation on the Aircraft;


 


(c)                                  Lessee
shall have notified Lessor as soon as practicable after the making of such
substitution or replacement;


 


(d)                                 as
soon as practicable after installation of the same on the Airframe or Engine
(and in any event no later than the earliest to occur of (i) thirty (30) days  following such installation, (ii) the Scheduled
Termination Date or (iii) the Termination Date) Lessee shall remove any such part not complying with the
requirements of Section 12.8 and replace the same with a part complying
with such requirements.


 


Upon the replacement by Lessee of any such non-conforming part pursuant
to the foregoing clause (d), title to such replacement part shall, without
further act, vest in Lessor and such part shall be deemed a Part hereunder.


 


12.11.                  Exchanging Parts.  Any Part removed from the Aircraft or
any Item of Equipment in the course of performance of maintenance on the same
may be subjected by Lessee to normal exchanges customary in the airline
industry in the ordinary course of Lessee’s business provided that (x) the
parts replacing such removed Parts are incorporated, installed in or attached
to the Aircraft or such Item of Equipment promptly following the removal of
such Parts, and (y) all applicable requirements of the Aeronautics
Authority or the Certificating Authority shall be adhered to with respect to
all such Parts being incorporated, installed, or attached, whether or not such Part was
originally removed from the Aircraft or any Item of Equipment or is a
replacement for any such removed Part. 
Lessee shall, whether or not such exchanged part is owned by Lessee at
the time such exchange is completed, comply or ensure the continued compliance
with the requirements of Sections 12.8, 12.9 and 12.10 as applicable prior to
installation of the same into the Aircraft or any Item of Equipment.


 


12.12.                  Temporary Attachment and
Removal of Engines.


 


(a)                                  Installation of Other
Engines.


 


(i)                                     In the regular course of performance
of Lessee’s Obligations under this Lease, Lessee may temporarily remove an
Engine from the Airframe and install an engine on the Airframe that is
owned by Lessee or which is subject to a lease, conditional sale agreement,
trust indenture or other security agreement, provided that such other engine is (x) free and clear of
all Liens except the rights of the parties to the lease or conditional sale or
other security agreement covering such engine and as the same are otherwise permitted
to exist pursuant to Section 17.7, and (y) Lessee, or if Lessee is
not the owner of the engine, the lessor, conditional seller, indenture
trustee or secured party of any such engine agrees in writing in a form
satisfactory to 


 






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Lessor that it will not acquire or claim, as
against Lessor, any right, title or interest in or any adverse right, title or
interest to the Airframe or any Item of Equipment as the result of any such
engine being installed on the Airframe.  If any
of the respective interests of Lessor or any relevant Financing Party in any
Item of Equipment is impaired or otherwise adversely affected by virtue of
installation of such engine on the Airframe, Lessee shall promptly remove such
engine from the Airframe, and if such removal is not completed within five (5) days
from the date on which Lessee obtains actual knowledge of such impairment or
adverse effect, such event will be deemed an Event of Default pursuant to Section 23(k).


 


(ii)                                  Lessee shall comply with the
requirements of Section 19.4(c) for as long as such engine is
installed on the Airframe and the engine shall be removed from the Airframe and
the removed Engine reinstalled on the Airframe upon the occurrence and continuation of a Default or Event of Default, but in any event, not later than
the Termination Date.


 


(iii)                               Lessor hereby agrees for the benefit
of any lessor of any engine leased to Lessee or any secured party or mortgagee
of an engine owned by Lessee subject to a security interest or mortgage granted
by Lessee or any conditional seller of an engine purchased by Lessee subject to
a conditional sale agreement that neither Lessor nor its successors or
assignees will acquire or claim, as against such lessor, secured party,
mortgagee or conditional vendor, or its assignee, any right, title or interest
in any engine owned by such lessor under such lease or subject to a security
interest, mortgage or conditional sale interest in favor of such secured party,
mortgagee or conditional seller under such security agreement, mortgage or
conditional sale agreement as the result of such engine being installed on the
Airframe at any time while such engine is subject to such lease, security
interest, mortgage or conditional sale agreement.


 


(b)                                 Installation of Engines on
other Airframes.  Provided no Default or Event of Default has
occurred and is continuing, Lessee may install an Engine removed from the Airframe on any
other airframe of the same type operated by and in Lessee’s fleet of aircraft,
but only if:


 


(i)                                     Lessee has title to such other
airframe and such airframe is free and clear of all Liens (except as the same
are permitted to exist pursuant to Section 17.7); or


 


(ii)                                  such other airframe is leased to
Lessee or owned by Lessee subject to a conditional sale or other security
agreement, provided  that such
airframe is free and clear of all Liens except the rights of the parties to the
lease or conditional sale or other security agreement covering such airframe
and as the same are otherwise permitted to exist pursuant to Section 17.7,
and (B) prior to such installation on an airframe that is leased to Lessee
or owned by Lessee subject to a conditional sale or other security agreement,
Lessor shall have received from the lessor, conditional seller or secured party
of such airframe a written agreement (which may be the lease, security
agreement or conditional sale agreement covering such airframe), in form and
substance reasonably satisfactory to Lessor, whereby such lessor, secured party
or conditional seller expressly agrees that neither it/they nor its/their
successors or assigns will acquire or claim any right, title or interest in any
Engine by reason of such Engine being installed on such airframe at any time
while such Engine is subject to this Lease or is owned by Lessor.  If any of the respective interests of Lessor
or any relevant Financing Party in an Engine is impaired or otherwise adversely
affected by 


 






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virtue
of installation on any such other airframe, Lessee shall promptly reinstall
such Engine on the Airframe, failing which such impairment or adverse effect
will be deemed an Engine Loss;


 


and in
either case, Lessee shall comply with the requirements of Section 19.4 for
as long as such Engine is installed on such other airframe and the Engine shall
be removed from such other airframe for reinstallation on the Airframe upon the occurrence and continuation of a
Default or Event of Default, but in any event, not less than sixty (60) days prior to the Scheduled
Termination Date.


 


12.13.                  Installation of
Items of Equipment on Other Aircraft. 
Subject to the preceding
provisions of this Article 12, Lessee may permit any Item (excluding
Landing Gear) to be installed on another aircraft solely to the extent such
aircraft is within Lessee’s fleet of aircraft owned or leased by Lessee;
provided, however, upon the occurrence and continuation of a Default or Event
of Default following the removal of any such Item from the Aircraft, Lessee
shall promptly, but in no event later than ten (10) days following such
Default or Event of Default:


 


(a)                                  reinstall on the Aircraft each such Item not
then currently installed thereon, assuming such Item is in airworthy condition,
or


 


(b)                                 in the event such Item is not in an airworthy
condition, such Item shall be restored promptly to an airworthy condition and
reinstalled on the Aircraft or, in the case of a Part, such Part may be
exchanged in accordance with Section 12.11.


 


12.14.                  Failure to
Reinstall Engines and Items of Equipment on the Aircraft.  If Lessee fails to comply with the
requirements set forth in Sections 12.12 and 12.13 hereof, the provisions of Section 8
of Appendix 2B, under the heading of “Maintenance, Modification and Operation
of the Aircraft” shall be applicable.


 






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13.                               MAINTENANCE
RESERVES


 


13.1.                        Maintenance
Reserves.  Lessee shall make
payments to Lessor in respect of the Maintenance Reserves in accordance with
Appendix 2D, on a monthly basis, within ten (10) days following the last
day of each Rent Period, with the first payment due ten (10) days
following the second Rent Payment Date; provided that Lessee’s final payment in
respect of Maintenance Reserves shall be made on the Termination Date.


 


13.2.                        Discrepancies.  If Lessee’s actual utilization of the
Aircraft is greater than Lessee’s utilization of the Aircraft reported to
Lessor in accordance with Article 16, Lessee shall make up any deficiency
payments in respect of Maintenance Reserves to Lessor within three (3) Business
Days of the date of receipt of written notice from Lessor.


 


13.3.                        Rights in
Maintenance Reserves.


 


(a)                                  All amounts paid by Lessee in
respect of Maintenance Reserves are the sole and exclusive property of Lessor
(subject to Lessee’s claims for reimbursement from the Maintenance Reserves
made pursuant to this Lease provided (x) no Payment Default or (y) Event
of Default has occurred and is continuing) and Lessor shall be entitled to
freely commingle such moneys with its several funds and deal with such moneys
as Lessor sees fit.  
Notwithstanding such stated intent, if and to the extent that the
Maintenance Reserves or any part thereof, under any applicable Law or
otherwise, are determined to be security deposits or otherwise the property of
Lessee or if it is so determined those monies are a debt owed to Lessee or that
Lessee shall have any interest in those monies, Lessee and Lessor agree that
subclauses (i) and (ii) below shall apply.


 


(i)                                     Pursuant
to applicable Law, Lessee hereby grants to Lessor a first and prior perfected
Lien and possessory security interest in the Maintenance Reserves as security
for Lessee’s Obligations, including, without limitation, the obligations of
Lessee to maintain and return the Aircraft and each Item of Equipment in the
condition required by this Lease.


 


(ii)                                  Lessee
shall not assign, hypothecate or otherwise transfer its interests, if any, in
the Maintenance Reserves.


 


(b)                                 Upon
and following a Payment Default or Event of Default, and in addition to all
other rights Lessor may have under this Lease under applicable Law, Lessor may
use, apply or retain all or any portion of the Maintenance Reserves, and,
without limitation, Lessor may immediately or at any time thereafter, while any
Payment Default or Event of Default is continuing, without prior notice to
Lessee (x) offset all or any part of the Obligations against the
liabilities of Lessor in respect of any obligations of Lessor, or (y) apply
the Maintenance Reserves in or towards the payment or discharge of the
Obligations in such order as Lessor sees fit. 
If Lessor uses or applies all or any portion of such Maintenance
Reserves, such application shall not be deemed a cure of any Payment Default or
Event of Default, and Lessee shall within three (3) Business Days after
written demand therefore deposit with Lessor in cash an amount sufficient to
fully restore each such Maintenance Reserve account to its original sum prior
to such application plus any amount then due for payment by Lessee in respect
of Maintenance Reserves.


 


13.4.                        Claims for
Reimbursement - Timing.  Any
claim by Lessee for reimbursement from the Maintenance Reserves made pursuant
to this Lease shall be made within the earlier to occur of (x) one hundred eighty (180) days
following the completion date of the Maintenance Check for 


 






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which such claim is being made
and (y) the Termination Date, provided, however, in the event Lessee does
not have sufficient information necessary to submit such claim to Lessor by the
time of the Termination Date, Lessee shall nevertheless notify Lessor of such
pending claim on or prior to the Termination Date and such claim for
reimbursement may then be made by Lessee following the Termination Date, but in
no event later than the date that occurs one hundred eighty (180) days
following the completion of the Maintenance Check for which such claim is being
made.  Should Lessee fail to make such
claim within such time period (or agree with Lessor in writing concerning an
alternate disposition for such claim), Lessee shall thereafter be forever
barred and estopped from making a claim in respect of such maintenance.


 






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14.                               SELLER’S
AND MANUFACTURER’S WARRANTIES AND SUPPORT


 


14.1.                        Assignable
Warranties.  At Delivery
Lessor will assign or make available to Lessee for the duration of the Lease
Term the benefit of all warranties given to Lessor by the Seller and the Engine
Manufacturer pursuant to the airframe and engine warranty assignment agreements
substantially in the forms appearing in Appendix 8. Lessor further agrees to
assign or otherwise make available to Lessee such rights as Lessor may have
under any warranty, service policy or product support plan of any manufacturer,
vendor, subcontractor or supplier with respect to the Aircraft, any Engine or any
Part, to the extent the same may legally be assigned or otherwise made
available to Lessee.  Lessor agrees that
it will not amend the Purchase Agreement if the amendment would have a
materially adverse effect on the Aircraft or alter the Detail Specification or
if it would affect the Scheduled Delivery Date of the Aircraft, unless Lessee
otherwise consents, which consent will not be unreasonably withheld.


 


14.2.                        Reassignment;
Assignment of Lessee Warranties. 
On the Termination Date:


 


(a)                                  the
benefit of any warranty and other rights assigned or made available by Lessor
to Lessee pursuant to this Lease will be reassigned automatically and without
further act or writing to Lessor or its designee; provided that upon the
occurrence and continuation of an Event of Default, Lessor may instruct any
Manufacturer of any Item of Equipment, by a reservation of rights, to make any
payments of monies under any warranty claims made by Lessee directly to Lessor
for further credit to Lessee upon and subject to Lessee’s cure of such Event of
Default; and


 


(b)                                 Lessee
shall assign and shall be deemed to have assigned to Lessor on and as of the
Termination Date, at no charge to Lessor, any and all warranties Lessee has
obtained in connection with any maintenance or services performed on the
Aircraft or any Item of Equipment during the Lease Term.


 


14.3.                        Warranty
Claims.  Lessee will
diligently and promptly pursue any valid claims it may have under the
warranties assigned to it hereunder with respect to the Aircraft and other Items
of Equipment.  At the request of Lessor,
Lessee shall provide an itemized list to Lessor not later than the earlier of (x) fourteen
(14) days prior to the Scheduled Termination Date and (y) the Termination
Date of all such warranty claims made by Lessee during the Lease Term to the
extent historical records of the same are maintained by Lessee.


 


14.4.                        Assignment
of Training, Product Support and Technical Assistance.  Contemporaneously with execution of the
Participation Agreement, Lessor shall assign or cause to be assigned to Lessee
certain rights to Seller and Engine Manufacturer training, product support and
on-site technical assistance.  If Lessee
fails to take Delivery of the Aircraft when tendered in accordance with this
Lease (except as a result of a delay described in Section 8.3), Lessee
will immediately pay to Lessor an amount equal to the Dollar value of such
training (x) consumed by Lessee or (y) forfeited by Lessor, based on
what the training and on-site technical assistance would have cost Lessee  had Lessee purchased such training directly from Airframe
Manufacturer and Engine Manufacturer. For the avoidance of doubt, this will
include (i) an Airbus technical representative at Lessee’s premises for
six (6) months after the Delivery Date, (ii) flight transition
courses for eight (8) flight crews, consisting of one (1) captain and
one (1) first officer per crew, to include ETOPS training, (iii) one
hundred (100) days of maintenance training and (iv) one (1) cabin
attendant course for up to three (3) cabin attendant instructors.


 






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15.                               SUBLEASING
AND WET LEASING


 


15.1.                        Subleasing.  Provided no Default or Event of Default has
occurred and is continuing, Lessee may, subject to the restrictions contained
in Section 11.6, enter into Permitted Subleases for the Aircraft with
Permitted Sublessees provided that:


 


(a)                                  The
term of such Permitted Sublease is not for a period exceeding the Lease Term
and shall expressly prohibit sub-subleasing of the Aircraft and any Item of
Equipment independent of the Airframe;


 


(b)                                 the rights of the Permitted
Sublessee under such Permitted Sublease are at all times expressly subject and
subordinate to the rights of Lessor hereunder and to the interests of any
Financing Parties and shall contain a provision substantially to the effect of:


 


“Anything in this sublease to the contrary
notwithstanding, the sublessee’s rights hereunder to the possession, use and
enjoyment of the Airframe, and if attached to the Airframe at the commencement
of the sublease or if subsequently delivered to sublessee during the term of
the sublease, the Engines in accordance with the terms hereof shall be subject
to the Aircraft Lease Agreement dated October 31, 2008, (the ‘Primary Lease’) between C.I.T. Leasing Corporation, as
lessor (the ‘Primary Lessor’), and the
sublessor hereunder, in respect of the Aircraft, Airframe and Engines, and the
sublessee confirms and agrees that this sublease is in all respects subject and
subordinate to the Primary Lease.  Upon
notice to the sublessee hereunder by the Primary Lessor that an Event of
Default (as defined in the Primary Lease) has occurred and is continuing, and
that the Primary Lease shall have been cancelled or terminated pursuant to the
terms thereof, the Primary Lessor may, at its option, by written notice to the
sublessee after the date of such cancellation or termination:


 


(i)                                     require
the sublessee to enter into an agreement in form and substance satisfactory to
the Primary Lessor, attorning to and recognizing the Primary Lessor, as the
sublessor hereunder and reconfirming all of the obligations of the sublessee
hereunder, or


 


(ii)                                  terminate
this sublease and require prompt delivery by the sublessee of the Aircraft to
the Primary Lessor, in accordance with the return provisions of this sublease.


 


Unless the sublessee shall have received any
such written notice from the Primary Lessor requiring attornment or terminating
this sublease, the sublessee shall be and remain fully obligated hereunder
notwithstanding the continuance of any Event of Default under the Primary Lease
or the termination or cancellation thereof pursuant to the terms thereof.”;


 


(c)                                  If the Permitted Sublessee is not a
U.S. Air Carrier, Lessee shall cause it to deliver to and for the benefit of
Lessor at or prior to the delivery of the Aircraft under the Permitted Sublease
a supplemental power of attorney for deregistration of the Aircraft;


 


(d)                                 Lessee and such Permitted Sublessee
shall not enter into any amendments, modifications, waivers or the like of any
provision of the Permitted Sublease without Lessor’s prior written consent and
should such consent be granted, Lessee shall deliver to Lessor a copy of any
such duly executed agreements between Lessee and such Permitted Sublessee in
connection with the same;


 






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(e)                                  if
necessary, Lessee and Permitted Sublessee shall authorize the filing of and
deliver documents appropriate for perfection filings in State of Registration
and such other jurisdictions as Lessor, in good faith, deems reasonable and
appropriate, in form and substance satisfactory to Lessor, covering the
interests of Lessee and such Permitted Sublessee under such Permitted Sublease,
together with any other documents requested by Lessor to protect or perfect the
interest of Lessor and any Financing Parties in the Permitted Sublease in the
State of Registration and/or such other jurisdictions;


 


(f)                                    Lessee
shall assign each Permitted Sublease and all rights and security deposits and
maintenance and other reserves received thereunder to Lessor pursuant to a
security assignment of the Permitted Sublease together with a consent and
agreement of the Permitted Sublessee, each in form and substance satisfactory
to Lessor and, if applicable, each Financing Party, as security for Lessee’s
Obligations, and Lessor shall receive an opinion of Lessee’s counsel regarding
the enforceability and perfection of the Permitted Sublease and such
assignments for security and the consent and agreement or other assurances
reasonably satisfactory to Lessor;


 


(g)                                 the
provisions of each Permitted Sublease shall provide for benefits and
protections to Lessee, as sublessor, which are (in respect of material terms
and in the aggregate) not less advantageous to Lessee, as sublessor, than the benefits
and protections provided to Lessor by the provisions of this Lease; and


 


(h)                                 Lessee
shall (x) notify Lessor of the terms of each Permitted Sublease (and
provide copies of the final drafts thereof) not less than ten (10) Business
Days prior to the execution of such Permitted Sublease, and (y) furnish
the “original” copy of such Permitted Sublease to Lessor as soon as possible
after the execution thereof, but in any event prior to the delivery of the
Aircraft to such Permitted Sublessee.


 


15.2.                        Wet Leasing.  Provided no Event of Default has occurred and
is continuing, Lessee may, subject to the restrictions contained in Section 11.6,
enter into Wet Leases for the Aircraft to any Person provided that:


 


(a)                                  the Wet Lease shall provide for the
chartering of the Aircraft thereunder to cease if the leasing of the Aircraft
under this Lease terminates for any reason;


 


(b)                                 the rights of the lessee under the
Wet Lease are at all times expressly subject to and subordinate to, and do not
conflict in any respect with (or give such wet lessee any rights greater than
the rights of Lessee under), the terms of this Lease and the rights of Lessor
hereunder and the interests of any Financing Party;


 


(c)                                  Lessee
provides Lessor with (x) a certified copy of the applicable provisions
from the Wet Lease or an officer’s certificate indicating whether Lessee or the
wet lessee under the Wet Lease will be responsible for maintaining the primary
passenger, baggage and cargo liability insurance relating to operation under
the Wet Lease, and (y) a certified copy or original of an insurance
certificate and broker’s letter of undertaking confirming the maintenance of
insurance coverage required by this Lease; and


 


(d)                                 in
any event, unless otherwise agreed by Lessor in writing, the term of such Wet
Lease ends on a day not later than thirty (30) days prior to the Scheduled
Termination Date.


 






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15.3.                        No
Independent Subleasing of Items of Equipment.  No Item of Equipment may be subleased
independently from the Aircraft.


 


15.4.                        Expenses.  Lessee shall pay or reimburse Lessor and any
Financing Party on demand for their reasonable respective out of pocket costs
and expenses incurred in connection with the review, negotiation and
consummation of the transactions contemplated by any Permitted Sublease or Wet
Lease and such parties may condition their consent and approval of the same on
receipt of such payment or reimbursement.


 


15.5.                        Lessee
Remains Liable.  Lessee shall remain primarily and
fully responsible and liable for the performance of its Obligations under and
the observance of the terms of this Lease and the Operative Documents,
notwithstanding any Permitted Sublease or any Wet Lease, as if such Permitted
Sublease or Wet Lease had not occurred.


 






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16.                               REPORTING
AND INSPECTIONS


 


16.1.                        Financial
Reporting.  Lessee agrees to
furnish to Lessor the following (unless available to Lessor via publicly
available websites and Lessee has so advised Lessor), which shall be deemed
Information:


 


(a)                                  Quarterly Statements. 
As soon as practicable after the end of the first, second and third
quarterly fiscal periods in each fiscal year of Holdings, and in any event
within sixty (60) days thereafter (or, if Lessee has obtained an extension from
the SEC to file its Form 10-Q, within ninety (90) days), a copy of the Form 10-Q
(excluding exhibits) filed by Holdings with the SEC for such quarterly period;
or if no such Form 10-Q was so filed, its consolidated balance sheet and
related statements of operations and cash flows as of the end of and for such
fiscal quarter (in the case of the statement of operations) and the then
elapsed portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, prepared in
accordance with GAAP, subject to normal year-end audit adjustments;


 


(b)                                 Annual
Statements.  As soon as
practicable after the end of each fiscal year, and in any event within one
hundred twenty (120) days thereafter, a copy of the Form 10-K (excluding
exhibits) filed by Holdings with the SEC for such fiscal year, or, if no such Form 10-K
was so filed, its audited consolidated balance sheet and related statements of
operations, stockholders’ equity and cash flows as of the end of such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by Holdings’ independent public accountants of
recognized national standing to the effect that such consolidated financial
statements present fairly in all material respects the consolidated financial
condition and results of operations of Holdings and its Subsidiaries (including
the Lessee) on a consolidated basis in accordance with GAAP;


 


(c)                                  [Reserved].


 


(d)                                 Notice of Proceedings. 
Prompt notice of any litigation or arbitral proceedings not covered by
insurance (except for deductibles standard in the airline industry) and of all
proceedings by or before any Governmental Authority (i) which might
adversely affect Lessor’s ownership or other interests in the Aircraft, or (ii) which
relate to the Aircraft and where the amount involved not covered by insurance
is in excess of Two Hundred Fifty Thousand Dollars ($250,000); and


 


(e)                                  Additional Information. 
Lessee will furnish to Lessor (i) all other information reasonably
requested by Lessor with respect to the financial condition, operations,
business and property of Lessee, (ii) promptly after the same has been made
public, a copy of any announcement released by Lessee to any stock exchange on
which Lessee is publicly traded by shares (if applicable), and (iii) a
copy of any other information concerning Lessee’s business which Lessee
releases or otherwise makes available to its other lessors, stockholders and/or
creditors generally, provided, that Lessee shall not be required to send copies
of the items described in clauses (ii) and (iii) above if such items
are available to Lessor via the publicly available websites and Lessee has so
advised Lessor.


 


16.2.                        Aircraft
Utilization and Other Reporting/Information.  During the Lease Term, Lessee agrees to furnish to Lessor the following
information in connection with Lessee’s utilization of the Aircraft:


 






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(a)                                  within (i) ten (10) days
following the second Rent Payment Date and each remaining Rent Payment Date
during the Lease Term, and (ii) on the Termination Date, a utilization
report in the form appearing in Appendix 8 reporting the utilization of the
Items of Equipment set forth therein for the immediately preceding calendar
month or part thereof;


 


(b)                                 notification within five (5) days
of the removal of any Engine, Landing Gear or APU, advising of (i) the
reason for such removal, (ii) the location of such Item of Equipment, (iii) the
total accumulated Flight Hours and Cycles of such Item of Equipment (or total
APU Hours with respect to the APU), (iv) the Flight Hours and Cycles
accumulated since the most recent Engine Restoration with respect to any Engine
or the most recent Overhaul with respect to any Landing Gear, as applicable, (v) the
APU Hours accumulated since the most recent Overhaul with respect to the APU,
and (vi) the intended workscope, if applicable;


 


(c)                                  information of any accident or
incident with respect to any Item of Equipment (other than Parts) that (x) involve
fatalities or injuries or (y) where the total estimated cost to repair all
damage to the respective Item or Items of Equipment is in excess of Two Hundred
Fifty Thousand Dollars ($250,000) within forty-eight (48) hours (or within
twenty-four (24) hours with respect to the Aircraft or the Airframe) of the
occurrence or detection thereof;


 


(d)                                 within a reasonable time (but not
less than ten (10) days) prior to the commencement date for any
Maintenance Check and in accordance with Section 12.6, the identity of the
Approved Maintenance Organization Lessee intends to have perform such check
together with a copy of the workscope intended to be accomplished in connection
with the same; and


 


(e)                                  upon request of Lessor, a copy of
the Maintenance Program, inclusive of all revisions issued as of the date of
such request.


 


16.3.                        Further
Information; Inspections.


 


(a)                                  Lessee
shall provide to Lessor, at Lessor’s request during the Lease Term and within
one hundred eighty (180) days following the Termination Date, a list of the
airports to which Lessee has operated the Aircraft during the (i) twelve
(12) months preceding such request, if requested during the Lease Term, or (ii) twelve
(12) months prior to the Termination Date, if requested by Lessor after the
Termination Date, and will authorize Lessor to confirm the status of Lessee’s
payment of airport, navigation, and en-route charges, including, but not
limited to, Eurocontrol, if applicable.


 


(b)                                 During
the Lease Term, Lessee shall furnish to Lessor such other information
concerning the location, condition, use, maintenance and operation of the Items
of Equipment as Lessor may reasonably request.


 


(c)                                  Lessee
shall permit any Person (including prospective purchasers, financiers or
lessees of the Aircraft) designated in writing by Lessor, to visit and visually
inspect (at any reasonable time, provided that, so long as no Event of Default
has occurred and is continuing, such inspection shall not unreasonably
interfere with Lessee’s business or operational commitments and shall not
involve the opening of any panels, but shall include access to all compartments
and bays, as well as access to the Engine and APU dataplates to verify serial
numbers) the Aircraft, Engines and Items of Equipment, their condition, use and
operation and the records maintained in connection therewith and to make copies
of such records as Lessor may reasonably designate.


 






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(d)                                 Lessor
shall be permitted to have representatives and/or agents present throughout the
accomplishment of Maintenance Checks to observe all aspects of the same including,
but not limited to, the workscope thereof. 
Neither Lessor nor any
person designated by Lessor shall have any duty to make any such inspection and
none shall incur any liability or obligation by reason of making or not making
such inspection.


 


16.4.                        Technical
Report Prior to Return of Aircraft.


 


(a)                                  Twenty
(20) months prior to
the Scheduled Termination Date, Lessee shall provide to Lessor a maintenance
status report detailing the information in the form appearing in Appendix 8.


 


(b)                                 At
Lessor’s request, Lessee will make copies available of (i) drawings of the
interior configuration of the Aircraft both as it then exists and as it will
exist at Return, (ii) an Airworthiness Directive status list, (iii) a
service bulletin incorporation list, (iv) Time Controlled Part listings
and current maintenance status of each, (v) a list of modifications and
alterations accomplished with respect to the Aircraft during the Lease Term, (vi) interior
material burn certificates, (vii) the complete workscope for the
Maintenance Checks and other work to be performed prior to Return, (viii) a
list of all no-charge service bulletin kits with respect to the Aircraft which
were ordered by Lessee from any Manufacturer, (ix) current Engine disk
sheets and a description of the work accomplished during the last shop visit
for each Engine and (x) any other data which is reasonably requested by
Lessor in connection with any of the foregoing.


 






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17.                               REGISTRATION;
PERFECTION OF OWNER’S TITLE; LIENS


 


17.1.                        Registration. 
At Delivery, Lessee shall register the Aircraft (or shall cause
the same to be registered) with the Register in the State of Registration with
the respective interests of Lessor and any relevant Financing Party recorded to
the fullest extent permitted by applicable law in the State of Registration and
shall thereafter maintain such registration throughout the Lease Term.  Lessee shall bear all costs incurred in
effecting and maintaining such registration during the Lease Term.  Lessor shall cooperate with Lessee in
effecting and maintaining such registration and shall provide to Lessee such
documents as Lessee may reasonably request in connection therewith.  Lessee shall not take or permit any action
inconsistent with the continued registration of the Aircraft or the recordation
of the various interests of Lessor and any Financing Party therein with the
Register, except in connection with a Permitted Sublease and related
re-registration of the Aircraft.  Lessor
agrees that throughout the Lease Term, Lessor will either remain a Citizen of
the United States or shall otherwise be qualified to register the Aircraft with
the State of Registration so that the Lessee will be able to comply with the requirements
of this Section 17.1.


 


17.2.                        Identification
Plates.  Lessee shall,
throughout the Lease Term, maintain in respect of the Aircraft and each Engine
a fireproof identification plate of a reasonable size, in a clearly visible
place in the cockpit of the Aircraft and on each Engine that contains the
legend in writing appearing in Appendix 2B, Section 5.  Lessee shall not remove, or cause or permit
the removal or modification of such identification plate without Lessor’s prior
written consent.  Lessee shall not allow
the name of any other Person (with the exception of Lessee) to be placed on the
Airframe or any Engine as a designation that might be interpreted as a claim of
ownership or of any interest therein.  Lessee shall promptly replace any
such nameplate that becomes illegible, lost, damaged or destroyed for any
reason.  If at any time Lessor transfers
its interest in the Aircraft or this Lease as permitted hereunder or Lessor
finances or refinances the Aircraft, Lessee will, at Lessor’s request and cost,
promptly affix such new nameplates to the Airframe and the Engines as may be
required by Lessor.


 


17.3.                        Aeronautics
Authority Acknowledgment.  If and to the extent that the same
is customarily available in the State of Registration, Lessee shall obtain and
deliver to Lessor at Delivery, a letter from the Aeronautics Authority
addressed to Lessor and (if so requested by Lessor) any Financing Party
confirming that it will recognize Lessor’s title to the Aircraft and the
respective rights of Lessor and/or such Financing Party to deregister the
Aircraft upon the cancellation, termination or expiration of the leasing of the
Aircraft hereunder.


 


17.4.                        Authorization to Make
Perfection Filings.  The execution of this Lease by the
parties hereto constitutes the authorization by Lessee to Lessor’s legal
counsel to make (and where necessary to execute on Lessee’s behalf) such
perfection filings as Lessor and its counsel deem necessary or desirable to
protect the interest of Lessor and any Financing Party hereunder.  From time to time on reasonable written
request made by Lessor, Lessee shall provide to Lessor a letter on the
letterhead of Lessee, in form and substance reasonably satisfactory to Lessor
and executed by an officer of Lessee, authorizing such Persons as Lessor may
specify to make such perfection filings as Lessor reasonably deems necessary or
desirable to protect the interests of Lessor or any Financing Party hereunder.


 


17.5.                        Perfection
of Title.


 


(a)                                  Lessee
shall, together with Lessor, cause, or, at Lessor’s request, assist Lessor in
causing, this Lease, the Lease Supplement and any and all additional
instruments which shall be executed pursuant to the terms hereof as permitted
by applicable Law or regulations, to be kept, filed and recorded in the offices
of any Governmental Authorities in the State of Registration as required by the
Register, any applicable Aeronautics Authority and any


 






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applicable Law.  Lessee shall not take any action which would
conflict with or adversely affect such filings and recordation of the Lease and
such other documents as provided herein.


 


(b)                                 If
at any time subsequent to the initial recordation under the preceding clause
(a), any filing or recording is reasonably necessary or desirable to protect
the interests of Lessor, Lessee, at its own cost and expense and upon request
by Lessor, shall cause this Lease, any financing statements with respect
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,
refiled and re-recorded in the appropriate office or offices pursuant to
applicable Laws, to perfect, protect and preserve the rights and interests of
Lessor hereunder and in the Aircraft or any Item of Equipment.  At the reasonable request of Lessor, Lessee
shall furnish to Lessor an opinion of counsel or other evidence satisfactory to
Lessor of each such filing or re-filing and recordation or re-recordation.


 


(c)                                  Without
limiting the foregoing, Lessee shall do or cause to be done any and all acts
and things which may be required under the terms of the Mortgage Convention to
perfect and preserve the title of Lessor and interests of Lessor in the
Aircraft within the jurisdiction of any signatory which has ratified the
Mortgage Convention if such jurisdiction is in the territory in which Lessee
does or is reasonably likely to operate the Aircraft, as Lessor may reasonably request.  Lessee shall also do or cause to be done, at
its own expense, any and all acts and things which may be required under the
terms of any other Law involving any jurisdiction in which Lessee does, or is
reasonably likely to, operate, or any and all acts and things which Lessor may
reasonably request, to perfect and preserve Lessor’s ownership rights regarding
the Aircraft within any such jurisdiction.


 


17.6.                        Cape Town
Convention.


 


(a)                                  Lessee
shall promptly enter into such amendments of the Operative Documents or into
new Operative Documents (in
form satisfactory to the parties), make
or approve registrations, filings and recordings, and/or do or cause to be done
such additional acts and things which may be reasonably requested by Lessor
(for itself or for and on behalf of any Financing Party) as being required by
or advisable under applicable law, in order (x) that the Operative
Documents effectively constitute international interests, while retaining the
commercial and business agreements of the parties as described therein in any
such new Operative Documents, and provide to the such parties the full benefit
of the Cape Town Convention with respect to the Aircraft and the Engines, and (y) the
Operative Documents contain such provisions as may be necessary to confirm the
commercial and business agreements of the parties therein to the greatest
extent permitted under the Cape Town Convention, including, without
limitation, with respect to:


 


(i)                                     matters concerning the documentation and registration in the International
Registry of international interest(s) or prospective international
interest(s) which are, or may be, vested in Lessor or any Financing Party
under this Lease or any other Operative Documents and the relative priority
thereof contemplated in the Operative Documents as against competing interests;


 


(ii)                                  matters concerning sales and prospective sales which are required or
permitted by this Lease or the other Operative Documents, including with
respect to documentation and registration in the International Registry and the
relative priority thereof contemplated in the Operative Documents as against
competing interests;


 


(iii)                               matters concerning any assignment
of associated rights or 


 






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prospective assignment of
associated rights which is required or permitted or constituted by this Lease
or any other Operative Document, the documentation and registration thereof in
the international registry and the relative priority thereof contemplated in
the Operative Documents as against competing interests;


 


(iv)                              delivery and recording with the Register of an irrevocable de-registration and export request authorisation
substantially in the form annexed to the Protocol, which may be exercised only
after the occurrence and during the continuance of an Event of Default; and


 


(v)                                 subject to the preceding and the following provisions of this Section 17.6,
including or excluding in writing the application of any provisions of the Cape Town Convention and/or the
Protocol that Lessor (for itself or acting for and on behalf of any Financing
Party), acting reasonably may deem advisable in connection with the foregoing.


 


(b)                                 In addition to the remedies set
forth in this Lease or as may otherwise be available to Lessor or any Financing
Party under any other Operative Documents, at law or in equity, upon the
occurrence and during the continuation of an Event of Default, Lessor may, but
shall not be obligated to, exercise any remedy available to it under the Cape
Town Convention and/or the Protocol (subject, in each case to the requirements
and limitations of the Cape Town Convention and the Protocol), including:


 


(i)                                     the remedies set forth in Articles
8, 9 and 34 of the Cape Town Convention and Article IX(1) of the
Protocol;


 


(ii)                                  relief pending final determination
under Article 13 of the Cape Town Convention and Article X of the
Protocol (including sale of the Aircraft and application of proceeds therefrom,
but excluding the application of Article 13(2) of the Cape Town
Convention); and


 


(iii)                               the procurement of the
de-registration of the Aircraft and the export and physical transfer of the
Aircraft or any Engine from the territory in which it is situated pursuant to Article IX
of the Protocol, but excluding, solely to the extent permitted by Article 15
of the Cape Town Convention, the provisions of Chapter III of the Cape Town
Convention with regard to default remedies without prejudice to Article IX(1) of
the Protocol, provided that such exclusion shall not be applicable (to the
extent permitted by Article 15 of the Cape Town Convention) to the extent
such default remedies are exercised outside the territorial limits of the State
of Registration and in a manner not involving the courts of the State of
Registration or of its territorial units; and (y) where a remedy is
available to it under the Cape Town Convention or the Protocol and also under
this Agreement and the other Operative Documents or other applicable law, to
the extent permitted by the Cape Town Convention and the Protocol and other
applicable law, and subject to the provisions of the previous clause (x),
Lessor (for itself and for and on behalf of any Financing Party) may elect
under which of the foregoing it shall exercise such remedy.


 


(c)                                  Without limiting the generality of
the foregoing or any other provisions of the Operative Documents, Lessee hereby
consents, pursuant to Article XV of the Protocol, to any assignment of
associated rights within the scope of Article 33(1) of the Cape Town
Convention which is permitted or required by the Operative Documents and
further agrees that the provisions of this Section 17.6, shall apply, in
particular, with respect to Articles 31(4)


 






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and 36(1) of
the Cape Town Convention to the extent applicable to any such assignment of
associated rights.


 


(d)                                 In this Section 17.6 the
following terms have the meanings given in the Cape Town Convention and the
Protocol:


 


international interest,  prospective international interest, international
registry, assignment of associated rights, prospective assignment of associated
rights, registered, sale and prospective sale and proceeds.


 


17.7.                        Permitted
Liens.  Lessee shall not,
directly or indirectly, create, incur, assume or suffer to exist any Lien on or
with respect to this Lease, any Item of Equipment, title thereto or any
interest therein, except (i) the respective rights of Lessor and Lessee as
herein provided; (ii) a Lessor’s Lien; (iii) Liens for Taxes not yet
due or being contested in good
faith by appropriate proceedings so long as adequate reserves are
maintained with respect to such Taxes in accordance with GAAP; (iv) inchoate
materialmen’s, mechanics’, workmen’s, repairmen’s, employees’ or other like
Liens arising in the ordinary course of business and for amounts the payment of
which is either not yet delinquent or is being contested in good faith by
appropriate proceedings (and for which adequate security has been posted by
Lessee); and (v) Liens for airport, navigation, and en-route charges
arising in the ordinary course of business and for amounts the payment of which
is either not yet delinquent or is being contested in good faith by appropriate
proceedings (and for which adequate security has been posted by Lessee).  Lessee shall not be permitted to contest any
Lien if such contest gives rise to any reasonable possibility of the sale,
forfeiture, confiscation, distraint, seizure or loss of any Item of Equipment
or any interest therein in the course of any such proceedings, or as a result
of any such Lien or the respective interests of Lessor or any Financing Party
will be adversely affected.  Lessee shall
promptly, at its own expense, take such action as may be necessary to duly
discharge any such Lien not excepted above if the same shall arise at any time
with respect to any Item of Equipment.


 






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18.                               GENERAL
INDEMNITY


 


18.1.                        Scope.  Lessee agrees to indemnify, defend, reimburse
and hold harmless, to the fullest extent permitted by Law, each Indemnitee from
and against any and all Claims which in any way may result from, pertain to or
arise in any manner out of, or are in any manner related to:


 


(a)                                  the
Aircraft, this Lease or any other Operative Document, or the breach of any
representation, warranty, covenant or Obligation made or to be performed by
Lessee hereunder or thereunder; or


 


(b)                                 the
condition, design, ownership, manufacture, purchase, delivery, non-delivery,
lease, acceptance, rejection, possession, return, disposition, use, or
operation of the Aircraft either in the air or on the ground; or


 


(c)                                  any
defect in the Aircraft or any Item of Equipment (whether or not discovered or
discoverable by Lessee or Lessor) arising from the material or any articles
used therein or from the design, testing, or use thereof or from any
maintenance, service, repair, overhaul, or testing of the Aircraft or any Item
of Equipment, whether or not the Aircraft or any Item of Equipment is in the
possession of Lessee, and regardless of where the Aircraft or any Item of
Equipment may then be located; or


 


(d)                                 the
accuracy, validity or traceability of any of the Aircraft Documents; or


 


(e)                                  any
en route navigation charges, navigation service charges, airport charges and
landing fees and all other charges payable in connection with the use of or for
services provided at any airport or by any navigation service or Governmental
Authority, whether in respect of the Aircraft or any other aircraft owned,
leased or operated by Lessee; or


 


(f)                                    any
lawful action taken by any Indemnitee in relation to the release or attempt to
release the Aircraft from any arrest, confiscation, seizure, taking in
execution, impounding, forfeiture or detention of the Aircraft; or


 


(g)                                 any
act or omission of Lessee which invalidates or which renders voidable any
Insurances or which is outside the scope of, or excluded from, the coverage
thereof; or


 


(h)                                 any
transaction, approval, or document contemplated by this Lease or any other
Operative Document or given or entered into in connection herewith or
therewith.


 


Upon payment in full to any Indemnitee of any indemnities contained in
this Article 18 by Lessee, Lessee shall be subrogated to all rights and
remedies which such indemnified party has or may have against the Manufacturer
or any other Person.  If any Indemnitee
or Lessee has knowledge of any Claim for which Lessee is obligated to indemnify
under this Article 18, it shall give prompt written notice thereof to
Lessee or such Indemnitee, as the case may be, but failure to give such notice
shall not relieve Lessee of its obligations hereunder.


 


18.2.                        Lessee’s
Release.  Lessee hereby waives
and releases each Indemnitee from any Claims (whether existing now or hereafter
arising) for or on account of or arising or in any way connected with injury to
or death of personnel 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, leasing, condition, use or operation of the
Aircraft or any Item of Equipment, either in the air or on the ground, or which
may be caused by any defect in the Aircraft or any Item of Equipment from the
material or any article used therein or from the design or testing thereof, or
use thereof, or from any maintenance, service, repair, overhaul or testing of
the Aircraft or any Item of 


 






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Equipment regardless of when
such defect may be discovered, whether or not the Aircraft or any Item of
Equipment is at the time in the possession of Lessee, and regardless of the
location of the Aircraft or any Item of Equipment at any such time.


 


18.3.                        Repayment.  If an Indemnitee shall obtain a repayment of
any amount paid by Lessee, such Indemnitee shall, so long as there exists no
Default or Event of Default, promptly pay to Lessee the amount of such
repayment, together with the amount of any interest received by such Indemnitee
on account of such repayment.


 


18.4.                        Payment.  Subject to the provisions of Section 18.3
hereof, Lessee shall pay directly to each Indemnitee all amounts due under this
Article 18 within five (5) days of the receipt of written notice by
Lessee from such Indemnitee that such payment is due, together with evidence of
the calculation thereof.


 


18.5.                        Exclusion.  Notwithstanding the foregoing provisions of
this Article 18, Lessee shall not be obligated to make any payment to an
Indemnitee by way of indemnity in respect of any Claim against such Indemnitee,
but only to the extent that such Claim results from or arises out of:


 


(a)                                  the
gross negligence or willful misconduct of such Indemnitee;


 


(b)                                 any
Lessor’s Lien, except to the extent any such Claim results from or arises out
of (and in which case such Claim shall not be excluded from Lessee’s indemnity
Obligations under this Article 18):


 


(i)                                     the
premature termination of any funding or other financing arrangements with a
Financing Party with respect to the Lessor’s financing of the acquisition or
continued ownership of the Aircraft following the occurrence and continuation
of an Event of Default; or


 


(ii)                                  any
indemnity payment payable by an Indemnitee to another Person under any
financing arrangements with a Financing Party with respect to the Lessor’s
financing of the acquisition or continued ownership of the Aircraft and for
which Lessee has an Obligation of indemnity pursuant to Section 18.1;


 


(c)                                  any
Taxes; or


 


(d)                                 acts
or events which occur before Delivery or after the Termination Date  (except
with respect to any Claims arising from or related to Lessee’s acts or
omissions in connection with its activities under and pursuant to, among other
things, the Participation Agreement or any assignment of Manufacturer’s support
or warranty rights), unless any such act or event results from an act or
omission of Lessee which occurred during the Lease Term.


 


18.6.                        After-Tax
Nature of Indemnity.  Each
indemnity payable pursuant to this Article 18 shall be paid on an
After-Tax Basis.


 


18.7.                        Survival.  The indemnities contained in this Article 18
shall continue in full force and effect notwithstanding the occurrence of the
Termination Date, and are expressly made for the benefit of and shall be
enforceable by each Indemnitee.


 






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19.                               INSURANCE


 


19.1.                        Obligation
to Insure.  Lessee shall, for
the Lease Term, maintain in full force and effect, at its own cost and expense,
the Insurances.  Lessor is not under any
duty or obligation to verify the existence or adequacy of the Insurances.


 


19.2.                        Liability
Insurance  Lessee shall
maintain in effect commercial aircraft liability insurance against bodily
injury and property damage losses arising from ground, flight and taxiing
exposures, including, inter alia, passenger legal liability, cargo liability
and products liability insurance in the amount set forth in Appendix 2B, Section 4.1
and in the aggregate with respect to products/completed operations and Personal
Injury liabilities, or such higher amount as Lessee may maintain from time to
time on similar aircraft, for any one accident, or series of accidents arising
out of any one event, with respect to the Aircraft and Items of Equipment.  Such policy shall include war risks coverage,
inter alia, war, hijacking, acts of terrorism, confiscation, appropriation,
nationalization and seizure up to the full limit required herein or the current
FAA or other governmental program covering the war perils specified for the
full limit required herein.  Any such
liability insurance policy shall not be subject to any deductible amount except
with respect to baggage, cargo/mail liability, and hangar keeper’s liability
coverage, for which there may not be a deductible in an amount exceeding Ten
Thousand Dollars ($10,000) or such higher amount as may be usual and customary
in the worldwide airline insurance marketplace for airlines similarly situated
with, and operating similar aircraft as, the Lessee as may be approved by
Lessor in writing from time to time (such approval not to be unreasonably
withheld).  All Insurances shall:


 


(a)                                  name
the Additional Insureds as additional insureds;


 


(b)                                 be
primary without right of contribution from any other insurance which is carried
by any Additional Insureds with respect to the Aircraft or any Engine when not
installed on the Aircraft; and


 


(c)                                  each
liability policy shall expressly provide that all of the provisions thereof,
except the limits of liability, shall operate in the same manner as if there
were a separate policy covering each insured.


 


19.3.                        Contractual Liability; Tail Coverage for Liability Insurance  The Insurances referred to in Section 19.2 shall:


 


(a)                                  include
and insure (to the extent of the risks covered by the policies) the indemnity
provisions of Article 18;


 


(b)                                 for
a period of two (2) years after the Termination Date, at Lessee’s cost and
expense, continue to name each Indemnitee as additional insureds; and


 


(c)                                  should
Lessor transfer its interest in the Aircraft and this Lease pursuant to Article 25,
for a period of two (2) years from the effective date of such transfer
continue to name as additional insured(s) the transferring Lessor (and the
relevant Financing Parties and other related Indemnitees).


 


19.4.                        Insurance
Against Loss or Damage to the Items of Equipment


 


(a)                                  Lessee
shall maintain in effect with
respect to the loss or damage to the Items of Equipment:


 






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(i)                                     all-risk
ground, flight and ingestion aircraft hull insurance for the Agreed Value set
forth in Appendix 2B, Section 4.2 covering the Aircraft, for the Engine
Agreed Value set forth in Appendix 2B, Section 4.3 covering each Engine
when not installed on the Airframe


 


(ii)                                  war
risk insurance including, but not limited to, war, acts of terrorism,
political/non-political hijacking, confiscation, including confiscation by the
Government of Registry (other than the United States Government) appropriation,
nationalization, seizure and further including coverage for electromagnetic,
chemical and biological risks as the same is available on the standard
commercial aviation insurance markets for airlines similarly situated with, and
operating similar aircraft as, the Lessee.


 


(b)                                 All
such insurance shall be payable in Dollars in the United States and shall be,
with respect to the Aircraft and each Engine, on an “agreed value” basis as
required in Article 19.4 (a) (i). 
Any hull insurance carried in accordance with this Section 19.4
shall not contain any provision for self-insured amounts or a deductible that
exceeds the deductible amount appearing in Appendix 2B, Section 4.4.  Any policies carried in accordance with this Section 19.4
shall designate Lessor as owner and lessor and Lessor, or its nominee, as sole
loss payee, on behalf of the Additional Insureds as their respective interests
may appear, of the Aircraft covered thereby.


 


(c)                                  Installation of Other
Engines on the Aircraft  If Lessee installs an
engine not owned by Lessor on the Aircraft, either (x) Lessee’s hull
insurance on the Aircraft must automatically increase to such higher amount as
is necessary in order to satisfy the requirement of this Section 19.4 that
Lessor receive the Aircraft Agreed Value in the event of an Event of Loss and
the amount required by the third party engine owner or (y) separate
additional insurance on such engine will attach in order to satisfy separately
the requirements of Lessee to such third party engine owner.


 


(d)                                 Installation of Engines on other Airframes.  If Lessee installs or permits the
installation of an Engine on an airframe that is not the Airframe, either (x) the
hull insurance maintained on such airframe must automatically increase by an
amount equal to the Engine Agreed Value so that Lessor receives the Engine
Agreed Value in the event of an Event of Loss with respect to such Engine while
installed on such airframe, or (y) separate additional insurance on such
Engine will attach in order to satisfy separately the requirements of Lessee
with respect to such Engine.


 


(e)                                  Additional Lessee Coverage. 
Lessee may obtain additional hull insurance on the Aircraft, over and
above the Agreed Value hereunder, provided that it does not adversely affect
the coverage required to be maintained hereunder. Lessor nor any of the
Indemnified Parties or Additional Insureds shall have no right to any proceeds
of any such additional insurance maintained by Lessee.


 


19.6.                        Requirements for All
Insurances  All Insurances shall:


 


(a)                                  be
maintained in effect with insurers reasonably acceptable to Lessor, of
recognized responsibility, specializing and normally participating in the
international airline insurance market;


 






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(b)                                 provide
that in respect of the interests of the Additional Insureds such policies of
insurance shall insure the Additional Insureds regardless of any breach or violation
of any warranty, declarations or conditions contained in such policies by
Lessee or any other insured;


 


(c)                                  provide
that, other than in respect of unpaid premiums with respect to the Aircraft,
Engines, Parts, and/or other Items of Equipment, the Additional Insureds shall
have no responsibility for any premiums, assessments, warranties or
representations in connection with such insurance;


 


(d)                                 include
the geographic limits of all territories over which the Aircraft and any Engine
will be operated, subject to such territory exclusions as may be usual and
customary in the worldwide airline insurance marketplace for airlines similarly
situated and operating similar aircraft as the Lessee;


 


(e)                                  waive
any rights of setoff, counterclaim, or deduction (other than in respect of
unpaid premiums with respect to the Aircraft, Engines, Parts, and/or Items of
Equipment), whether by attachment or otherwise, and all rights of subrogation
against the Additional Insureds and their respective successors, assigns, agents,
officers, employees and servants, but only to the same extent the Lessee has
waived its rights of recovery against and/or indemnified the Additional
Insureds and their respective successors, assigns, agents, officers, employees
and servants; and


 


(f)                                    provide
that if the insurers cancel such insurance for any reason whatever, for
nonpayment of premium, or if there is any adverse material change in policy
terms and conditions adverse to the interests of the Additional Insureds, such
cancellation or change shall not be effective until thirty (30) days from
issurance by Lessee’s appointed broker to Lessor of such cancellation or change
(ten (10) days for nonpayment of premium and seven (7) days for
cancellation with respect to war risk and allied perils insurance or such
shorter period as shall be customary for such insurance in such area of the
world).


 


19.7.                        Reports 
Lessee and its insurance underwriters or brokers shall advise
Lessor in writing promptly of any default in the payment of any premium.  On or before the Delivery Date, and
thereafter on or prior to each renewal or replacement by Lessee of the
insurance required hereby, but not less often than annually, Lessee will cause
its broker to furnish to Lessor one or more original certificates of insurance,
and a broker’s letter of undertaking, each executed and delivered by an
insurance broker appointed by Lessee and approved by Lessor (such approval not
to be unreasonably withheld), which together shall describe in reasonable
detail the insurance carried on the Aircraft. 
Lessee will cause its insurance brokers to identify to Lessor the
insurers and shall certify to Lessor that the insurance then maintained on the
Aircraft is customary in the commercial passenger airline industry for airlines
similarly situated with, and operating similar aircraft as, the Lessee; and
shall advise Lessor in writing at least thirty (30) days (seven (7) days
or such lesser period as may from time to time be applicable in the case of any
war risk and allied perils coverage and ten (10) days for reason of
non-payment of premiums) prior to the cancellation by the underwriters of any
such insurance or as soon as possible in respect of automatic termination for
war risk insurance required hereunder.  Certificates
of insurance shall be provided to Lessor on or prior to the expiration or
replacement date of the insurance required hereunder.  Otherwise, not less than five (5) Business
Days before the expiration or termination date of any insurance required
hereunder, Lessee will provide Lessor with faxed or other electronic
confirmation from Lessee’s insurance brokers certifying that renewal
certificates of insurance evidencing the renewal or replacement of such
insurance pursuant to the provisions of this Article 19 will be issued effective
as of the termination date of the prior insurance coverage.  Within fifteen (15) days after such renewal,
Lessee will furnish to Lessor an 


 






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original certificate (or other
documentation reasonably acceptable to Lessor) of such insurance coverage
acceptable to Lessor from such insurance broker.


 


19.8.                        Assignee of Lessor’s
Interests  If Lessor and/or any Financing Party assigns
all or any of its rights or otherwise disposes of any interest in the Aircraft
or this Lease to any other Person, Lessee shall, upon request, procure that
such Person shall (x) be named as loss payee in substitution for Lessor
and/or such Financing Party, as applicable in the hull policies and/or as
additional insured in the liability policies effected hereunder and (y) enjoy
the same rights and insurance enjoyed by Lessor and such Financing Party, as
applicable, under such policies.


 


19.9.                        Failure to Insure 
If at any time
the Insurances are not maintained by Lessee in compliance with this Article 19,
Lessor and any Financing Party shall be entitled but not bound to do any of the
following (without prejudice to any of the rights which any of them may have
under the Operative Documents by reason of such failure):


 


(a)                            upon giving notice thereof to
Lessee, to pay any premiums due or to effect or maintain such insurance or
otherwise remedy such failure in such manner as Lessor or, if applicable, any
Financing Party considers appropriate (and Lessee shall upon demand reimburse
Lessor or if applicable, the relevant Financing Party in full for any amount so
expended in that connection); and/or


 


(b)                           at any time while such failure is
continuing, to require the Aircraft to remain at any airport or (as the case
may be), subject to the Aircraft being adequately insured, proceed to and
remain at any airport designated by Lessor, until such failure is remedied to
Lessor’s satisfaction.


 


19.10.                  Lessor’s Right to Insure  Lessee acknowledges that each of Lessor and each Financing Party has an
insurable interest in the Aircraft and each Item of Equipment and may, at its
own expense, obtain insurance or contingent insurance in its own name with
respect to such insurable interest. 
Lessee shall provide to Lessor and each Financing Party all reasonable
assistance as from time to time requested by it in order to adequately protect
such insurable interest. Neither Lessor nor any Financing Party shall maintain
any such insurance that would prejudice the insurance maintained by Lessee
pursuant to this Lease.  Lessee
shall have no right to any proceeds of any insurance policies maintained by
Lessor.


 


19.11.                  Changes to Insurance
Practice  If there is a material change in the generally
accepted industry-wide practice with regard to the insurance for
airlines similarly situated with, and operating similar aircraft as, the Lessee or any material change with respect
to the insurance of aircraft based or operated in any jurisdiction in which the
Aircraft may then be based or operated (whether relating to all or any of the
types of Insurances required to be effected under this Article 19) for
airlines similarly situated with, and operating similar aircraft as, the Lessee such that Lessor shall be of the
reasonable opinion that the Insurances required pursuant to this Article 19
are insufficient to protect the respective interests of Lessor and the other
Indemnitees (bearing in mind the nature and route of operation of the
Aircraft), the insurance requirements set forth in this Article 19 shall
be amended, as soon as practicable following notice by Lessor to Lessee, so as
to include such additional or varied requirements as may be reasonably
necessary to ensure that the insurance as so varied shall provide comparable
protection to Lessor and the other Indemnitees to that which it would have done
if such change had not occurred.  In such
circumstances, Lessor will consult in good faith with Lessee in relation to any
proposed change.


 


19.12.                  AVN 67B 
Notwithstanding anything to the contrary contained in this Article 19,
Lessor shall accept the terms of AVN 67B (“Airline Finance/Lease
Contract Endorsement”) where 


 






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such endorsement is contrary to
the terms of this Lease as long as such endorsement is customary in the London
international insurance markets for commercial passenger airline.


 






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20.                               LOSS
AND DAMAGE TO THE AIRCRAFT AND ITEMS OF EQUIPMENT


 


20.1.                        Risk of Loss
and Damage.  Following Delivery, Lessee shall bear the full
risk of any loss, destruction, hijacking, theft, condemnation, confiscation,
seizure or requisition of or damage to the Aircraft and each Item of Equipment
and of any other occurrence which shall deprive Lessee of the Aircraft or any
Item of Equipment for the time being of the use, possession or enjoyment
thereof including, without limitation, any resulting loss in value of the
Aircraft or any Item of Equipment due to any of the aforementioned
circumstances.


 


20.2.                        Notification of Loss and
Damage.


 


(a)                                  Lessee shall give Lessor notice in
writing within two (2) days (or within twenty-four (24) hours with respect
to the Aircraft or the Airframe) after the occurrence of any Event of Loss.


 


(b)                                 Each of Lessee and Lessor shall
supply to the other all necessary information, documentation and assistance
which may reasonably be required in connection with making any claim under the
Insurances.


 


20.3.                        Event of Loss —
Aircraft/Airframe.  Following Delivery, if an Event of Loss
occurs in respect of the Airframe (with or without the Engines), Lessee shall
pay, or procure that the insurer pays, to Lessor (or to any Financing Party
named as loss payee under the Insurances) as soon as reasonably practicable but
in any event within one hundred twenty (120) days after the date of such Event
of Loss or, if earlier, the third Business Day following the date such
insurance proceeds are received, the Agreed Value as at the date of such Event
of Loss (or such earlier date, as the case may be) together with all Rent and
other amounts then due and payable under Operative Documents.


 


(a)                                  The Net Event of Loss Proceeds
received by Lessor (or such other person as may be designated as loss payee)
from Lessee or the insurer pursuant to this Article 20 shall be applied as
follows:


 


(i)                                     first, in discharge of the Agreed
Value;


 


(ii)                                  second, in discharge of any unpaid
Rent and any other amounts (other than the Agreed Value) due and payable by
Lessee under the Operative Documents; and


 


(iii)                               third, payment of the balance, if
any, to Lessee.


 


(b)                                 Lessee shall continue to pay Basic
Rent on the days and in the amounts required under this Lease notwithstanding
any such Event of Loss provided  that no
further installments of Basic Rent shall become due after the date on which all
sums due under this Section 20.3 shall have been paid in full, and on such
date the Lease Term shall terminate and Lessor shall, at Lessee’s cost and
subject to the rights (if any) of the insurer cause title to the Aircraft (and
to any surviving Engine) to be conveyed to Lessee (or Lessee’s insurers, as the
case may be) on a quitclaim basis, without warranty or recourse, except that
the same shall be free and clear of all rights of Lessor and Lessor’s Liens
without representation, recourse to or warranty by Lessor or any Financing
Party and, provided no Default or Event of Default has occurred and is
continuing, Lessor shall thereafter return the Security Deposit to Lessee.


 






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20.4.                        Event of Loss — Engine or
APU.  Upon the occurrence of
an Event of Loss with respect to an Engine or APU, under circumstances in which
there has not occurred an Event of Loss with respect to the Aircraft or
Airframe, Lessee shall forthwith, but in any event, before the earliest to
occur of (x) the Scheduled Termination Date, (y) the Termination
Date, and (z) ninety (90) days after the occurrence of such Event of Loss,
convey to Lessor, free and clear of all Liens, title to another engine or, as
applicable, auxiliary power unit of the same or an improved model and suitable
for installation and use on the Airframe.  
Notwithstanding anything to the contrary in the preceding sentence, at
such time as Lessee obtains title to (i) an engine and (ii) an
auxiliary power unit, each of which complies with the requirements for a
replacement engine or auxiliary power unit (as the case may be) set forth in
this Section 20.4, then the ninety (90) day period specified in sub-clause
(z) above shall be reduced thereafter to sixty (60) days with respect to
an Event of Loss of any Engine or the APU, as applicable.


 


(a)                                  Replacement Engine. 
The replacement engine shall not have accumulated more than one hundred
ten percent (110%) of the total Flight Hours and Cycles since new and since
completion of the most recent Engine Restoration as compared to the replaced
Engine and have a value and utility at least equal to, and be in as good
operating condition as, the Engine with respect to which such Event of Loss
shall have occurred, based on but not limited to (i) Cycles accumulated on
each Engine Life Limited Part, (ii) Flight Hours accumulated since new
(and accumulated since completion of the most recent heavy maintenance shop
visit that completed a workscope at least equivalent to that of an Engine
Restoration if an Engine Restoration had previously been accomplished on the
Engine that suffered such Event of Loss), and (iii) Flight Hours and
Cycles accumulated since new (and accumulated since the most recent restoration
or refurbishment of each engine module with respect to any module for which a
restoration or refurbishment had previously been accomplished on the Engine
that suffered such Event of Loss), assuming such Engine was of the value and
utility and in the condition and repair as required by the terms hereof
immediately prior to the occurrence of such Event of Loss. Prior to transfer of
title of such replacement engine to Lessor, both Lessor and Lessee shall in
good faith determine whether an adjustment, if any, should be made to the
Engine Reserves for the replaced Engine and following transfer of title of such
replacement engine to Lessor, if it was determined that (x) additional
Engine Restoration Reserves (if applicable) or Engine Life Limited Parts
Reserves were due, then Lessee shall promptly pay such amount due to Lessor or (y) the
amount then currently held by Lessor is in excess of what is needed in the
Engine Restoration Reserve (if applicable) or the Engine Life Limited Parts
Reserve for the replacement engine, then, provided no Event of Default has
occurred and is continuing, Lessor shall promptly refund such excess amount to
Lessee, provided, that if, after becoming an Engine pursuant to this Lease,
such replacement engine is covered by a Lessee Engine TCA (as defined in Section 2.A.(vi)(d) of
Appendix 2D hereof), the adjustments described in this Section 20.4(a) shall
only apply (A) to the Engine Restoration Reserves if an Engine Restoration
has not been accomplished with respect to such replacement engine during the
Lease Term, subject to a requirement for Lessee to make a payment to Lessor on
the Termination Date pursuant to Section 2.A.(vi)(d) of Appendix 2D
hereof, and (B) to the Engine Life Limited Parts Reserves, at the time
such replacement engine becomes an Engine.


 


(b)                                 Replacement APU.  The
replacement auxiliary power unit shall not have accumulated more than one
hundred ten percent (110%) of the total APU Hours and APU Cycles since new and
since completion of its most recent APU Overhaul as compared to the replaced
auxillary power unit and shall have a value and utility at least equal to, and
be in as good operating condition as, the APU with respect to which such Event
of Loss shall have occurred, based on but not limited to (i) APU Hours
(and APU Cycles if applicable) accumulated since new with respect to each APU
Life Limited  Part (as
applicable), (ii) APU


 






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Hours accumulated since new (and accumulated
since completion of the most recent Overhaul that completed a workscope at
least equivalent to that of an Overhaul if an Overhaul had previously been
accomplished on the APU that suffered such Event of Loss), and (iii) APU
Hours accumulated since new (and since the most recent Overhaul for each
auxiliary power unit module if an Overhaul had previously been accomplished on
the APU that suffered such Event of Loss), assuming such APU was of the value
and utility and in the condition and repair as required by the terms hereof
immediately prior to the occurrence of such Event of Loss.


 


(c)                                  Lessor Inspection. 
Lessee shall identify to Lessor a candidate replacement engine or
auxiliary power unit (as applicable) and Lessor may inspect such candidate
replacement engine or auxiliary power unit, which shall include, at Lessor’s
option, (i) a full borescope inspection of the compressor, turbine and
combustion sections of the replacement engine or auxiliary power unit and (ii) a
records inspection, and the results of each such inspection must be
satisfactory to Lessor.


 


(d)                                 Replacement Subject to Lease.  Upon acceptance by Lessor, such replacement
engine or, as applicable, auxiliary power unit, shall be deemed an “Engine” or,
as applicable, an “APU”, as defined herein for all purposes hereunder.  Lessee agrees to take such action and execute
and deliver such documents, including, but not limited to a warranty bill of
sale, a supplement hereto and legal opinions, as Lessor may reasonably request
in order that any such replacement Engine or APU shall be duly and properly
titled in the name of Lessor and leased hereunder to the same extent as any
Engine or APU replaced thereby.


 


20.5.                        Event of Loss — Landing
Gear.


 


(a)                                  Upon
the occurrence of an Event of Loss with respect to a Landing Gear, under
circumstances in which there has not occurred an Event of Loss with respect to
the Aircraft or the Airframe, Lessee shall forthwith replace such Landing Gear
as soon as reasonably possible, but in any event, before the earliest to occur
of (x) the Scheduled Termination Date, (y) the Termination Date, and (z) 
ninety (90) days from the date of the occurrence of such Event of Loss, by duly
conveying to Lessor, free and clear of all Liens, title to another landing gear
of the same or an improved model and suitable for installation and use on the
Airframe.


 


(b)                                 The
replacement landing gear shall have a value and utility at least equal to, and
be in as good operating condition as, the Landing Gear with respect to which
such Event of Loss shall have occurred, based on but not limited to (i) the
maximum weight certified for such landing gear; (ii) Flight Hours, Cycles
and calendar time accumulated since new with respect to each Landing Gear Life
Limited  Part (as applicable),
and (iii) Flight Hours, Cycles and calendar time accumulated since new
(and accumulated since Overhaul if an Overhaul had previously been accomplished
on the Landing Gear that suffered such Event of Loss), assuming such Landing
Gear was of the value and utility and in the condition and repair as required
by the terms hereof immediately prior to the occurrence of such Event of Loss.


 


(c)                                  Lessee
shall identify to Lessor a candidate replacement landing gear and Lessor may
inspect such replacement landing gear, which shall include, at Lessor’s option,
a records inspection, and the results of such inspection must be satisfactory
to Lessor.


 


(d)                                 Upon
acceptance by Lessor, any such replacement landing gear shall be deemed a “Landing
Gear”, as defined herein for all purposes hereunder.  Lessee agrees to take such action and execute
and deliver such documents, including, but not limited to a warranty 


 






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bill of sale, a supplement hereto and legal
opinions, as Lessor may reasonably request in order that any such replacement
landing gear shall be duly and properly titled in the name of Lessor and leased
hereunder to the same extent as any Landing Gear replaced thereby.


 


20.6.                        Repairable Damage.


 


(a)                                  In
the event of repairable damage to any Item of Equipment for which Lessee’s
insurance proceeds are paid or payable, subject to no Event of Default having
occurred and continuing, all insurance proceeds which may be paid or payable by
the insurers of the Aircraft shall, subject to receipt (x) by Lessor of a
true and correct copy of the adjuster’s claim report, and (y) by Lessee
and the insurers of Lessor’s prior written approval for the release of such
proceeds, be paid to:


 


(i)                                     Lessee
in respect of all loss or damage Lessee has made good (or caused to be made
good), or


 


(ii)                                  the
repairer for the cost of the completed repair works, or


 


(iii)                               to
the vendor of any new or replacement Item of Equipment for the cost of such new
or replacement Item of Equipment;


 


provided  that Lessee
shall have furnished to Lessor a true and correct copy of the insurance
adjuster’s written confirmation, in a form reasonably satisfactory to Lessor,
that the repairs have been fully performed and that all invoices in relation
thereto have been paid and a certification by Lessee that all such repairs have
been performed in accordance with the terms of this Lease.  Any such insurance proceeds payable following
the occurrence and continuation of an Event of Default (or not otherwise
applied in the manner described above) shall be applied in such manner as
Lessor may direct.


 


(b)                                 In
the event of repairable damage to any Item of Equipment for which insurance
proceeds are paid or payable, if such insurance proceeds paid in respect
thereof are insufficient to pay the cost or estimated cost of making good or
repairing such damage or the cost of purchasing a replacement engine, auxiliary
power unit, landing gear or part if the same is beyond economic repair, Lessee
will pay the deficiency.


 


20.7.                        Documents Loss. 
Upon the occurrence of a Documents Loss under circumstances in
which there has not occurred an Event of Loss with respect to an Item of
Equipment for which such Lost Documents relate, Lessee shall within thirty (30)
days from the date of such loss notify Lessor in writing and thereafter replace
such Lost Documents (such replacement documents hereinafter “Reconstructed Documents”) by:


 


(a)                                  obtaining
copies of such Lost Documents from the Approved Maintenance Organization that
accomplished the maintenance covered by the respective Lost Documents, each
such copy to be certified by the Quality Assurance Department of the respective
Approved Maintenance Organization as to being a true copy of the respective
Lost Document, or


 


(b)                                 the
re-accomplishment of Overhauls and Tasks specified in such Lost Documents as
soon as reasonably possible, but in any event, before the earliest to occur of (x) sixty
(60) days following the Documents Loss, (y) the Scheduled Termination
Date, and (z) the Termination Date. 
The Reconstructed Documents shall comply with all requirements for
Required Approvals with respect to the Item of Equipment to which such Lost
Documents 


 






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relate and shall be sufficient to document
the then current maintenance status of the affected Items of Equipment.  Lessor shall be entitled to inspect the
Reconstructed Documents and the results of each such inspection must be
satisfactory to Lessor.  Upon acceptance
by Lessor, such Reconstructed Documents shall be deemed Aircraft Documents as defined
herein for all purposes hereunder.


 


20.8.                        Application
of Payments from Governmental Authorities.  Payments received by Lessor or Lessee from
any Governmental Authority or entity with respect to an Event of Loss resulting
from the condemnation, confiscation or seizure of, or requisition of title to
or use of the Aircraft or the Airframe, shall be retained by Lessor, if
received by Lessor, or promptly paid over to Lessor, if received by Lessee, up
to the Agreed Value (plus any amounts of unpaid Rent and any other amounts due
to Lessor hereunder or under any other Operative Documents).  At such time as Lessor has received such
amounts in full, Lessor shall promptly remit the excess, if any, of such
payments to Lessee.  Payments received by
Lessor or Lessee from any Governmental Authority or entity with respect to an
Event of Loss resulting solely from the condemnation, confiscation or seizure
of, or requisition of title to or use of any Engine shall be paid over to, or
retained by, Lessee, provided that Lessee shall have fully performed its
obligations under this Article 20 with respect to such Engine. Payments received
by Lessor or Lessee from any Governmental Authority with respect to a
requisition of use during the Lease Term of the Aircraft, the Airframe or any
of the Engines, which requisition does not constitute an Event of Loss, shall,
so long as no Default or Event of Default has occurred and is continuing, be
paid to, or retained by, Lessee.


 


20.9.                        No Lessor
Liability to Repair or Replace Following Delivery.  Lessor will not be liable for any expense in
repairing or replacing any Item of Equipment or be liable to supply another
aircraft or any item of equipment in lieu of the Aircraft or any Item of
Equipment if the same is lost, confiscated, damaged, destroyed or otherwise
rendered unfit for use or be required to produce or provide Reconstructed
Documents (as such term is defined in this Article 20).


 






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21.                               TAXES;
TAX INDEMNITY


 


21.1.                        Indemnity.


 


(a)                                  Indemnity.  Except as
provided in Section 21.1(b), Lessee shall pay, and shall indemnify and
hold harmless each Indemnitee for and against, all Taxes arising or resulting
from or otherwise relating to any Item of Equipment, any Operative Document, or
any of the transactions and activities provided for or contemplated in, or
permitted by, the Operative Documents, including without limitation, the
purchase, ownership, delivery, leasing, subleasing, wet-leasing, registration,
possession, use, operation, landing, take-off, storage, location, presence,
maintenance, alteration, modification, improvement, servicing, repair,
overhaul, pooling, interchange, exchange, substitution, replacement, loss,
return, sale or other disposition of, or any damage, addition or transfer of
title to, any Item of Equipment or any interest therein, the execution,
delivery, filing, registration, recording, presence, performance of, payment
under or enforcement of, or the cure of any default or the exercise of any
remedy under, any Operative Document or any other documents executed from time
to time pursuant to any Operative Document (regardless of how or when such
Taxes are imposed or assessed, whether imposed on or assessed against any
Indemnitee, Lessee, any Item of Equipment, any Operative Document, any interest
therein or any use thereof, or otherwise) and all costs and expenses
(including, but not limited to, reasonable attorney’s fees and disbursements)
paid or incurred by any Indemnitee with respect to any Tax for which Lessee is
required to indemnify such Indemnitee pursuant to this Article 21 or in
connection with the enforcement of this Article 21.


 


(b)                                 Excluded Taxes. 
Lessee shall have no obligation under Section 21.1(a) to
indemnify an Indemnitee for:


 


(i)                                     any
Tax imposed on or measured by the total net income of such Indemnitee except to
the extent that such Tax would not have been payable in the absence of (A) the
registration, use, presence or other connection of any Item of Equipment in or
with, or any act or omission of Lessee or any Affiliate, agent, representative
or contractor of Lessee or any Person using or having possession, custody or
control of any Item of Equipment in, the jurisdiction imposing such Tax, (B) the
inaccuracy or breach of any of the representations, warranties, covenants or
agreements of Lessee in the Operative Documents, or (C) an Event of
Default;


 


(ii)                                  any
Tax imposed on or with respect to any sale or other transfer by such Indemnitee
of such Indemnitee’s interest in the Aircraft pursuant to Section 25.2,
provided that the exclusion in this clause (ii) shall not apply to
any sale or transfer that occurs (A) in connection with or as a result of
a Default, an Event of Default, an Event of Loss, or any maintenance, repair,
overhaul, pooling, interchange, exchange, removal, replacement, substitution,
modification, improvement, or alteration of any Item of Equipment, or (B) at
Lessee’s request, or (C) pursuant to a requirement in any Operative
Document or any applicable Law;


 


(iii)                               any
Tax to the extent that such Indemnitee’s liability for such Tax is caused
directly by, and would not have been incurred but for, the gross negligence or
willful misconduct of such Indemnitee; or


 


(iv)                              in
the case of a transferee of Lessor’s interest in the Aircraft pursuant to Section 25.2,
Taxes imposed on the transferee or on payments to the transferee to the extent
that, under applicable Law in effect on the date of the transfer to such
transferee, the amount of such Taxes exceeds the amount of Taxes that would
have 


 






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been imposed on the transferor to such
transferee or on payments to such transferor and indemnified against hereunder
if such transfer had not occurred, provided that the exclusion in this clause (iv) shall
not apply to a transferee Lessor that acquires its interest in the Aircraft
pursuant to a transfer in connection with an Event of Default.


 


(c)                                  No Reduction for Withholding.  Lessee
agrees that all amounts payable by Lessee (or by any other Person on account of
any obligation of Lessee) pursuant to the Operative Documents shall be paid
without any deduction or withholding on account of any Taxes, monetary transfer
fees, or other charges or withholdings of any nature, except to the extent that
the deduction or withholding of any Tax is required by applicable Law, in which
event Lessee shall (i) except to the extent that such Tax is an Excluded
Tax described in Section 21.1(b)(iv), pay to the Person entitled to
receive such payment (the “Payee”) such
additional amount as is necessary so that the Payee receives, after such
deduction or withholding (including any withholding with respect to such
additional amount), an amount equal to the amount that the Payee would have
received if such deduction or withholding had not been made and (ii) deliver
to Lessor within sixty (60) days after the date of such payment an official
receipt of the relevant taxing authority showing that Lessee paid to such
taxing authority the full amount of the Tax required to be deducted or
withheld.


 


21.2.                        Tax Filings;
Information.


 


(a)                                  Unless
otherwise directed or agreed in writing by Lessor, Lessee shall properly
prepare and timely file all reports, returns, declarations and other documents
(each a “Tax Document”) that are required by
applicable Law to be filed with any Governmental Authority or other taxing
authority with respect to each Indemnified Tax.


 


(b)                                 Lessee
shall (i) deliver to Lessor within thirty (30) days after receipt of
Lessor’s written request, a certificate of an officer of Lessee, in form and
substance satisfactory to Lessor, demonstrating compliance with Lessee’s
covenants in Section 11.6 during the period or periods specified in Lessor’s
written request, and (ii) deliver to each Indemnitee as soon as reasonably
practicable (and in any event within thirty (30) days) after receipt of such
Indemnitee’s written request therefor, such information and copies of such
records and other documents (including, without limitation, the flight log for
the Aircraft) maintained or required to be maintained by Lessee or by any other
user of any Item of Equipment in the regular course of its business as such
Indemnitee may request from time to time to enable such Indemnitee to comply
with applicable Tax reporting, audit, audit dispute resolution, and litigation
requirements, and if requested by any Indemnitee, make such information,
records and other documents available for inspection by such Indemnitee or its
authorised representatives.


 


(c)                                  Without
limiting the obligations of Lessee under Section 21.2(b), Lessee and
Lessor shall co-operate with one another in providing information that is
reasonably required to fulfill each party’s Tax filing requirements and any
audit information request arising from such filing, provided that no Indemnitee
shall have any obligation to furnish or disclose to Lessee or any other Person
any Tax return or other information relating to its Tax affairs that such
Indemnitee deems, in its sole discretion, to be confidential or proprietary.


 


21.3.                        Payment of
Taxes and Indemnities.


 


(a)                                  To
the extent required or permitted by applicable Law, Lessee shall pay each
Indemnified Tax when due directly to the proper taxing authority, unless
otherwise directed or agreed in writing by Lessor, except Indemnified Taxes (i) which
Lessee is contesting in good faith by appropriate proceedings that do not
involve any risk of criminal penalty or any 


 






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reasonable possibility of sale, forfeiture,
confiscation, seizure or loss of, or the imposition of any Lien on, any Item of
Equipment or any interest therein and (ii) for which Lessee maintains
adequate reserves in accordance with GAAP.


 


(b)                                 Any
indemnity payable by Lessee to an Indemnitee shall be paid within ten (10) days
after the date on which Lessee receives such Indemnitee’s written demand
therefor (which demand shall provide a description in reasonable detail of the
applicable Indemnified Taxes and the calculation of the amount of the indemnity
payment demanded).


 


(c)                                  All
amounts payable by Lessee pursuant to this Article 21 shall be paid on an
After-Tax Basis.


 


21.4.                        Contest


 


(a)                                  If
an Indemnitee receives a written claim from any taxing authority for any
Indemnified Tax, such Indemnitee shall notify Lessee within thirty (30) days
after receipt of such claim, but the failure to so notify Lessee shall not
affect Lessee’s obligations under this Article 21, unless such failure
causes all rights of Lessee to contest such claim to be precluded.


 


(b)                                 If
requested by Lessee in writing within thirty (30) days after such notification,
such Indemnitee shall, upon receipt of indemnity satisfactory to it and at the
expense of Lessee (including, without limitation, all reasonable costs,
expenses, losses, legal and accounting fees and disbursements, penalties and
interest), in good faith contest (or, at the option of such Indemnitee, permit
Lessee to contest) the validity, applicability or amount of such Tax in
accordance with and to the extent permitted by applicable Law, and shall not settle any contest without the
consent of Lessee (which consent shall not be unreasonably withheld), provided
that such Indemnitee shall have no obligation to begin or continue (or
to permit Lessee to begin or continue) any contest under this Section 21.4
unless the following conditions are satisfied at the time the contest is to be
commenced and at all times during the contest:


 


(i)                                     Lessee
shall have provided such Indemnitee, together with Lessee’s written contest
request, with an opinion of independent tax counsel satisfactory to such
Indemnitee (both as to counsel and substance) to the effect that there is a
meritorious basis for such contest;


 


(ii)                                  contesting
such Tax claim will not result in any risk of imposition of any criminal
penalty or, in Lessor’s reasonable opinion, any risk of any sale, forfeiture,
confiscation, seizure or loss of, or the creation of any Lien on, any Item of
Equipment or any interest therein;


 


(iii)                               no Event
of Default shall have occurred and be continuing;


 


(iv)                              if
such Indemnitee decides to contest such Tax claim by paying the Taxes that are
the subject of such claim and taking action to obtain a refund thereof, Lessee
shall have advanced to such Indemnitee on an interest-free basis the amount of
Taxes that are the subject of such claim and shall have agreed in writing to
indemnify such Indemnitee and its Affiliates on an After-Tax Basis for any
adverse Tax consequences to such Indemnitee or any of its Affiliates resulting
from such interest-free advance;


 






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(v)                                 the
amount of the Taxes to be contested exceeds $25,000 (or the equivalent in any other currency);


 


(vi)                              Lessee
shall have provided such Indemnitee with a written acknowledgment of Lessee’s
liability to indemnify such Indemnitee for the Taxes to be contested if and to
the extent that the contest is not successful;


 


(vii)                           Lessee
shall be paying, on demand and on an After-Tax Basis, all reasonable costs and
expenses incurred by such Indemnitee in connection with the conduct of such
contest (including, without limitation, all reasonable costs, expenses, losses,
legal and accounting fees and disbursements, penalties and interest); and


 


(viii)                        if the sum
of the Taxes that are the subject of such Tax claim exceeds One Million Dollars
($1,000,000) (or the equivalent in any other currency), Lessee shall have
provided a letter of credit or other additional collateral satisfactory in form
and amount to such Indemnitee to secure Lessee’s obligations hereunder;


 


and provided, further, that
such Indemnitee shall have no obligation to begin or continue (or to permit
Lessee to begin or continue) the contest of any or all of the Taxes that are
the subject of such Tax claim if such Indemnitee (x) waives its right
under this Article 21 to be indemnified for the Taxes which such
Indemnitee declines to contest and (y) repays to Lessee the amount (if
any) which Lessee previously advanced to such Indemnitee pursuant to Section 21.4(b)(iv) with
respect to the Taxes that such Indemnitee declines to contest.


 


(c)                                  The party
contesting any Tax claim pursuant to this Section 21.4 shall control the
conduct of the contest and shall, upon request, consult with the other party
regarding the conduct of the contest and inform the other party of the progress
of the contest.


 


21.5.                        Refunds; Tax
Savings


 


(a)                                  If
Lessee pays an indemnity on an After-Tax Basis pursuant to Sections 21.1(a) and
21.3(c), or pays an additional amount on an After-Tax Basis pursuant to
Sections 21.1(c)(i) and 21.3(c), with respect to an Indemnified Tax to an
Indemnitee and such Indemnitee receives a refund of such Indemnified Tax or
determines that it has received a net cash benefit due to any Tax Saving (as
defined in Section 21.5(d)) with respect to such Indemnified Tax (other
than any Tax Saving previously taken into account in the calculation of any indemnity
pursuant to Sections 21.1(a) and 21.3(c) or any additional amount
pursuant to Sections 21.1(c) and 21.3(c)), then subject to Section 21.6,
such Indemnitee shall, to the extent it can do so without prejudice to the
retention of such refund or Tax Saving, pay to Lessee an amount equal to the
lesser of (i) the sum of such refund (after deducting all costs and
expenses that were incurred by such Indemnitee and not reimbursed by Lessee for
the purpose of obtaining such refund) or such net cash benefit plus any
additional net cash benefit received by such Indemnitee due to any Tax Saving
resulting from such payment or (ii) the amount of the indemnity or
additional amount previously paid by Lessee to such Indemnitee with respect to
such Indemnified Tax, less the sum of all prior payments made by such
Indemnitee to Lessee pursuant to this sentence with respect to such Indemnified
Tax.  If such Indemnitee receives, in
addition to such refund, an amount representing interest on such refund, such
Indemnitee shall pay to Lessee that proportion of such interest which is fairly
attributable to the refund of the Indemnified Tax paid or indemnified by
Lessee.


 


(b)                                 Lessee
shall indemnify each Indemnitee on an After-Tax Basis for any additional Tax
that is imposed on such Indemnitee as a result of the disallowance, loss,
unavailability, recapture, or reduction of all or any part of any Tax Saving or
refund for which 


 






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such Indemnitee made a payment to Lessee
pursuant to Section 21.5(a), and Section 21.4 shall not apply to any
such Tax.


 


(c)                                  Each
Indemnitee shall use good faith in preparing its income tax returns for any
taxable year to claim any deduction or credit described in Section 21.5(d) which
such Indemnitee has actual knowledge of and is entitled to claim.  Subject to the preceding sentence, each
Indemnitee shall have sole discretion in the management of its Tax
affairs.   No Indemnitee shall have any
obligation (i) to conduct its business or arrange or alter in any respect
its Tax or financial affairs so that it is entitled to receive a refund or Tax
Saving or (ii) to provide to Lessee or any other Person copies of or
access to any Tax returns or other information with respect to its Tax affairs.


 


(d)                                 For
the purpose of this Section 21.5, the term “Tax Saving”
means, with respect to any Indemnitee, any net reduction in such Indemnitee’s
liability for Excluded Taxes on or measured by net income which such Indemnitee
determines it has received by reason of any existing and currently realizable
deduction from taxable income or credit against any such Excluded Tax resulting
from:


 


(i)                                     payment
of an Indemnified Tax for which Lessee previously paid an indemnity to such
Indemnitee on an After-Tax Basis pursuant to Sections 21.1(a) and 21.3(c),
or paid an additional amount to such Indemnitee on an After-Tax Basis pursuant
to Sections 21.1(c)(i) and 21.3(c), or


 


(ii)                                  a
payment by such Indemnitee to Lessee pursuant to this Section 21.5.


 


21.6                           Effect of
Event of Default on Indemnitee Payment Obligations  No Indemnitee shall have any obligation to
make any payment to Lessee pursuant to this Article 21 while an Event of
Default is continuing.   The amount
otherwise payable to Lessee may be applied to satisfy Lessee’s obligations
under the Operative Documents and, to the extent not so applied,, shall be paid
to Lessee following the date on which no Event of Default is continuing.


 


21.7                           Withholding
Tax Exemption Documentation 
Lessor will deliver to Lessee on or before the Delivery Date and
thereafter as soon as reasonably practicable after receipt of Lessee’s written
request therefor (and, in the case of any Lessor that acquires its interest in
the Aircraft by transfer from a prior Lessor pursuant to Section 25.2,
within thirty (30) days after the date of such transfer) a completed and signed
Internal Revenue Service Form W-8BEN, W-8ECI or W-9 if Lessor is entitled
by applicable Law and form instructions to execute such form and if such form
is required by applicable Law to enable Lessee to pay Rent to Lessor pursuant
to this Lease without withholding (or withholding at a reduced rate, as the
case may be) any United States federal withholding Tax that Lessee would be
required by Law to withhold in the absence of such form.


 


21.8                           Non-Party
Indemnitees  Lessor shall make
reasonable efforts to cause each other Indemnitee to comply with its
obligations under this Article 21.


 


21.9.                        Survival.  The respective obligations of Lessee under
this Article 21 shall remain in full force and effect, notwithstanding the
occurrence of the Termination Date.


 






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22.                               RETURN
OF AIRCRAFT


 


22.1.                        Time and
Place.  On the Scheduled
Termination Date (or, if applicable, the Termination Date if such date is prior
to the Scheduled Termination Date) and unless the Aircraft has suffered an
Event of Loss, Lessee, at its own expense, shall Return the Aircraft to Lessor
at the Redelivery Location.  Lessor and
Lessee shall evidence Lessor’s acceptance of Return of the Aircraft, and any
exceptions thereto, by executing a Return Acceptance Certificate.  Unless a Default or an Event of Default shall
have occurred and be continuing or unless this Lease shall have been cancelled
by Lessor pursuant to Article 24, upon such execution and delivery, this
Lease shall terminate, with neither party hereto having any further liability
to the other hereunder except for those Obligations which specifically survive
the expiration, cancellation or termination of this Lease or as are otherwise
reserved in accordance with such Return Acceptance Certificate. If an Event of
Default occurs by Lessee failing to complete Return on the Scheduled
Termination Date or if an Event of Default occurs prior to or after the
Scheduled Termination Date and Lessor exercises its remedy to thereafter
repossesses the Aircraft, Lessee is nonetheless obligated to comply, and to
have the Aircraft comply, with the return requirements set forth in this Article 22
on the date of actual Return or repossession by Lessor.


 


22.2                           Condition.  Upon return of the Aircraft pursuant to Section 22.1,
Lessee shall comply with the requirements of Appendix 2E and Lessee shall
return the Aircraft in a condition in compliance with the provisions of this
Lease, including this Article 22, and Appendix 2E.


 


22.3                           Lessee’s
Continuing Obligations.


 


(a)                                  If Lessee shall, for any reason
whatsoever, fail to return the Aircraft in a timely manner in the condition
specified in this Lease, the Obligations of Lessee shall continue and the Lease
Term shall be deemed to be extended, day-to-day, until Return of the Aircraft;
provided  that this paragraph shall not be
construed as permitting Lessee to fail to meet its Obligation to return the
Aircraft in accordance with the requirements of this Lease and shall not
constitute a waiver by Lessor of any Default or Event of Default arising out of
such failure or prejudice the rights of Lessor under Article 24 with
respect thereto.


 


(b)                                 If the Aircraft is not returned to
Lessor in accordance with this Lease on the Scheduled Termination Date:


 


(i)                                     for the first fifteen (15) days
following the Scheduled Termination Date, Basic Rent shall be payable in an
amount equal to 125% of the monthly Basic Rent for the Aircraft, prorated on a
daily basis, payable weekly in arrears, for each day following the Scheduled
Termination Date until Lessor has been allowed and has completed a full and
thorough inspection of the Aircraft and Aircraft Documents as contemplated
herein and the Aircraft and Aircraft Documents are returned to Lessor in the
condition required hereunder, and (ii) for each day after the first
fifteen (15) days following the Scheduled Termination Date, an amount equal to
twice the monthly Basic Rent for the Aircraft, prorated on a daily basis,
payable weekly in arrears, until Lessor has been allowed and has completed a
full and thorough inspection of the Aircraft and Aircraft Documents as
contemplated herein and the Aircraft and Aircraft Documents are returned to
Lessor in the condition required hereunder at the time of return to Lessor,
provided, however, Lessor shall not unreasonably refuse to accept return of the
Aircraft solely due to minor discrepancies of the Aircraft and/or the Aircraft
Documents where such minor discrepancies are (x) listed as Aircraft
Discrepancies in the Return Acceptance Certificate set forth in Attachment 3 to
Appendix 7 hereto and (y) do not affect the airworthiness and
marketability of the Aircraft; and


 






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(ii)                                  payments in respect of Maintenance
Reserves shall continue to be payable and, with respect to Maintenance Reserves paid on a monthly basis,
prorated on a daily basis based on a month consisting of thirty (30)
days;


 


each of
which amounts shall be paid by Lessee at the earlier to occur of
each next Rent Payment Date, the date otherwise specified above and Return.


 


(c)                                  Lessor
may elect, in its sole and absolute discretion and without prejudice to its
rights under this Lease, to accept the return of the Aircraft prior to the Aircraft
being put in the condition required by this Article 22 and thereafter have
any such non-conformance corrected at such time as Lessor may deem appropriate
and at commercial rates then charged by the Person selected by Lessor to
accomplish such correction.  Any direct
expenses incurred by Lessor for such correction will become Supplemental Rent
payable by Lessee on demand following the submission of a written statement by
Lessor to Lessee, identifying the items corrected and setting forth the expense
of such corrections in reasonable detail. 
Lessee’s Obligation to pay such Supplemental Rent will survive the
Termination Date and until such time that the Aircraft is put into the
condition required for Return and Lessee’s remaining Obligations due for performance
on the Termination Date have been performed in full.


 


22.4.                        Legal Status
Upon Return.  At Return, the
Aircraft shall be:


 


(a)                                  free
and clear of all Liens, except Lessor’s Liens; and


 


(b)                                 duly
registered in the name of Lessee, as lessee, and evidencing the ownership
interest of Lessor to the extent permitted under the Law of the State of
Registration of the Aircraft (including, without limitation, execution and
delivery by Lessee of such documents as may be required to de-register the
Aircraft from the Register and to terminate the Lease or to evidence the
expiration, termination or cancellation of the Lease).


 


At Return, Lessee shall, at its own cost and expense, procure or
cooperate with Lessor in procuring the immediate deregistration of the Aircraft
from the Register.


 


22.5.                        Airport and
Navigation Charges.  Lessee
shall ensure that upon Return any and all airport, navigation and other similar
charges in connection with the use and operation of the Aircraft or any other
aircraft operated by or in Lessee’s fleet of aircraft which give rise or would
if unpaid give rise to any Lien in relation to the Aircraft or any Item of
Equipment have been paid and discharged in full and will at Lessor’s request
produce evidence thereof reasonably satisfactory to Lessor.


 






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23.                               EVENTS
OF DEFAULT


 


Any one or more of the following events shall
constitute an “Event of Default” under this
Lease:


 


(a)                                  Lessee
shall fail to make any payment of Rent or in respect of Maintenance Reserves
when due hereunder and such failure shall continue for five (5) Business
Days; or


 


(b)                                 Lessee
shall fail to procure and maintain, or cause to be procured and maintained, the
Insurances or Lessee shall operate the Aircraft at a time when or in a place
where such Insurances shall not be in effect or is otherwise outside the scope
of coverage of the Insurances or Lessee fails to comply with the provisions of
Sections 11.5 (Compliance with Laws) or 17.1 (Registration); or


 


(c)                                  Lessee
shall fail to make any payment of any portion of the Security Deposit when due
hereunder and such failure shall continue for five (5) Business Days; or


 


(d)                                 [Reserved]


 


(e)                                  Lessee
voluntarily suspends substantially all of its airline operations or any
material franchise, concession, permit, right, or privilege required for the
conduct of the business and operation of Lessee are revoked, cancelled or
otherwise terminated and as a result of any of the foregoing, the preponderant
business activity of Lessee shall cease to be that of a commercial airline, in
each case except in connection with a merger or consolidation transaction
otherwise permitted hereunder; or


 


(f)                                    Lessee
shall cease to be a U.S. Air Carrier; or


 


(g)                                 Any
representation or warranty made by Lessee herein or in any document or
certificate furnished to Lessor in connection herewith or pursuant hereto
(other than financial statements and other documents, including exhibits, filed
with the SEC capable of being amended or updated) shall prove to have been
incorrect in any material respect when made or deemed made; or


 


(h)                                 The
occurrence of a Related Lease Event of Default or a Related Loan Event of Default
while C.I.T. Leasing Corporation (or one of its Affiliates) owns, or is the
beneficial owner of, the Aircraft; or


 


(i)                                     Lessee
shall at any time fail to maintain the Items of Equipment so that a current and
valid certificate of airworthiness cannot be or is not maintained for the
Aircraft and such failure continues for ten (10) days; or


 


(j)                                     (i) Lessee
repudiates this Lease, any Related Lease, Related Loan or any assignment for
security of any Permitted Sublease or (ii) this Lease ceases to be a valid
and enforceable agreement and in full force and effect for any reason due to
any action or inaction of Lessee, and, in the case of this sub-clause (ii), if
such unenforceability is susceptible to cure, Lessee has not cured the same
within two (2) Business Days; or


 


(k)                                  Lessee
shall fail to comply with its obligations pursuant to 17.5 (Perfection of
Title), or 17.6 (Cape Town Convention) and such failure shall continue for a
period of fifteen (15) Business Days after notice thereof is given by Lessor to
Lessee; or


 


(l)                                     [Reserved.]


 






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(m)                               Lessee
shall fail to perform or observe in any material respect any other of the
covenants, conditions, or agreements to be performed or observed by it
hereunder and such failure shall continue for a period in excess of thirty (30)
days after written notice thereof is given by Lessor to Lessee of such failure,
provided, however, that if Lessee shall be diligently undertaking to
cure any such failure which as it relates to maintenance, service, repair or
overhaul of the Aircraft, the Engines or Parts and, notwithstanding the
diligence of Lessee in attempting to cure such failure, such failure is not
cured within said thirty-day period but is curable with future due diligence,
there shall exist no Event of Default under this Section 23 so long as
Lessee is proceeding with due diligence to cure such failure and such failure
is remedied not later than sixty (60) days after such original failure; or


 


(n)                                 [Reserved]


 


(o)                                 (i) Lessee
shall commence any case, proceeding or other action (A) under any existing
or future Law relating to bankruptcy, insolvency, examinership, administration,
reorganization or other relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, or
other similar official for it or for all or any substantial part of its assets,
or Lessee shall make a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against Lessee any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged, unstayed or unbonded for a period of sixty (60)
days; or (iii) there shall be commenced against Lessee any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, stayed or bonded pending appeal within
sixty (60) days from the entry thereof; or (iv) Lessee shall admit in
writing its inability to, pay its debts as they become due.


 


Lessee hereby acknowledges that the occurrence of any one of the
foregoing Events of Default would represent a material default in the
performance of its Obligations.


 






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24.                               LESSOR’S
RIGHTS AND REMEDIES FOLLOWING AN EVENT OF DEFAULT


 


24.1.                        Lessor’s
Rights Following an Event of Default.  At any time after the occurrence and
continuation of an Event of Default Lessor may treat such event as a
repudiation by Lessee of the Lease generally and of its Obligations and may.


 


(a)                                  in the event of the occurrence and
continuation of an Event of Default before Delivery, by notice to Lessee
terminate its obligation to lease the Aircraft to Lessee hereunder; and/or


 


(b)                                 proceed by appropriate court action
to enforce performance by Lessee of the applicable covenants and provisions of
this Lease or the other Operative Documents or to recover damages for the
breach thereof; and/or


 


(c)                                  by notice to Lessee cancel this
Lease on and as of the date specified in such notice and (without further
notice to Lessee) retake possession of the Aircraft, and Lessee agrees that
Lessor may by its agents or representatives for this purpose enter upon Lessee’s
premises where the Aircraft may be located or cause the same to be redelivered
to Lessor, and Lessor shall be entitled to act as attorney for Lessee in
causing such redelivery or in directing pilots to fly the Aircraft to said
airport for redelivery thereof to Lessor and shall have all the powers and
authorizations legally necessary for taking such action (at Lessor’s election);
and/or


 


(d)                                 do
anything that may be required to cure the Event of Default (notwithstanding
Lessor having no obligation or responsibility to do so and without prejudice to
Lessor’s right to treat any such non-compliance by Lessee as an Event of
Default under this Lease) and recover from Lessee all costs and expenses
incurred in doing so; and/or


 


(e)                                  with or without taking possession
thereof, sell all the Aircraft or any Item of Equipment at public or private
sale, with or without advertisement, for cash or upon credit, or otherwise
dispose of, hold, use, operate, lease to others or keep idle the Aircraft or
any Item of Equipment as Lessor in its sole discretion may determine
appropriate, all free and clear of any rights of Lessee and without any duty to
account to Lessee with respect to such action or inaction or for any proceeds
thereof, all in such manner and on such terms as Lessor considers appropriate
in its absolute discretion, as if this Lease had never been entered into;
and/or


 


(f)                                    require Lessee to pay to Lessor all
amounts due and payable by Lessee to Lessor and/or any Indemnitee under the
Operative Documents to which it is a party as of the date of termination or
cancellation of this Lease; and/or


 


(g)                                 in the event Lessor shall have
obtained possession of the Aircraft as contemplated in Section 24.1(c) above
or otherwise, but shall not have re-leased or sold the Aircraft as contemplated
by Section 24.4 below, Lessor shall have the right (but without limiting
any of its other rights hereunder or under applicable law), by written notice
to Lessee specifying a payment date, to demand that Lessee pay to Lessor, and
Lessee shall pay to Lessor, on the payment date specified in such notice:  (A) all accrued but unpaid Basic Rent,
Maintenance Reserves and any Supplemental Rent payable by Lessee for the
Aircraft due to and including the payment date specified in such notice, plus (B) the
aggregate unpaid Basic Rent for the Aircraft which would otherwise have accrued
over the remainder of the Lease Term but for the Event of Default, discounted
monthly to present value as of the payment date specified in such notice at the
Discount Rate.  The amounts referred to
in this Section 24.1(g) shall continue to bear interest at the Past
Due Rate from the payment date specified in said 


 






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notice
until payment is made.  Following payment
of all amounts payable by Lessee as provided in this Section 24.1(g) and
payment of all other amounts payable pursuant to any other provisions of this
Lease, including amounts payable in connection with Lessor’s exercise of its
remedies hereunder pursuant to this Article 24, if Lessor subsequently
re-leases the Aircraft for any portion of the Lease Term that would have
remained in effect hereunder if an Event of Default had not occurred, Lessor
shall refund to Lessee an amount equal to the basic rental payments paid to
Lessor under the re-leasing, as the same are received by Lessor, for the period
from the commencement of the term of the re-leasing to the date upon which the
Lease Term for the Aircraft would have expired but for Lessee’s default, but
only to the extent of the Basic Rent referred to in clause (B) of this Section 24.1(g) and
Supplemental Rent referred to in clause (A) of this Section 24.1(g) are
received by Lessor; provided always that Lessee shall not be entitled to any
such refund under this Section 24.1(g) if (x) such refund would result
in Lessor receiving and retaining less than the full amount of all payments
that Lessor would have been entitled to receive and retain under this Lease
(after giving effect to any discounting of future payments) if Lessee had fully
performed its obligations hereunder throughout the entire Lease Term of this
Lease or (y) an Event of Default has occurred pursuant to Section 23 (o) (i) or
(ii); and/or


 


(h)                                 in connection with each of the
foregoing (except Section 24.1 (g), require Lessee to pay to Lessor on
demand and to indemnify Lessor for, from and against the following: all
damages, costs, fees, disbursements and expenses incurred or recoverable
pursuant to applicable Law by Lessor or in connection with such Event of
Default, including, but not limited to:


 


(i)                                     all direct (but not incidental)
losses, including lost profits (calculated on an After-Tax Basis) suffered by
Lessor because of Lessor’s inability to place the Aircraft on lease with
another lessee or inability to place the Aircraft on lease with another lessee
on terms as favourable to Lessor as this Lease and the other Operative
Documents or because whatever use, if any, to which Lessor is able to put the
Aircraft upon its return to Lessor, or the amount received by Lessor upon a
sale or other disposal of the Aircraft, is not as profitable to Lessor as
leasing the Aircraft in accordance with the terms of this Lease and the other
Operative Documents would have been, including, in each case, lost Rent
payments during any remarketing period or during any period in which the
Aircraft is placed in storage (and taking into account any expenses incurred by
Lessor in remarketing the Aircraft and/or in modifying or reconfiguring the
Aircraft to meet the requirements of an alternative lessee); and


 


(ii)                                  interest at the Past Due Rate on (A) any
amounts due and payable by Lessee under this Lease, but not paid, and (B) any
judgment against Lessee issued by a court of competent authority until the same
are paid in full; and


 


(iii)                               any direct out-of-pocket loss, cost,
expense or liability sustained or incurred by Lessor owing to Lessee’s failure
to redeliver the Aircraft on the date, at the place and in the condition
required by this Lease, including
any costs, fees, disbursements and expenses incurred in (A) repossessing,
storing, preserving, shipping, maintaining, repairing and refurbishing any Item
of Equipment to the condition required by this Lease and (B) preparing any
Item of Equipment for sale or lease, advertising the sale or lease of any such
Items and selling or re-leasing the same; and


 






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(iv)                              reasonable
legal fees and other costs and expenses incurred by reason of the occurrence of
any Default or Event of Default or the exercise of Lessor’s remedies with
respect thereto; and/or


 


(i)                                     in connection with Section 24.1
(g) above or Section 24.3 below, require Lessee to pay to Lessor on
demand and to indemnify Lessor for, from and against the following:


 


(i)                                     all losses related to Lessor putting
the Aircraft in its required return condition in accordance with the terms of
this Lease and any expenses incurred by Lessor in remarketing the Aircraft and/or
in modifying or reconfiguring the Aircraft to meet the requirements of an
alternative lessee; and


 


(ii)                                  interest at the Past Due Rate on (A) any
amounts due and payable by Lessee under this Lease, but not paid, and (B) any
judgment against Lessee issued by a court of competent authority until the same
are paid in full; and


 


(iii)                               any loss, cost, expense or
liability sustained or incurred by Lessor owing to Lessee’s failure to
redeliver the Aircraft on the date, at the place and in the condition required
by this Lease, including any
costs, fees, disbursements and expenses incurred in (A) repossessing,
storing, preserving, shipping, maintaining, repairing and refurbishing any Item
of Equipment to the condition required by this Lease and (B) preparing any
Item of Equipment for sale or lease, advertising the sale or lease of any such
Items and selling or re-leasing the same; and


 


(iv)                              reasonable
legal fees and other costs and expenses incurred by reason of the occurrence of
any Default or Event of Default or the exercise of Lessor’s remedies with
respect thereto; and/or


 


(j)                                     require Lessee to indemnify each
Indemnitee on demand against any expense which such Indemnitee may sustain or
incur as a result or consequence of such Event of Default, including (but not
limited to) any loss, premium, penalty or expense which may be incurred in
repaying funds raised to finance the Aircraft or any Item of Equipment
or in unwinding any swap, forward interest rate agreement or other financial
instrument relating in whole or in part to any financings by Lessor in
connection with this Lease, any Operative Document, any Item of Equipment or any rights
thereunder or in connection therewith (including any interest, fees, penalties, breakage costs or other sums
whatsoever paid or payable on account of funds borrowed, including funds
borrowed in order to carry any unpaid Rent, any unpaid amount in respect of
Maintenance Reserves, or other Obligations); and/or


 


(k)                                  apply
and/or set off against any Obligations and Lessor’s costs, damages, expenses
and disbursements incurred in connection with such Event of Default, at Lessor’s
discretion, all amounts paid to Lessor in respect of Maintenance Reserves or
Security Deposit pursuant to this Lease, as well as any other amounts paid by
Lessee under any Operative Document; and/or


 


(l)                                     require Lessee to redeliver
possession of the Aircraft to Lessor at the Redelivery Location (or such other
location as Lessor may require); and/or


 


(m)                               exercise
any other rights, and avail itself of any of any other remedies, provided by
applicable Law.


 






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Without prejudice to Lessor’s other remedies under this Lease or any
other Operative Document, Lessee agrees that the occurrence of an Event of
Default shall entitle Lessor to automatically and unilaterally cancel or
terminate this Lease without requirement of judicial intervention for all legal
purposes.  All costs and expenses
incurred or advanced by Lessor for or on account of any Obligations following
the occurrence and continuation of an Event of Default shall bear interest at
the Past Due Rate from the date on which such expenditure is incurred by Lessor
until the date of reimbursement thereof by Lessee (both before and after any
relevant judgment, if any).


 


24.2.                        De-Registration.  If an Event of Default occurs following
Delivery, Lessor may otherwise deal with the Aircraft as if this Lease has never
been made and Lessee will at the request of Lessor take all steps necessary to
effect (if applicable) de-registration of the Aircraft and its export from the
country where the Aircraft is for the time being situated and any other steps
necessary to enable the Aircraft to be redelivered to Lessor in accordance with
this Lease. Lessee hereby irrevocably and by way of security for its
obligations under this Lease appoints (which appointment is coupled with an
interest) Lessor as its attorney to execute and deliver any documentation and
to do any act or thing required in connection with the foregoing.


 


24.3                           Present
Value of Payments.  In
calculating Lessor’s damages hereunder, upon the occurrence of an Event of
Default all Rent and other amounts which would have been due hereunder during
the Lease Term if an Event of Default had not occurred, together with amounts,
if any, scheduled to be paid by a new lessee after any re-lease of the
Aircraft, will be calculated on a present value basis using a discount rate
equal to the Discount Rate, discounted to the earlier of the date on which
Lessor obtains possession of the Aircraft or Lessee makes an effective tender
thereof.


 


24.4.                        Damages After Re-Lease or Sale.  In the event Lessor shall have re-leased the
Aircraft or shall have sold the Aircraft, Lessor, in lieu of exercising its
rights under Section 24.1(g) above, (but without limiting any of its
other rights hereunder or under applicable law), may, if it shall so elect,
demand that Lessee pay Lessor and Lessee shall pay Lessor, as liquidated
damages for loss of a bargain and not as a penalty (in lieu of the Basic Rent
for the Aircraft due for the period commencing as of the commencement of the
term of the re-leasing or the date of sale, as the case may be) any accrued but
unpaid Basic Rent, Maintenance Reserves and Supplemental Rent for the Aircraft
due up to and including the date of the commencement of the term of the
re-leasing or the date of sale plus:


 


(i)                                     in the case of
a re-leasing, the excess of (A) the aggregate unpaid Basic Rent for the
Aircraft which would otherwise have become due hereunder over the Lease Term
but for the Event of Default, discounted monthly to present value as of the
date of the commencement of the term of the re-leasing at the Discount Rate,
over (B) the aggregate basic rental payments to become due under the
re-leasing from the date of the commencement of the term of the re-leasing to
the date upon which the Lease Term for the Aircraft would have expired but for
Lessee’s default, discounted monthly to present value as of the date of the
commencement of the term of the re-leasing at the Discount Rate, or


 


(ii)                                  in the case of
a sale, the excess of (A) the Agreed Value for the Aircraft, computed as
of the Basic Rent payment date immediately preceding the date of sale, over (B) the
net cash proceeds of such sale.


 


For the avoidance of doubt,
the amounts specified in this Section 24.4 shall continue to bear interest
at the Past Due Rate from the date of the commencement of the term of the re-leasing
or the date of sale, as the case may be, until payment is made.


 






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24.5.                        Remedies Cumulative.  Except as otherwise expressly provided above,
no remedy referred to in this Article 24 is intended to be exclusive, but
each shall be cumulative and in addition to any other remedy referred to above
or otherwise available to Lessor; and the 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 or Event of
Default shall in any way be, or be construed to be, a waiver of any future or
subsequent Default or Event of Default.


 


24.6.                        Lessor’s
Exercise of Remedies.  In
effecting any repossession of the Aircraft (including the Aircraft Documents,
any Item of Equipment, an Engine, or Part) (“Repossessed
Items”), Lessor and its representatives and agents, to the extent
permitted by Law, shall:


 


(a)                                  have
the right to enter upon any premises where it reasonably believes the
Repossessed Items to be located; and


 


(b)                                 have
the right to maintain possession of and dispose of the Repossessed Items on any
premises owned by Lessee or under Lessee’s control.


 


24.7.                        Application
of Payments Following Default or Event of Default.  Any and all payments received by
Lessor under this Lease and under any other Operative Document following the
occurrence and continuation of a Default or Event of Default, whether in
respect of Rent, Supplemental Rent or otherwise, may be applied by Lessor to
the Obligations of Lessee in any manner or order as Lessor may determine in its
sole discretion, notwithstanding any instructions, directions or notice given
by Lessee or any other Person with respect to the application of such payments.


 


24.8.                        Use of
Termination Date.  If this
Lease is cancelled or the leasing of the Aircraft is otherwise terminated and
the Aircraft is repossessed in connection with Lessor’s exercise of remedies
following the occurrence and continuation of an Event of Default prior to the
Scheduled Termination Date, then notwithstanding the use of the term “Termination
Date” in this Lease, the period of the Lease Term and the “Scheduled
Termination Date” will be utilized in calculating the damages to which Lessor
may be entitled to receive from Lessee pursuant to Section 24.1.


 






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25.                               ASSIGNMENT
AND TRANSFER


 


25.1.                        No
Assignment by Lessee.  Except
as permitted by Section 15.1, Lessee shall not transfer, assign, novate,
mortgage or complete any other such or similar transfer of any interest in this
Lease or any of its rights hereunder or in any Item of Equipment, and any such
purported assignment shall be void ab initio.


 


25.2.                        Transfer of
Lessor’s Interests.  Each of Lessor and any Financing
Party may at any time and without Lessee’s consent transfer to any Person (a “Transferee”) the Aircraft and/or all or any of its rights
and obligations under this Lease and the other Operative Documents to which it
is a party (such transfer to include any delegation to a Servicer pursuant to Section 27.3
hereof); provided (A) any
such Transferee shall have a minimum net worth of Twenty Five Million Dollars
($25,000,000) or its obligations under this Lease shall be guaranteed by a
Person having such minimum net worth and (B) no such transfer
shall, individually or in the aggregate, increase Lessee’s liabilities or
obligations hereunder (including without limitation those set forth in Sections
5.6, 8.6, 11.6, 18, 21 and 24) or materially adversely affect Lessee’s rights
under this Lease or any other Operative Document to which it is a party, based on current laws in effect at
the time of such transfer, than it would have had if such transfer had not
taken place.  Lessee acknowledges that an
increase in the number of Indemnitees and/or Additional Insureds shall not, of
itself, constitute an increase in Lessee’s obligations hereunder. No
such transfer shall render the Aircraft ineligible for registration in the
United States.


 


25.3.                        Cooperation
with Transfers.  Lessee shall do such things and
execute such documents as may be reasonably requested of it to give effect to a
transfer contemplated by Section 25.2 including (a) entering into an
assignment and assumption agreement or novation deed with the Transferee in
form and substance reasonably satisfactory to Lessee, and (b) providing
Lessor scheduling and routing information for the Aircraft or the Item of
Equipment being transferred.  Lessor
shall reimburse (or cause Lessee to be reimbursed) for any reasonable
out-of-pocket expenses (including reasonable legal fees) incurred by Lessee in
connection with such transfer and the recordation of any instruments in
connection therewith.  Lessee shall make
such amendments to the Insurances effected in respect of the Aircraft so as to
ensure continued compliance with the requirements of Article 19 with
regard to the interests of such Transferee and any new Financing Parties and
shall provide to Lessor updated documentation evidencing such amendments.


 


25.4.                        Financings.  Lessor may at any time and without Lessee’s
consent enter into any financing arrangements (which may include the conversion
of the lease transaction contemplated by this Lease to a “leveraged lease”
structure, a “head-lease, sub-lease” or other lease structure) with respect to
the Aircraft pursuant to which (a) Lessor may assign its rights under this
Lease and the other Operative Documents (by way of security) to any Financing
Parties and (b) Lessor may execute a mortgage over the Aircraft in favor
of the Financing Parties; provided, that no such financing transaction shall,
individually or in the aggregate, increase Lessee’s liabilities or obligations
hereunder (including without limitation those set forth in Sections 5.6, 8.6,
11.6, 18, 21 and 24) or materially adversely affect Lessee’s rights under this
Lease or any other Operative Document to which it is a party, based on current laws in effect at the time
of such transfer, than it would have had if such transfer had not taken place.
Such financing arrangements may also take the form of a securitization (a “Securitization”) involving one or more loans from one or
more financial institutions (each a “Lender”),
and/or with notes, loan certificates, or pass through certificates issued
pursuant to an indenture with a trustee (the “Trustee”),
which notes, loan certificates or pass through certificates may be guaranteed
(in whole or in part) by one or more monoline insurers (each, a “Financial Guarantor”).  Lessee acknowledges that an increase
in the number of Indemnitees and/or Additional Insureds shall not, of itself,
constitute an increase in Lessee’s obligations hereunder.


 






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25.5.                        Cooperation
with Financings.  Lessee shall cooperate with Lessor
and do such things and execute such documents and make such filings and
registrations in the State of Registration as may be reasonably requested of it
by Lessor in order to protect the interests of the Financing Parties and/or
Lessor in connection with any financing contemplated by Section 25.4
including, without limitation, (a) executing an acknowledgement of any
assignment of Lessor’s rights under this Lease in favor of any relevant Financing
Party, on terms customary in aircraft financing transactions or
Securitizations, (b) providing Lessor scheduling and routing information
for the Aircraft or any Item of Equipment being financed, (c) making such
amendments to this Lease and any of the other Operative Documents and executing
such additional documents, as may be reasonably requested by Lessor in
connection with the Securitization, provided that any such amendment or
additional documentation does not adversely affect the rights, or increase the
obligations, of Lessee under the Lease and Operative Documents, and (d) making
such amendments to the Insurances maintained in respect of the Aircraft to
ensure continued compliance with the requirements of Article 19 with
regard to the interests of Lessor and any such Financing Party, and shall
provide to Lessor updated documentation evidencing such amendments.  Lessor shall reimburse (or cause Lessee to be
reimbursed) for any reasonable out-of-pocket expenses (including reasonable
legal fees) incurred by Lessee in connection with such financing transaction
and in the recordation of any instruments in connection therewith.


 






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26.                               LAW AND JURISDICTION


 


26.1.                        Governing
Law.  THIS LEASE SHALL IN ALL
RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK, NEW YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW
PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).


 


26.2.                        Consent to
Jurisdiction.  Each of Lessee
and Lessor hereby irrevocably consents that any legal action or proceeding
against Lessee or Lessor or any of Lessee’s or Lessor’s assets with respect to
this Lease may be brought in any jurisdiction where Lessee or Lessor or any of
their respective assets may be found, or in any court of the State of New York
or any Federal court of the United States of America located in New York, New
York, located in the Borough of Manhattan, United States of America, as Lessee
or Lessor may elect, and by execution and delivery of this Lease each of Lessee
and Lessor hereby irrevocably submits to and accepts with regard to any such
action or proceeding, for itself and in respect of its assets, generally and
unconditionally, the jurisdiction of the aforesaid courts.


 


26.3.                        Process
Agent and Service of Process. 
Lessee shall, not later than the execution date of this Lease, irrevocably
designate, appoint and empower a duly authorized agent for service of process
in the State of New York reasonably acceptable to Lessor in any suit or
proceeding with respect to this Lease.  A
copy of any such process served on such agent shall be promptly forwarded by
airmail by the person commencing such proceeding to Lessee at its address set
forth in Appendix 2B, Section 6, but the failure of Lessee to receive such
copies shall not affect in any way the service of such process as
aforesaid.  Lessee further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified airmail, postage prepaid, to Lessee at its address set forth in
Appendix 2B, Section 6.  The
foregoing, however, shall not limit the rights of Lessor to serve process in
any other manner permitted by Law or to bring any legal action or proceeding or
to obtain execution of judgment in any jurisdiction.


 


26.4.                        Jurisdiction
and Forum.  Lessee agrees that
final judgment against Lessee in any action or proceeding in connection with
this Lease shall be conclusive and may be enforced in any other jurisdiction
within or outside the United States of America by suit on the judgment, a certified
or exemplified copy of which shall be conclusive evidence of the fact and the
amount of Lessee’s indebtedness.  Lessee
hereby irrevocably waives, to the fullest extent permitted by Law, any
objection which Lessee may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to this Lease brought in
the State of New York, and hereby further irrevocably waives any claim that any
such suit, action or proceeding brought in the State of New York has been
brought in an inconvenient forum.  To the
extent that Lessee may in any jurisdiction in which proceedings may at any time
be taken for the determination of any question arising under or for the
enforcement of this Lease (including any interlocutory proceedings or the
execution of any judgment or award arising therefrom) be entitled to claim or
otherwise be accorded for itself or its property, assets or revenues immunity
from suit or attachment (whether in aid of execution, before judgment or otherwise)
or other legal process, and to the extent that in any such jurisdiction, there
may be attributed to Lessee, or its property, assets or revenues such immunity
(whether or not claimed), Lessee hereby irrevocably agrees not to claim and
waives such immunity to the fullest extent permitted by the Law of such jurisdiction.


 


26.5.                        Waiver of
Jury Trial.  THE LESSEE AND
THE LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY
ARE BOTH PARTIES INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN 


 






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TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS LEASE, ANY OF THE
OPERATIVE DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.


 


26.6.                        Waiver of
Immunity.  Each party to this Lease agrees that in any
legal action or proceedings against it or its assets in connection with this
Lease and/or any other Operative Document no immunity from such legal action or
proceedings (which shall include, without limitation, suit, attachment prior to
judgment, other attachment, the obtaining of judgment, execution or other
enforcement) shall be claimed by or on behalf of it or with respect to its
assets, irrevocably waives any such right of immunity which it or its assets
now have or may hereafter acquire or which may be attributed to it or its
assets and consents generally in respect of any such legal action or
proceedings to the giving of any relief or the issue of any process in
connection with such action or proceedings including, without limitation, the
making, enforcement or execution against any property whatsoever (irrespective
of its use or intended use) of any order of judgment which may be made or given
in such action or proceedings.


 






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27.                               MISCELLANEOUS


 


27.1.                        Severability.  Any
provision of this Lease prohibited by or unlawful or unenforceable under any
applicable Law actually applied by any court of competent jurisdiction shall,
to the extent required by such Law, be severed from this Lease and rendered
ineffective so far as is possible without modifying the remaining provisions of
this Lease.


 


27.2.                        Amendments.  No term or provision of this Lease
may be amended, modified, waived, discharged or terminated orally, but only by
a written instrument signed by Lessor and Lessee.


 


27.3.                        Lessor’s
Right to Perform; Lessor’s Right to Delegate and Servicer.


 


(a)                                  If
Lessee fails to perform or comply with any Obligations, Lessor shall have the
right, but not the obligation, to discharge such obligation, and the amount of
such payment made and the expenses of Lessor incurred in connection with such
discharge shall be payable by Lessee upon demand, together with interest at the
Past Due Rate from the date such expenses were incurred.


 


(b)                                 Lessor
may delegate to any Person or Persons (the “Servicer”)
all or any of the rights, powers or discretions vested in it by this Lease or
any of the other Operative Documents, and any such delegation may be made upon
such terms and conditions and subject to such regulations (including the power
to sub-delegate) as Lessor in its absolute discretion deems fit, but Lessor
shall continue to remain liable to Lessee for the full performance of the
obligations of the Lessor hereunder notwithstanding any such delegation.  Upon notice to the Lessee of the appointment
of such a Servicer, such Servicer may act as Lessor’s servicer for all matters
related to this Lease and the Aircraft, and Lessee agrees that it shall
communicate with and deal with such Servicer with respect to all such matters
as if the Servicer were the Lessor under this Lease.


 


27.4.                        Counterparts.  This Lease may be executed simultaneously in
two or more counterparts and by different parties hereto on separate
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.  To the extent, if any, that this Lease
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction) no security interest in this
Lease may be created through the transfer or possession of any counterpart
other than the counterpart which has been marked “Original” on the signature page thereof.


 


27.5.                        Delivery of
Documents by Electronic Means. 
Delivery of an executed counterpart of this Lease or of any other
documents in connection with this Lease by fax or other electronic image file
will be deemed as effective as delivery of an originally executed
counterpart.  Any party delivering an
executed counterpart of this Lease or other document by fax or other electronic
image file will also deliver an originally executed counterpart, but the
failure of any party to deliver an originally executed counterpart of this
Lease or such other document will not affect the validity or effectiveness of
this Lease or such other document.


 


27.6.                        Survival.  The representations, warranties, covenants,
agreements and indemnities (including, without limitation, the indemnities
contained in Articles 18, 21 and 24) of Lessee and Lessor set forth in this
Lease, and Lessee’s and Lessor’s obligations hereunder, shall survive the
Termination Date to the extent required for full performance and satisfaction
thereof.


 


27.7.                        Entire
Lease.  This Lease (including
all Appendices) and the other Operative Documents executed pursuant hereto
constitute the entire agreement between Lessor and Lessee 


 






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regarding the Aircraft and any
prior or contemporaneous written or oral understandings with regard to the
subject matter hereof are superseded hereby in their entirety.


 


27.8.                        Successors
and Assigns.  Subject to the provisions of Article 25,
the terms and provisions of this Lease and each other Operative Document shall
be binding upon and inure to the benefit of Lessor and Lessee and their
respective successors and permitted assigns.


 


27.9.                        Brokers.  Each party agrees to indemnify and hold the
other harmless from and against any and all claims, suits, damages, costs and
expenses (including, but not limited to reasonable attorney’s fees and
disbursements) asserted by any agent, broker or other third party for any
commission or compensation of any nature whatsoever based upon the lease of the
Aircraft, if such claim, damage, cost or expense arises out of any action or
alleged action by the indemnifying party, its employees or agents.  It is understood and agreed between the
parties that this Lease has been concluded by direct negotiation without any
intermediaries, agents or brokers (other than professional advisors).  Each party hereby represents and warrants to
the other party that it has not paid, agreed to pay or caused to be paid
directly or indirectly in any form, any commission, percentage, contingent fee,
brokerage or other similar payments of any kind, in connection with the establishment
or operation of this Lease, to any Person.


 


27.10.                  Transaction Costs.  Whether or not the transactions contemplated
hereby are consummated, each party hereto agrees to pay its own costs and
expenses incurred in connection with the preparation, execution and delivery of
this Lease and any other documents delivered in connection herewith, including
without limitation the fees, expenses and disbursements of counsel, except as
otherwise expressly set forth herein.  In
addition, Lessee shall be solely responsible for (i) all costs, including
reasonable attorneys’ fees and disbursements, incurred in registering the
Aircraft and an executed counterpart of this Lease and the Lease Supplement in
the State of Registration and any other necessary jurisdiction, (ii) all
costs, including reasonable attorneys’ fees and disbursements, incurred in
connection with the de-registration of the Aircraft from the Register or any
other applicable Aeronautics Authority upon the cancellation or termination of
this Lease and (iii) payment to Lessor on execution of this Lease of the
Documentation Fee, which amount shall be refundable if the transactions
contemplated by this Lease are not consummated as a result of any act or
failure to act by Lessor.  Each of Lessor
and Lessee agrees to pay the reasonable costs and expenses (including attorneys’
fees and disbursements) of the other party incurred in connection with the
entering into or giving or withholding of any future waiver, supplement or
amendment or other action with respect to the Lease or any other document
delivered in connection therewith that it may request, except in the case of an
Event of Default in which case all of such costs shall be at the expense of
Lessee.


 


27.11.                  Time is of the Essence.  Time and strict and punctual performance are
of the essence with respect to each provision of this Lease.


 


27.12.                  Language.    This Lease is in
the English language and all notices, opinions, financial statements and other
documents given under this Lease shall be provided in the English language


 


27.13                     No Rights of
Third Parties.   No third parties, other than
Indemnitees and Affiliates of Lessor, are intended to nor shall they be deemed
to have a right to (x) benefit from, or (y) seek to enforce, any of
the provisions of this Lease, and any enforcement by an Indemnitee shall be
made by and through Lessor, except as otherwise provided in Sections 18 or 19.


 


27.14.                  Delegation.  Lessor may delegate to any appropriately licensed and/or experienced
person(s) all or any of the rights, powers or discretions vested in it by
this Lease or any other Operative Document and any such delegation may be made
upon such terms and conditions as between such person and Lessor as Lessor in
its absolute discretion may determine.


 






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27.15.                  Further Assurances. 
Lessee shall from time to time do and perform such other and further
acts and execute and deliver any and all such further instruments as may be
required by law or reasonably requested in writing by Lessor to establish,
maintain and protect the rights and remedies of Lessor and to carry out and
effect the intent and purposes of this Lease and the other Operative Documents.


 


27.16.                  Rights at Law.  Nothing contained in any Operative Document shall be construed to limit
in any way any right, power, remedy or privilege of Lessor hereunder or under
any other Operative Document or now or hereafter existing at law or in
equity.  Each and every right, power,
remedy and privilege of Lessor under the Operative Documents (i) shall be
in addition to and not in limitation of, or in substitution for, any other
right, power, remedy or privilege under any Operative Document or at law or in
equity, (ii) may be exercised from time to time or simultaneously and as
often and in such order as may be deemed expedient by Lessor and (iii) shall
be cumulative and not mutually exclusive and the exercise of one shall not be
deemed a waiver of the right to exercise any other.


 


27.17.                  Confidentiality.


 


(a)                                  During
the Lease Term the contents of this Lease and the other Operative Documents and
all Information shall remain confidential and the parties hereto and their
respective Affiliates will not disclose the Information to any other Person
without prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, that Lessor and Lessee may, without
the consent of each other party, disclose the Information in any of the
following situations:


 


(i)                                     To
directors, officers, employees, permitted assigns and agents (such assigns and
agents to agree in writing to be bound by the provisions of this 27.17) of
Lessor, Lessee or any Affiliate (direct or indirect) of any of such parties; or


 


(ii)                                  To
auditors, accountants or legal advisors of Lessor, Lessee or any Affiliate
(direct or indirect) of any of such parties; or


 


(iii)                               To
actual or potential lenders/Financing Parties, purchasers or other permitted
assigns of Lessor, Lessee or any Affiliate of any of such parties, including
but not limited to providing financial information about Lessee to potential
lenders/Financing Parties to, and purchasers from, Lessor, provided that such potential
lenders/Financing Parties will agree in writing for the benefit of Lessee to
keep such Information confidential in a manner similar to the provisions
hereunder and that their access to Information is solely for purposes of
evaluating an investment in a Securitization or other financing of the
Aircraft, or such purchaser provides to Lessee a confidentiality agreement in a
form reasonably acceptable to Lessee; or


 


(iv)                              To
rating agencies with respect to ratings of Lessor or a related Securitization; or


 


(v)                                 To
such other parties as Lessor or Lessee may reasonably believe to  be required by law, by government regulation or order
(including, without limitation any regulation or order of a bank regulatory
agency), by subpoena or by any other legal process.


 


(b)                                 Notwithstanding
any of the foregoing, Information will not be considered confidential, and
Lessor and Lessee and their respective Affiliates may disclose any item of the
Information without restriction in any of the following circumstances, if such item:


 






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(i)                                     is
publicly available (either to the general public or to any relevant trade or
industry) prior to any party’s receipt of it from another party hereto;


 


(ii)                                  is
thereafter made publicly available (either to the general public or to any
relevant trade or industry) by another party hereto or by a third party which
is entitled to make such item publicly available; or


 


(iii)                               was
known to any party hereto on a non-confidential basis prior to its disclosure
to such party by another party hereto.


 


27.18.                  Notices.  All notices provided for herein shall be in
writing and shall be deemed to have been given when delivered personally, when
telecopied, or if deposited in the mail, when received, to the addressees
appearing in Appendix 2B, Section 6 or to such other address as any party
may designate for itself by written notice to the other party or parties.


 


27.19.                  Section 1110.  The Lessee acknowledges that the Lessor would
not have entered into this Lease unless it had available to it the benefits of
a lessor under Section 1110 of Title 11 of the United States Code (“Section 1110”). 
The Lessee covenants and agrees with the Lessor that to better ensure
the availability of such benefits, the Lessee shall support any motion,
petition or application filed by the Lessor with any bankruptcy court having
jurisdiction over the Lessee, whereby the Lessor seeks recovery of possession
of the Aircraft under Section 1110 and shall not in any way oppose such
action by the Lessor unless the Lessee shall have complied with the
requirements of Section 1110 to be fulfilled in order to entitle the
Lessee to continue use and possession of the Aircraft under this Lease.  In the event Section 1110 is amended, or
it is repealed and another statute is enacted in place thereof, the Lessor and
the Lessee agree to amend this Lease and take such other action (to the extent not
inconsistent with this Lease) as the Lessor reasonably deems necessary so as to
afford to the Lessor the rights and benefits as such amended or substituted
statute confers upon owners and lessors of aircraft similarly situated to the
Lessor


 


27.20.                  No  Future Documentation Fee.    Lessee and Lessor hereby agree that, with
respect to any additional aircraft delivered to Lessee from Lessor on or prior
to December 31, 2012, Lessee shall not be required to pay a Documentation
Fee.


 






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28.                               CRAF PROGRAM.


 


28.1                           Commitment to CRAF.    So long as no Default or Event of Default
shall have occurred and be continuing, Lessee may use the Aircraft in
connection with contract solicitations by the Air Mobility Command of the
United States Government (“AMC”) and may
transfer possession of the Aircraft to the United States Government or any
instrumentality or agency thereof pursuant to the Civil Reserve Air Fleet
Program authorized under 10 U.S.C. § 9511 et seq., or any substantially
similar or substitute program (hereafter, the “CRAF Program”),
for a period not extending beyond the last day of the Lease Term, provided
that:  (i) the rights of the AMC or
the recipient under the CRAF Program shall be subject and subordinate to all
the terms of this Lease, including the right of Lessor to terminate this Lease
and immediately repossess the Aircraft following an Event of Default, (ii) Lessee
shall remain primarily liable for the performance of all the terms of this
Lease to the same extent as if such use or transfer had not occurred, and (iii) Lessee
shall promptly notify Lessor upon subjecting the Airframe or any Engine to the
CRAF Program in any contract year and provide Lessor with the name and address
of the Contracting Office Representative for the AMC to whom notice must be
given in connection with the enforcement of remedies under this Lease pursuant
to Article 24 hereof.  Lessee agrees
to promptly notify Lessor in writing of the transfer of possession of the
Airframe and any Engine to the CRAF Program and of any activation of the
Airframe and any Engine under the CRAF Program.


 


28.2                           Indemnification by United States Government.    Notwithstanding any other
provision of this Lease requiring Lessee to maintain insurance in respect of
the Aircraft, Lessor agrees to accept, in lieu of commercial insurance against
any risk with respect to the Aircraft, insurance provided by the FAA under
Chapter 443 of Title 49 of the United States Code or indemnification from the
United States Government in favor of Lessor against such risk in an amount
which, when added to the amount of commercial or FAA insurance against such
risk maintained by Lessee (including permitted self-insurance) with respect to
the Aircraft, shall be at least equal to the amount of insurance against such
risk otherwise required by Article 19 of this Lease, provided that Lessee
shall promptly notify Lessor as to the existence of such FAA insurance or
United States Government indemnification and promptly furnish to Lessor a copy
of such FAA insurance or United States Government indemnification agreement and
a certificate of a firm of independent aircraft insurance brokers of recognized
standing and responsibility, appointed by Lessee, certifying that such
indemnification and other insurance maintained by Lessee with respect to the
Aircraft is in full compliance with all the requirements of this Article 28
of this Lease.


 


28.3                           No Geographical Limits.    So long as the Aircraft is
operated pursuant to the CRAF Program pursuant to which the United States
Government has assumed liability for any damage, loss, destruction or failure
to return possession of the Aircraft and for injury to persons and damage to
property of others and all other liabilities and risks required to be insured
against pursuant to Article 19, there will be no limitation on the
geographic area in which the Aircraft may be operated pursuant to the CRAF Program.


 


28.4                           Notice of Default.    If an Event of Default
occurs under this Lease and Lessor elects to pursue its remedies under Article 24
to terminate this Lease and repossess the Aircraft, Lessor will so notify the
United States Government by sending a written communication to that effect to
the following address:


 


Headquarters Air Mobility
Command

AMC Contracting Office - DOYAI

402 Scott Drive, Unit 3A1

Scott Air Force Base, Illinois 62225-5302


 






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28.5                           Receipt
of Payments.  So long as no Default or Event of Default has
occurred and is continuing, all payments received by Lessee from the United
States Government or any instrumentality or agency thereof for the use and
operation of the Aircraft under the CRAF Program will be paid over to or
retained by Lessee.  If a Default or an
Event of Default has occurred and is continuing, all payments received by
Lessee from the United States Government or any instrumentality or agency
thereof for the use and operation of the Aircraft under the CRAF Program shall
be paid to Lessor and may be used by Lessor to satisfy any obligations owing by
Lessee under this Lease.  In furtherance
thereof, Lessee hereby assigns to Lessor, as security for the performance of
Lessee’s obligations hereunder, all of Lessee’s present and future rights to
payments from the United States Government or any instrumentality or agency
thereof for the use and operation of the Aircraft under the CRAF Program.  On request by Lessor, Lessee shall at its
sole expense take all actions necessary to perfect Lessor’s rights and
interests in respect thereof, including, without limitation, compliance with
the Assignment of Claims Act, 31 U.S.C., Section 3727, and Lessee shall
provide Lessor with a legal opinion, in form and substance reasonably
satisfactory to Lessor, as to the due perfection of such assignment.


 






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IN WITNESS WHEREOF,
Lessor and Lessee have each caused this Lease to be duly executed by their
authorized representatives as of the 31st day of October,
2008.


 


	
  HAWAIIAN
  AIRLINES, INC.

  	
   

  	
  C.I.T.
  LEASING CORPORATION

  
	
  Lessee

  	
   

  	
  Lessor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
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  Title:

  	
   

  	
   

  	
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  Title:

  	
   

  	
   

  	
   

  	
   

  



 


TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER
THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE
PERFECTED THROUGH THE POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT
MARKED “CHATTEL PAPER ORIGINAL”.


 






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CHATTEL
PAPER ORIGINAL


 


IN WITNESS WHEREOF,
Lessor and Lessee have each caused this Lease to be duly executed by their
authorized representatives as of the 31st day of October,
2008.


 


	
  HAWAIIAN AIRLINES, INC.

  	
  C.I.T. LEASING CORPORATION

  
	
  Lessee

  	
  Lessor

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
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  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
									



 


TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER
THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE
PERFECTED THROUGH THE POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT
MARKED “CHATTEL PAPER ORIGINAL”.


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 

















 


Appendix 1


to Aircraft Lease Agreement


 


DEFINITIONS


 


Airbus Aircraft — New


 


“Acceptance Certificate” means the
acceptance certificate executed and delivered by Lessee to Lessor at Delivery
in the form of Appendix 3.


 


“Additional Insureds” means the
Indemnitees and each of them.


 


“Aeronautics Authority” means the FAA or
such other governmental department, bureau, commission or agency that under the
Law of the State of Registration shall from time to time have control or
supervision of civil aviation in that state or have jurisdiction over the registration,
airworthiness, operation, or other matters relating to, the Aircraft.


 


“Affiliate” means any other Person
directly or indirectly controlling, directly or indirectly controlled by or
under direct or indirect common control with the Person specified.


 


“After-Tax Basis” means, with respect to any indemnity or other
amount (an “Amount”) which is required by any Operative Document to be
paid on an “After-Tax Basis” by Lessee (or by any other Person under the
Operative Documents) to any Indemnitee (or to any other Person for the account
or benefit of any Indemnitee), payment of such Amount supplemented by a further
payment or payments that will, in the good faith determination of the
Indemnitee, leave the Indemnitee and its Affiliates with a net economic
realisation equal to the Amount, after considering the net amount of all Taxes
imposed on any Indemnitee with respect to the receipt or accrual of the Amount
and such supplemental payments.


 


“Agreed Option(s)” means a change to the
Standard Specification by way of Specification Change Notices (SCNs) or other changes agreed in writing among Lessee,
Lessor and Seller.


 


“Agreed Value” means, with respect to
the Aircraft, the amount set forth in Appendix 2B.


 


“Airbus Damages” has the meaning given
in Section 8.9.


 


“Aircraft” means, as the context may
require, the Airframe together with (i) the Engines, whether or not
installed on the Airframe, (ii) all Parts or components thereof, (iii) spare
parts or ancillary equipment or devices furnished with the Airframe or the
Engines under this Lease and subject to this Lease, (iv) all items of
equipment and other property, tangible and intangible, described in the Detail
Specification or in the Airframe Manufacturer’s Aircraft Inspection Report (or “AIRS Report”) delivered on the Delivery Date and not
otherwise described in the preceding portions of this definition, (v) all
Aircraft Documents, and (vi) all substitutions, replacements and renewals
of any and all thereof.


 


“Aircraft Documents” means, whether in
paper, photographic, digital, electronic or other medium, (i) the manuals
and records identified in the attachments to the Acceptance Certificate hereto
and all other records and documentation pertaining to the Aircraft and
delivered with the Aircraft on the Delivery Date and (ii) all other
Required Approvals, records and documentation generated during the Lease Term
that are related to the maintenance, inspections and alterations, modifications
and additions accomplished during the Lease Term with respect to the Aircraft.


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 1-1

















 


“Airframe” means the Airbus A330-200
aircraft (except for the Engines) as more specifically described in the Lease
Supplement, together with the APU, all Landing Gear and any and all Parts, so
long as the same shall be incorporated in or installed on or attached to the
Airframe or so long as title thereto shall remain vested in Lessor in
accordance with the terms of this Lease after removal from the Airframe.


 


“Airworthiness Directive” or “AD” means any airworthiness directive issued by the
Certificating Authority, in addition to any airworthiness directive issued by
the Aeronautics Authority, each to the extent the same is applicable to the
Aircraft and/or any Item of Equipment.


 


“AMC” has the meaning given in Section 28.1.


 


“Appraisal Procedure” means a procedure
to determine the monthly Fair Market Rental Value determined by two (2) recognized
independent aircraft appraisers, one chosen by the Lessor and one chosen by the
Lessee. If such appraisers cannot agree on the Fair Market Rental Value within
thirty (30) days after their appointment, then a third recognized independent
aircraft appraiser shall be chosen by the mutual consent of such two
appraisers, and the Fair Market Rental Value shall be determined by the average
of the appraisals submitted by the three (3) appraisers (provided
that the appraisal furthest from such average shall not be counted in
determining the Fair Market Value Rental). If either Lessee or Lessor shall
fail to appoint an appraiser by the date which is 120 days prior to the
commencement of the Extension Term, or if such two appraisers cannot agree on the
amount of such appraisal and fail to appoint a third appraiser by the date
which is 90 days prior to the commencement of the Extension Term, then either
Lessee or Lessor may apply to any court having jurisdiction to make such
appointment.


 


“Approved Maintenance Organization”
means a maintenance facility approved by the FAA pursuant to FAR Part 145
for the performance of maintenance, testing, inspection, repair, overhaul or
modification on the Aircraft or any Item of Equipment.


 


“APU” means the auxiliary power unit
installed in the Airframe on the Delivery Date, or any replacement thereof made
pursuant to this Lease, together, in any case, with any and all Parts which are
from time to time incorporated in or attached to such auxiliary power unit and
any and all Parts removed therefrom until replaced with Parts incorporated or
attached to such auxiliary power unit.


 


“APU Cycle” means one complete
continuous operation of the APU beginning at the moment the APU is started and
continuing until it subsequently shuts down.


 


“APU Hour” means each hour or part
thereof, rounded to the nearest minute, elapsing from the moment the APU is
started to the moment when the APU is shut down.


 


“APU Overhaul Reserve” means the then
current balance of payments received from Lessee and held by Lessor, net of
disbursements, made pursuant to Appendix 2D, Section “APU Overhaul Reserve”.


 


“Assumed Reference Rate” is the assumed
Reference Rate appearing in Appendix 2B, Section 1.2(a).


 


“Base Year Dollars” means the value of
Dollars in January 2007.


 


“Basic Rent” shall mean the rent payable
for the Aircraft for each Rent Period under this Lease in the amount determined
in Appendix 2B, Section 1.


 






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treatment and filed separately with the SEC


 


App 1-2

















 


“BFE” means any equipment defined as
buyer-furnished equipment under Seller’s standard specification and/or which is
to be provided to the Seller for incorporation into the Aircraft regardless of
whether such equipment is provided by or for and on behalf of Lessor as
buyer-furnished equipment or provided by Seller at the direction of Lessor as
seller-purchased equipment, seller-supplied or seller-furnished equipment.


 


“Business Day” means (a) in the case of
payments under this Lease or any Operative Document, any day (other than
Saturday or Sunday) on which banks are open for business in New York, United
States of America; and (b) in all other cases, any day (other than Saturday
or Sunday) on which banks are open for business in New York, United States of
America, the State of Registration and if different from the State of
Registration, the Lessee’s State of Organization.


 


“C-Check” means with respect to the
Aircraft, the accomplishment of Tasks that, at the time of such check, would
require accomplishment prior to the next due c-check based upon the interval
for each such Task in the MPD, and where such Tasks are controlled by Flight
Hours, Cycles and/or calendar time, as applicable to each such Task and (ii) the
rectification of each defect discovered during the accomplishment of such
Tasks.


 


“Cape Town Convention” means, together, the official
English text of each of the Convention on International Interests in Mobile
Equipment (the “Convention”) and the Protocol
thereto on Matters Specific to Aircraft Equipment (the “Protocol”)
each as opened for signature on 16 November 2001 at Cape Town, South
Africa.


 


“Certificating Authority” means the
EASA.


 


“Certificating Authority Form” means an
EASA Form One or an FAA Form 8130-3 or any successor to either such
forms.


 


“Citizen of the United States” has the
meaning set forth in Section 40102(a)(15)(c) of the Title 49 of the
United States Code.


 


“Claims” means any and all claims,
damages, losses, liabilities, demands, suits, judgments, causes of action,
legal proceedings, whether civil or criminal, penalties, fines and other
sanctions, and any reasonable attorney’s fees and other reasonable costs and
expenses in connection therewith or in establishing the right to
indemnification hereunder, including any of the foregoing arising or imposed
with or without the fault or negligence of any Indemnitee (whether passive or
active) or under the doctrine of strict or absolute liability.


 


“CRAF Program” has the meaning given in Section 28.1.


 


“Customization Options Payment” has the
meaning given in Appendix 2B, Section 1.


 


“Cycle” means one take-off and landing
of the Aircraft (or in respect of any Engine, Landing Gear, or Part, an
aircraft on which such Engine, Landing Gear, or Part is (or was) then
currently installed).


 


“Default” means any event, condition or
circumstance which, with the lapse of time and/or the giving of notice and/or
determination of materiality and/or fulfilment of any other condition
stipulated herein (or any combination of the foregoing) would constitute an
Event of Default.


 


“Delivery” means the delivery of the
Aircraft by Lessor to Lessee in accordance with this Lease and which shall be
evidenced by execution and delivery of the Lease Supplement and the Acceptance
Certificate.


 






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App 1-3

















 


“Delivery Date” means the date on which
Delivery occurs.


 


“Delivery Location” means the premises
of the Airframe Manufacturer in Toulouse, France.


 


“Delivery Reference Date” means the date
that is the third (3rd) Business Day prior to the Delivery Date and which
shall be specified in the Acceptance Certificate.


 


“Delivery Reference Rate” means the
Reference Rate in effect three (3) Business Days prior to the Delivery
Date and which shall be specified in the Acceptance Certificate.


 


“Detail Specification” means the
Standard Specification as the same has been modified by Agreed Options in
accordance with the Lease.


 


“Discount Rate” means the rate per annum
equal to LIBOR plus two hundred fifty (250) basis points.


 


“Documentation Fee” means the fee to be
paid from Lessee to Lessor in the amount set forth in Appendix 2B, Section 7,
with respect to Lessor’s documentation fee for aircraft lease transactions.


 


“Documents Loss” means the loss or
destruction of the Aircraft Documents or any of them.


 


“Dollars” or “$”
means the lawful currency of the U.S.


 


“EASA” means the European Aviation
Safety Agency, an agency of the European Union having responsibility for
aviation safety, regulation and oversight of member states of the European
Union, or any Person, governmental department, bureau, commission or agency
succeeding to the functions of the European Aviation Safety Agency.


 


“Engine(s)” means each of the engines
identified in the Lease Supplement, or any replacement of any thereof made
pursuant to this Lease, together, in any case, with any and all Parts which are
from time to time incorporated in or attached to any such Engine and any and
all Parts removed therefrom.


 


“Engine  Agreed Value”
means, with respect to each Engine when not installed on the Airframe, the
amount set forth in Appendix 2B, Section 4.3.


 


“Engine Life Limited Parts Reserve”
means the then current balance of payments received from Lessee and held by
Lessor, net of disbursements, made pursuant to Appendix 2D, Section “Engine
Life Limited Parts Reserve”.


 


“Engine Loss”
means the occurrence of (a) an Event of Loss with respect to an Engine
only (whether or not installed on the Airframe) or (b) any divestiture or
impairment of title of Lessor to an Engine as a result of the installation of
such Engine on any other airframe.


 


“Engine Restoration” means any engine shop visit having a
workscope that at a minimum, includes a complete refurbishment or full overhaul
of the high pressure turbine and combustion section of the relevant Engine,
accomplished in accordance with the Engine Manufacturer’s Engine Management
Programme applicable to the Engine.


 


“Engine Restoration Reserve” means the
then current balance of payments received from Lessee and held by Lessor, net
of disbursements, made pursuant to Appendix 2D, Section “Engine Restoration
Reserve”.


 


“Escalation” means the application of
the revision formula set forth in Appendix 2C to an amount stated in Base Year
Dollars and the product resulting from such application being added to the 


 






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App 1-4

















 


originally stated amount, provided that escalation from January, 2007
to the Delivery Date shall not exceed an average rate of 3.50% per annum,
compounded, such amount to be prorated for the calendar year within which
Delivery occurs.


 


“European Union” or “EU” means the union of countries established pursuant to the
Treaty of Maastricht, which came into effect on November 1, 1993, as amended
by the Treaty of Amsterdam, which came into effect on May 1, 1999, and the
Treaty of Nice signed on February 26, 2001, and as may be amended from
time to time.


 


“Event of Default” means those events
and circumstances listed in Article 23.


 


“Event of
Loss” means, with respect to any Item of Equipment (excluding
Parts), any of the following events:


 


(a)           the agreed, actual,
arranged, compromised or constructive total loss of such Item (including any
damage to the same which results in an insurance settlement on the basis of a
total loss, or requisition for use or hire of the same which results in an
insurance settlement on the basis of a total loss); or


 


(b)           the destruction or
damage that permanently renders such Item to be unfit for normal use for any reason
whatsoever; or


 


(c)           theft,
hijacking, disappearance or requisition for use or hire of such property which
deprives Lessee of possession and/or use of such property for a period in
excess of 180 consecutive days, other than a requisition of use (but not title)
by the U.S. Government or any agency or instrumentality thereof which bears the
full faith and credit of the U.S. Government (it being understood that
activation of the Aircraft under CRAF is not to be regarded as a “confiscation,
condemnation, seizure or requisition for use of hire”); or


 


(d)           the
confiscation, condemnation, or seizure, or requisition of title or other
compulsory acquisition of title for any reason, of such property by any
Governmental Authority other than the federal government of the US or any
instrumentality or agency thereof the obligations of which are guaranteed by
the full faith and credit of the federal government of the US; or


 


(e)           the confiscation, condemnation, or
seizure or requisition for use or hire of the Airframe or the deprivation of
the possession or use of the Airframe as a result of any law or other action by
the Aeronautics Authority or any Governmental Authority (other than where the
same amounts to the circumstances provided in clause (d)), for a period of one
hundred twenty (120) consecutive days, or for such longer period, up to a
maximum of one hundred twenty (120) additional consecutive days, so long as
Lessee is diligently attempting to bring the Airframe into conformity with such
law or other action; or


 


(f)            any other case
which by subsequent agreement Lessor and Lessee may deem, with the agreement of
the insurers, to be an Event of Loss.


 


An Event of Loss with respect to
the Aircraft shall be deemed to have occurred if an Event of Loss occurs with
respect to the Airframe.


 


“Event of
Loss Proceeds” means the proceeds of any insurance required to be
maintained by Lessee hereunder, or any compensation or similar payment arising,
in respect of an Event of Loss.


 






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App 1-5

















 


“Excluded Tax” means any Tax to the
extent excluded by Section 21.1(b) of the Lease from Lessee’s tax
indemnity obligations under Section 21.1(a) of the Lease.


 


“Excusable Delay” means any delay in Delivery not occasioned by the fault or negligence
of Lessor and/or due to or arising from Lessor’s reasonable control including,
without limitation, (i) acts of God or the public enemy, natural
disasters, civil war, insurrection or riots, quarantine restrictions, strikes,
lockouts, or labour stoppages and/or (ii) fires, floods, explosions,
earthquakes, epidemics or serious accidents, and/or (iii) delays relating
to or arising out of Seller’s failure to deliver the Aircraft to Lessor.


 


“FAA” means the United States Federal
Aviation Administration and/or the Administrator of the United States Federal
Aviation Administration, or any Person, governmental department, bureau,
commission or agency succeeding to the functions of either of the foregoing.


 


“FAA Requirements” means, as applicable
to the Aircraft, any of the regulations, rules, or decisions of, or governing,
the FAA.


 


“Fair Market Rental Value” means the
monthly Basic Rent obtainable in cash in an arms-length lease (for the
Extension Term) between an informed and willing Lessee (under no compulsion to
lease) and an informed and willing Lessor (under no compunction to lease), and
shall be determined on the assumption that the Aircraft is in the United States
of America, available for use by Lessee and in the condition required by and
otherwise in compliance with the terms and conditions of this Lease.


 


“FAR” means the Federal Aviation
Regulations as set forth in Title 14 of the United States Code of Federal
Regulations, Chapter 1 (Parts 1 - 199).


 


“Final Check” means the C-Check and the
6 Year HMV Check and 12 Year HMV Check, each if due within the intervals set
forth in Section 3.1 (Airframe) of Appendix 2E (Return Conditions) hereof
(or as such intervals may be increased or decreased as set forth in the MPD),
to be accomplished by Lessee immediately prior to the redelivery of the
Aircraft to Lessor as more specifically described in Section 3.1 of
Appendix 2E hereof.


 


“Financing Party” means any Person or
Persons, from time to time notified by Lessor to Lessee, from whom financing
for the acquisition or continued ownership of the Aircraft by Lessor has been
obtained and/or in whose favor or for whose benefit security over the Aircraft
has been granted by Lessor any Security Agent, Security Trustee, servicer,
lender and/or financial guarantor.


 


“Flight Hour” means each hour or fraction thereof, measured to two
decimal places, elapsing from the moment the wheels of the Airframe (or in
respect of any Engine, Landing Gear, or Part, an aircraft on which such Engine,
Landing Gear, or Part is (or was) then currently installed) leave the
ground on take-off to the moment when the wheels of the Airframe (or such
aircraft on which an Engine, Landing Gear, or Part is (or was) then
currently installed) touch the ground on landing.


 


“GAAP” means (i) generally accepted
accounting principles as set forth in the statements of financial accounting
standards issued by the Financial Accounting Standards Board of the American
Institute of Certified Public Accountants or (ii) International Financial
Reporting Standards and International Accounting Standards (and interpretations
thereof) published by the International Accounting Standards Board, as in
effect at the relevant time, and applied on a basis consistent with prior
periods except as may be disclosed in the pertinent Person’s financial
statements.


 


“Governmental Authority” means and includes (whether having a
distinct legal personality or not) (a) any national government, political
subdivision thereof, or local jurisdiction therein, (b) any board,
commission, department, division, organ, instrumentality, court or agency of
any entity referred to in 


 






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SEC


 


App 1-6

















 


(a) above, however
constituted, and (c) any association, organization or institution
(international or otherwise) of which any entity mentioned in (a) or (b) above
is a member or to whose jurisdiction any thereof is subject or in whose
activities any thereof is a participant.


 


“Holdings” means Hawaiian Holdings, Inc.,
a Delaware corporation and the parent of Lessee.


 


“I.A.T.A.” means the International Air
Transport Association.


 


“Indemnified Tax” means any Tax for
which Lessee has an obligation of indemnity pursuant to Article 21 of the
Lease and does not include any Excluded Tax.


 


“Indemnitee” means Lessor, any Financing
Party, and their respective Affiliates, officers, directors, shareholders,
members, managers, partners, duly authorized agents, employees, and their
respective successors and assigns.


 


“Information” means the terms and
conditions of this Lease and any other Operative Document and any other
information delivered to any party to this Lease in connection with this Lease
or any Operative Document.


 


“Insurances”
means any and all contracts or policies of insurance (or reinsurance) required
to be maintained from time to time under this Lease.


 


“International Registry” or “IR” means the International Registry of Mobile Assets
organized pursuant to the Cape Town Convention.


 


“Item of Equipment” or “Item” means individually or collectively, as the context
requires, the Aircraft, the Airframe and any of the Engines, any Landing Gear,
the APU and any of the Parts, whether or not installed in or attached to the
Aircraft or the Airframe.


 


“Landing Gear” means the complete strut
assembly of each landing gear installed on the Airframe on the Delivery Date
(or any replacement for any such landing gear made pursuant to the terms of
this Lease) and shall consist of the inner and outer cylinders of the main
landing gear and the nose landing gear, including the truck assembly and axles
of such landing gear.


 


“Landing Gear Overhaul Reserve” means
the then current balance of payments received from Lessee and held by Lessor,
net of disbursements, made pursuant to Appendix 2D, Section “Landing Gear
Overhaul Reserve”.


 


“Law” means and includes (a) any
statute, decree, constitution, regulation, rule, order, judgment, AD or other
directive of any Governmental Authority; (b) any treaty, pact, compact or
other agreement to which any Governmental Authority is a party; (c) any
judicial or administrative interpretation or application of any Law described
in (a) or (b) above; and (d) any amendment or revision of any of
the foregoing.


 


“Lease” means this Aircraft Lease
Agreement, including all appendices, exhibits and schedules hereto, as the same
may be amended from time to time.


 


“Lease Supplement” means the lease
supplement dated the Delivery Date in the form of Appendix 4.


 


“Lease Term” means the period appearing
in Appendix 2A which otherwise commences on the Delivery Date and ends on the
Termination Date.


 






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“Lessee’s Actual Cost” means Lessee’s
cost incurred in performing an Obligation under this Lease, determined as
follows:  (i) if Lessee elects that
such obligation be performed by a third party, then Lessee’s Actual Cost shall
be the actual charges, including shipping, freight and handling charges, of
such third party charged to and paid by Lessee (but excluding shipping and
freight charges and mark-ups, handling charges or overhead added by Lessee),
and (ii) if Lessee elects that such obligation be performed by Lessee,
then Lessee’s Actual Cost shall be Fifty Dollars ($50.00) per labor hour (the “Labor
Rate”) plus Lessee’s direct cost for materials and services provided by
third parties without mark-ups, handling charges or overhead added to such third-party
charges by Lessee. The Labor Rate set forth in the preceding sentence shall be
increased for inflation on 1 June of each calendar year after execution of
the Lease (beginning June 1, 2009) by a percentage amount equal to three
percent (3%) by adding: (x) the product of the then current Labor Rate
multiplied by the value of (.03), and (y) the then current Labor Rate, as
the same has been increased in accordance with this paragraph.


 


“Lessor’s Lien” means:


 


(i)             the rights of Lessor,
Financing Party or any other person or entity having an ownership, mortgage or
security interest in the Aircraft or this Lease which has been granted or
conveyed by Lessor; and


 


(ii)          Liens which result from
claims against Lessor or Lender that are not to be paid or indemnified against
by Lessee under this Lease.


 


“LIBOR” means, for any period, the
three-month rate of interest per annum at which deposits in Dollars are offered
to major banks in the London interbank market at approximately 11:00 a.m.
(London time) three (3) Business Days before the first day of such period,
as reported by the Reuters Screen LIBOR01 Page 3750 (or such other page as
may replace such page on such system for the purpose of reporting London
Interbank Offered Rates of major banks) under the heading for British Bankers
Association Interest Settlement Rates in the column designated “USD” (U.S.
Dollar).


 


“Lien” means any mortgage, charge, pledge,
lien, hypothecation, lease, title retention, assignment, trust arrangement,
right of possession or detention or security interest of any kind, howsoever
created or arising.


 


“Life Limited Part” or “LLP” means any Part that has a pre-determined life
limit mandated by the Manufacturer, the Certificating Authority, the
Aeronautics Authority or any other applicable Governmental Authority, which
requires any such Part to be discarded upon reaching such life limit.


 


“Lost Documents” means Aircraft
Documents that have suffered a Documents Loss.


 


“Maintenance Check(s)” means the 6 Year
HMV Check and 12 Year HMV Check performed or to be performed on the Airframe,
any Engine Restoration performed or to be performed on an Engine, any Engine
LLP replacement or any Overhaul performed or to be performed on any Landing
Gear or the APU.


 


“Maintenance Program” mean Lessee’s
maintenance program (as approved by the Aeronautics Authority) for the Aircraft
encompassing scheduled maintenance, condition monitored maintenance and
on-condition maintenance of the Aircraft and each Item of Equipment.


 


“Maintenance Reserve Claim” means any
claim by Lessee for payment by Lessor from the applicable Maintenance Reserves
of Reimbursable Expenses following completion by Lessee of a Maintenance Check.


 






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App 1-8

















 


“Maintenance Reserve(s)” means,
collectively, the then current balance of payments received from Lessee and
held by Lessor, net of disbursements, made pursuant to the terms of Appendix 2C
to the 6 Year HMV Check Airframe Reserve, 12 Year HMV Check Airframe Reserve,
Engine Restoration Reserves, Engine Life Limited Parts Reserves, Landing Gear
Overhaul Reserve and APU Overhaul Reserve.


 


“Manufacturer” means, in the case of the
Airframe, Seller, in the case of the Engines, Rolls-Royce plc, and in the case
of any Item of Equipment, the manufacturer of such Item of Equipment.


 


“Manufacturer’s Repair Manual” means the
most current revision of the respective (i) maintenance, repair or
overhaul manual or (ii) the structural repair manual, each issued by the
Manufacturer and applicable to the maintenance performed on the Aircraft or any
Item of Equipment.


 


“Modified Accelerated Cost Reduction System”
or “MACRS” means that category under Section 168
of the United States Internal Revenue Code of 1986.


 


“Mortgage Convention” means the
Convention for the International Recognition of Rights in Aircraft, signed (ad
referendum) at Geneva, Switzerland, on June 19, 1948, and amended from
time to time, but excluding the terms of any adhesion thereto or ratification
thereof containing reservations to which the United States of America does not
accede.


 


“MPD” means the Airframe Manufacturer’s
Maintenance Planning Document, as revised from time to time to include all
revisions up to and including the then most current revision issued by the
Airframe Manufacturer.


 


“Net Event of
Loss Proceeds” means any Event of Loss Proceeds actually received by
Lessor (or such other person entitled to receipt thereof), less any expenses
(including attorney’s fees and costs) and/or Taxes incurred by Lessor (or any
other relevant Person) in connection with the collection or receipt of such
funds.


 


“Obligations” means all of Lessee’s
obligations, liabilities and agreements now existing or hereafter arising under
any Operative Document.


 


“Operative Document(s)” means, either
collectively or individually as the context requires, this Lease, the Lease
Supplement, the Acceptance Certificate, the Participation Agreement, any
warranty assignment, acknowledgment and consent and any and all other
documents, instruments and agreements entered into in connection with any of
the foregoing and to which Lessee is a party.


 


“Outside Delivery Date” means the date
that is specified in Appendix 2A.


 


“Overhaul” means:


 


(i)            with respect to any Landing Gear,
Engine module or Part, the complete refurbishment or major restoration of such
Landing Gear, Engine module or Part in accordance with the overhaul or
restoration procedures in the respective Manufacturer’s Repair Manual for such
Landing Gear, Engine module or Part, the extent of which refurbishes or
restores such Landing Gear, Engine module or Part, as applicable, to a “zero
time since overhaul” condition in accordance with such Manufacturer’s Repair
Manual;


 


(ii)           with respect to the APU, the complete
refurbishment or restoration of the compressor, combustion section and turbine
of the APU pursuant to the procedures set forth in the Manufacturer’s Repair
Manual; and


 






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App 1-9














 


(iii)          with respect to any Engine, an Engine
Restoration.


 


“Part(s)” means all appliances,
components, parts, instruments, appurtenances, accessories, furnishings, seats,
BFE and other equipment and additions of whatever nature (other than Engines,
the APU, any Landing Gear, and any temporary replacement parts installed
pursuant to Article 12 of the Lease), which may from time to time be
incorporated or installed in or attached to any Item of Equipment or which have
been removed therefrom, but which remain associated with and/or form part of
the Aircraft or any Item of Equipment pursuant to the terms of the Lease.


 


“Participation Agreement” means the
agreement in the form of Appendix 5.


 


“Past Due Rate” means the lesser of (i) the
rate per annum equal to LIBOR plus two hundred (200) basis points, and (ii) the
maximum rate permitted by applicable Law.


 


“Payment Default” means a Default by
Lessee with respect to any payment due Lessor from Lessee pursuant to any
Operative Document.


 


“Permitted Sublease” means any sublease
of the Aircraft to a Permitted Sublessee permitted under the terms and subject
to the conditions of this Lease.


 


“Permitted Sublessee” means a Person:


 


(a)           which
is a commercial passenger air carrier that holds the requisite licenses and
approvals for the maintenance and operation of the Aircraft; and


 


(b)           with
respect to which, at the time such Person becomes a Permitted Sublessee
pursuant to the terms and conditions of this Lease and for the term of any
Permitted Sublease to which such Permitted Sublessee is a party, no proceeding
is pending or shall be instituted in connection with any insolvency, bankruptcy,
reorganization, examinership, administration, liquidation, moratorium or other
laws affecting the enforcement of creditors’ rights generally; and


 


(c)           that
is expressly consented to in writing by Lessor, which consent shall not be
unreasonably withheld or delayed.


 


“Person” means an individual, general
partnership, corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, limited liability company or limited
partnership, Governmental Authority or other entity of whatever nature.


 


“Purchase Agreement” means that certain
Purchase Agreement, dated as of June 29, 2006 between Lessor and Seller,
as amended from time to time, pursuant to which Lessor has agreed to purchase
the Aircraft from Seller.


 


“Redelivery Location” means such airport
in the Pacific or Mountain Time zones of the continental United States of
America, as may be agreed in writing by Lessor and Lessee prior to the
Scheduled Termination Date for Return of the Aircraft, or in the absence of
such agreement, at such airport in the Pacific or Mountain Time zones of the
continental United States of America as Lessor shall notify Lessee in writing.


 


“Reference Rate” means the relevant “Treasury
Rate” which is the rate per annum equal to the yield for each of the U.S.
Treasury Securities that matures nearest to the tenth (10th) anniversary of the
determined Delivery Date, as reported for the Reuters Page 5 closing
information shown on the following Business Day on Page 233 (or such
replacement page) of the information ordinarily provided by Reuters America, or
if such report or screen is unavailable, in The Wall Street Journal  


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 1-10

















 


under the heading “Treasury Bonds, Notes & Bills” (and the
subheading of “Ask Yld.” under “Govt. Bonds & Notes”).


 


“Register” means the registry of
aircraft which is maintained in the State of Registration by the Aeronautics
Authority having authority with respect to the registration of the Aircraft.


 


“Reimbursable Event” means, subject to
the provisions and exclusions of Appendix 2D, the completion by Lessee during
the Lease Term of a Maintenance Check or the replacement of any Engine Life
Limited Parts.


 


“Reimbursable Expenses” means, as the
context requires, any or all of the 6 Year HMV Check Reimbursable Expenses, 12
Year HMV Check Reimbursable Expenses, Engine Restoration Reimbursable Expenses,
Engine Life Limited Parts Reimbursable Expenses, Landing Gear Overhaul
Reimbursable Expenses and APU Overhaul Reimbursable Expenses, each as such
terms are defined in Appendix 2D.


 


“Related Lease(s)” means any and all
leases of aircraft between Lessor or any Affiliate of Lessor, or trustee on
behalf of Lessor or any Affiliate of Lessor, as lessor, and Lessee or any
Affiliate of Lessee, as lessee, whether such leases may be construed to be “true”
leases or otherwise.


 


“Related Lease Event of Default” means,
in relation to any Related Lease, any breach or default of Lessee’s obligations
thereunder which, with the lapse of time or the giving of notice, or both, would
constitute an “event of default” or similar event however termed thereunder
under which the party to whom such obligations are owing would have the right
to exercise remedies including the termination or cancellation of the Related
Lease.


 


“Related Loan(s)” means any and all
loans by Lessor or any Affiliate of Lessor, or trustee on behalf of Lessor or
any Affiliate of Lessor to Lessee or any Affiliate of Lessee.


 


“Related Loan Event of Default” means,
in relation to any Related Loan, any breach or default of Lessee’s obligations
thereunder which, with the lapse of time or the giving of notice, or both,
would constitute an “event of default” or similar event however termed
thereunder under which the party to whom such obligations are owing would have
the right to exercise remedies.


 


“Related Obligations” means the
obligations, liabilities and agreements now existing or hereafter arising of
Lessee or any Affiliate of Lessee under any Related Lease or Related Loan.


 


“Rent” means Basic Rent and Supplemental
Rent payable pursuant to this Lease.


 


“Rent Payment Date” means the first day
of each Rent Period of the Lease Term and which is the date on which payment of
Basic Rent is due and payable.


 


“Rent Period” means the period
commencing on and including the Delivery Date and ending on and including the
last day of the calendar month in which the Delivery Date occurs and each of
the consecutive calendar monthly periods thereafter throughout the Lease Term,
provided that the final Rent Period of the Lease Term may consist of less than
a calendar month if this Lease expires, terminates or is cancelled effective as
of or on a date other than the last day of a calendar month.


 


“Required Approval” means evidence
documenting approval by the respective Airframe or Engine Manufacturer (as
applicable) and the Certificating Authority with respect to (i) any repair
to the Airframe or any Engine, where the accomplishment of such repair does not
conform with the repair procedures set forth in the Manufacturer’s Repair
Manual and (ii) any alteration or modification of the Airframe or any
Engine.


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 1-11

















 


“Return”
means the return of the Aircraft and all Items of Equipment to Lessor pursuant
to and in accordance with Article 22 and the other provisions of this
Lease.


 


“Return Acceptance Certificate” means
the certificate substantially in the form of Appendix 7 to be executed and
delivered by Lessor and Lessee at Return.


 


“6 Year HMV Check”
means a maintenance inspection (and rectification of defects discovered during
such inspection) that as a minimum includes (a) the next due C-Check and (b) each
Task that has (i) an initial interval of six (6) years as set forth
in the MPD, and (ii) a repetitive interval of six (6) years.


 


“6 Year HMV Check Airframe Reserve”
shall each have the meaning set forth in Exhibit C hereto.


 


“Scheduled Delivery Date” means the
delivery month identified in Appendix 2A and, when known following receipt of
notice by Lessor from the Seller, the day during such month (or such other
date) Lessor expects to take delivery of the Aircraft from Seller, as the same
is notified by Lessor to Lessee.


 


“Scheduled Termination Date” means the
day on which the Lease Term is scheduled to expire (as provided in Appendix 2A
and as such Lease Term may be extended by the Extension Term), and which may be
independent from the Termination Date as provided in the definition of such
term.


 


“SEC” means the Securities and Exchange
Commission of the United States of America, or any Governmental Authority
succeeding to the functions of the Securities and Exchange Commission.


 


“Security
Agent” means such Person, as notified by Lessor to Lessee, who will
act as security agent for and on behalf of any Financing Party in relation to
any financing arrangements to be entered into in respect of the Aircraft.


 


“Security
Deposit” means (i) the cash security deposited with Lessor
pursuant to Section 4.1 and Section 2 of Appendix 2B; plus (ii) any additional amounts Lessee is required to
pay Lessor from time-to-time after execution of this Lease in accordance with Section 2
of Appendix 2B; less (iii) any amounts
applied or utilized by Lessor in accordance with the provisions of Sections
4.3.


 


“Security
Trustee” means such Person, as notified by Lessor to Lessee, who
will act as security trustee for and on behalf of any Financing Parties in
relation to any security to be granted over the Aircraft as a result of a
financing thereof.


 


“Seller” means Airbus S.A.S., or an
Affiliate that will sell and deliver title to the Aircraft to Lessor on the
Delivery Date.


 


“Standard Specification” means the
A330-200 Standard Specification G.000.02000 Issue 4.2 dated 12 July 2005.


 


“State of Organization” means the
country and/or state under which Laws a Person is organized and existing, or,
with respect to Lessor and Lessee, the country and/or state identified on the
first page of this Lease.


 


“State of Registration” means the United
States of America.


 


“Subsidiary”
means, as to any Person, any other Person of which at least a majority of the
voting stock (or equivalent equity interests) is owned or controlled by such
first Person or by one or more other Subsidiaries.


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 1-12

















 


“Supplemental Rent” means all amounts,
liabilities and obligations (other than Basic Rent and payments in respect of
Maintenance Reserves) which Lessee assumes or agrees to pay to Lessor under
this Lease, including without limitation, and to the extent permitted by
applicable Law, interest at the Past Due Rate calculated on any:  (i) part of any installment of Basic
Rent not paid on the Rent Payment Date for the period the same remains unpaid
and (ii) Supplemental Rent or Maintenance Reserves not paid when due
hereunder, until the same is paid.


 


“10 Year HMV Check” means a maintenance
inspection (and rectification of defects discovered during such inspection)
that as a minimum includes (a) the next due C-Check, and (b) each
Task that has an initial interval of ten (10) years as set forth in the
MPD. In the event the EASA and the FAA does not approve an escalation in the
MPD from the current 10 Year HMV Check to a 12 Year HMV Check, then all
references to the 12 Year HMV Check shall mean the 10 Year HMV Check as
described herein. If the 10 Year HMV Check is escalated to a 12 Year HMV Check
in the MPD and approved as such by the EASA and the FAA, then this definition
will not be applicable.


 


“12 Year HMV Check” means a maintenance
inspection (and rectification of defects discovered during such inspection)
that as a minimum includes (a) the next due C-Check, and (b) each
Task that has (i) a repetitive inspection interval of six (6) years
as set forth in the MPD, and (ii) an initial interval of twelve (12) years
as set forth in the MPD. In the event the EASA and the FAA does not approve an
escalation in the MPD from the current 10 Year HMV Check to a 12 Year HMV
Check, then all references to the 12 Year HMV Check shall mean the 10 Year HMV
Check.


 


“12 Year HMV Check Airframe Reserve”
shall each have the meaning set forth in Exhibit C hereto.


 


“Task(s)” means each inspection or other
requirement set forth in the MPD that (a) has a repetitive interval
designated by a letter or combination of a letter and a number, or (b) is
based upon (i) the accumulation of Flight Hours and/or Cycles, or (ii) the
accumulation of APU Hours and/or APU Cycles, or (iii) an elapsed number of
calendar days, months and/or years.


 


“Tax(es)” means any taxes (including,
without limitation, sales, use, business, gross or net income, personal
property, license, documentation, transfer, import, export, fuel, leasing,
occupational, VAT, excess profits, excise, gross or net receipts, franchise,
stamp, environmental and other taxes), levies, imposts, withholdings, fees,
assessments, duties and other charges of any nature, and any penalties, fines,
additions to tax, interest or other charges related thereto which are imposed
by any Governmental Authority or other taxing authority in any jurisdiction or
by any international or multinational taxing or regulatory authority.


 


“Termination Date” means:


 


(i)            the Scheduled Termination Date if
Return is completed on the Scheduled Termination Date (taking into account, if
applicable, the Extension Term); or


 


(ii)           the date, if other than the Scheduled
Termination Date, of Lessee’s Return of the Aircraft with all Obligations then
due for performance having been performed; or


 


(iii)          the date on which this Lease
terminates in accordance with Section 8.3; or


 


(iv)          the date on which this Lease
terminates in accordance with Section 20.3 following the occurrence of an
Event of Loss with respect to the Aircraft or the Airframe following Delivery;
or


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 1-13

















 


(v)           the date on which this Lease is
cancelled or terminated pursuant to Article 24 following the occurrence of
an Event of
Default.


 


“Time Controlled Part” means any Item of
Equipment, including any Life Limited Part, having a Task applicable to it
based upon a predetermined time limit or interval in accordance with the MPD
and/or any requirement of the Manufacturer of such Item of Equipment, the
Maintenance Program, the Certificating Authority or the Aeronautics Authority,
to the extent such Task requires such Item of Equipment to be discarded,
overhauled, or re-certified upon reaching such time limit or interval.


 


“U.S.” or “U.S.A.”
means the United States of America.


 


“U.S. Air Carrier” means any United
States air carrier as to which there is in force a certificate issued pursuant
to Section 41102(a) of the Federal Aviation Act, and holding an air
carrier operating certificate issued by the Secretary of Transportation
pursuant to chapter 447 of title 49 of the U.S. Code (or the equivalent
authority issued by the Civil Aeronautics Board under the predecessor
regulatory laws, rules and regulations) for aircraft capable of carrying
10 or more individuals or 6,000 pounds or more of cargo or which may operate as
an air carrier by certification or otherwise under any successor or substitute
provisions therefor.


 


“VAT” means any Tax that is, or is in
the nature of, a value added, turnover, sales, use, rental, leasing, services,
goods and services, consumption, or transaction privilege Tax.


 


“Watch Item” means any discrepancy
requiring further inspection of the Aircraft or applicable Item of Equipment
following the Termination Date, where such additional inspection shall be
required prior to the later of the accumulation of (i) six thousand
(6,000) Flight Hours, (ii) one thousand two hundred (1,200) Cycles, or (iii) eighteen
(18) months, as applicable.


 


“Wet Lease(s)” means any arrangement
whereby Lessee agrees to furnish the Aircraft to a third party pursuant to
which (i) Lessee shall at all times maintain full operational, technical
and navigational control and maintenance oversight of the Aircraft, (ii) the
Aircraft shall be operated solely by employees of Lessee possessing all current
appropriate Aeronautics Authority certificates and licenses (it is understood
that cabin attendants need not be regular employees of Lessee), (iii) the
insurance required to be maintained by Lessee under the Lease shall remain in
full force and effect (provided that such insurance with respect to
legal liabilities for passenger and cargo may be on a contingent basis for the
duration of any such arrangement as long as such third party under such
arrangement maintains primary coverage for such insurance in favor of Lessor,
Lessee, and any Indemnitee and Additional Insureds in accordance and strict
compliance with the terms, conditions, and requirements of this Lease, evidence
of which in the form of a certificate of insurance and letter of undertaking
from the brokers of such third party under such arrangement shall be provided
to Lessor prior to the commencement of such arrangement), (iv) the
Aircraft shall be used and maintained by Lessee as otherwise required by and in
accordance with the terms and conditions of this Lease.


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 1-14

















 


Appendix 2


to Aircraft Lease Agreement


 


COMMERCIAL
TERMS


 


Contents:


 


Appendix 2A         Lease Term


Appendix 2B         Rent,
Security Deposit, Insurance and other Financial Matters


Appendix
2C         Escalation


Appendix
2D         Maintenance Reserves


Appendix 2E          Return
Conditions


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 2-1

















 


Appendix
2A


to Aircraft Lease Agreement


 


LEASE TERM


 


1.             Scheduled Delivery Date is November 2010.


 


2.             Outside Delivery Date is June 30, 2011, or such later
date as may be agreed in writing between Lessor and Lessee.


 


3.             Lease Term


 


The Lease Term shall commence on the Delivery
Date and shall end on, but not later than, 11:59 P.M. New York, New York
time on the last day of the one hundred twentieth (120th) Rent Period of the
Lease Term (or the one hundred twenty-first (121st) Rent Period if the Delivery
Date is on a day other than the first day of a calendar month), but which shall
in any event end on the Termination Date.


 


4.             Lease Term Extension Option


 


Provided no Default or Event of Default shall
have occurred and be continuing, Lessee shall have the right to increase the
Lease Term by a period of [...***...] (“Extension Term”).  Lessee shall provide Lessor irrevocable
written notice of the exercise of such right which must be received by Lessor
on or before the last day of the one hundred eighth (108th) Rent Period or, if Delivery
does not occur on the first day of the month, the one hundred ninth (109th) Rent Period at which time
this Lease shall be automatically extended on the same terms and conditions as
for the initial duration of the Lease Term, provided that Basic Rent during the
Extension Term shall be [...***...].


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 2-2

















 


Appendix
2B


to Aircraft Lease Agreement


 


RENT,
SECURITY DEPOSIT, INSURANCE


AND OTHER
FINANCIAL MATTERS


 


1.             [...***...]


 


2.             Security Deposit — Timing of Payments and Amounts.


 


2.1.          Prior
to the execution of this Lease, Lessee has paid Lessor the amount of [...***...].


 


2.2.          [...***...]


 


2.3.          [...***...]


 


2.4.          [...***...],
Lessee shall deposit with Lessor any additional amounts necessary such that the
total amount deposited in accordance with this Section 2 constitutes
[...***...].


 


2.5           [...***...]


 


2.6           If Lessor uses or applies all or any
part of the Security Deposit, other than the use or application of a portion of
the Security Deposit to the payment of Basic Rent pursuant to Section 2.5
of Appendix 2B, such use or application shall not be deemed a cure by Lessee,
or waiver by Lessor or any other Person, of any Event of Default and Lessee
shall, within three (3) Business Days after Lessor’s written demand, pay
to Lessor in cash such amount as may be necessary to restore the Security
Deposit to its original amount.


 


3.             Lessor’s Account


 


All payments made under Section 5.1 of
this Lease or any other Operative Document shall be made to the account of
Lessor by wire transfer of immediately available funds to its correspondent
bank:


 


[...***...]


 


4.             Insurances


 


4.1.          Liability Insurance Coverage Amount:  One Billion Dollars ($1,000,000,000).


 


4.2.          [...***...]


 


4.3           [...***...]


 


4.4.          Aircraft Hull Deductible Amount:  One Million Dollars ($1,000,000) per
occurrence, or such other hull deductible as may be usual and customary in the
worldwide airline insurance marketplace for the type of aircraft covered by
this Lease, as agreed by Lessor (such agreement not to be unreasonably
withheld).


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 2-3

















 


5.             Legend


 


“LEASED
FROM C.I.T. LEASING CORPORATION, NEW YORK, NEW YORK, U.S.A., AS OWNER AND
LESSOR”.


 


6.             Notices


 


	
  If to Lessee:

  	
   

  	
  If to Lessor:

  
	
   

  	
   

  	
   

  
	
  Hawaiian Airlines, Inc.

  	
   

  	
  C.I.T. Leasing Corporation

  
	
  3375 Koapaka Street

  	
   

  	
  11 West 42nd Street, 12th Floor

  
	
  Suite G350

  	
   

  	
  New York, New York  10036

  
	
  Honolulu, Hawaii 96819

  	
   

  	
  USA

  
	
  USA

  	
   

  	
  Attention: Chief Counsel — Transportation
  Finance

  
	
  Attention: 
  Executive Vice President — Chief Financial Officer;

  	
   

  	
  Fax: 
  +212 461 5402

  
	
  Executive Vice President and General
  Counsel

  	
   

  	
   

  
	
  Fax: 
  +808 835-3030

  	
   

  	
   

  



 


7.             [...***...]


 


8.                                       Lessee’s Covenants Regarding Use of the Aircraft.  The following is added as Section 11.6
to the Lease:


 


(a)           Capitalized terms defined in Section 11.6(g) are
used in this Section 11.6 as so defined.


 


(b)           Lessee covenants to Lessor that
during the term of this Lease (i) the Aircraft will be operated “to and
from the United States” (within the meaning of Section 168(g)(4)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”))
or within the United States, (ii) neither the Aircraft nor any
Engine will be “leased to a tax-exempt entity” (within the meaning of
Section 168(h) of the Code), and (iii) no Engine will be “used
predominantly outside the United States” within the meaning of Section 168(g)(1)(A) of
the Code while it is not attached to the Airframe.


 


(c)           Lessee further agrees to indemnify
Lessor on an After-Tax Basis for any and all losses, reductions or deferrals of
the Assumed MACRS Deductions arising from a breach of Lessee’s covenant in Section 11.6(b) or
any of Lessee’s agreements in Section 21.2(b) (each, an “MACRS Loss”).


 


(d)           If Lessee pays an indemnity to Lessor
on an After-Tax Basis pursuant to this Sections 11.6 with respect to any MACRS
Loss and if Lessor determines that it has received a net cash benefit exceeding
one Dollar ($1.00) due to any Tax Saving, then Lessor shall pay to Lessee an
amount equal to such net cash benefit, provided that Lessor shall have no obligation
to pay any amount to Lessee under this Section 11.6(d) while an Event
of Default is continuing or to the extent that the cumulative amount payable by
Lessor pursuant to this Section 11.6 would exceed the cumulative amount
paid by Lessee to Lessor pursuant to Section 11.6(c).   Lessee shall indemnify Lessor on an
After-Tax Basis for any additional Taxes imposed on Lessor as a result of any
disallowance, loss, unavailability, recapture, or reduction of all or any part
of any Tax Saving for which Lessor makes a payment to Lessee pursuant to this Section 11.6(d).


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 2-4

















 


(e)           Any indemnity payable by Lessee
pursuant to Section 11.6(c) shall be calculated based on the
applicable combined state and federal tax rate of Lessor multiplied by the
dollar amount of the MACRS Loss.


 


(f)            Lessor agrees to use good faith in
preparing its income tax returns for any taxable year to claim any Additional
MACRS Deduction or Increased Basis which Lessor has actual knowledge of and is
entitled to claim. Subject to the preceding sentence, Lessor and its Affiliates
shall have sole discretion in the management of their respective Tax affairs
and shall have no obligation (i) to conduct their respective businesses or
arrange or alter in any respect their respective Tax or financial affairs so
that Lessor receives a net cash benefit from any Tax Saving or (ii) to provide
to Lessee or any other Person copies of or access to any Tax returns or other
information with respect to their respective Tax affairs.


 


(g)           For the purpose of this Section 11.6:


 


(i)            the term “Actual MACRS
Deduction” means, with respect to any taxable year of Lessor, the
cost recovery deduction allowable to Lessor with respect to the Aircraft for
such taxable year pursuant to Section 168 of the Code;


 


(ii)           the term “Additional
MACRS Deduction” means, with respect to any taxable year of Lessor,
the amount (if any) by which the Actual MACRS Deduction for such taxable year
exceeds the Assumed MACRS Deduction for such taxable year as a result of one or
more MACRS Losses in any prior taxable year for which Lessee has paid all
indemnities due to Lessor pursuant to Section 11.6(c);


 


(iii)          the term “Assumed
MACRS Deductions” means cost recovery deductions for 100% of Lessor’s
cost of the Aircraft pursuant to Section 168(b) of the Code,
commencing in the calendar year in which the Delivery occurs, computed (i) on
the basis that the Aircraft is “7-year property” (within the meaning of Section 168(e) of
the Code), (ii) by using the 200% declining balance method and a seven
year recovery period pursuant to Section 168(c) of the Code,
switching to the straight-line method for the first taxable year of Lessor for
which such method yields a larger allowance, (iii) assuming salvage value
is zero, and (iv) using a half-year convention;


 


(iv)          the term “Gain
Reduction” means, in the case of any sale or other disposition of
the Aircraft in which Lessor recognizes gain for federal income tax purposes,
the amount by which the gain recognized by Lessor from such sale or other
disposition is less, as a result of one or more MACRS Losses in any prior
taxable year for which Lessee has paid all indemnities due to Lessor pursuant
to Section 11.6(c), than the gain that Lessor would have recognized if no
MACRS Loss had occurred;


 


(v)           the term “Increased
Basis” means, with respect to any taxable year of Lessor, the amount
(if any) by which the Lessor’s adjusted basis in the Aircraft exceeds, as a
result of one or more MACRS Losses in any prior taxable year for which Lessee
has paid all indemnities due to Lessor pursuant to Section 11.6(c), the
adjusted basis that Lessor would have in the Aircraft if no MACRS Loss had
occurred; and


 


(vi)          the term “Tax Saving”
means any net reduction in Lessor’s liability for Excluded Taxes on or measured
by net income which Lessor determines it has realized with respect to any
taxable year of Lessor as a result of:


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 2-5














 


(A)                              an
Additional MACRS Deduction allowable for that taxable year, or


 


(B)                                a
Gain Reduction  from the sale or other
disposition of the Aircraft in that taxable year, or


 


(C)                                any
payment(s) by Lessor to Lessee pursuant to Section 11.6(d),


 


in each case calculated based on the
applicable combined state and federal tax rate of Lessor.


 


[...***...]


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 2-6

















 


Appendix
2C


to Aircraft Lease Agreement


 


[...***...]


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 2-7

















 


Appendix
2D


to Aircraft Lease Agreement


 


[...***...]


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 2-11

















 


Appendix
2E


to Aircraft Lease Agreement


 


RETURN CONDITIONS


 


[...***...]


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 2-24

















 


Appendix 3


to Aircraft Lease Agreement


 


ACCEPTANCE
CERTIFICATE


 


(MSN
            )


 


Hawaiian Airlines, Inc., (“Lessee”) hereby acknowledges that on this
           day of
                ,
2010, C.I.T. Leasing Corporation (“Lessor”) did
deliver for inspection and acceptance to Lessee under the Aircraft Lease Agreement
made between Lessor and Lessee dated as of October 31, 2008 (the “Lease”) the Aircraft, as described below, together with all
Aircraft Documents applicable thereto, in accordance with the Lease.  Capitalized terms used but not defined herein
shall have the meanings given such terms in the Lease.


 


	
  1.

  	
  Aircraft Details

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Airframe

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aircraft
  Model:

  	
  Airbus A330-200

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Manufacturer’s
  Serial Number:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Airframe
  Maintenance Status:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  
	
   

  	
   

  	
  Total
  Cycles:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Engines (Installed)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Engine
  Type

  	
  Rolls Royce Trent 772B

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Manufacturer’s
  Serial Numbers:

  	
                                 and                           

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Maximum
  Takeoff Thrust Rating:

  	
                      lbs.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Engines
  Maintenance Status:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Position 1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ESN:

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  
	
   

  	
   

  	
  Total
  Cycles:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Position 2

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ESN:

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 3-1

















 


	
   

  	
  Total
  Cycles:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  APU (Installed)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APU Type

  	
                                                      

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Manufacturer’s
  Serial Number:

  	
                                                      

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APU
  Maintenance Status:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  APU Hours:

  	
   

  
	
   

  	
   

  	
  Total
  APU Cycles:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Landing Gear (Installed)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Manufacturer’s
  Serial Numbers:

  	
  Left Main:                          

  
	
   

  	
   

  	
   

  	
  Right Main:                        

  
	
   

  	
   

  	
   

  	
  Nose:                                 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Landing
  Gear Maintenance Status:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Left Main

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  
	
   

  	
   

  	
  Total
  Cycles:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Right Main

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  
	
   

  	
   

  	
  Total
  Cycles:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nose

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  
	
   

  	
   

  	
  Total
  Cycles:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Interior
  Configuration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Seating

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lavatories

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Galleys

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Passenger
  Service Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PSIU

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Aircraft Documents

  	
   

  



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 3-2

















 


	
   

  	
   

  	
  As described
  in [Attachment(s)                   
  to this Acceptance Certificate]

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Commercial Matters

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Rent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Rent Payment Date:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  [Delivery LIBOR Rate:               
  percent (    %)]

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  Delivery Reference Rate:             
  percent (    %)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iv)

  	
  Customization Options Payment:
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [(v)]

  	
  Basic Rent at Delivery:
  $

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Aircraft
  Agreed Value

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $

  



 


3.                                       Acceptance for Delivery


 


(a)                                  Lessee hereby
confirms to Lessor on
                                    ,
2010 at            A.M./P.M.,
Central European Time at Toulouse, France that the above described Aircraft is
in accordance with the specifications, terms and conditions for Delivery set
forth in the Lease, is satisfactory in all respects and is in the condition
required for Delivery under the Lease 
except as set forth in the exceptions letter between Lessor and Lessee
(the “Exceptions Letter”).  The parties agree that the Exceptions Letter (i) shall
include a list of the Aircraft’s non-material deviations from the
specifications, terms and conditions required for Delivery, and (ii) shall
describe the procedures to correct such non-material deviations.


 


(b)                                 The Scheduled
Termination Date is
                              
20      *.


 






*                 NOTE:  This
stated date is provided for the convenience of the parties only and the
provisions of Article 2 and Appendix 2A, paragraph 3 shall be controlling.


 


(c)                                  Lessee confirms that
the Aircraft has been examined by its duly appointed and authorized
representatives and the same conforms to the information set forth above.


 


(d)                                 The Lease is in full
force and effect, Lessor has fully, duly and timely performed all of its
obligations of every kind and nature thereunder and Lessee has no claims,
offsets, deductions, set-offs or defenses of any kind or nature in connection
with the Lease.


 


(e)                                  The execution and
delivery of this Acceptance Certificate by Lessee (i) signifies Lessee’s
absolute and irrevocable acceptance by Lessee of the Aircraft under the Lease, (ii) constitutes
conclusive and irrebuttable proof that the Aircraft is delivered in accordance
with the description set forth in and in the condition required by the Lease, (iii) Lessee
hereby expressly waives any right it may have to revoke acceptance of the
Aircraft pursuant hereto for any reason, notwithstanding any nonconformity,
discovered, difficult of discovery, or undiscovered, on the date hereof, and (iv) Lessee
hereby unconditionally and irrevocably waives its right to revoke acceptance of
Delivery of any Item of Equipment.


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 3-3

















 


4.                                       Governing Law


 


THIS CERTIFICATE OF ACCEPTANCE SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN THE
PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).


 


IN WITNESS WHEREOF, this Acceptance
Certificate has been executed and delivered this
       day of
                    ,
2010.


 


	
   

  	
  HAWAIIAN AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 3-4

















 


Attachment
1


to
Acceptance Certificate


 


SUMMARY
LISTING OF AGREED OPTIONS CHANGES


TO
STANDARD SPECIFICATION


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 3-5

















 


Attachment
2


to
Acceptance Certificate


 


[AIRS
REPORT — DOCUMENTATION LISTING]


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 3-6














 


Appendix 4


to Aircraft Lease Agreement


 


LEASE
SUPPLEMENT


(MSN
          )


 


LEASE SUPPLEMENT dated as of
                            ,
20      , (this “Lease
Supplement”), between C.I.T. LEASING CORPORATION, as Lessor (“Lessor”), and HAWAIIAN AIRLINES, INC., as Lessee (“Lessee”).


 


Lessor
and Lessee have previously entered into that certain Aircraft Lease Agreement
dated as of October 31, 2008, (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.


 


The
Lease and this Lease Supplement relate to the Aircraft as more precisely
described below and in the Acceptance Certificate.  A counterpart of the Lease is attached hereto
and shall be filed together with this Lease Supplement with the Aeronautics
Authority.


 


In consideration of the premises and other
good and sufficient consideration, Lessor and Lessee hereby agree as follows:


 


1.                                       Lessor hereby
delivers and leases to Lessee under and pursuant to the Lease and Lessee hereby
accepts, acknowledges receipt of possession and leases from Lessor under and
pursuant to the Lease the Aircraft described below, together with the Aircraft
Documents and Records described in the Agreement (the “Delivered
Aircraft”):


 




	
   

  	
  Aircraft Model:

  	
   

  	
  Airbus A330-200

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Manufacturer’s Serial Number:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Installed Engines

  	
   

  	
  Two (2) Rolls Royce Trent 772B

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Manufacturer’s Serial Numbers:

  	
   

  	
                                  and                                  

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
                    
  Registration Mark

  	
   

  	
   

  






 


2.                                       The Delivery Date of the Aircraft is
the date of this Lease Supplement set forth in the opening paragraph hereof.


 


3.                                       By execution and delivery of this
Lease Supplement, the Delivered Aircraft is and shall be for the Lease Term
subject to the Lease.


 


4.                                       The amount of Basic Rent for the
Delivered Aircraft is as set forth in the Lease and the Acceptance Certificate.


 


5.                                       Lessee hereby confirms to Lessor
that (i) the Delivered Aircraft and each delivered Engine have been duly
marked in accordance with the terms of the Lease, (ii) the Aircraft is
insured 


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 4-1

















 


as required by the Lease, (iii) the
representations and warranties of Lessee referred to in Article 9 of the
Lease are hereby repeated with effect as of the date first above written, (iv) having
inspected the Delivered Aircraft, Lessee acknowledges that the Delivered
Aircraft satisfies all conditions required for Lessee’s acceptance of delivery
as set forth in the Lease, and (v) the execution and delivery of this
Lease Supplement signifies absolute and irrevocable acceptance by Lessee of the
Delivered Aircraft for all purposes hereof and of the Lease.


 


6.                                       THIS
LEASE SUPPLEMENT SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF
LAWS PRINCIPLES (OTHER THAN THE PROVISIONS OF SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).


 


7.                                       This Lease Supplement may be
executed in any number of counterparts; each of such counterparts, shall for
all purposes be deemed to be an original; and all such counterparts shall together
constitute but one and the same Lease Supplement; provided, that to the extent,
if any, that this Lease Supplement constitutes chattel paper (as such term is
defined in the Uniform Commercial Code as in effect in any applicable
jurisdiction), no security interest in this Lease Supplement may be created
through the transfer or possession of any counterpart other than the “Original”,
which shall be identified on the signature page thereof.


 


8.                                       This Lease Supplement supplements
and forms a part of the Lease.  The Lease
and all Operative Documents, as supplemented hereby, are hereby ratified,
approved and confirmed in all respects.


 


[REMAINDER OF THIS PAGE LEFT
BLANK INTENTIONALLY]


 






*** Material has been omitted pursuant to a request for confidential treatment
and filed separately with the SEC


 


App 4-2

















 


IN WITNESS WHEREOF, Lessor and Lessee have
each caused this Lease Supplement to be duly executed by their authorized
representatives on the date first above written.


 


 


	
  HAWAIIAN AIRLINES, INC.

  	
  C.I.T. LEASING CORPORATION

  
	
  Lessee

  	
  Lessor

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  



 


[MSN             ]


 


TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER
THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE
PERFECTED THROUGH THE POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT
MARKED “CHATTEL PAPER ORIGINAL”


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 4-3

















 


CHATTEL
PAPER ORIGINAL


 


IN WITNESS WHEREOF,
Lessor and Lessee have each caused this Lease to be duly executed by their authorized
representatives as of the     
  day of           ,
2008.


 


 


	
  HAWAIIAN AIRLINES, INC.

  	
  C.I.T. LEASING CORPORATION

  
	
  Lessee

  	
  Lessor

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  



 


[MSN             ]


 


TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES CHATTEL PAPER UNDER
THE UNIFORM COMMERCIAL CODE, NO SECURITY INTEREST IN THIS DOCUMENT MAY BE
PERFECTED THROUGH THE POSSESSION OF ANY ORIGINAL OR COPY HEREOF OTHER THAN THAT
MARKED “CHATTEL PAPER ORIGINAL”.


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 4-4

















 


Appendix 5


to Aircraft Lease Agreement


 


PARTICIPATION
AGREEMENT


 


The final agreed form of Participation
Agreement, in form and substance reasonably satifactory to the parties therein,
shall be agreed by no later than fifteen (15) days from execution and delivery
of this Lease, with such final form to be the Participation Agreement as agreed
between the parties.


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 5-1

















 


Appendix 6


to Aircraft Lease Agreement


 


CONDITIONS
PRECEDENT / POST-DELIVERY ITEMS


 


Airbus A330-200


MSN


 


Lease Execution Date: 
                              
2008


 


Scheduled Delivery Date:  November 2010


 


	
  Item

  No.

  	
   

  	
  Description

  	
   

  	
  Date Due

  	
   

  	
  Status

  	
   

  
	
  1.

  	
   

  	
  Chattel
  Paper Original of Lease (ONE COPY ONLY – DELIVERED TO LESSOR)

  	
   

  	
  Lease
  Execution Date

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Lease
  Agreement

  	
   

  	
  Lease
  Execution Date

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Participation
  Agreement

  	
   

  	
  Lease
  Execution Date

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  [RESERVED.]

  	
   

  	
  Lease
  Execution Date

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Written
  evidence of company action authorizing the lease of the Aircraft and
  execution, delivery and performance of the Lease

  	
   

  	
  Seven
  (7) Business Days after Lease Execution

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Incumbency
  Certificate of person or persons authorized to execute the Lease and related
  Operative Documents on behalf of Lessee

  	
   

  	
  Seven
  (7) Business Days after Lease Execution

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  [RESERVED.]

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Power of
  Attorney evidencing the authority of Lessee’s representatives designated to
  accept delivery of the Aircraft and execute the Lease Supplement and
  Acceptance Certificate on behalf of Lessee at Delivery

  	
   

  	
  Five
  (5) Business Days prior to the Scheduled Delivery Date

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Letter of
  Undertaking executed by independent aircraft insurance brokers and, if
  applicable, reinsurance brokers, each acceptable to Lessor, together with certificates
  of insurance and, if applicable, reinsurance, evidencing the insurances
  required to be maintained by Lessee under the Lease

  	
   

  	
  Three
  (3) Business Days prior to the Scheduled Delivery Date

  	
   

  	
   

  	
   

  



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 6-1

















 


	
  Item

  No.

  	
   

  	
  Description

  	
   

  	
  Date Due

  	
   

  	
  Status

  	
   

  
	
  10.

  	
   

  	
  Application
  for Registration of the Aircraft duly executed by Lessee and/or Lessor

  	
   

  	
  Three
  (3)  Business Days prior to the Scheduled Delivery Date

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  First
  Payment of Basic Rent (which payment shall include Lessee’s payment of Basic
  Rent due and payable for the second Rent Period of the Lease Term if the
  Delivery Date is on or after the 15th day of the calendar month)

  	
   

  	
  One
  (1) Business Day prior to the Scheduled Delivery Date

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Security
  Deposit balance payment due under Section 2.4 of Appendix 2B

  	
   

  	
  One
  (1) Business Day prior to the Scheduled Delivery Date

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Acceptance
  Certificate

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Chattel
  Paper Original of Lease Supplement (ONE COPY ONLY — DELIVERED TO LESSOR)

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Lease
  Supplement

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Certificate
  of Airworthiness [for Export] for the Aircraft issued by the [EASA][DGAC][LBA]

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Copy of
  Lessee’s Air Operator’s Certificate issued by the Aeronautics Authority

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Copy of
  [provisional] Certificate of Registration for the Aircraft showing due
  registration in the name of Lessor as owner and lessor and Lessee as lessee

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Evidence of
  Registration of the Aircraft, the Lease [and related interests] with the IR

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Assignment
  of Warranties (Airframe) substantially in the form appearing in Appendix 8

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Consent to
  Assignment of Warranties (Airframe) substantially in the form appearing in
  Appendix 8

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Assignment
  of Warranties and Product Support (Engines) substantially in the form
  appearing in Appendix 8

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Consent to
  Assignment of Warranties and Product Support (Engines) substantially in the
  form appearing in Appendix 8

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  An opinion
  in a form acceptable to Lessor from Lessor’s special counsel in the State of
  Registration confirming, among other things, the due and proper registration
  of the Aircraft in the State of Registration and the IR.

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  25.

  	
   

  	
  Evidence of
  Appointment of Lessee’s Agent for Service of Process pursuant to
  Section 26.3 of the Lease

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  [RESERVED.]

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27.

  	
   

  	
  [RESERVED.]

  	
   

  	
   

  	
   

  	
   

  	
   

  



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 6-2

















 


	
  Item

  No.

  	
   

  	
  Description

  	
   

  	
  Date Due

  	
   

  	
  Status

  	
   

  
	
  28.

  	
   

  	
  [RESERVED.]

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  Letters
  addressed to Eurocontrol (if the Aircraft is operated to or over Europe),
  authorizing the recipient to issue to Lessor, upon Lessor’s request made from
  time to time, a statement of account of all sums due by Lessee to the
  authority with respect to the Aircraft and which letters shall survive the
  cancellation, termination and expiration of the Lease

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  [RESERVED.]

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
   

  	
  Opinions of
  Lessee’s counsel, general counsel, and reguatory counsel substantially in the
  forms appearing in Appendix 8 to the Lease

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  32.

  	
   

  	
  such other
  certificates, documents, opinions and agreements relating to the transactions
  contemplated by or related to this Lease and the other Operative Documents,
  as may be necessary or reasonably requested by Lessor

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  Copy of
  [permanent] Certificate of Registration for the Aircraft showing due
  registration in the name of Lessor as owner and lessor and Lessee as lessee

  	
   

  	
  Thirty (30)
  days following the Delivery Date

  	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  UCC-1
  Financing Statements to be filed with the Secretary of State of Delaware

  	
   

  	
  Delivery
  Date

  	
   

  	
   

  	
   

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 6-3














 


Appendix 7


to Aircraft Lease Agreement


 


RETURN
ACCEPTANCE CERTIFICATE


 


C.I.T. Leasing Corporation (“Lessor”) hereby acknowledges, pursuant to the Aircraft Lease
Agreement made between Lessor and Hawaiian Airlines, Inc., (“Lessee”) dated as of October 31, 2008 (the “Lease”), that on this
           day of
                ,
200  , at
      :        
Central European Time it has received from Lessee possession of the following
Aircraft.  Capitalized terms used but not
defined herein shall have the meanings given such terms in the Lease.


 


	
  1.

  	
  Aircraft Details

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (a)

  	
  Airframe

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Aircraft
  Model:

  	
  Airbus A330-200

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Manufacturer’s
  Serial Number:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Airframe
  Maintenance Status:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  
	
   

  	
   

  	
  Total
  Cycles:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours Since Last 6 Year HMV Check:  

  
	
   

  	
   

  	
  Total
  Cycles Since Last 6 Year HMV Check:  

  
	
   

  	
   

  	
  Date
  Last 6 Year HMV Check Accomplished:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours Since Last 12 Year HMV Check:

  
	
   

  	
   

  	
  Total
  Cycles Since Last 12 Year HMV Check:

  
	
   

  	
   

  	
  Date
  Last 12 Year HMV Check Accomplished:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours Since Last C-Check:

  
	
   

  	
   

  	
  Total
  Cycles Since Last C-Check:

  
	
   

  	
   

  	
  Date
  Last C-Check Accomplished:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Engines (Installed)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Engine
  Type

  	
  Rolls Royce Trent 772B

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Manufacturer’s
  Serial Numbers:

  	
                                 and                           

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Maximum
  Takeoff Thrust Rating:

  	
                      lbs.

  



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 7-1

















 


	
   

  	
   

  	
  Engines
  Maintenance Status:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Position 1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ESN:

  
	
   

  	
   

  	
  Total
  Flight Hours:

  
	
   

  	
   

  	
  Total
  Cycles:

  
	
   

  	
   

  	
  Total
  Flight Hours Since Last Engine Restoration:

  
	
   

  	
   

  	
  Total
  Cycles Since Last Engine Restoration:

  
	
   

  	
   

  	
  Date of Last
  Engine Restoration:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Position 2

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ESN:

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  
	
   

  	
   

  	
  Total
  Cycles:

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours Since Last Engine Restoration:

  
	
   

  	
   

  	
  Total
  Cycles Since Last Engine Restoration:

  
	
   

  	
   

  	
  Date of
  Last Engine Restoration:

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  APU (Installed)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APU
  Manufacturer & Model

  	
                                                      

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Manufacturer’s
  Serial Number:

  	
                                                      and

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APU
  Maintenance Status:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  APU Hours:

  	
   

  
	
   

  	
   

  	
  Total APU
  Cycles:

  	
   

  
	
   

  	
   

  	
  Total
  APU Hours Since Last Overhaul:

  
	
   

  	
   

  	
  Total
  APU Cycles Since Last Overhaul:

  
	
   

  	
   

  	
  Date of
  Last Overhaul:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Landing Gear (Installed)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Manufacturer’s
  Serial Numbers:

  	
  Left Main:                          

  
	
   

  	
   

  	
   

  	
  Right Main:                        

  
	
   

  	
   

  	
   

  	
  Nose:                                 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Landing
  Gear Maintenance Status:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Left Main

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  
	
   

  	
   

  	
  Total
  Cycles:

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours Since Last Overhaul:

  
	
   

  	
   

  	
  Total
  Cycles Since Last Overhaul:

  
	
   

  	
   

  	
  Date of
  Last Overhaul:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Right Main

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  	
   

  
	
   

  	
   

  	
  Total
  Cycles:

  	
   

  



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 7-2

















 


	
   

  	
   

  	
  Total
  Flight Hours Since Last Overhaul:

  
	
   

  	
   

  	
  Total
  Cycles Since Last Overhaul:

  
	
   

  	
   

  	
  Date of
  Last Overhaul:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Nose

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total
  Flight Hours:

  
	
   

  	
   

  	
  Total
  Cycles:

  
	
   

  	
   

  	
  Total
  Flight Hours Since Last Overhaul:

  
	
   

  	
   

  	
  Total
  Cycles Since Last Overhaul:

  
	
   

  	
   

  	
  Date of
  Last Overhaul:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Interior
  Configuration

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Seating

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lavatories

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Galleys

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Passenger
  Service Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PSIU

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Aircraft Documents and Other Equipment

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  As described in Attachment 1 to this Return
  Acceptance Certificate.

  
	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Fuel On Board

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
                                          
  kgs.

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Maintenance Reserves (check one)

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  There are no claims for reimbursement from
  the Maintenance Reserves outstanding and unpaid as of the date hereof.

  
	
   

  	
   

  	
   

  
	
   

  	
  or

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  o

  	
  Claims for reimbursement from the
  Maintenance Reserves are outstanding as of the date hereof and are itemized
  in Attachment [      ] hereto.

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Return Acceptance

  
	
   

  	
   

  	
   

  
	
   

  	
  The Aircraft and Aircraft Documents are
  hereby accepted by Lessor for return under the Lease subject to (i) the
  provisions of the Lease and (ii) the correction by Lessee (or
  procurement by Lessee at Lessee’s cost) within
         days following the date hereof of the
  discrepancies specified in Attachment 3 hereto.

  
	
   

  	
   

  	
   

  







*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 7-3

















 


	
  4.

  	
  Termination of Lease

  
	
   

  	
   

  
	
   

  	
  Subject to the following paragraph, the
  Lease is hereby terminated without prejudice to Lessee’s continuing
  obligations and Lessor’s continuing rights under the Lease.

  
	
   

  	
   

  
	
  5.

  	
  Lessee’s Representations and Warranties

  
	
   

  	
   

  
	
   

  	
  Lessee represents and warrants that during
  the Lease Term all maintenance and repairs to the Aircraft and each Item of
  Equipment were performed in accordance with the requirements of the
  Lease.  Lessee further confirms that
  all of its Obligations, whether accruing prior to the date hereof or which survive
  the termination or expiration of the Lease by their terms and accrue after
  the date hereof, will remain in full force and effect until all such
  Obligations have been satisfied in full.

  
	
   

  	
   

  
	
  6.

  	
  Governing Law

  
	
   

  	
   

  
	
   

  	
  THIS RETURN ACCEPTANCE CERTIFICATE SHALL IN
  ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
  STATE OF NEW YORK, APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
  WITHIN SUCH STATE WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN
  THE PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
  STATE OF NEW YORK).

  
	
   

  	
   

  
	
   

  	
  IN WITNESS WHEREOF, Lessor and Lessee have
  each caused this Return Acceptance Certificate to be duly 

  
	
  executed by their authorized
  representatives on the date first above written.

  



 


	
  HAWAIIAN AIRLINES, INC.

  	
  C.I.T. LEASING CORPORATION

  
	
  Lessee

  	
  Lessor

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  



 


[MSN             ]


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 7-4

















 


Attachment 1
to Return Acceptance Certificate


 


Aircraft
Documents and Equipment Inventory


 


Aircraft Documents


 


	
   

  	
  1.

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aircraft Manuals

  
	
   

  
	
   

  	
  1.

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Loose Equipment

  
	
   

  
	
   

  	
  1.

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Avionics Inventory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hard Time Components Inventory

  
	
   

  
	
   

  	
  1.

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  
	
   

  	
  .

  	
   

  	
   

  	
   

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 7-5

















 


Attachment 2
to Return Acceptance Certificate


 


Maintenance
Reserves Claims Outstanding at Return


 


[Write “None” if there are no claims outstanding]


 


	
  Type of Work

  	
   

  	
  Service Provider

  	
   

  	
  Invoice Amount

  	
   

  
	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 7-6

















 


Attachment 3
to Return Acceptance Certificate


 


Aircraft
Discrepancies


 


[Write “None” if there are no Aircraft
Discrepancies]


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 7-7

















 


Appendix 8


to Aircraft Lease Agreement


 


FORMS


 


	
  Form 1

  	
  Form of Aircraft Utilization Report

  
	
  Form 2

  	
  Form of Quiet Enjoyment Letter

  
	
  Form 3

  	
  Form of Recognition of Rights
  (Engines)

  
	
  Form 4

  	
  Maintenance Status Report

  
	
  Form 5

  	
  Form of Lessee’s Counsel’s Opinion

  
	
  Form 6

  	
  Form of ATC Authorization Letter

  
	
  Form 7

  	
  Form of Lease Termination Agreement

  
	
  Form 8

  	
  Form of Assignment and Consent –
  Warranties (Airframe)

  
	
  Form 9

  	
  Form of Assignment and Consent –
  Warranties (Engines)

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 8-1

















 


Form 1


 


Form of Aircraft Utilization Report


 


UTILIZATION
REPORT


 


Lessee:  Hawaiian Airlines, Inc.


Date of Report:  __________ 20    


Report Period:  ________ 20___
through ________ 20


 


=============


 


General Information


 


	
  Aircraft Model: Airbus
  A330-200

  	
  Engine Type: Rolls-Royce Trent 772B

  
	
   

  	
   

  
	
  Airframe Serial Number:

  	
   

  	
   

  	
  Lease Engine 1 Serial Number:

  	
   

  
	
   

  	
   

  	
   

  
	
  Lease APU Serial Number:

  	
   

  	
   

  	
  Lease Engine 2 Serial Number:

  	
   

  
	
   

  	
   

  	
   

  
	
  Lease Nose Landing Gear S/N:

  	
   

  	
   

  	
  Lease Left Main Gear S/N:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lease Right Main Gear S/N:

  	
   

  
	
   

  	
   

  	
   

  
	
  ========

  	
  ========

  
	
   

  	
   

  	
   

  
	
  Installed 1 Engine S/N:

  	
   

  	
   

  	
  Installed 2 Engine S/N:

  	
   

  
	
   

  	
   

  	
   

  
	
  Installed APU S/N:

  	
   

  	
   

  	
  Installed Nose Landing Gear S/N:

  	
   

  
	
   

  	
   

  	
   

  
	
  Installed Left Main Gear S/N:

  	
   

  	
   

  	
  Installed Right Main Gear S/N:

  	
   

  
	
   

  	
   

  	
   

  
	
  Utilization Information — Airframe

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Airframe Flight Hours:

  	
   

  	
   

  	
  Airframe Cycles:

  	
   

  
	
   

  	
   

  	
   

  
	
  Airframe Total FHSN:

  	
   

  	
   

  	
  Airframe Total CSN:

  	
   

  
	
   

  	
   

  	
   

  
	
  Airframe Base:

  	
   

  	
   

  	
  Airframe Status:

  	
   

  
	
   

  	
   

  	
  [In Service;
  Check; etc.]

  
	
  Utilization Information —Engines

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Lease Engine 1 — Serial Number

  	
   

  	
   

  
	
   

  	
   

  
	
  FH During Report Period:

  	
   

  	
   

  	
  Cycles During Report Period:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH:Cycle Utilization Ratio:

  	
         :1

  	
   

  	
  Cycles Since New:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH Since New:

  	
   

  	
   

  	
  Cycles Since Restoration:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH Since Restoration:

  	
   

  	
   

  	
  Installed On MSN:

  	
   

  
	
   

  	
   

  	
   

  
	
  Airframe Position:

  	
   

  	
   

  	
  Airframe Reg’n Mark:

  	
   

  
	
   

  	
   

  	
   

  
	
  Airframe Owner (if not Lessor):

  	
   

  
								



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 8-2

















 


	
  Removed From Service:

  	
   

  	
   (Date)

  	
   

  	
  Current Location:

  	
   

  
	
   

  	
   

  	
   

  
	
  Reason for Removal:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Lease Engine 2 — Serial Number

  	
   

  	
   

  
	
   

  	
   

  
	
  FH During Report Period:

  	
   

  	
   

  	
  Cycles During Report Period:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH:Cycle Utilization Ratio:

  	
         :1

  	
   

  	
  Cycles Since New:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH Since New:

  	
   

  	
   

  	
  Cycles Since Restoration:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH Since Restoration:

  	
   

  	
   

  	
  Installed On MSN:

  	
   

  
	
   

  	
   

  	
   

  
	
  Airframe Position:

  	
   

  	
   

  	
  Airframe Reg’n Mark:

  	
   

  
	
   

  	
   

  	
   

  
	
  Airframe Owner (if not Lessor):

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Removed From Service:

  	
   

  	
   (Date)

  	
   

  	
  Current Location:

  	
   

  
	
   

  	
   

  	
   

  
	
  Reason for Removal:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Installed Engine 1 — Serial Number

  	
   

  	
   (if
  not Lease Engine)

  
	
   

  	
   

  
	
  Engine Owner:

  	
   

  	
   

  	
  Airframe Position:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Installed Engine 2 — Serial Number

  	
   

  	
   (if
  not Lease Engine)

  
	
   

  	
   

  
	
  Engine Owner:

  	
   

  	
   

  	
  Airframe Position:

  	
   

  
	
   

  	
   

  
	
  Utilization Information —APU

  	
   

  
	
   

  	
   

  
	
   

  	
  Lease APU — S/N

  	
   

  	
   

  
	
   

  	
   

  
	
  APU Hours During Report 

  Period:

  	
   

  	
   

  	
  APU Cycles During Report 

  Period:

  	
   

  
	
   

  	
   

  	
   

  
	
  APU Hours Since New:

  	
   

  	
   

  	
  APU Cycles Since New:

  	
   

  
	
   

  	
   

  	
   

  
	
  APU Hours Since Overhaul:

  	
   

  	
   

  	
  APU Cycles Since Overhaul:

  	
   

  
	
   

  	
   

  	
   

  
	
  Installed On MSN:

  	
   

  	
   

  	
  Removed From Service:

  	
   

  	
   (Date)

  
	
   

  	
   

  	
   

  
	
  Airframe Reg’n Mark:

  	
   

  	
   

  	
  Current Location:

  	
   

  
	
   

  	
   

  	
   

  
	
  Airframe Owner (if not Lessor):

  	
   

  
	
   

  	
   

  	
   

  
	
  Reason for Removal:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Installed APU — Serial Number 

  	
   

  	
   (if
  not Lease APU)

  
	
   

  	
   

  
	
  APU Owner:

  	
   

  	
   

  	
   

  	
   

  
																	



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 8-3














 


Utilization Information –Landing Gear


 


	
  Lease
  Nose Landing Gear – S/N __________________________

  
	
   

  	
   

  	
   

  
	
  FH During Report 

  Period:

  	
   

  	
   

  	
  Cycles During Report 

  Period:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH Since New:

  	
   

  	
   

  	
  Cycles Since New:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH Since Overhaul:

  	
   

  	
   

  	
  Cycles Since Overhaul:

  	
   

  
	
   

  	
   

  	
   

  
	
  Removed From Service:

  	
   

  	
  (Date)

  	
   

  	
  Current Location:

  	
   

  
	
   

  	
   

  	
   

  
	
  Reason for Removal:

  	
   

  
	
   

  
	
  Installed
  Nose Landing Gear – S/N ______________________  (if not Lease Nose Landing Gear)

  
	
   

  
	
  NLG Owner:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Lease
  Left Main Landing Gear – S/N ______________________  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FH During Report 

  Period:

  	
   

  	
   

  	
  Cycles During Report 

  Period:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH Since New:

  	
   

  	
   

  	
  FH Since Restoration:

  	
   

  
	
   

  	
   

  	
   

  
	
  Cycles Since New:

  	
   

  	
   

  	
  Cycles Since Restoration:

  	
   

  
	
   

  	
   

  	
   

  
	
  Removed From Service:

  	
   

  	
  (Date)

  	
   

  	
  Current Location:

  	
   

  
	
   

  	
   

  	
   

  
	
  Reason for Removal:

  	
   

  
	
   

  
	
  Installed
  Left Main Landing Gear – S/N ______________________  (if not Lease Left Main Landing Gear)

  
	
   

  
	
  Left MLG Owner:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Lease
  Right Main Landing Gear – S/N _____________________

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FH During Report 

  Period:

  	
   

  	
   

  	
  Cycles During Report 

  Period:

  	
   

  
	
   

  	
   

  	
   

  
	
  FH Since New:

  	
   

  	
   

  	
  FH Since Restoration:

  	
   

  
	
   

  	
   

  	
   

  
	
  Cycles Since New:

  	
   

  	
   

  	
  Cycles Since Restoration:

  	
   

  
	
   

  	
   

  	
   

  
	
  Removed From Service:

  	
   

  	
  (Date)

  	
   

  	
  Current Location:

  	
   

  
	
   

  	
   

  	
   

  
	
  Reason for Removal:

  	
   

  
	
   

  
	
  Installed
  Right Main Landing Gear – S/N ______________________
  (if not Lease Right Main Landing Gear)

  
	
   

  
	
  Right MLG Owner:

  	
   

  	
   

  
									



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 8-4

















 


	
   

  	
  HAWAIIAN AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Title)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Date)

  



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 8-5

















 


Form 2


 


Form of Quiet Enjoyment Letter


 


	
  To:

  	
  [·]

  
	
   

  	
   

  
	
  Dated:

  	
  [·]

  



 


Airbus
A330-200, msn [·], registration mark [·] (the “Aircraft”) and the
Aircraft Lease Agreement dated October 31, 2008, between C.I.T. Leasing
Corporation (“Lessor”) and Hawaiian Airlines, Inc. (“Lessee”) relating to
the Aircraft (the “Lease”)


 


Dear Sirs


 


1.                                       Capitalized terms in this letter
have the meanings given to them in the Lease.


 


2.                                       Pursuant to Section 10.2(b) of
the Lease, in consideration of you issuing to us an acknowledgement to the
[security assignment] (the “Acknowledgement”)
in respect of the Lease, we confirm to you that neither we nor any person
lawfully claiming through us (which expression includes any Financing Party)
will interfere with the quiet possession and use of the Aircraft by Lessee [or
any Permitted Sublessee] throughout the Lease Term so long as no Event of
Default has occurred and is continuing.


 


3.                                       The foregoing undertaking is not to
be construed as restricting our rights to dispose of the Aircraft in certain
circumstances to such persons and on such terms as we consider appropriate,
subject to any applicable provisions of the Lease and/or the Acknowledgement. However,
if we become entitled to exercise such rights during the Lease Term and
provided that no Event of Default has occurred and is continuing we will
dispose of the Aircraft expressly subject to the Lease provided that
the purchaser issues an undertaking to you that it will not interfere with the
quiet possession and use of the Aircraft by you throughout the remaining term
of the Lease and will be bound by the terms of the Lease as if named as Lessor
thereunder.


 


4.                                       THIS
LETTER SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF  THE STATE OF NEW YORK, NEW
YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE PROVISIONS
OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK).


 


Please
countersign the attached copy of this letter in order to confirm your agreement
to the arrangements contained herein.


 


 


	
   

  	
  C.I.T.
  Leasing Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 8-6

















 


Acknowledged and agreed this       
day of                      ,
20   .


 


	
  Hawaiian
  Airlines, Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 8-7

















 


Form 3


 


Form of Recognition of Rights (Engines)


 


[ON THE LETTERHEAD OF THE
OWNER/


LESSOR/SECURED PARTY OF THE
AIRFRAME


ON WHICH THE ENGINE IS BEING
INSTALLED]


 


[INSERT DATE]


 


[INSERT ADDRESS OF AIRCRAFT OWNER]


 


Re:                              Acknowledgment
of ownership of and waiver of lien interest in one (1) Rolls Royce Trent
772B Aircraft Engine Bearing Manufacturer’s Serial Number ___________ (the “Engine”)


 


Dear Sirs:


 


The undersigned, _______________________ (“Secured Party”), is the legal and beneficial owner of one (1) Airbus
A330-200 aircraft bearing manufacturer’s serial number [____] and [_____]
registration mark [_____] (“Secured Aircraft”),
which aircraft is on lease to ____________________ (“Lessee”).
[NOTE: PROVIDE ALTERNATE STATEMENT FOR SECURED PARTY’S INTEREST AND/OR LESSOR’S
INTEREST AS NECESSARY]


 


We understand that, pursuant to an aircraft
lease agreement dated October 31, 2008 (“Aircraft
Lease”) between C.I.T. Leasing Corporation as lessor (“CIT”) and Lessee, you are the owner of and have leased one (1) Airbus
A330-200 aircraft bearing manufacturer’s serial number [___] and [____________]
registration mark [________] to Lessee and which lease includes the lease of
one (1) [____________] aircraft engine bearing  manufacturer’s serial number [________] (the “Leased Engine”). We have been advised by Lessee that it
desires to install the Leased Engine on the Secured Aircraft.


 


At the
request of Lessee and for its benefit and the benefit of CIT, Secured Party
hereby (i) acknowledges and agrees that CIT is the owner and lessor to
Lessee of the Leased Engine under the Aircraft Lease, (ii) agrees that
Secured Party has not acquired or claimed nor will it acquire or claim, and
hereby waives, releases and renounces any right, title or interest in the
Leased Engine by reason of the Leased Engine being installed on the Secured
Aircraft at any time and that the foregoing shall apply notwithstanding any
contrary laws of accession, or the like, which may from time to time be enacted
or in effect in any jurisdiction where the Leased Engine and/or Secured
Aircraft may be located, and the same are expressly waived by Secured Party
hereby, (iii) agrees not to impede or interfere with the exercise by CIT
of its rights and remedies to regain possession of the Leased Engine pursuant
to the Aircraft Lease, (iv) agrees that the foregoing acknowledgements and
agreements of Secured Party shall inure to the benefit of CIT’s successors and
assigns, and (v) if requested by CIT, consents to and agrees to cooperate
with CIT (at no cost to Secured Party) in connection with the filing of any
notices and registrations, in form and substance reasonably satisfactory to
Secured Party, of CIT’s interest in the Leased Engine with the applicable
governmental authorities in the country of registration of the Secured
Aircraft, the country of Lessee’s organization and such other jurisdiction as
CIT may deem appropriate and, if applicable, the International
Registry of Mobile Assets organized pursuant to the Cape Town Convention.


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 8-8

















 


THIS LETTER SHALL IN ALL RESPECTS BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, NEW
YORK, U.S.A. APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE WITHOUT REGARD FOR CONFLICT OF LAW PRINCIPLES (OTHER THAN THE
PROVISIONS OF SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).


 


Sincerely,


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 8-9

















 


Form 4


 


Maintenance Status Report – Required Information


 


1.                                      Airframe


 


a.                                       Aircraft
and Appliances Airworthiness Directive Summaries


b.                                      Aircraft
times and cycles log


c.                                       Airframe
Utilization Report


d.                                      Avionics
Computerized Inventory


e.                                       CPCP
Summary as may be applicable


f.                                         Dent
and Damage Chart


g.                                      Emergency
Equipment Layout Drawing


h.                                      Fire
Blocking Certification


i.                                          Maintenance
last done next due task listing


j.                                          Life
Limited Parts Summary


k.                                       Interior
Layout configuration


l.                                          Maintenance
Program Summary and Time Interval Summary-Upon request


m.                                    Service
Bulletin, Engineering Orders, Major Repair and Alteration Summaries


n.                                      Scheduled
Maintenance Checks Tally Sheets


o.                                      Time
Control Components Summary


 


2.                                      Engines


 


a.                                       Airworthiness
Directive Summaries


b.                                      Last
Shop visit/Engine Restoration Mini Package


c.                                       Current
Disk Sheet


d.                                      Date,
Flight Hours and Cycles of Engine at last Engine install (including Airframe
Flight Hours and Cycles)


e.                                       Service
Bulletin Status / Engineering Orders and MOD Summaries


f.                                         Trend
Monitor Readout for the three (3) months prior to the report


 


3.                                      Landing
Gear


 


a.                                       Aircraft
date, Flight Hours and Cycles at installation


b.                                      Landing
Gear (each) Overhaul/restoration date, Flight Hours and Cycles.


c.                                       Life
Limited Parts Summary


d.                                      Last
shop visit/Overhaul report


 


4.                                      APU


 


a.                                       Airworthiness
Directive Summary


b.                                      Last
shop visit/Overhaul mini package report


c.                                       Flight
Hours and Cycles formula (as applicable if Hobbs not installed)


d.                                      Aircraft/
APU date, APU Hours and APU Cycles at installation.


e.                                       Life
Limited Parts Summary


f.                                         Service
Bulletin Summary


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 8-10

















 


Form 5


 


Form of Lessee’s Counsel Opinions


 


The final agreed form of Lessee’s counsel
opinion, general counsel opinion, and regulatory counsel opinion, in form and
substance reasonably satifactory to Lessor and Lessee, shall be agreed by no
later than fifteen (15) days from execution and delivery of this Lease, with
such final forms to be the legal opinions as agreed between the Lessor and
Lessee as required by item 31 of Appendix 6 of this Lease.


 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 8-11

















 


Form 6


 


Form of Air Traffic Control and Airport Authorities Letters


 


[LESSEE’S
LETTERHEAD]


 


	
  To:

  	
   

  	
  Eurocontrol Organization

  
	
   

  	
   

  	
  for the Safety of Air Navigation

  
	
   

  	
   

  	
  Rue de la Loi,
  72

  
	
   

  	
   

  	
  1040 Bruxelles

  
	
   

  	
   

  	
  Belgium

  
	
   

  	
   

  	
   

  
	
  Re:

  	
   

  	
  Air Navigation / Airport Charges — Airbus
  A330-200 Aircraft with Manufacturer’s Serial Number ____ and United States
  Registration Mark [*] (the “Aircraft”)

  



 


Ladies and Gentlemen,


 


We hereby confirm that Hawaiian Airlines, Inc. (the “Lessee”) has entered into an Aircraft Lease Agreement with
C.I.T. Leasing Corporation (“CIT”) dated October 31,
2008 (the “Lease”).


 


We wish to enable CIT as lessor to monitor the value of air navigation
and other charges incurred by us in relation to the above Aircraft.


 


We hereby irrevocably and unconditionally authorize you to release to
CIT as lessor (or its duly authorized representatives) upon its request from
time to time, a statement of account of all sums due by us to you, as at the
date of each such request, in respect to all aircraft operated by Lessee,
including but not limited to the Aircraft, the subject of the aforementioned
Lease.


 


This authorization may only be revoked or amended by a written
instruction signed by us and CIT.


 


	
  Yours faithfully,

  	
   

  
	
   

  	
   

  
	
  Hawaiian Airlines, Inc.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  



 






*** Material has been omitted pursuant to a request for confidential
treatment and filed separately with the SEC


 


App 8-12

















 


Form 7


 


Form of Lease Termination Agreement


 


LEASE
TERMINATION


(MSN [*])


 


By
execution hereof (this “Lease Termination”),
the undersigned, C.I.T. LEASING CORPORATION (“CIT”),
as lessor, and HAWAIIAN AIRLINES, INC. (“Hawaiian”), as
lessee, acknowledge and agree that the Lease Agreement defined and described on
Exhibit A attached hereto, has by its terms expired or has otherwise been
cancelled or terminated and Lessee hereby releases the Equipment, which is also
defined and described on Exhibit A attached hereto, from the terms and
conditions of the Lease Agreement.


 


This
Lease Termination is without prejudice to the surviving rights of the parties
under the Lease Agreement and nothing in this Lease Termination shall relieve either
party from its obligations under the Lease Agreement which are still
unsatisfied and/or from any of its obligations under the Lease Agreement which
may be due after the date of this Lease Termination.


 


This
Lease Termination may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute but one and the
same instrument.


 


Dated as of this _____ day of ______________,
20__.


 


 


	
  HAWAIIAN AIRLINES, INC.

  	
   

  	
  C.I.T. LEASING CORPORATION

  
	
  Lessee

  	
   

  	
  Lessor

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  



 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 8-13














 


EXHIBIT
A


 


The
Equipment


 


[TO BE COMPLETED AT LEASE
TERMINATION]


 


The
Lease Agreement


 


 


[TO BE COMPLETED AT LEASE
TERMINATION]


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 8-14

















 


Form 8


 


Form of Assignment of Warranties and Consent (Airframe)


 


This Assignment of Warranty and Support
Rights is made this ______ day of ____________, 20__ (the “Assignment
Agreement”)


 


BETWEEN


 


(1)                                  C.I.T.
LEASING CORPORATION, a company organized and existing under the laws of the
State of Delaware, U.S.A. and whose principal place of business is at 505 Fifth
Avenue, New York, New York, 10017, U.S.A (“Lessor”); and


 


(2)                                  HAWAIIAN
AIRLINES, INC., a corporation organized and existing under the laws of
Delaware, whose address and principal place of business is at 3375 Koapaka
Street, Suite G-350, Honolulu, Hawaii 96819, U.S.A. (“Lessee”).


 


1.                                       Preamble.     In
connection with the lease by Lessor to Lessee of one Airbus A330-200 model
aircraft bearing manufacturer’s serial number ___ (the “Aircraft”),
reference is made to the following documents:


 


(a)                                  the
Airbus [______________] Purchase Agreement between Lessor and Airbus S.A.S. (“Airbus”) dated as of [________________], as the same may be
further amended (the “Purchase Agreement”)[,
partially assigned with respect to the Aircraft to Lessor pursuant to which
Lessor agreed to purchase the Aircraft];


 


(b)                                 the
Aircraft Lease Agreement between Lessor and Lessee dated October 31, 2008
(the “Lease Agreement”); and


 


(c)                                  the
Participation Agreement among Lessor and Lessee dated ___________ ___, 200_
(the “Participation Agreement”).


 


2.                                       Assignment.     Pursuant
to the Lease, Lessor has leased the Aircraft to Lessee. Included in such Lease
is a commitment by Lessor to assign to Lessee certain warranty and other rights
related to the Aircraft under the Purchase Agreement. With effect from the
actual delivery date of the Aircraft by Lessor to Lessee in respect of (a) through
[___] below, Lessor hereby assigns to Lessee and Lessee accepts the assignment
on the terms and conditions specified herein of the benefit of the following
rights (the “Rights”) under the Articles of the Purchase Agreement
indicated below (the “Assigned Provisions”) with respect to the
Aircraft:


 


(a)                                  Article 12
(Warranties and Service Life Policy); [and]


 


(b)                                 Article 13
(Patent and Copyright Indemnity)[; and]


 


(c)                                  Article 15
(Seller Representative) as follows:  a
Manufacturer’s technical representative will be at Lessee’s premises for six (6) man-months
after the Delivery Date, with the precise location to be agreed upon between
Lessee and Manufacturer;][and]


 


(d)                                 Article 16
(Training), but only to the following extent:


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 8-15

















 


(i)                                   eight
(8) flight crew transition courses consisting of one (1) captain and
one (1) first officer per crew,


 


(ii)                                one
hundred (100) trainee days of maintenance training, the courses to be selected
out of the standard listing of the Manufacturer’s A330-200 Maintenance Courses,
and


 


(iii)                             one (1) cabin
attendant course for up to three (3) cabin attendant instructors; [and]


 


[(___)               Article 17
(Vendors’ Product Support)].


 


3.                                       Conditions
of Assignment.     This
Assignment Agreement is made subject to the following conditions:


 


(a)                                  Lessee
hereby agrees to be bound by and to comply with all applicable terms,
conditions and limitations of the Articles of the Purchase Agreement referred
to in Section 2 above (copies of which are attached hereto as Schedule 2)
with respect to the exercise of any of the Rights and to be bound by the
covenants of the Buyer (as defined in the Purchase Agreement) in the Assigned
Provisions to the same extent as if Lessee had been named “Buyer” of the
Aircraft under the Purchase Agreement.


 


(b)                                 Nothing
contained herein shall subject Airbus to any liability or additional obligations
whatsoever to which it would not otherwise be subject under the Purchase
Agreement, or, except to the extent set forth in section 3(c) below,
modify in any respect whatsoever its contractual rights under the Purchase
Agreement.


 


(c)                                  So
long as this Assignment Agreement is in full force and effect, Lessee and not
Lessor will be responsible for compliance with Articles 12 [and][,] 13[,]
[15,][16 ][and 17] of the Purchase Agreement, in each case with respect to the
Aircraft. Upon termination of this Assignment Agreement, Lessor shall once
again be bound by such Articles with respect to the obligations thereunder, and
Lessor shall be entitled to the rights and benefits described in Section 2
above originally received by Lessor in connection with its purchase of the
Aircraft from Airbus.


 


(d)                                 Other
than with respect to the obligations assumed by Lessee under this Assignment
Agreement as set forth in section 3(a) above, Lessor shall remain fully
bound by all provisions of the Purchase Agreement other than those provisions
relating to rights reserved to Lessor with respect to which Lessor shall remain
fully bound by.


 


4.                                       Reassignment.     Upon
expiration or termination of the Lease, and provided that Lessee and Lessor
shall have furnished Airbus with written notice thereof, upon receipt of such
notice by Airbus, the rights contained herein and remaining available on the
date of such notice shall automatically be reassigned to Lessor, and in
connection therewith Lessee shall execute any and all such acknowledgements or
assurances Lessor may reasonably require.


 






*** Material has been omitted
pursuant to a request for confidential treatment and filed separately with the
SEC


 


App 8-16

















 


5.                                       Assignment
by Lessee.     The
rights of Lessee under this Assignment Agreement in respect of the Purchase
Agreement shall not, without the consent of Lessor and Airbus, be further
assigned by Lessee.


 


6.                                       Notification.


 


(a)                                  It
shall be a condition subsequent to this Assignment Agreement that this
Assignment Agreement shall, at the expense of Lessee, be notified to Airbus
within two (2) weeks of the date hereof pursuant to Article 1690 of
the French Civil Code.


 


(b)                                 All
notices and requests required or authorized under this Assignment Agreement
shall be given in writing either by personal delivery to a responsible officer
of the party to whom the same is given or by internationally recognized courier
service or by telefax directed as set forth below:


 


Lessor shall
be addressed at:


 


C.I.T. Leasing Corporation

11 West 42nd Street, 12th Floor

New York, New York 10036

U.S.A.

Attention:  Chief Counsel —
Transportation Finance

Fax: +212 461-5402


 


Lessee shall
be addressed at:


 


	
   

  	
  Hawaiian Airlines, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
   

  
	
   

  	
  Fax: +

  	
   

  	
   

  



 


Airbus shall
be addressed at:


 


1 Rond-Point Maurice Bellonte

31707 Blagnac Cedex, France

Attention:  Executive Vice-President
Customer Services

Fax:  (33) 5 61 93 46 65

Telephone:  (33) 5 61 30 40 12


 


or such other address or to such other person
as the party receiving the notice or request may designate from time to time.


 


Such notice or request shall be deemed to be
effective in the case of (i) personal delivery, on the date upon which
personally delivered, (ii) delivery by courier, on the date of receipt or (iii) telefax
transmission, on the date of confirmation of successful transmission.


 


7.                                       Consent
of Airbus.     It
shall be a condition precedent to this Assignment Agreement becoming effective
that Airbus execute the Consent contained in Schedule 1 hereto.


 






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App 8-17

















 


8.                                       Applicable
Law and Jurisdiction.     THIS
ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CHOICE OF LAW,
AND THE PARTIES AGREE THAT ANY COMPETENT FEDERAL OR STATE COURT LOCATED IN NEW
YORK, NEW YORK SHALL HAVE JURISDICTION OVER ANY DISPUTE ARISING IN CONNECTION
HEREWITH. Nothing in this section will prevent either party from making a claim
in a court of competent jurisdiction in France if Airbus is involved.


 


9.                                       Confidentiality.     Each of
Lessor and Lessee (which for this purpose will include their employees, agents
and advisors) will maintain the terms and conditions of this Assignment
Agreement and any reports, documentation (including the provisions of the
Purchase Agreement furnished under section 2 hereof) or other data furnished
hereunder (collectively, “Information”)
strictly confidential and will not, without the prior written consent of the
other party and Airbus, disclose such Information to any other person or
entity; provided that Lessor and Lessee may, without the consent of the other
party or Airbus, disclose the Information in any of the following situations:


 


(i)                                   to
directors, officers, employees and permitted assignees of Lessor and Lessee; or


 


(ii)                                to
auditors, accountants or legal advisors of Lessor, the Lessee or their
respective permitted assignees; or


 


(iii)                             to
such other parties as may be required by law, by government regulation or order
(including, without limitation, any regulation or order of a bank regulatory
agency), by subpoena or by any other legal process. In the event that a
disclosure becomes necessary, as provided in this sub-clause (iii), Lessor and
Lessee shall consult and cooperate with Airbus to limit the scope and form of
such disclosure to the extent permissible and will make such applications as
will be necessary to implement the foregoing.


 


Notwithstanding any of the foregoing,
Information will not be considered confidential and Lessor and Lessee and their
respective permitted assignees may disclose any item of Information without
restriction in any of the following circumstances:  If such item:


 


(i)                                   is
publicly available (either to the general public or to any relevant trade or
industry) prior to either party’s receipt of it from Airbus hereto;


 


(ii)                                is
thereafter made publicly available (either to the general public or to any
relevant trade or industry) by Airbus hereto or by a third party which is entitled
to make such item publicly available; or


 


(iii)                             becomes
available to either party hereto on a non-confidential basis from a source
which has represented to such party that such source is entitled to disclose
it.


 


With respect to any public disclosure or
filing containing Information, Lessor and Lessee agree to submit to Airbus a
copy of the proposed document to be filed or disclosed and will give Airbus a
reasonable period of time in which to review the said document.


 






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App 8-18

















 


10.                                 Definitions.     Capitalized
terms not otherwise defined herein shall have the meaning set forth in the
Lease.


 


11.                                 Counterparts.     This
Assignment Agreement may be executed in any number of counterparts, each of
which is an original and all of which together evidence the same agreement.


 


IN WITNESS WHEREOF, the parties have caused
this Assignment Agreement to be executed on their behalf by their duly
authorized representatives.


 


 


	
   

  	
  C.I.T. LEASING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAWAIIAN AIRLINES, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  



 






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App 8-19

















 


SCHEDULE 1


 


Manufacturer
Consent


 


                       
20      


 


Re:                               HAWAIIAN
AIRLINES, INC.:  ASSIGNMENT OF WARRANTY
AND SUPPORT RIGHTS


 


Dear Sirs,


 


1.                                       Reference
is made to that certain Assignment of Warranty and Support Rights dated                  
20        (the “Assignment
Agreement”), by and between C.I.T. Leasing Corporation (“Lessor”) and Hawaiian Airlines, Inc. (the “Lessee”) concerning the assignment of certain warranty
rights, patent and copyright indemnities, rights with respect to seller
representatives and training, and vendors’ product support rights under
Articles 12 [and][,] 13[,][15,][16][ and 17] of the Purchase Agreement, respectively,
with respect to the Aircraft.


 


2.                                       All
terms defined herein bear the meaning ascribed hereto in the Assignment Agreement.


 


3.                                       Airbus
hereby consents to the assignment and reassignment contained in Sections 2 and
4, respectively, of the Assignment Agreement on the terms and conditions set
forth therein, subject to the following conditions:


 


(a)                                  Airbus
shall have received formal notification of the Assignment Agreement within two (2) weeks
of the date hereof pursuant to Article 1690 of the French Civil Code;


 


(b)                                 Airbus
shall not be subject by reason of the Assignment Agreement to any (i) liability
or additional obligations whatsoever to which it would not otherwise be subject
under the Purchase Agreement, or (ii) modification in any respect
whatsoever of its contractual rights under the said Purchase Agreement;


 


(c)                                  So
long as the Assignment Agreement is in full force and effect, Lessee and not
Lessor will be responsible for compliance with Articles 12 [and][,]
13[,][15,][16][ and 17] of the Purchase Agreement, in each case with respect to
the Aircraft. Upon termination of the Assignment Agreement, Lessor shall once
again be bound by such clauses with respect to the obligations thereunder, and
Lessor shall be entitled to the rights and benefits described in Section 2
of the Assignment Agreement originally received by Lessor in connection with
its purchase of the Aircraft from Airbus.


 


(d)                                 Lessee
hereby agrees to be bound by and to comply with all applicable terms,
conditions and limitations of Articles 12 [and][,] 13[,][15,][16][ and 17] of
the Purchase Agreement with respect to the exercise of any of the Rights and to
be bound by the covenants of the Buyer in the Assigned Provisions to the same
extent as if Lessee had been named “Buyer” of the Aircraft under the Purchase
Agreement.


 


(e)                                  Other
than with respect to the obligations assumed by Lessee under the Assignment
Agreement as set forth in section 3(a) of the Assignment Agreement, Lessor
shall remain fully bound by all provisions of the Purchase Agreement.


 


(f)                                    For
the avoidance of doubt, until Airbus receives written notice from Lessor of the
termination of the Lease, Airbus shall be entitled to perform the obligations 


 






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App 8-20

















 


corresponding to the Rights assigned
exclusively in favor of Lessee pursuant to the Assignment Agreement.


 


4.               This Consent shall
be governed by and construed in accordance with the laws of the State of New
York and any dispute arising hereunder may be referred to any federal or state
court located in New York, New York. Nothing in this clause will prevent any
party from making a claim in a court of competent jurisdiction in France.


 


5.               Confidentiality.
Each of Lessor and Lessee (which for this purpose will include their employees,
agents and advisors) will maintain the terms and conditions of this Consent and
any reports or other data furnished hereunder (collectively, the “Information”)
strictly confidential and will not, without the prior written consent of the
other party and Airbus, disclose such Information to any other person or
entity; provided that Lessor and Lessee may, without the consent of the other
party or Airbus, disclose the Information in any of the following situations:


 


(i)                                   to
directors, officers, employees and permitted assignees of Lessor and Lessee; or


 


(ii)                                to
auditors, accountants or legal advisors of Lessor, Lessee or their respective
permitted assignees; or


 


(iii)                             to
such other parties as may be required by law, by government regulation or order
(including, without limitation, any regulation or order of a bank regulatory
agency), by subpoena or by any other legal process. In the event that a
disclosure becomes necessary, as provided in this sub-clause (iii), Lessor and
Lessee shall consult and cooperate with Airbus to limit the scope and form of
such disclosure to the extent permissible and will make such applications as
will be necessary to implement the foregoing.


 


Notwithstanding any of the foregoing,
Information will not be considered confidential and Lessor and Lessee and their
respective permitted assignees may disclose any item of Information without
restriction in any of the following circumstances:  If such item:


 


(i)                                   is
publicly available (either to the general public or to any relevant trade or
industry) prior to either party’s receipt of it from Airbus hereto;


 


(ii)                                is
thereafter made publicly available (either to the general public or to any
relevant trade or industry) by Airbus hereto or by a third party which is entitled
to make such item publicly available; or


 


(iii)                             becomes
available to either party hereto on a non-confidential basis from a source
which has represented to such party that such source is entitled to disclose
it.


 


With respect to any public disclosure or
filing containing Information, Lessor and Lessee agree to submit to Airbus a
copy of the proposed document to be filed or disclosed and will give Airbus a
reasonable period of time in which to review the said document.


 


6.               Counterparts.
This Consent may be executed in any number of counterparts, each of which is an
original and all of which together evidence the same agreement.


 






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App 8-21

















 


	
   

  	
   

  	
  For and on behalf of AIRBUS, S.A.S.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signed in acknowledgment for and on behalf
  of

  	
   

  	
  Signed in acknowledgment for and on behalf
  of 

  
	
   

  	
   

  	
   

  
	
  C.I.T. Leasing Corporation

  	
   

  	
  Hawaiian Airlines, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 






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App 8-22

















 


Form 9


 


Form of Assignment of Warranties and Consent (Engines)


 


The final agreed form of the Assignment of
Warranties and Consent (Engines), in form and substance reasonably satifactory
to the parties therein, shall be agreed by no later than fifteen (15) days from
execution and delivery of this Lease, with such final form to be the Assignment
of Warranties and Consent (Engines) as agreed between the parties.


 






*** Material has been omitted
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SEC


 


App 8-23