<PAGE>
          CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED
         SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT
                     TO A REQUEST FOR CONFIDENTIAL TREATMENT

                                                                   Exhibit 10.15

================================================================================

                            AIRCRAFT LEASE AGREEMENT

                          Dated as of November 30, 2003

                                     BETWEEN

                   COMPANIA PANAMENA DE AVIACION, S.A. (COPA)

                                    as LESSEE

                                       and

                     INTERNATIONAL LEASE FINANCE CORPORATION

                                    as LESSOR

================================================================================

Aircraft Make and Model:                New B737-700 or 800
Aircraft Manufacturer's Serial Number:  30676
Aircraft Registration Mark:             Per Estoppel and Acceptance Certificate
Make and Model of Engines:              Per Estoppel and Acceptance Certificate.
Serial Numbers of Engines:              Per Estoppel and Acceptance Certificate

                               NEW AIRCRAFT NO. I

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
ARTICLE 1 SUMMARY OF TRANSACTION.........................................     2
   1.1     Description of Aircraft.......................................     2
   1.2     Scheduled Delivery Date and Location..........................     2
   1.3     Initial Lease Term............................................     2
   1.4     **Material Redacted**.........................................     2
   1.5     Security Deposit..............................................     2
   1.6     Transaction Fee...............................................     2
   1.7     Rent During Initial Lease Term................................     2
   1.8     **Material Redacted**.........................................     3
   1.9     Reserves......................................................     3
   1.10    Additional Rent for Excess Airframe and Engine Cycles.........     4
   1.11    Country of Aircraft Registration..............................     4
   1.12    Maintenance Program...........................................     4
   1.13    Agreed Value of Aircraft......................................     4
   1.14    LESSOR's Bank Account.........................................     4

ARTICLE 2 DEFINITIONS....................................................     5
   2.1     General Definitions...........................................     5
   2.2     Specific Definitions..........................................     9

ARTICLE 3 PLACE AND DATE OF DELIVERY.....................................    11
   3.1     Place of Delivery.............................................    11
   3.2     Scheduled Delivery Date.......................................    11
   3.3     Delivery subject to Manufacturer Delivery.....................    11
   3.4     No LESSOR Liability...........................................    11
   3.5     Total Loss of Aircraft prior to Delivery......................    11
   3.6     Cancellation for Delay........................................    11

ARTICLE 4 LEASE TERM **Material Redacted**...............................    12
   4.1     Initial Lease Term............................................    12
   4.2     **Material Redacted**.........................................    12
   4.3     "Lease Term" and "Expiration Date"............................    12
   4.4     "Termination Date"............................................    12

ARTICLE 5 SECURITY DEPOSIT, TRANSACTION FEE, RENT, RESERVES AND
   OTHER PAYMENTS........................................................    13
   5.1     Security Deposit..............................................    13
   5.2     Transaction Fee...............................................    13
   5.3     Rent..........................................................    14
   5.4     Reserves......................................................    15
   5.5     Additional Rent for Excess Cycles.............................    15
   5.6     LESSOR's Bank Account.........................................    16
   5.7     Default Interest..............................................    16
   5.8     No Deductions or Withholdings.................................    17
</TABLE>


                                        i

<PAGE>

<TABLE>
<S>                                                                         <C>
   5.9     Net Lease.....................................................    17
   5.10    Currency Indemnity............................................    18
   5.11    LESSOR Performance of LESSEE Obligation.......................    18
   5.12    Consideration for Rent and other Amounts......................    18

ARTICLE 6 INVOLVEMENT WITH AIRCRAFT MANUFACTURER.........................    19
   6.1     LESSEE Selection of Aircraft..................................    19
   6.2     Agency Agreement..............................................    19
   6.3     Procurement of BFE............................................    19
   6.4     Assignment of Training........................................    19
   6.5     LESSEE Inspection of Aircraft.................................    19
   6.6     Aircraft at Delivery..........................................    19
   6.7     Delivery of the Aircraft to LESSEE............................    20
   6.8     LESSEE Acceptance of Aircraft.................................    20

ARTICLE 7 PRE-DELIVERY, DELIVERY AND POST-DELIVERY DOCUMENTARY AND
   OTHER REQUIREMENTS....................................................    21
   7.1     Pre-Delivery Requirements.....................................    21
   7.2     Delivery Requirements.........................................    21
   7.3     Post-Delivery Requirements....................................    23

ARTICLE 8 DISCLAIMERS....................................................    24
   8.1     "As Is, Where Is".............................................    24
   8.2     Waiver of Warranty of Description.............................    24
   8.3     LESSEE Waiver.................................................    25
   8.4     Conclusive Proof..............................................    25
   8.5     No LESSOR Liability for Losses................................    25
   8.6     No Liability to Repair or Replace.............................    25
   8.7     No Waiver.....................................................    25

ARTICLE 9 MANUFACTURERS' AND VENDORS' WARRANTIES.........................    26
   9.1     Warranties....................................................    26
   9.2     Reassignment..................................................    26
   9.3     Warranty Claims...............................................    26

ARTICLE 10 OPERATION OF AIRCRAFT.........................................    27
   10.1    Costs of Operation............................................    27
   10.2    Compliance with Laws..........................................    27
   10.3    Training......................................................    27
   10.4    No Violation of Insurance Policies............................    27
   10.5    Flight and Airport Charges....................................    27

ARTICLE 11 SUBLEASES.....................................................    29
   11.1    No Sublease without LESSOR Consent............................    29
   11.2    LESSOR Costs..................................................    29
   11.3    Any Approved Sublease.........................................    29
   11.4    Assignment of Sublease........................................    29
</TABLE>


                                       ii

<PAGE>

<TABLE>
<S>                                                                         <C>
   11.5    Wet Leases....................................................    29
   11.6    Continued Responsibility of LESSEE............................    29

ARTICLE 12 MAINTENANCE OF AIRCRAFT.......................................    30
   12.1    General Obligation............................................    30
   12.2    Specific Engine Requirements..................................    30
   12.3    Specific Obligations..........................................    31
   12.4    Replacement of Parts..........................................    32
   12.5    Removal of Engines............................................    33
   12.6    Removal of APU................................................    34
   12.7    Pooling. of Entries, APU and Parts............................    34
   12.8    Installation of Engines on other aircraft.....................    34
   12.9    Engine Thrust Rating..........................................    35
   12.10   Modifications.................................................    35
   12.11   Performance of Work by Third Parties..........................    36
   12.12   Reporting Requirements........................................    36
   12.13   Information Regarding Maintenance Program.....................    37
   12.14   LESSOR Rights to Inspect Aircraft.............................    37

ARTICLE 13 USE OF RESERVES...............................................    38
   13.1    Airframe Reserves.............................................    38
   13.2    Engine Performance Restoration Reserves.......................    38
   13.3    Engine LLP Reserves...........................................    38
   13.4    Reimbursement.................................................    39
   13.5    Reimbursement Adjustment......................................    39
   13.6    Costs in Excess of Reserves...................................    39
   13.7    Reimbursement after Termination Date..........................    40

ARTICLE 14 TITLE AND REGISTRATION........................................    41
   14.1    Title to the Aircraft During Lease Term.......................    41
   14.2    Registration of Aircraft......................................    41
   14.3    Filing of this Lease..........................................    41
   14.4    Evidence of Registration and Filings..........................    41

ARTICLE 15 IDENTIFICATION PLATES.........................................    42
   15.1    Airplane Identification Plates................................    42
   15.2    Engine Identification Plates..................................    42
   15.3    APU Identification Plate......................................    42

ARTICLE 16 TAXES.........................................................    44
   16.1    General Obligation of LESSEE..................................    44
   16.2    Exceptions to Indemnity.......................................    44
   16.3    After-Tax Basis...............................................    45
   16.4    Timing of Payment.............................................    45
   16.5    Contests......................................................    45
   16.6    Refunds.......................................................    46
   16.7    Cooperation in Filing Tax Returns.............................    46
</TABLE>


                                       iii

<PAGE>

<TABLE>
<S>                                                                         <C>
   16.8    Tax Restructuring.............................................    46
   16.9    Survival of Obligations.......................................    46

ARTICLE 17 INDEMNITIES...................................................    47
   17.1    General Indemnity.............................................    47
   17.2    Exceptions to General Indemnities.............................    48
   17.3    After-Tax Basis...............................................    48
   17.4    Timing of Payment.............................................    48
   17.5    Subrogation...................................................    48
   17.6    Notice........................................................    49
   17.7    Refunds.......................................................    49
   17.8    Defense of Claims.............................................    49
   17.9    Survival of Obligation........................................    49

ARTICLE 18 INSURANCE.....................................................    50
   18.1    Categories of Insurance.......................................    50
   18.2    Write-back of any Date Recognition Exclusion..................    50
   18.3    Installation of Third Party Engine............................    50
   18.4    Insurance for Indemnities.....................................    50
   18.5    Insurance required by Manufacturer............................    50
   18.6    Renewal.......................................................    50
   18.7    Assignment of Rights by LESSOR................................    50
   18.8    Deductibles...................................................    51
   18.9    Insurance for Wet Lease Operations............................    51
   18.10   Other Insurance...............................................    51
   18.11   Information...................................................    51
   18.12   Currency......................................................    51
   18.13   Grounding of Aircraft.........................................    51
   18.14   Failure to Insure.............................................    51
   18.15   Reinsurance...................................................    52
   18.16   Limit on Hull in favor of LESSEE..............................    52

ARTICLE 19 LOSS, DAMAGE, AND REQUISITION.................................    53
   19.1    Definitions...................................................    53
   19.2    Notice of Total Loss..........................................    54
   19.3    Total Loss of Aircraft or Airframe............................    54
   19.4    Surviving Engine(s)...........................................    55
   19.5    Total Loss of Engine and not Airframe.........................    55
   19.6    Total Loss of APU.............................................    56
   19.7    Other Loss or Damage..........................................    56
   19.8    Copy of Insurance Policy......................................    57
   19.9    Government Requisition........................................    57
   19.10   LESSOR Retention of Reserves..................................    57

ARTICLE 20 REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE...........    58
   20.1     Representations and Warranties...............................    58
</TABLE>


                                       iv

<PAGE>

<TABLE>
<S>                                                                         <C>
   20.2     Covenants....................................................    60

ARTICLE 21 REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR...........    62
   21.1    Representations and Warranties................................    62
   21.2    Covenant of Quiet Enjoyment...................................    63

ARTICLE 22 FINANCIAL AND OTHER INFORMATION...............................    64

ARTICLE 23 RETURN OF AIRCRAFT............................................    65
   23.1    Date of Return................................................    65
   23.2    Last Engine Shop Visits.......................................    65
   23.3    Technical Report..............................................    65
   23.4    Return Location...............................................    65
   23.5    Full Aircraft Documentation Review............................    65
   23.6    Copy of LESSEE's Maintenance Program..........................    66
   23.7    Aircraft Inspection...........................................    66
   23.8    Certificate of Airworthiness Matters..........................    67
   23.9    General Condition of Aircraft at Return.......................    67
   23.10   Checks Prior to Return........................................    70
   23.11   Part Lives....................................................    72
   23.12   Export and Deregistration of Aircraft.........................    74
   23.13   LESSEE's Continuing Obligations...............................    74
   23.14   Airport and Navigation Charges................................    75
   23.15   Return Acceptance Receipt.....................................    75
   23.16   Indemnities and Insurance.....................................    75
   23.17   Storage.......................................................    75

ARTICLE 24 ASSIGNMENT....................................................    76
   24.1    No Assignment by LESSEE.......................................    76
   24.2    Sate or Assignment by LESSOR..................................    76
   24.3    LESSOR's Lender...............................................    76
   24.4    LESSEE Cooperation............................................    76
   24.5    Protections...................................................    77

ARTICLE 25 DEFAULT ON LESSEE.............................................    78
   25.1    LESSEE Notice to LESSOR.......................................    78
   25.2    Events of Default.............................................    78
   25.3    LESSOR's General Rights.......................................    79
   25.4    Deregistration and Export of Aircraft.........................    80
   25.5    LESSEE Liability for Damages..................................    80
   25.6    Waiver of Default.............................................    81
   25.7    Present Value of Payments.....................................    81
   25.8    Use of "Termination Date".....................................    81

ARTICLE 26 NOTICES.......................................................    82
   26.1    Manner of Sending Notices.....................................    82
</TABLE>


                                        v

<PAGE>

<TABLE>
<S>                                                                         <C>
   26.2    Notice Information............................................    82

ARTICLE 27 GOVERNING LAW AND JURISDICTION................................    83
   27.1    California Law................................................    83
   27.2    Non-Exclusive Jurisdiction in California......................    83
   27.3    Service of Process............................................    83
   27.4    Prevailing Party in Dispute...................................    83
   27.5    Waiver........................................................    83

ARTICLE 28 MISCELLANEOUS.................................................    84
   28.1    Press Releases................................................    84
   28.2    Power of Attorney.............................................    84
   28.3    LESSOR Performance for LESSEE.................................    84
   28.4    LESSOR's Payment Obligations..................................    84
   28.5    Application of Payments.......................................    84
   28.6    Usury Laws....................................................    84
   28.7    Delegation of Authority by LESSOR.............................    84
   28.8    Confidentiality...............................................    85
   28.9    Permits of Parties............................................    85
   28.10   Further Assurances............................................    85
   28.11   Translations of Lease.........................................    85
   28.12   Use of Word "including".......................................    85
   28.13   Headings......................................................    85
   28.14   Invalidity of any Provision...................................    85
   28.15   Negotiation...................................................    86
   28.16   Time is of the Essence........................................    86
   28.17   Amendments in Writing.........................................    86
   28.18   Counterparts..................................................    86
   28.19   Delivery of Documents by Fax..................................    86
   28.20   Entire Agreement..............................................    86
   28.21   **Material Redacted**........................................     86
</TABLE>

EXHIBIT A - AIRCRAFT DESCRIPTION
EXHIBIT B - AGENCY AGREEMENT
EXHIBIT C - CERTIFICATE OF INSURANCE
EXHIBIT D - BROKERS' LETTER OF UNDERTAKING
EXHIBIT E - ESTOPPEL AND ACCEPTANCE CERTIFICATE
EXHIBIT F - OPINION OF COUNSEL
EXHIBIT G - FORM OF POWER OF ATTORNEY
EXHIBIT H - ASSIGNMENT OF RIGHTS (AIRFRAME)
EXHIBIT I - ASSIGNMENT OF RIGHTS (ENGINES)
EXHIBIT J - RETURN ACCEPTANCE RECEIPT
EXHIBIT K - MONTHLY REPORT
EXHIBIT L - AIRCRAFT DOCUMENTATION
EXHIBIT M - TECHNICAL EVALUATION REPORT


                                       vi

<PAGE>

                            AIRCRAFT LEASE AGREEMENT

     THIS AIRCRAFT LEASE AGREEMENT is made and entered into as of November __,
2003.

     BETWEEN:

     COMPANIA PANAMENA DE AVIACION, S.A. (COPA), a Panamanian corporation whose
address and principal place of business is at Avenida Justo Arosemena y Calle
39, Apartado 1572, Panama 1, Panama ("LESSEE") and

     INTERNATIONAL LEASE FINANCE CORPORATION, a California corporation whose
address and principal place of business is at 1999 Avenue of the Stars, 39th
Floor, Los Angeles, California 90067, United States of America ("LESSOR").

     The subject matter of this Lease is one (1) new B737 - 700 or B737 - 400
aircraft (election to be made by LESSEE in accordance with the terms of this
Lease). In consideration of and subject to the mutual covenants, terms and
conditions contained in this Lease, LESSOR hereby agrees to lease to LESSEE and
LESSEE hereby agrees to lease from LESSOR the aircraft and the parties further
agree as follows:

<PAGE>

                                    ARTICLE 1

                             SUMMARY OF TRANSACTION

     The following is a summary of the lease transaction between LESSEE and
LESSOR. It is set forth for the convenience of the parties only and will not be
deemed in any way to amend, detract from or simplify the other provisions of
this Lease.

1.1  DESCRIPTION OF AIRCRAFT

     One new B737-700 or B737-800 aircraft (LESSEE must elect model type on or
     before January 4, 2004)

1.2  SCHEDULED DELIVERY DATE AND LOCATION

     In the month of December 2004 at Seattle, Washington.

1.3  INITIAL LEASE TERM

     The term of leasing of the Aircraft will commence on the delivery date and
     continue for twelve (12) months with six (6) successive, automatic twelve
     (12) month extensions and one (1) automatic five (5) month extension

1.4  **MATERIAL REDACTED**

     **Material Redacted**

1.5  SECURITY DEPOSIT

     **Material Redacted**, payable as follows (in U.S. Dollars) to be held,
     returned, applied and/or refunded in accordance with the terms of this
     Lease:

<TABLE>
<CAPTION>
                PAYMENT DATE                           AMOUNT
                ------------                           ------
<S>                                            <C>
2 business days following LOI Execution.....   **Material Redacted**
2 business days following Lease execution...   **Material Redacted**
June 1, 2004................................   **Material Redacted**
</TABLE>

1.6  TRANSACTION FEE

     **Material Redacted**, payable within 2 business days after execution of
     this Lease

1.7  RENT DURING INITIAL LEASE TERM


                                        2

<PAGE>

     Payable monthly in advance and equal to the sum of:

     (a) **Material Redacted** per month expressed in January 2003 U.S. Dollars*

     *The above base rent is expressed in January 2003 U.S. Dollars and will
     increase in accordance with Boeing's announced escalation rates for the
     period from and including the 1st day of January 2003 through and including
     the delivery date of the Aircraft;

     plus

     (b) **Material Redacted** per month of the incremental cost (net of
     Manufacturer charges) of (1) all BEE approved by LESSOR (whether
     buyer-furnished equipment or seller-purchased equipment) paid for by LESSOR
     in place of or in addition to LESSEE's specification BFE for the Aircraft
     as specified in LESSEE's specification for the Aircraft and (ii) all other
     agreed-to changes to LESSEE's specification for the Aircraft paid for by
     LESSOR. **Material Redacted**

     *The election of -700 or -800 will be made by giving written notice to
     LESSOR on or before January 4, 2004. In the event that LESSEE makes no
     election, the Aircraft will be a -700.

1.8  **MATERIAL REDACTED**

     **Material Redacted**

1.9  RESERVES

     Payable as follows:

<TABLE>
<CAPTION>
     TYPE OF RESERVES                    AMOUNT OF RESERVES
     ----------------                    ------------------
<S>                         <C>
Airframe Reserves:          **Material Redacted** airframe flight hour
Engine Performance          **Material Redacted** per engine flight
   Restoration Reserves:*   hour for each engine*
Engine LLP Reserves:        **Material Redacted** per engine cycle for
                            each engine
</TABLE>

*    Engine reserves will be paid each month at the applicable rate based on the
     thrust rating at which a particular Engine is operated.


                                        3

<PAGE>

1.10 ADDITIONAL RENT FOR EXCESS AIRFRAME AND ENGINE CYCLES

     **Material Redacted** for each cycle the airframe and **Material Redacted**
     for each cycle an engine operated during a calendar year in excess of the
     maximum number of cycles which would result from an average hour/cycle
     ratio of **Material Redacted** hours to **Material Redacted** cycle.

1.11 COUNTRY OF AIRCRAFT REGISTRATION

     Republic of Panama or at LESSEE's request, the United States (if permitted
     by law)

1.12 MAINTENANCE PROGRAM

     LESSEE's Maintenance Program

1.13 AGREED VALUE OF AIRCRAFT

     **Material Redacted**

1.14 LESSOR'S BANK ACCOUNT

     International Lease Finance Corporation
     JPMorgan Chase Bank
     270 Park Avenue
     New York, New York 10017

     ABA#021000021


                                        4

<PAGE>

                                    ARTICLE 2

                                   DEFINITIONS

          Except where the context otherwise requires, the following words have
the following meanings for all purposes of this Lease. The definitions are
equally-applicable to the singular and plural forms of the words. Any agreement
defined below includes each amendment, modification, supplement and waiver
thereto in effect from time to time.

2.1  GENERAL DEFINITIONS.

          "AIRCRAFT" means the Airframe, two (2) Engines, APU, Parts and as the
context permits, Aircraft Documentation, collectively. As the context requires,
"Aircraft" may also mean the Airframe, any Engine, the APU, any Part, the
Aircraft Documentation or any part thereof individually. For example, in the
context of return to LESSOR the term "Aircraft" means the Airframe, Engines,
APU, Parts and Aircraft Documentation collectively, yet in the context of LESSEE
not creating any Security Interests other than Permitted Liens on the Aircraft,
the term "Aircraft" means any of the Airframe, any Engine, the APU, any Part or
the Aircraft Documentation individually.

          "AIRCRAFT DOCUMENTATION" means all (a) log books, Aircraft records,
manuals and other documents provided to LESSEE in connection with the Aircraft,
(b) documents listed in the Estoppel and Acceptance, Certificate and Exhibit L
and (c) any other documents required to be maintained during the Lease Term and
until the Termination Date by the Aviation Authority, LESSEE's Maintenance
Program and this Lease.

          "AIRFRAME" means the airframe listed in the Estoppel and Acceptance
Certificate executed at Delivery together with all Parts relating thereto
(except Engines or engines and the APU).

          "AIRWORTHINESS DIRECTIVES" or "ADs" means all airworthiness directives
(or equivalent) applicable to the Aircraft issued either by the Aviation
Authority or the aviation authority of the country of manufacture of the
Aircraft.

          "APU" means (a) the auxiliary power unit of the Aircraft listed in the
Estoppel and Acceptance Certificate executed at Delivery, (b) any replacement
auxiliary power unit acquired by LESSOR and leased to LESSEE pursuant to Article
19.6 following a Total Loss of the APU; and (c) all Parts installed in or on
such APU at Delivery (or substituted, renewed or replacement Parts in accordance
with this Lease) so long as title thereto is or remains vested in LESSOR in
accordance with the terms of Article 12.4.

          "AVIATION AUTHORITY" means the Authoridad de Acronautica Civil of the
Republic of Panama or any Government Entity which under the Laws of the Republic
of Panama from time to time has control over civil aviation or the registration,
airworthiness or operation of aircraft in the Republic of Panama. If the
Aircraft is registered in a country other than the Republic of Panama, "Aviation
Authority" means the agency which regulates civil aviation in such other
country.


                                        5

<PAGE>

          "AVIATION DOCUMENTS" means any or all of the following which at any
time may be obtainable from the Aviation Authority: (a) if required, a temporary
certificate of airworthiness from the Aviation Authority allowing the Aircraft
to be flown after Delivery to the State of Registration, (b) an application for
registration of the Aircraft with the appropriate authority in the State of
Registration, (c) the certificate of registration for the Aircraft issued by the
State of Registration, (d) a full certificate of airworthiness for the Aircraft
specifying transport category (passenger), (e) an air transport license, (f) an
air operator's certificate, (g) such recordation of LESSOR's title to the
Aircraft and interest in this Lease as may be available in the State of
Registration and (h) all such other authorizations, approvals, consents and
certificates in the State of Registration as may be required to enable LESSEE
lawfully to operate the Aircraft.

          "BASIC ENGINE" means those units and components of the Engine which
are used to induce and convert fuel/air mixture into thrust/power; to transmit
power to the fan and accessory drives; to supplement the function of other
defined systems external to the Engine; and to control and direct the flow of
internal lubrication, plus all essential accessories as supplied by the Engine
manufacturer. The nacelle, installed components related to the Aircraft systems,
thrust reversers, QEC and the primary exhaust nozzle are excluded.

          "BFE" means any equipment which is to be provided by the purchaser of
the Aircraft (whether actually provided by LESSOR as buyer-furnished equipment
or Manufacturer as seller-purchased equipment).

          "BUSINESS DAY" means a day other than a Saturday or Sunday on which
the banks in the Republic of Panama and the city where LESSOR's Bank is located
are open for the transaction of business of the type required by this Lease.

          "CREDITOR" means any lessor, owner, bank, lender, mortgagee or other
Person which is the owner of or has any interest in an aircraft engine or
aircraft operated by LESSEE.

          "CREDITOR AGREEMENT" means the applicable agreement between a Creditor
and LESSEE or between Creditors pursuant to which such Creditor owns, leases or
has an interest in either a Boeing B737-NG aircraft operated by LESSEE on which
an Engine may be installed or in an aircraft engine which may be installed on
the Airframe.

          "DEFAULT" means any event which, upon the giving of notice, the lapse
of time and/or a relevant determination, would constitute an Event of Default.

          "DELIVERY" means the delivery of the Aircraft from LESSOR to LESSEE
pursuant to Articles 3 and 6.

          "DELIVERY DATE" means the date on which Delivery takes place.

          "DOLLARS" and "$" means the lawful currency of the U.S.

          "ENGINE" means (a) each of the engines listed on the Estoppel and
Acceptance Certificate; (b) any replacement engine acquired by LESSOR and leased
to LESSEE pursuant to Article 19.5 following a Total Loss of an Engine; and (c)
all Parts installed in or on any of such


                                        6

<PAGE>

engines at Delivery (or substituted, renewed or replacement Parts in accordance
with this Lease) so long as title thereto is or remains vested in LESSOR in
accordance with the terms of Article 12.4.

          "EUROCONTROL" means the European Organization for the Safety of Air
Navigation established by the Convention related to the Co-operation for the
Safety of Air Navigation (Eurocontrol) signed on December 13, 1960, as amended.

          "EVENT OF DEFAULT" means any of the events referred to in Article
25.2.

          "FAA" means the Federal Aviation Administration of the Department of
Transportation or any successor thereto under the Laws of the U.S.

          "FARS" means the U.S. Federal Aviation Regulations embodied in Title
14 of the U.S. Code of Federal Regulations, as amended from time to time, or any
successor regulations thereto.

          "GENEVA CONVENTION" means the Convention on the International
Recognition of Rights in Aircraft signed in Geneva, Switzerland on June 19,
1945.

          "GOVERNMENT ENTITY" means any (a) national, state or local government,
(b) board, commission, department, division, instrumentality, court, agency or
political subdivision thereof and (c) association, organization or institution
of which any of the entities listed in (a) or (b) is a member or to whose
jurisdiction any such entity is subject.

          "LANDING GEAR" means the installed main and nose landing gear,
components and their associated actuators, side braces and parts.

          "LAW" means any (a) statute, decree, constitution, regulation order or
any directive of any Government Entity, (b) treaty, pact, compact or other
agreement to which any Government Entity is a signatory or party, (c) judicial
or administrative interpretation or application of any of the foregoing or (d)
any binding judicial precedent having the force of law.

          "LEASE" means this Aircraft Lease Agreement, together with all
Exhibits hereto.

          "LESSOR'S LIEN" means any Security Interest created by LESSOR.

          "MAINTENANCE PROGRAM" means LESSEE's maintenance program as approved
by the Aviation Authority or such other maintenance program as LESSOR may, in
its discretion, accept in writing.

          "MANUFACTURER" means The Boeing Company.

          "MPD" means the Maintenance Planning Document published by
Manufacturer and applicable to the Aircraft.

          "OVERHAUL" means the full reconditioning of the Aircraft, an Engine,
the APU, Landing Gear, module or Part, as the case maybe, in which such
equipment has been fully


                                        7

<PAGE>

disassembled; cleaned; thoroughly inspected; and returned to such condition
specified by the applicable manufacturer's manual as shall permit the operation
of such Engine, APU, Part, Landing Gear, etc. for the maximum period of time,
hours or cycles, as applicable, as specified by the relevant manufacturer's
Overhaul manual.

          "PART" means any part, component, appliance, system module, engine
module, accessory, material, instrument, communications equipment, furnishing,
LESSEE-furnished or LESSOR-purchased equipment or other item of equipment (other
than complete Engines or engines or the APU) for the time being installed in or
attached to the Airframe, any Engine or the APU or which, having been removed
from the Airframe, any Engine or the APU, remains the property of LESSOR.

          "PDM" means the post Delivery modification during which the
installation of a blended winglet system and LESSEE's in flight entertainment
system will be installed. Scheduling, arranging and coordinating the arrival at
the PDM location of the Aircraft, BFE, material and parts will be LESSEE's
responsibility.

          "PERMITTED LIEN" means (a) LESSOR's Liens; (b) Security Interests
arising in the ordinary course of LESSEE's business for Taxes either not yet
assessed or, if assessed, not yet due or being contested in good faith in
accordance with Article 16.5; (c) materialmen's, mechanics', workmen's,
repairmen's, employees' liens or similar Security Interests (including liens for
airport and navigation facility fees) arising by operation of Law after the
Delivery Date in the ordinary course of LESSEE's business for amounts which are
either not yet due or are being contested in good faith by appropriate
proceedings (and for which adequate reserves have been made or, when required in
order to pursue such proceedings, an adequate bond has been provided) so long as
such proceedings do not involve any danger of sale, forfeiture or loss of the
Aircraft; or liens on LESSEE's interest arising out of judgments or awards
against LESSOR.

          "PERSON" means any individual, firm, partnership, joint venture,
trust, corporation, company, Government Entity, committee, department, authority
or any body, incorporated or unincorporated, whether having distinct legal
personality or not.

          "PRIME RATE" means the rate of interest from time to time announced by
JPMorgan Chase Bank in New York as its prime commercial lending rate.

          "PROHIBITED COUNTRY" means any country to which the export and/or use
(as applicable) of a B737-700 / 800 aircraft with CFM56-7B engines attached
thereto is not permitted under (a) any United Nations sanctions, (h) the Council
Regulation (EC) No. 149/2003 which updates and amends Council Regulation (EC)
1334/2000, (c) the United States Export Administration Act 1979 (as amended) or
any successor legislation and/or the Export Administration Regulations
promulgated thereunder, (d) where applicable, the various regulations
administered from time to time by the Office of Foreign Assets Control of the
U.S. Treasury Department, (e) any similar or corresponding legislation then in
effect in the U.S., the United Kingdom, France, Spain or Germany or (f) any
subsequent United Nations Sanctions Orders the effect of which prohibits or
restricts the export and/or use of B737-700 / 800 aircraft with CFM56-7B engines
attached thereto to such country. For purposes of this Lease, Prohibited Country
will be defined by applicable regulations listed above which are updated,
amended and


                                        8

<PAGE>

superseded from time to time, the violation of which may reasonably be expected
to result in civil, criminal or seizure liability for LESSEE, LESSOR or the
Aircraft.

          "QEC" means all interface parts which are installed between the Engine
pylon and the Basic Engine.

          "RETURN CHECK" means the accomplishment of all work cards specified in
the Maintenance Program and the MPD which (a) are necessary to clear the
Aircraft of all such tasks for **Material Redacted**, or (b) are required to be
performed at lesser intervals than **Material Redacted**. If pursuant to the
then-current MPD, the performance interval for a task is shorter than every
**Material Redacted**, then such task will also be performed. All non-routine
tasks generated as a result of the performance of these work cards must also be
performed. For avoidance of doubt, if the inspection interval pursuant to the
then-current MPD for a particular work card only refers to one or two of the
three measurement tests, then the most restrictive measurement test or tests
referred to in the then-current MPD will be utilized in determining whether the
task must be performed.

          "SECURITY INTEREST" means any encumbrance or security interest,
however and wherever created or arising including (without prejudice to the
generality of the foregoing) any right of ownership, security, mortgage, pledge,
charge, encumbrance, lease, lien, statutory or other right in rem,
hypothecation, title retention, attachment, levy, claim or right of possession
or detention.

          "STATE OF REGISTRATION" means the Republic of Panama, the United
States of America at LESSEE's request (if permitted by Law) or such other
country or state of registration of the Aircraft as LESSOR may, in its sole, but
reasonable discretion, approve in writing.

          "U.S." means the United States of America.

2.2  SPECIFIC DEFINITIONS. The following terms are defined in the Articles
     referenced below:

<TABLE>
<CAPTION>
             TERMS               ARTICLE
             -----               -------
<S>                              <C>
Agreed Value                     19.1
Airframe Reserves                5.4.1
Default Interest                 5.7
Delivery Location                3.1
Engine LLP Reserves              5.4.1
Engine Performance Restoration   5.4.1
Reserves
Expenses                         17.1
Expiration Date                  4.3
**Material Redacted**            4.2.1
Indemnitees                      17.1
Initial Lease Term               4.1
Lease Term                       4.3
</TABLE>


                                        9

<PAGE>

<TABLE>
<CAPTION>
             TERMS               ARTICLE
             -----               -------
<S>                              <C>
LESSOR's Assignee                24.2.1
LESSOR's Bank                    5.6
LESSOR's Lender                  24.3
Manufacturer's Escalation Rate   5.3.l
Modification                     12.10.1
Net Total Loss Proceeds          19.1
Operative Documents              20.1.3
Rent                             5.3.1
Reserves                         5.4.1
Scheduled Delivery Date          3.2
Security Deposit                 5.1.1
Taxes                            16.1
Termination Date                 4.4
Total Loss                       19.1
Total Loss Date                  19.1
Total Loss Proceeds              19.1
Transaction Fee                  5.2
</TABLE>


                                       10

<PAGE>

                                    ARTICLE 3

                           PLACE AND DATE OF DELIVERY

3.1 PLACE OF DELIVERY. Delivery of the Aircraft by LESSOR to LESSEE will occur
at Manufacturer's facility in Seattle, Washington or such other place as may be
agreed in writing between the parties (the "DELIVERY LOCATION").

3.2 SCHEDULED DELIVERY DATE. As of the date of this Lease, Delivery of the
Aircraft from Manufacturer to LESSOR and LESSOR to LESSEE is scheduled to occur
in the month of December 2004. LESSOR will notify LESSEE in writing (or other
method so long as LESSEE acknowledges such notice) from time to time and in a
timely manner of the exact date on which LESSOR expects Delivery to take place
(the "SCHEDULED DELIVERY DATE").

3.3 DELIVERY SUBJECT TO MANUFACTURER DELIVERY. LESSOR and LESSEE expressly
acknowledge that Delivery of the Aircraft to by LESSOR to LESSEE is subject to
and conditioned upon delivery of the Aircraft by Manufacturer to LESSOR.

3.4 NO LESSOR LIABILITY. LESSOR will not be liable for any loss or expense, or
any loss of profit, arising from any delay or failure in Delivery to LESSEE
unless such delay or failure arises as a direct consequence of the willful
misconduct of LESSOR, and in no event will LESSOR be liable for any delay or
failure which is caused by any breach or delay on the part of Manufacturer or
any BFE supplier.

3.5 TOTAL LOSS OF AIRCRAFT PRIOR TO DELIVERY. If a Total Loss of the Aircraft
occurs prior to Delivery, neither party will have any further liability to the
other except that LESSOR will return to LESSEE the Security Deposit in
accordance with Article 5.1.3 and any prepaid Rent.

3.6 CANCELLATION FOR DELAY. Promptly after LESSOR becomes aware that in
Manufacturer's opinion a delay will cause Delivery to be delayed beyond December
31, 2005; LESSOR will promptly notify LESSEE in writing (or other method so long
as LESSEE acknowledges such notice). By written notice given within ten (10)
Business Days after LESSEE's receipt of such LESSOR notice, LESSEE may by
written notice to LESSOR terminate this Lease and this Lease will terminate on
the date of receipt of such notice. In the event of such termination, neither
party will have any further liability to the other party except that LESSOR will
promptly return to LESSEE the Security Deposit in accordance with Article 5.1.3
and any prepaid Rent. If LESSEE does not give notice of termination within such
ten (10) Business Days, LESSEE loses all right to terminate under this Article
3.6 unless otherwise agreed in writing by the parties. **Material Redacted**.


                                       11

<PAGE>

                                    ARTICLE 4

                        LEASE TERM **MATERIAL REDACTED**

4.1 INITIAL LEASE TERM. The term of leasing of the Aircraft will commence on the
Delivery Date and continue for twelve (12) months with six (6) successive,
automatic twelve (12) month extensions and one (1) automatic five (5) month
extension (the "INITIAL LEASE TERM") unless this Lease shall be earlier
terminated or extended pursuant to the provisions of Article 4.2.1

4.2 **MATERIAL REDACTED**

4.2.1 **Material Redacted**

4.2.2 **Material Redacted**

4.3 "LEASE TERM" AND "EXPIRATION DATE". "LEASE TERM" means the term of leasing
commencing on the Delivery Date and terminating on the Expiration Date.
"EXPIRATION DATE" means the date on which LESSEE is required to redeliver the
Aircraft to LESSOR in the condition required by this Lease on the last day of
the Initial Lease Term or **Material Redacted**

4.4 "TERMINATION DATE". If LESSEE returns the Aircraft to LESSOR on the
Expiration Date in the condition required by Article 23, then "TERMINATION DATE"
has the same meaning as "Expiration Date". If LESSEE does not do so, then
"TERMINATION DATE" means the date on which the first of the following events
occurs:

     (a) there is a Total Loss of the Aircraft prior to Delivery pursuant to
     Article 3.5;

     (b) cancellation of this Lease occurs pursuant to Article 3.6;

     (c) there is a Total Loss of the Aircraft and payment is made to LESSOR in
     accordance with Article 19.3;

     (d) an Event of Default occurs and LESSOR repossesses the Aircraft or
     otherwise terminates this Lease pursuant to Article 25.3 prior to the
     Expiration Date and recovers possession and control of the Aircraft;

     (e) an Event of Default occurs hereunder by LESSEE returning the Aircraft
     in the condition required by this Lease after the Expiration Date; or

     (f) an Event of Default occurs and LESSOR repossesses the Aircraft or
     otherwise terminates this Lease pursuant to Article 25.3 after the
     Expiration Date and recovers possession and control of the Aircraft.


                                       12

<PAGE>

                                    ARTICLE 5

                    SECURITY DEPOSIT, TRANSACTION FEE, RENT,
                           RESERVES AND OTHER PAYMENTS

5.1 SECURITY DEPOSIT.

5.1.1 LESSEE will pay LESSOR a security deposit of **Material Redacted** for its
     lease of the Aircraft (the "SECURITY DEPOSIT"). The Security Deposit is
     payable as follows (in US$):

<TABLE>
<CAPTION>
PAYMENT DATE                                AMOUNT (-700)           AMOUNT (-800)
------------                            ---------------------   ---------------------
<S>                                     <C>                     <C>
Two (2) Business Days following LOI
   Execution **Material Redacted**      **Material Redacted**   **Material Redacted**

Two (2) Business Days following Lease   **Material Redacted**   **Material Redacted**
   execution **Material Redacted**

June 1, 2004 **Material Redacted**      **Material Redacted**   **Material Redacted**

TOTAL                                   **Material Redacted**   **Material Redacted**
</TABLE>

5.1.2 The Security Deposit may be commingled with LESSOR's general funds and any
     interest earned on such Security Deposit will be for LESSOR's account. If
     the Security Deposit is reduced below the required amount by application to
     meet LESSEE's unperformed obligations under this Lease, LESSEE will
     replenish the Security Deposit within ten (10) days after LESSOR's demand
     therefor. The Security Deposit will serve as security for the performance
     by LESSEE of its obligations under this Lease and any other agreements
     between LESSEE and LESSOR relating to aircraft, engines, aircraft equipment
     or the extension of credit and may be applied by LESSOR upon the occurrence
     of an Event of Default hereunder or of a default by LESSEE under any such
     other agreements.

5.1.3 Upon termination of this Lease in accordance with Article 4.4, LESSOR will
     promptly return to LESSEE the amount of the Security Deposit then held by
     LESSOR (so long as no default by LESSEE exists under any other agreement
     between LESSEE and LESSOR relating to aircraft, engines or aircraft
     equipment or the extension of credit by LESSOR to LESSEE), without
     interest, less an amount determined by LESSOR to be a reasonable estimate
     of the costs, if any, which LESSOR will incur to remedy any Default or
     Event of Default which has occurred and is continuing under this Lease,
     including the correction of any discrepancies from the required condition
     of the Aircraft on return of the Aircraft.

5.2 TRANSACTION FEE. Within two (2) Business Days after execution of this Lease,
LESSEE will pay LESSOR a nonrefundable transaction fee of **Material Redacted**
(the "TRANSACTION FEE").


                                       13

<PAGE>

5.3 RENT.

5.3.1 LESSEE will pay LESSOR the following amounts monthly in advance as rent
     for the Aircraft (the "RENT"):

     INITIAL LEASE TERM: Payable monthly in advance and equal to the sum of:

          (a) **Material Redacted** (in the event that LESSEE elects -700) or
          **Material Redacted** (in the event that LESSEE elects -800) per month
          expressed in January 2003 U.S. Dollars* (prorated for any partial
          month during the Lease Term or during the first and last calendar
          month of the Lease Term if such month is less than a full month)

               *The above base rent is expressed in January 2003 U.S. Dollars
               and will increase in accordance with Boeing's announced
               escalation rates for the period from and including the 1st of
               January 2003 through and including the Delivery Date of the
               Aircraft (the "MANUFACTURER'S ESCALATION RATE");

          plus

          (b) **Material Redacted** per month of the incremental cost (net of
          Manufacturer charges) of (i) all BFE approved by LESSOR (whether
          buyer-furnished equipment or seller-purchased equipment) paid for by
          LESSOR in place of or in addition to LESSEE's Specification BFE for
          the Aircraft as specified in LESSEE's Specification for the Aircraft
          and (ii) all other agreed-to changes to LESSEE's Specification for the
          Aircraft paid for by LESSOR. **Material Redacted**

          Any increases to the above base rent during the Lease Term will be
          calculated immediately prior to Delivery. **Material Redacted**

     **Material Redacted**:

     **Material Redacted**

5.3.2 The first payment of Rent during the Lease Terms will be paid no later
     than three (3) Business Days prior to the Scheduled Delivery Date. Each
     subsequent payment of Rent will be due monthly thereafter no later than the
     same day of the month as the Delivery Date of the Aircraft except that, if
     such day is not a Business Day, the Rent will be due on the immediately
     preceding Business Day. If Delivery occurred on the 29th, 30th or 31st of
     the month and in any given month during the Lease Term there is no such
     corresponding date, Rent will be payable on the last Business Day of such
     month. In the event that after LESSEE has paid the Rent three days prior to
     the Scheduled Delivery Date and then prior to Delivery the Delivery is
     delayed by more than seven (7) days, LESSOR will refund the Rent to LESSEE
     and LESSEE will repay the Rent prior to the Delivery Date.


                                       14

<PAGE>

5.4 RESERVES.

5.4.1 LESSEE will pay to LESSOR supplemental Rent, based on LESSEE's use of the
     Aircraft during the Lease Term, in the form of the following reserves in
     the following amounts (individually, "AIRFRAME RESERVES", "ENGINE
     PERFORMANCE RESTORATION RESERVES" and "ENGINE LLP RESERVES" and
     collectively "RESERVES"):

<TABLE>
<CAPTION>
   TYPE OF RESERVES                       AMOUNT OF RESERVES
   ----------------                       ------------------
<S>                      <C>
Airframe Reserves:       **Material Redacted** per Airframe flight hour

Engine Performance       **Material Redacted** per

Restoration Reserves*:   Engine flight hour for each Engine (payable when the
                         Engine is utilized on the Aircraft or another aircraft)
                         or **Material Redacted** per Engine flight hour for
                         each Engine (payable when the Engine is utilized on the
                         Aircraft or another aircraft)

Engine LLP Reserves:     **Material Redacted** per Engine cycle for each Engine
                         (payable when the Engine is utilized on the Aircraft or
                         another aircraft)
</TABLE>

*    Engine Reserves will be paid each month at the applicable rate based on the
     thrust rating at which a particular Engine is operated during such month.

5.4.2 The amount of the Engine Performance Restoration Reserves and Engine LLP
     Reserves set forth in Article 5.4.1 will be increased by LESSOR in the
     event of all increase in the thrust rating of an Engine in accordance with
     Article 12.9.

5.4.3 Such Reserves will be paid on or before the 10th day of the calendar month
     next following the month in which the Delivery Date occurs and on or before
     the 10th day of each succeeding calendar month for flying performed during
     the calendar month prior to payment. All Reserves for flying performed
     during the month in which the Termination Date occurs will be paid on the
     Termination Date, unless otherwise agreed by the parties.

5.4.4 No interest will accrue or be paid at anytime to LESSEE on such Reserves
     and, subject to LESSOR's obligations under Article 13, LESSOR may commingle
     the Reserves with LESSOR's general funds.

5.5 ADDITIONAL RENT FOR EXCESS CYCLES. If in any calendar year (or portion
thereof) of the Lease Term the Airframe or any Engine operated more cycles than
the maximum number of cycles which would result from an average hour/cycle ratio
of **Material Redacted** hours to **Material Redacted** cycle, LESSEE will pay
LESSOR as additional Rent **Material Redacted** for each Airframe cycle and
**Material Redacted** for each Engine cycle the Airframe and any Engine actually
operated during such calendar year (or portion thereof) in excess of the number
of cycles which result from an average hour/cycle ratio of **Material Redacted**
hours to **Material Redacted** cycle. A calculation will be made as of December


                                       15

<PAGE>

31 of each year and such additional Rent will be due and payable by LESSEE on
the date on which the next Reserves payment is due (in accordance with Article
5.4.3) following such hour/cycle calculation period.

     Example: If the Airframe operated **Material Redacted** hours in a calendar
     year, it would have **Material Redacted** cycles resulting from an average
     hour/cycle ratio of **Material Redacted** hours to **Material Redacted**
     cycle. If in fact the Airframe operated **Material Redacted** cycles in
     such calendar year, the Airframe operated **Material Redacted** excess
     cycles in such calendar year and LESSEE will pay LESSOR **Material
     Redacted** (**Material Redacted** excess cycles x **Material Redacted** =
     **Material Redacted**).

     Similarly, if an Engine which is rated at **Material Redacted** thrust
     operated **Material Redacted** cycles in such calendar year, such Engine
     operated **Material Redacted** excess cycles in such calendar year and
     LESSEE will pay LESSOR **Material Redacted** (**Material Redacted** excess
     cycles x **Material Redacted** = **Material Redacted**).

     Alternatively, if an Engine which is rated at **Material Redacted** thrust
     operated **Material Redacted** cycles in such calendar year, such Engine
     operated **Material Redacted** excess cycles in such calendar year and
     LESSEE will pay LESSOR **Material Redacted** (**Material Redacted** excess
     cycles x **Material Redacted** = **Material Redacted**).

5.6 LESSOR'S BANK ACCOUNT. The Security Deposit, Transaction Fee, Rent, Reserves
and any other payment due under this Lease will be paid by wire transfer of
immediately available U.S. Dollar funds to LESSOR's bank account at:

               International Lease Finance Corporation
               JPMorgan Chase Bank
               270 Park Avenue
               New York, New York 10017
               ABA# 021000021

or to such other bank account in the United States (or such other jurisdiction
as may be agreed) as LESSOR may from time to time designate by at least three
(3) days prior written notice ("LESSOR'S BANK"). When it is stated in this Lease
that an installment of the Security Deposit, the monthly Rent, Reserves or any
other payment is due or must be paid or made by LESSEE by a specific date, then
such payment actually must be received by LESSOR's Bank on or before such
specific date on or before close of business (local time), even if, in order for
such payment to be received by LESSOR's Bank by such specific date, LESSEE must
initiate the wire transfer prior to such specific date.

5.7 DEFAULT INTEREST. If LESSOR's Bank does not receive the Rent or any other
amount on or before the specific date when due, LESSOR will suffer loss and
damage the exact nature and amount of which are difficult or impossible to
ascertain. LESSEE will pay LESSOR as supplemental Rent (by way of agreed
compensation and not as a penalty) interest on any due


                                       16

<PAGE>

and unpaid amounts payable by LESSEE under this Lease. Interest will be
calculated at a per annum rate (based on a 360 day year) which is equal to
**Material Redacted** plus the Prime Rate in effect on the date on which the
amount was originally due for the period from the date the amount originally was
due through the date the amount actually is received at LESSOR's Bank or, in the
case of LESSOR's performance of LESSEE's obligations hereunder, from the date of
payment by LESSOR through the date of LESSEE's repayment to LESSOR ("DEFAULT
Interest"). Default Interest will accrue on a day-to-day basis and be compounded
monthly.

5.8 NO DEDUCTIONS OR WITHHOLDINGS. Subject to Article 16 of this Lease, All
payments by LESSEE under this Lease, including the Security Deposit, Transaction
Fee, Rent, Reserves, Default Interest, fees, indemnities or any other item, will
be made in full without any deduction or withholding whether in respect of
set-off, counterclaim, duties, or Taxes (in accordance with Article 16) imposed
in the State of Registration or any jurisdiction from which such payments are
made unless LESSEE is prohibited by Law from doing so, in which event LESSEE
will gross up the payment amount such that the net payment received by LESSOR
after any deduction or withholding equals the amounts called for under this
Lease. LESSEE will also do all of the following:

     (a) Ensure that the deduction or withholding does not exceed the minimum
     amount legally required;

     (b) Pay to the relevant Government Entities within the period for payment
     permitted by applicable Law the full amount of the deduction or withholding
     (including the full amount of any deduction or withholding from any
     additional amount paid pursuant hereto); and

     (c) Furnish to LESSOR within thirty (30) clays after each payment an
     official receipt of the relevant Government Entities involved for all
     amounts so deducted or withheld.

5.9  NET LEASE.

5.9.1 This Lease is a net lease and LESSEE's obligation to pay Rent and make
     other payments in accordance with this Lease will be absolute and
     unconditional under any and all circumstances and regardless of other
     events, including the following:

     (a) any right of set-off, counterclaim, recoupment, defense or other right
     (including any right of reimbursement) which LESSEE may have against
     LESSOR, Manufacturer, the Engine manufacturer or any other person for any
     reason, including any claim LESSEE may have for the foregoing;

     (b) unavailability or interruption in use of the Aircraft for any reason,
     including a requisition thereof or any prohibition or interference with or
     other restriction against LESSEE's use, operation or possession of the
     Aircraft (whether by Law or otherwise), any defect in title, airworthiness,
     merchantability, fitness for any purpose, condition, design, specification
     or operation of any kind or nature of the Aircraft, the ineligibility of
     the Aircraft for any particular use or


                                       17

<PAGE>

     trade or for registration under the Laws of any jurisdiction or Total Loss
     of the Aircraft in accordance with Article 19.3;

     (c) insolvency, bankruptcy, reorganization, arrangement, readjustment of
     debt, dissolution, liquidation, receivership, administration or similar
     proceedings by or against LESSOR, LESSEE, Manufacturer, the Engine
     manufacturer or any other Person;

     (d) invalidity or unenforceability or lack of due authorization of or other
     defect in this Lease;

     (e) failure or delay on the part of any party to perform its obligations
     under this Lease; or

     (f) any other circumstance which but for this provision would or might have
     the effect of terminating or in any other way affecting any obligation of
     LESSEE hereunder.

5.9.2 Nothing in Article 5.9 will be construed to limit LESSEE's rights and
     remedies in the event of LESSOR's breach of its warranty of quiet enjoyment
     set forth in Article 21.2 or to limit LESSEE's rights and remedies to
     pursue in a court of law any claim it may have against LESSOR or any other
     Person.

5.10 CURRENCY INDEMNITY. If under any applicable Law, whether as a result of a
judgment against LESSEE or the liquidation of LESSEE or for any other reason,
any payment hereunder is required to be made or recovered in a currency other
than Dollars then, to the extent that the payment (when converted into Dollars
at the "rate of exchange" on the date of payment or, in the case of a
liquidation, the latest date for the determination of liabilities permitted by
the applicable Law) falls short of the amount payable under this Lease, LESSEE
will as a separate and independent obligation, fully indemnify LESSOR against
the amount of the shortfall. If the amount received by LESSOR upon converting
the payment into Dollars exceeds the amount payable under this Lease, LESSOR
will remit such excess to LESSEE. For the purposes of this paragraph "rate of
exchange" means the rate at which LESSOR is able on the relevant date to
purchase Dollars in New York or London (at LESSOR's option) with such other
currency.

5.11 LESSOR PERFORMANCE OF LESSEE OBLIGATION. If LESSEE fails to make any
payment under this Lease to a third party in connection with the Aircraft or
fails to perform any other obligation required under this Lease, LESSOR may (but
is not required to) at its election and without waiver of its rights perform
such obligation and/or pay such amount. Within five (5) Business Days after
written notice to LESSEE of the amount paid by LESSOR on behalf of LESSEE,
LESSEE will repay such amount to LESSOR together with Default Interest. Such
payment to LESSOR will constitute additional Rent payable by LESSEE to LESSOR
hereunder. Any payment, performance or compliance by LESSOR of a LESSEE
obligation hereunder will not affect the occurrence or continuance of a Default
or Event of Default, as the case maybe.

5.12 CONSIDERATION FOR RENT AND OTHER AMOUNTS. The amount of the Rent and other
payments contained herein are in consideration of LESSEE's waiver of warranties
and indemnities set forth in Articles 8 and 17, respectively, and the other
provisions of this Lease.


                                       18

<PAGE>

                                    ARTICLE 6

                     INVOLVEMENT WITH AIRCRAFT MANUFACTURER

6.1 LESSEE SELECTION OF AIRCRAFT. LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF
THE AIRCRAFT SET FORTH IN THIS LEASE IS BASED UPON INFORMATION SUPPLIED BY
MANUFACTURER. LESSEE COVENANTS 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 LESSOR IS NOT A MANUFACTURER, REPAIRER OR SERVICING
AGENT OF THE AIRCRAFT.

6.2 AGENCY AGREEMENT. Certain obligations remain to be performed by LESSOR in
connection with the manufacture, fabrication and completion of the Aircraft by
Manufacturer which will be performed by LESSEE (as provided in the Agency
Agreement). LESSEE will act as LESSOR's agent with respect to some of these
matters pursuant to the terms of an Agency Agreement to be entered into between
LESSEE and LESSOR in the form set forth in Exhibit B.

6.3 PROCUREMENT OF BFE. Unless otherwise agreed, LESSOR will procure all BFE for
the Aircraft in accordance with the Aircraft specification. In respect of any
additional BFE not part of LESSEE's Specification as of the dale hereof, LESSOR
and LESSEE shall use reasonable efforts to purchase such BFE under the supplier
contract which provides the most favorable pricing.

6.4 ASSIGNMENT OF TRAINING. LESSOR hereby assigns to LESSEE all rights to
training to which LESSOR is entitled as a result of LESSOR's purchase of the
Aircraft and lease of the Aircraft to LESSEE. If LESSEE fails to take Delivery
of the Aircraft when tendered in accordance with Article 6.7, LESSEE will
immediately pay to LESSOR an amount equal to the Dollar value of such training
based on what the training would have cost LESSEE had LESSEE purchased such
training directly from Manufacturer.

6.5 LESSEE INSPECTION OF AIRCRAFT. During the course of final assembly of the
Aircraft, and at Delivery, LESSEE will have its own representative present to
inspect the Aircraft and to ensure its conformity with LESSEE's needs and the
terms of this Lease. LESSEE will have ground inspection and acceptance flight
rights with respect to the Aircraft. LESSEE acknowledges that, as between LESSEE
and LESSOR, in accepting the Aircraft LESSEE is relying on its own inspection
and knowledge of the Aircraft in determining whether the Aircraft meets the
requirements of this Lease.

6.6 AIRCRAFT AT DELIVERY. At Delivery, the Aircraft will be as set forth in
Exhibit A, as such description may be modified by any change requests agreed to
among LESSEE, LESSOR and Manufacturer (which will be reflected in amendment(s)
to this Lease). In the event of any discrepancies, LESSEE and LESSOR will
cooperate in good faith with one another and with Manufacturer and the Engine
manufacturer, as applicable, in order to arrive at a mutually acceptable
resolution of any such discrepancies. LESSOR will use commercially reasonable
efforts to cause Manufacturer to correct any discrepancies prior to Delivery or
will cause


                                       19

<PAGE>

Manufacturer to provide a commitment letter which will provide that any
discrepancies which exist at Delivery will be corrected at no cost to LESSEE.

6.7 DELIVERY OF THE AIRCRAFT TO LESSEE. Subject to LESSEE and LESSOR having
performed all of the conditions precedent to Delivery set forth herein,
immediately following delivery of the Aircraft from Manufacturer to LESSOR,
LESSOR will deliver the Aircraft to LESSEE at the Delivery Location. Provided
that the Aircraft is in the condition required by Article 6.6, upon the tender
of the Aircraft by LESSOR to LESSEE, LESSEE will accept the Aircraft and the
date of tender by LESSOR to LESSEE will be deemed to be the Delivery Date for
all purposes under this Lease, including, but not limited to, the commencement
of LESSEE's obligation to pay Rent hereunder.

6.8 LESSEE ACCEPTANCE OF AIRCRAFT. If LESSEE fails to (a) comply with its
obligations set forth in Article 6.2 (other that as a direct result of a failure
by LESSOR to comply with LESSOR's obligations hereunder or under the Agency
Agreement), (b) comply with the conditions contained in Articles 7.1 and 7.2 so
as to allow Delivery to take place immediately following delivery of the
Aircraft by Manufacturer to LESSOR or (c) take delivery of the Aircraft when
properly tendered for delivery by LESSOR in the condition required hereunder,
LESSEE will indemnify LESSOR for all costs and expenses incurred by LESSOR as a
direct result thereof including (without limitation) any payments other than the
purchase price which LESSOR becomes obliged to make to Manufacturer.


                                       20

<PAGE>

                                    ARTICLE 7

                    PRE-DELIVERY, DELIVERY AND POST-DELIVERY
                       DOCUMENTARY AND OTHER REQUIREMENTS

7.1 PRE-DELIVERY REQUIREMENTS. LESSEE will do each of the following prior to the
Scheduled Delivery Date of the Aircraft within the time frames set forth below:

7.1.1 Within one (1) month after execution of this Lease, LESSEE will deliver to
     LESSOR each of the following:

     (a) copies of resolutions of the Board of Directors of LESSEE or other
     written evidence of appropriate corporate action, duly certifying and
     authorizing the lease of the Aircraft hereunder and the execution, delivery
     and performance of this Lease, together with an incumbency certificate as
     to the person or persons authorized to execute and deliver documents on
     behalf of LESSEE hereunder;

     (b) an opinion of counsel in the form and substance of Exhibit F.

7.1.2 At least ten (10) days prior to the, Scheduled Delivery Date, LESSEE will
     have delivered to LESSOR a Certificate of Insurance and Brokers' Letter of
     Undertaking in the form and substance of Exhibits C and D, respectively,
     (or other form reasonably satisfactory to LESSOR) from LESSEE's insurance
     brokers evidencing insurance of the Aircraft in accordance with this Lease
     from the Delivery Date.

7.1.3 At least three (3) Business Days prior to the Scheduled Delivery Date,
     LESSEE will do each of the following:

     (a) pay to LESSOR the first monthly installment of Rent in accordance with
     Article 5.3.2;

     (b) provide LESSOR with a copy of such Aviation Documents as may be
     available prior to the Scheduled Delivery Date;

     (c) provide LESSOR with a power of attorney empowering LESSEE's
     representative, who maybe an officer or employee of LESSEE, to accept the
     Aircraft on behalf of LESSEE;

     (d) provide LESSOR with a power of attorney in the form of Exhibit G; and

     (e) provide LESSOR with such other documents as LESSOR may reasonably
     request.

7.2 DELIVERY REQUIREMENTS. On the Delivery Date of the Aircraft, each of the
following will occur:


                                       21

<PAGE>

7.2.1 LESSEE will execute. and deliver to LESSOR an Estoppel and Acceptance
     Certificate in the form of Exhibit E covering the Aircraft and effective as
     of the Delivery Date.

7.2.2 If not previously done, LESSEE and LESSOR will sign an amendment or
     supplement to Exhibit A evidencing all agreed-to changes to the
     specification of the Aircraft.

7.2.3 LESSEE will deliver a certificate signed by an officer of LESSEE stating
     all of the following:

     (a) the representations and warranties contained in Article 20 are true and
     accurate on and as of the Delivery Date as though made on and as of such
     date (except to the extent that such representations and warranties relate
     solely to an earlier date);

     (b) no Default or Event of Default has occurred and is continuing or will
     result from LESSEE's lease of the Aircraft hereunder; and

     (c) to the extent applicable, such officer has examined the Creditor
     Agreements between LESSEE and the other Creditors and such Creditor
     Agreements contain terms pursuant to which, subject to reciprocal rights,
     such Creditors have agreed that they will not obtain any right, title or
     interest in an Engine which is installed on another aircraft (or, if this
     is not the case, such officer will identify in the certificate the parties,
     the aircraft and the Creditor Agreements for which this statement is
     untrue).

7.2.4 LESSEE's counsel will deliver an opinion confirming the matters set forth
     in the opinion of counsel described in Article 7.1 and advising that all
     filing and other requirements described in the earlier opinion of counsel
     have been met to the extent the same may be met prior to Delivery of the
     Aircraft.

7.2.5 If any Creditor Agreement provides or contemplates that such Creditor will
     obtain any right, title or interest in an Engine which is installed on such
     Creditor's aircraft, LESSEE will deliver (if reasonably available) to
     LESSOR an engines cooperation agreement in form and substance acceptable to
     LESSOR which is executed by LESSEE and LESSEE's Creditors (as defined
     therein); provided, however, to the extent such agreement has not been so
     delivered, LESSEE hereby agrees that LESSEE will not install an Engine on
     such Aircraft until such agreement shall have been delivered.

7.2.6 LESSOR will deliver to LESSEE an assignment of Manufacturer and Engine
     manufacturer rights in the form and substance of Exhibits H and I,
     respectively, and concurrently therewith LESSOR, to the extent it has not
     previously done so, will be deemed to have assigned all product assurance
     and product support applicable to the owner or operator of the Aircraft to
     LESSEE during the Lease Term.


                                       22

<PAGE>

7.2.7 LESSEE will deliver to LESSOR a copy of such Aviation Documents as have
     not been previously delivered which are available.

7.3 POST-DELIVERY REQUIREMENTS.

7.3.1 As soon as reasonably practicable after Delivery but not later than thirty
     (30) days after arrival of the Aircraft in Panama, if not previously
     provided, LESSEE will do each of the following:

     (a) procure registration of the Aircraft in the register of aircraft of the
     State of Registration showing LESSOR as the owner and provide evidence of
     the same to LESSOR;

     (b) provide LESSOR with copies of all Aviation Documents not previously
     delivered; and

     (c) if the Aircraft could not be registered at Delivery, provide LESSOR
     with a follow-up opinion of counsel advising that the Aircraft has been
     registered in the State of Registration and that all necessary filings have
     been made.

7.3.2 Within forty-five (45) days after Delivery, LESSEE will provide LESSOR
     with a Technical Evaluation Report for the Aircraft in the form and
     substance of Exhibit M, as revised.


                                       23

<PAGE>

                                    ARTICLE 8

                                   DISCLAIMERS

          LESSOR HAS COMMITTED TO LESSEE THAT ON THE DELIVERY DATE THE AIRCRAFT
WILL BE IN THE CONDITION REQUIRED BY ARTICLE 6. SUCH COMMITMENT OR COVENANT ON
THE PART OF LESSOR EXPIRES AND THE DISCLAIMERS SET FORTH IN THIS ARTICLE 8 APPLY
UPON LESSEE'S ACCEPTANCE OF THE AIRCRAFT AND EXECUTION OF THE ESTOPPEL AND
ACCEPTANCE CERTIFICATE. AFTER SUCH TIME, THEN AS BETWEEN LESSOR AND LESSEE:

8.1 "AS IS, WHERE IS". LESSEE AGREES THAT IT IS LEASING THE AIRCRAFT "AS IS,
WHERE IS". LESSEE UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT NEITHER LESSOR
NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES HAVE MADE OR
WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION, REPRESENTATION, WARRANTY OR
COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE) AS TO (a) THE
CAPACITY, AGE, AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONFORMITY TO THE
PROVISIONS OF THIS LEASE, DESCRIPTION, CONDITION (WHETHER OF THE AIRCRAFT, ANY
ENGINE, ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP,
MATERIALS, MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE,
MERCHANTABILITY, PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE
(INCLUDING THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE AIRCRAFT
DOCUMENTATION IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY
PART THEREOF, OR THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT
DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR CONCEALED, EXTERIOR OR INTERIOR, (b)
THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER
INTELLECTUAL PROPERTY RIGHTS, (c) ANY IMPLIED WARRANTY ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR (d) ANY OTHER REPRESENTATION
OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART
THEREOF, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.

8.2 WAIVER OF WARRANTY OF DESCRIPTION. IN CONSIDERATION OF (a) LESSEE'S RIGHTS
HEREUNDER TO INSPECT THE AIRCRAFT AND (b) LESSOR'S ASSIGNMENT TO LESSEE OF ANY
EXISTING AND ASSIGNABLE WARRANTIES OF MANUFACTURER AND THE ENGINE MANUFACTURER,
LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS
EXECUTION AND DELIVERY OF THE ESTOPPEL AND 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 TO THE REMEDIES SET FORTH IN
SECTIONS 10508 THROUGH 10522 OF THE CALIFORNIA COMMERCIAL CODE. EVEN IF AT ANY
TIME THE FAILURE OF THE


                                       24

<PAGE>

AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND
UTILITY OF THE AIRCRAFT AND EITHER (i) LESSEE ACCEPTED THE AIRCRAFT BASED ON A
REASONABLE ASSUMPTION THAT THE NONCONFORMITY WOULD BE CURED AND IT WAS NOT
SEASONABLY CURED OR (ii) LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE
NONCONFORMITY BUT LESSEE'S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED
EITHER BY LESSOR'S ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT
PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO LESSOR FOR DAMAGES OR RELIEF
ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION.

8.3 LESSEE WAIVER. LESSEE hereby waives as between itself and LESSOR and agrees
not to seek to establish or enforce any rights and remedies, express or implied
(whether statutory or otherwise) against LESSOR or the Aircraft relating to any
of the matters mentioned in Articles 8.1 or 8.2 and the leasing thereof by
LESSOR to LESSEE.

8.4 CONCLUSIVE PROOF. DELIVERY BY LESSEE TO LESSOR OF THE ESTOPPEL AND
ACCEPTANCE CERTIFICATE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND LESSEE
THAT LESSEE'S TECHNICAL EXPERTS HAVE EXAMINED AND INVESTIGATED THE AIRCRAFT AND
ENGINES AND (a) EACH IS AIRWORTHY AND IN GOOD WORKING ORDER AND REPAIR AND (b)
THE AIRCRAFT AND ENGINES AND THE AIRCRAFT DOCUMENTATION ARE WITHOUT DEFECT
(WHETHER OR NOT DISCOVERABLE AT DELIVERY) AND IN EVERY WAY SATISFACTORY TO
LESSEE.

8.5 NO LESSOR LIABILITY FOR LOSSES. LESSEE agrees that LESSOR will not be liable
to LESSEE, any sublessee or any Person, whether in contract or tort and however
arising, for any cost, loss or damage (consequential or otherwise) arising out
of the condition of the Aircraft, whether or not due in whole or in part to an
act or omission or the active or passive negligence of LESSOR but excluding acts
resulting from the willful misconduct of LESSOR.

8.6 NO LIABILITY TO REPAIR OR REPLACE. LESSOR will not be liable for any expense
in repairing or replacing any item of the Aircraft or be liable to supply
another aircraft or any item in lieu of the Aircraft or any Part thereof if the
same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for
use.

8.7 NO WAIVER. Nothing in this Article 8 or elsewhere in this Lease will be
deemed to be a waiver by LESSEE of any rights it may have against Manufacturer,
the Engine manufacturer or any other Person including, without limitation,
rights LESSEE may have under Article 9 of this Lease.


                                       25

<PAGE>

                                   ARTICLE 9

                     MANUFACTURERS' AND VENDORS' WARRANTIES

9.1 WARRANTIES. Asset forth in Article 7.2.5, at Delivery LESSOR will assign to
LESSEE for the duration of the Lease Term the benefit of all warranties and
indemnities given to LESSOR by Manufacturer and the Engine manufacturer.
Effective on the Delivery Date, all other vendor warranties with respect to the
Aircraft are hereby assigned by LESSOR to LESSEE. Additionally, LESSOR will
cooperate in a commercially reasonable manner with LESSEE in order to enforce
any material warranty claims and take all other actions reasonably necessary to
effectively assign to LESSEE and to secure the benefits for LESSEE of such
warranties.

9.2 REASSIGNMENT. On the Termination Date, the benefit of any warranty assigned
by LESSOR to LESSEE pursuant to Articles 7.2.5 and 9.1 will be reassigned
automatically to LESSOR or its designee (with the exception of any claims and
rights of payment to LESSEE arising prior to the Termination Date). LESSEE's
rights under such warranties (including LESSEE's claims and rights to payment
thereunder) will revert to LESSOR during any period in which an Event of Default
is continuing. Similarly, any additional warranties received by LESSEE from
Manufacturer, Engine manufacturer and any other vendor or repair facility for
work performed on the Aircraft, Engine or any Part during the Lease Term will be
automatically assigned by LESSEE to LESSOR or its designee on the Termination
Date (with the exception of any claims and rights of payment to LESSEE arising
prior to the Termination Date). LESSEE at its own cost and expense will do all
such things and execute such documents as may be required for these purposes.

9.3 WARRANTY CLAIMS. LESSEE will diligently and promptly pursue any valid claims
it may have against Manufacturer and others under such warranties with respect
to the Aircraft.


                                       26

<PAGE>

                                   ARTICLE 10

                              OPERATION OF AIRCRAFT

10.1 COSTS OF OPERATION. LESSEE will pay all costs incurred in the operation of
the Aircraft during the Lease Term and until the Termination Date, for profit or
otherwise, including the costs of flight crews, cabin personnel, fuel, oil,
lubricants, maintenance, insurance, storage, landing and navigation fees,
airport charges, passenger service and any and all other expenses of any kind or
nature, directly or indirectly, in connection with or related to the use,
movement and operation of the Aircraft. The obligations, covenants and
liabilities of LESSEE under this paragraph arising prior to return of the
Aircraft to LESSOR will continue in full force and effect, notwithstanding the
termination of this Lease or expiration of the Lease Term.

10.2 COMPLIANCE WITH LAWS. Except as otherwise provided in this Lease, LESSEE
agrees throughout the Lease Term and until the Termination Date to maintain
operational control of the Aircraft and use the Aircraft in accordance with
applicable Laws of the State of Registration and of any country, state,
territory or municipality into or over which LESSEE may operate. LESSEE will not
employ, suffer or cause the Aircraft to be used in any business which is
forbidden by Law or in any manner which may reasonably be expected to render it
liable to condemnation, destruction, seizure, or confiscation by any authority.
LESSEE will not permit the Aircraft to fly to any airport or country if so doing
would cause LESSEE or LESSOR to be in violation of any Law applicable to either
of them or the Aircraft except as may be necessary to preserve the Aircraft or
the safety, well being or life of passengers or crew, provided, however, that in
such event LESSEE will take reasonable actions to remove the Aircraft from such
airport or country as soon as reasonably practical.

10.3 TRAINING. LESSEE will not use the Aircraft for testing or for training of
flight crew members other than LESSEE crew members and will not use the Aircraft
for training any more than it utilizes for training the other aircraft in its
fleet.

10.4 NO VIOLATION OF INSURANCE POLICIES. LESSEE will not use or permit the
Aircraft to be used in any manner or for any purpose which is not covered by the
insurance policies 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 may
reasonably be expected to invalidate or limit any such insurance policy.

10.5 FLIGHT AND AIRPORT CHARGES.

10.5.1 LESSEE will pay promptly when due all airport or enroute navigation
     charges (including Eurocontrol charges if and when applicable), navigation
     service charges, landing fees and all charges payable by LESSEE for the use
     of or for services provided at any airport, whether in respect of the
     Aircraft or any other aircraft of LESSEE which, if unpaid, may reasonably
     be expected to subject the Aircraft to any lien, and will indemnify and
     hold LESSOR harmless in respect of the same. This indemnity will continue
     in full force and effect notwithstanding the


                                       27

<PAGE>

     termination or expiration of the Lease Term for any reason or the return of
     the Aircraft.

10.5.2 If requested by LESSOR (but not more often than each six (6) months
     unless a Default or Event of Default shall have occurred and be
     continuing), LESSEE will provide LESSOR with a list of the airports to
     which LESSEE regularly operates the Aircraft or its other aircraft (in the
     event that the operation of such other aircraft may reasonably be expected
     to give rise to a lien on the Aircraft for navigation, landing, parking,
     storage or other similar charges). LESSEE hereby authorizes Eurocontrol (if
     and when applicable) or another aviation authority or airport or creditor
     claiming rights on the Aircraft to confirm the status of LESSEE's payments
     to such creditor for the Aircraft and its other aircraft, as and when
     requested by LESSOR.


                                       28

<PAGE>

                                   ARTICLE 11

                                    SUBLEASES

11.1 NO SUBLEASE WITHOUT LESSOR CONSENT. LESSEE WILL NOT SUBLEASE OR PART WITH
POSSESSION OF THE AIRCRAFT (EXCEPT FOR MODIFICATION, MAINTENANCE, TESTING,
SERVICE AND/OR REPAIR) AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR
(NOT TO BE UNREASONABLY WITHHELD OR DELAYED) AND IN ACCORDANCE WITH SUCH
REQUIREMENTS AS MAY FROM TIME TO TIME BE AGREED IN WRITING BETWEEN LESSOR AND
LESSEE.

11.2 LESSOR COSTS. LESSEE will indemnify LESSOR on demand for all out-of-pocket
expenses (including reasonable legal fees) incurred in connection with LESSOR's
assessment of the subleasing proposal (whether or not LESSOR's consent to such
sublease is ultimately given) and implementation of the sublease.

11.3 ANY APPROVED SUBLEASE. Any sublease approved by LESSOR will be for a term
no greater than the remaining Lease Term. The applicable sublease agreement will
contain provisions consistent with this Lease protecting LESSOR's title to the
Aircraft, providing appropriate LESSOR disclaimers and indemnities, regarding
the maintenance and repair standards for the Aircraft and concerning the
insurances which will be carried by the sublessee and the circumstances which
constitute a Total Loss of the Aircraft. Any such sublease will be subject and
subordinate to this Lease. LESSOR will have an opportunity to review the
proposed sublease agreement reasonably in advance in order to determine that it
meets the requirements of this Article 11.3. In its sole and reasonable
discretion, LESSOR may require an opinion of counsel in connection with such
sublease, including LESSOR's right to repossess the Aircraft in the event of an
Event of Default hereunder or under the sublease. LESSEE will not amend the
terms of any approved sublease agreement without the prior written consent of
LESSOR, which consent will not be unreasonably withheld.

11.4 ASSIGNMENT OF SUBLEASE. Any approved sublease will be assigned to LESSOR as
security. LESSEE will deliver the original counterpart of the sublease to LESSOR
and make any filings necessary to protect LESSOR's security interest.

11.5 WET LEASES. The wet leasing of the Aircraft during the Lease Term (in which
LESSEE and its crews retain operational control of the Aircraft) will not be
considered a sublease of the Aircraft and will be permitted without LESSOR's
consent, provided that (a) the Aircraft remains registered in the State of
Registration, (b) the Aircraft will be operated in accordance with applicable
rules related to any Prohibited Country, (c) LESSEE provides LESSOR with either
a certified copy of the applicable provisions from the wet lease agreement or an
officer's certificate indicating whether LESSEE or the wet lessee will be
responsible for maintaining the primary passenger, baggage and cargo liability
insurance relating to operation under the wet lease and (d) LESSEE complies with
Article 18.9.

11.6 CONTINUED RESPONSIBILITY OF LESSEE. LESSEE will continue to be responsible
for performance of its obligations under this Lease during any period of
sublease or wet lease.


                                       29

<PAGE>

                                   ARTICLE 12

                             MAINTENANCE OF AIRCRAFT

12.1 GENERAL OBLIGATION. During the Lease Term and until the Termination Date,
LESSEE alone has the obligation, at its expense, to maintain and repair the
Aircraft, Engines, APU and all of the Parts (a) in accordance with the
Maintenance Program, (b) in accordance with the rules and regulations of the
Aviation Authority, (c) in accordance with Manufacturer's type design, (d) in
accordance with any other regulations or requirements necessary in order to
maintain a valid Certificate of Airworthiness for the Aircraft and meet the
requirements at all times during the Lease Term and upon return of the Aircraft
to LESSOR for issuance of a Standard Certificate of Airworthiness for transport
category aircraft issued by the FAA in accordance with FAR Part 21 (except
during those periods when the Aircraft is undergoing maintenance, Modification
or repairs as required or permitted by this Lease and to the extent in conflict
with the requirements of the Aviation Authority) and (e) in the same manner and
with the same care as used by LESSEE with respect to aircraft and engines of
like make and model operated by LESSEE and without in any way discriminating
against the Aircraft as compared to such other aircraft.

12.2 SPECIFIC ENGINE REQUIREMENTS.

12.2.1 No Engine will remain in an unserviceable condition for more than three
     (3) months unless engine restoration is ongoing and has not been suspended
     or delayed without reasonable technical cause and LESSEE uses commercially
     reasonable efforts to cause such Engine to be returned to service.

12.2.2 When replacing Parts in the Engines, LESSEE will utilize only original
     equipment manufacturer parts (OEM parts). The foregoing will not apply to
     QEC and thrust reverser Parts.

12.2.3 LESSEE will not discriminate against the Engines with respect to Overhaul
     build standards and life-limited Part replacements and, in any event, at
     each performance restoration shop visit on an Engine, LESSEE will (a) build
     the Engine life-limited Parts to at least 8,000 cycles remaining and (b)
     perform, at a minimum, a performance restoration workscope sufficient to
     allow such Engine to achieve at least 8,000 hours and 8,000 cycles of
     operation following such shop visit. Notwithstanding the foregoing, LESSOR
     agrees that the performance restoration workscope contained in the
     maintenance cost per flight hour when agreed to among LESSEE, LESSOR and
     LESSEE's engine maintenance provider will be substituted for the
     performance restoration workscope described above. Failing the foregoing,
     LESSOR and LESSEE agree to negotiate in good faith and agree on a
     performance restoration workscope for the last engine shop visit which is
     reasonable in view of the age and condition of the Engine, the required
     condition at return and the cost of such restoration to LESSEE and LESSOR.

12.2.4 With respect to the last Engine shop visit of an Engine prior to return
     of the Aircraft, LESSEE will submit to LESSOR in advance the intended
     workscope of


                                       30

<PAGE>

     such shop visit. If LESSOR requests, LESSEE will perform additional work at
     such shop visit at LESSOR's cost provided that if the same shall result in
     delay in redelivery, extension of the Lease Term or cause the Engine to be
     removed from service for a period in excess of the period the Engine would
     have been removed to revenue service absent such additional work, no Rent
     or other costs will be payable by LESSEE for the period which is
     attributable solely to LESSOR's requested work (unless and to the extent
     LESSOR and LESSEE shall have otherwise agreed in writing).

12.2.5 Except as otherwise agreed by the parties (including, pursuant to any
     side letter) LESSEE will not enter into any Engine maintenance cost per
     flight hour, power-by-the-horn or similar agreement with the Engine
     manufacturer or any other Engine maintenance facility or organization
     without LESSOR's prior written consent which consent shall not be
     unreasonably withheld or delayed. LESSEE will at its cost be responsible
     for performing all word necessary to meet the return conditions with
     respect to the Engines set forth in Article 23 even if such work is not
     covered by LESSEE's Engine maintenance agreement. Without limiting the
     foregoing, any such Engine maintenance agreement will provide that:

     (a) LESSOR will receive and retain the monthly Engine Performance
     Restoration Reserves paid by LESSEE until an Engine shop visit has been
     completed;

     (b) LESSEE will pay the Engine maintenance facility directly for any Engine
     Overhaul and repair costs in excess of the Engine Performance Restoration
     Reserves, including any differential between the hourly Engine Performance
     Restoration Reserves payable by LESSEE to LESSOR and the hourly rates
     charged by the Engine maintenance facility; and

     (c) LESSEE will pay the Engine maintenance facility directly for any
     services provided by the Engine maintenance facility over and above repair
     of the Engines, such as trend monitoring, spare engines or spare parts.

12.3 SPECIFIC OBLIGATIONS. Without limiting Article 12.1, LESSEE agrees that
such maintenance and repairs will include but will not be limited to each of the
following specific items:

     (a) performance in accordance with the Maintenance Program of all routine
     and non-routine maintenance work;

     (b) incorporation in the Aircraft of all Airworthiness Directives, all
     mandatory service bulletins of Manufacturer, the Engine manufacturer and
     other vendors or manufacturers of Parts incorporated on the Aircraft and
     any service bulletins which must be performed in order to maintain the
     warranties on the Aircraft, Engines, APU and Parts;

     (c) incorporation in the Aircraft of all other service bulletins of
     Manufacturer, the Engine manufacturer and other vendors which LESSEE
     schedules to adopt


                                       31

<PAGE>

     within the Lease Term for the rest of its B737-700 / 800 aircraft fleet. It
     is the intent off the parties that the Aircraft will not be discriminated
     from the rest of LESSEE'S fleet in service bulletin compliance (including
     method of compliance) or other maintenance matters unless LESSEE's
     exclusion of the such modification is reasonable giving consideration to
     the remaining Lease Term and industry practice;

     (d) incorporation in the Maintenance Program for the Aircraft of a
     corrosion prevention and control program as recommended by Manufacturer and
     the correction of any discrepancies in accordance with the recommendations
     of Manufacturer and the Structural Repair Manual. In addition, all
     inspected areas will be properly treated with corrosion inhibitor as
     recommended by Manufacturer;

     (e) maintaining in English and keeping in an up-to-date status the records
     and historical documents set forth in Attachment I of Exhibit J;

     (f) maintaining historical records, in English, for on condition,
     condition-monitored, hard tine and life-limited Parts (including an FAA
     Form 8130 or JAA Form) from the manufacturer of such Part or a repair
     facility which evidence that such Part is new or overhauled and establish
     authenticity, total time in service and time since overhaul for such Part),
     the hours and cycles the Aircraft and Engines operate and all maintenance
     and repairs performed on the Aircraft; and

     (g) properly documenting all repairs, Modifications and alterations and the
     addition, removal or replacement of equipment, systems or components in
     accordance with the rules and regulations of the Aviation Authority and
     reflecting such items in the Aircraft Documentation, including
     Manufacturer's manuals, as required by such rules and regulations. In
     addition, all repairs to the Aircraft will be accomplished in accordance
     with Manufacturer's Structural Repair Manual (or FAA-approved data
     supported by an FAA Form 8110-3 or equivalent). All Modifications and
     alterations will also be accomplished in accordance with FAA-approved data
     supported by FAA Form 8110-3 or equivalent.

12.4 REPLACEMENT OF PARTS.

12.4.1 LESSEE, at its own cost and expense, will promptly replace all Parts
     which may from time to tine become worn out, lost, stolen, destroyed,
     seized, confiscated, damaged beyond repair or rendered unfit or beyond
     economical repair (BER) for use for any reason. In the ordinary course of
     maintenance, service, repair, overhaul or testing, LESSEE may remove any
     Part provided that LESSEE replaces such Part as promptly as reasonably
     practicable. All replacement Parts will (a) be owned by LESSEE free and
     clear of all Security Interests(except Permitted Liens) of any kind or
     description (or, if not owned by LESSEE, LESSEE guarantees to LESSOR such
     title and clearance of all Security Interests), (b) be in airworthy
     condition and of at least equivalent model, service bulletin and
     modification status and have a value and utility at least equal to the
     Parts


                                       32

<PAGE>

     replaced, assuming such replaced Parts were in the condition and repair
     required to be maintained by the terms hereof and (c) have a current
     "serviceable tag" (an FAA Form 8130 or JAA Form 1) of the manufacturer or
     maintenance facility providing such items to LESSEE, indicating that such
     Parts are new, serviceable or Overhauled. So long as a substitution meets
     the requirements of the Maintenance Program and Aviation Authority, LESSEE
     may substitute for any Part a part that does not meet the requirements of
     the foregoing sentence if a complying Part cannot be procured or installed
     within the available ground time of the Aircraft and as soon as practicable
     the noncomplying part is removed and replaced by a complying Part. With
     respect to replacement modules in an Engine, the replacement module will
     not have been previously operated at a higher thrust rating than the
     replaced module. As set forth in Article 12.2.2, LESSEE may not replace any
     Part in the Engines, excluding QEC and thrust reversers, with a part other
     than an original equipment manufacturer part (an OEM part). With respect to
     replacement modules in an Engine, the replacement module will not have been
     previously operated at a higher thrust rating than the replaced module.

12.4.2 All Parts removed from the Airframe, any Engine or the APU will remain
     the property of LESSOR and subject to this Lease no matter where located,
     until such time as such Parts have been replaced by Parts (which have been
     incorporated or installed in or attached to the Airframe, such Engine or
     the APU) which meet the requirements for replacement Parts specified above
     and title to such replacement Parts has passed to LESSOR under the Laws of
     the State of Registration and the lex situs. To the extent permitted by the
     Laws of the State of Registration and the lex situs it is the intent of
     LESSOR and LESSEE that without further act and immediately upon any
     replacement Part becoming incorporated, installed or attached to the
     Airframe, an Engine or the APU as above provided, (a) title to the removed
     Part will thereupon vest in LESSEE, free and clear of all rights of LESSOR
     and LESSOR Liens and LESSOR will, upon LESSEE's reasonable request, provide
     LESSEE with a bill of sale thereto, (b) title to the replacement Part will
     thereupon vest in LESSOR free and clear of all rights of LESSEE free and
     clear of all rights of LESSEE and liens (other than LESSOR Liens) and
     LESSEE will, upon LESSOR's reasonable request, provide LESSOR with a bill
     of sale thereto and (c) such replacement Part will become subject to this
     Lease and be deemed to be a Part hereunder to the same extent as the Parts
     originally incorporated or installed in or attached to the Airframe, such
     Engine or the APU.

12.5 REMOVAL OF ENGINES.

12.5.1 If an Engine is removed for testing, service, repair, maintenance,
     Overhaul work, alterations or modifications, title to such Engine will at
     all times remain vested in LESSOR.

12.5.2 LESSEE will be entitled to remove any of the Engines from the Aircraft
     and install another engine or engines on the Aircraft, provided that LESSEE
     complies with each of the following obligations:


                                       33

<PAGE>

     (a) the insurance requirements set forth in Article 18 and Exhibit C are in
     place;

     (b) LESSEE ensures that the identification plates referred to in Article 15
     are not removed from any Engine upon such Engine being detached from the
     Aircraft; and

     (c) title to the Engine remains with LESSOR free from all Security
     Interests (except Permitted Liens) regardless of the location of the Engine
     or its attachment to or detachment from the Aircraft.

12.6 REMOVAL OF APU.

12.6.1 If the APU is removed for testing, service, repair, maintenance, Overhaul
     work, alterations or modifications, title to the APU will at all times
     remain vested in LESSOR.

12.6.2 LESSEE will be entitled to remove the APU from the Aircraft and install
     another auxiliary power unit on the Aircraft, provided that LESSEE complies
     with each of the following obligations:

     (a) the insurance requirements set forth in Article 18 and Exhibit C are in
     place;

     (b) LESSEE ensures that the identification plates referred to in Article 15
     are not removed from the APU; and

     (c) title to the APU remains with LESSOR free from all Security Interests
     (except Permitted Liens) regardless of the location of the APU or its
     attachment to or detachment from the Aircraft.

12.7 POOLING. OF ENTRIES, APU AND PARTS. With LESSOR's prior written consent,
not to be unreasonably withheld or delayed, LESSEE may subject the Engines, APU
and Parts to normal interchange or pooling agreements with responsible
international scheduled commercial air carriers customary in the airline
industry and entered into by LESSEE in the ordinary course of its business with
respect to its entire B737-700 / 800 fleet so long as (a) in the case of pooling
of an Engine or APU, such Engine or APU is returned to LESSEE within one hundred
eighty (180) days, (b) no transfer of title to the Engine or APU occurs, (c) all
other terms of this Lease continue to be observed with respect to the Engines,
APU or Parts, including but not limited to Articles 8, 10, 12, 14, 15, 16, 17,
18 and 19 and (d) LESSEE continues to be fully responsible to LESSOR for the
performance of all of its obligations hereunder.

12.8 INSTALLATION OF ENGINES ON OTHER AIRCRAFT. Any Engine removed from the
Aircraft may be installed on another aircraft in LESSEE's fleet which utilizes
engines of the same type as the Engine only if one of the situations described
in this Article 12.8 exists:

12.8.1 LESSEE or LESSOR has title to such other aircraft free and clear of all
     Security Interests (except Permitted Liens).


                                       34

<PAGE>

12.8.2 LESSEE, LESSOR and all of the Creditors of LESSEE of such aircraft enter
     into an engines cooperation agreement in form and substance acceptable to
     LESSOR in which each party agrees to recognize one another's rights in the
     engines. LESSEE will reimburse LESSOR and LESSOR's Lender for their
     reasonable attorneys' fees and costs in negotiating and finalizing engine
     cooperation agreement arrangements with LESSEE and its Creditors.

12.8.3 Such other aircraft is subject to a Creditor Agreement (but no other
     Security Interests except Permitted Liens) which by its terms expressly or
     effectively states that such Creditor and its successors and assigns will
     not acquire any right, title or interest in any Engine by reason of such
     Engine being installed on such aircraft provided the owner of such Engine
     provides reciprocal title recognition provisions. To evidence the
     foregoing, at or before Delivery, LESSEE will provide LESSOR with an
     officer's certificate as to this matter (and officer's certificate will be
     provided during the Lease Term with respect to other Creditor Agreements
     regarding aircraft entering LESSEE's operating fleet subsequent to
     Delivery). LESSEE hereby agrees that if LESSOR's title to an Engine is in
     fact impaired under any such Creditor Agreement, such impairment will be a
     Total Loss of such Engine and the provisions of Article 19.5 will apply. To
     the extent another Creditor Agreement contains such provisions, then LESSOR
     hereby agrees for the benefit of the Creditor of Such Creditor Agreement
     that neither LESSOR nor its successors or assigns will acquire or claim any
     right, title or interest in any engine in which LESSEE or another Creditor
     has an interest as a result of such engine being installed on the Airframe.

12.9 ENGINE THRUST RATING. if an Engine is utilized by LESSEE on the Aircraft or
on any other airframe (or if the Engine is utilized by any sublessee or user
under a pooling arrangement in accordance with this Lease) at a thrust rating
greater than the thrust rating set forth in Exhibit A, LESSEE will promptly
notify LESSOR and the amounts of Engine Performance Restoration Reserves and, if
applicable, Engine LLP Reserves, set forth in Article 5.4.1 will be increased in
an amount consistent with Engine manufacturer's published data. Notwithstanding
anything to the contrary herein, Engine Performance Restoration Reserves shall
be calculated with respect to any relevant period based on the thrust rating at
which the Engine is actually operated, from time to time, during such period.

12.10 MODIFICATIONS.

12.10.1 No modification, alteration, addition or removal to the Aircraft
     ("MODIFICATION") expected to cost over **Material Redacted** or deviation
     from the Aircraft's original type design or configuration will be made
     without the prior written consent of LESSOR, which consent will not be
     unreasonably withheld or delayed. The term Modification does not include
     Airworthiness Directives Or Manufacturer's recommended service bulletins,
     for which LESSOR's consent is not required. **Material Redacted**.

12.10.2 LESSOR may review LESSEE's proposed designs, plans, engineering drawings
     and diagrams, and flight and maintenance manual revisions for any proposed


                                       35

<PAGE>

     Modification. If requested by LESSOR, LESSEE will furnish LESSOR (at
     LESSEE's expense) with such documents in final form and any other documents
     required by Law, as a result of such Modification. All Modifications
     incorporated on the Aircraft will be properly documented in the Aircraft
     Documentation and be fully approved by the Aviation Authority.

12.10.3 Notwithstanding any other provision of this Lease, no Modification will
     be made which has the effect of decreasing the utility or value of the
     Aircraft or invalidating any warranty applicable to the Aircraft.

12.10.4 No Modification will be made by LESSEE if an Event of Default exists and
     is continuing hereunder.

12.10.5 Unless otherwise agreed by LESSOR in writing, all permanent or
     structural Modifications will promptly become a part of the Aircraft and
     LESSEE relinquishes to LESSOR all rights and title thereto. However, all
     temporary and non-structural Modifications will remain the property of
     LESSEE and, at LESSOR's request and LESSEE's cost, will be removed from the
     Aircraft prior to return of the Aircraft, with LESSEE restoring the
     Aircraft to the condition it was in prior to the Modification in a manner
     cosmetically acceptable to LESSOR (considering international passenger
     airline standards). Notwithstanding the foregoing, no such removal will be
     permitted without LESSOR's permission after the occurrence of an Event of
     Default hereunder and immediately upon the occurrence of an Event of
     Default hereunder, without the requirement of any further act or notice,
     all right, title and interest in such Modifications will immediately vest
     in LESSOR.

12.10.6 LESSOR will bear no liability for the cost of Modifications of the
     Aircraft whether in the event of grounding or suspensions of certification,
     or for any other cause.

12.11 PERFORMANCE OF WORK BY THIRD PARTIES. Whenever maintenance and repair work
on the Aircraft or Engines will be regularly performed by a Person other than
LESSEE, such Person will be an FAA-authorized repair station.

12.12 REPORTING REQUIREMENTS.

12.12.1 Commencing with a report furnished ten (10) days after the end of the
     calendar month in which Delivery occurs, LESSEE will furnish to LESSOR a
     Monthly Report in English in the form attached hereto as Exhibit K.. Each
     Monthly Report will be furnished within ten (10) days after the end of each
     calendar month, except that the Monthly Report pertaining to the last month
     (or any portion thereof) of this Lease will be furnished to LESSOR on the
     Termination Date.

12.12.2 Once each eighteen months during the Lease Term, LESSEE will provide
     LESSOR with an updated Technical Evaluation Report for the Aircraft in the
     form and substance of Exhibit M, as revised.


                                       36

<PAGE>

12.12.3 From time to time, LESSEE will provide LESSOR with such other technical
     information or documents as LESSOR may reasonably request.

12.13 INFORMATION REGARDING MAINTENANCE PROGRAM. Upon reasonable notice to
LESSEE, LESSEE will provide LESSOR with access to the Maintenance Program for
the Aircraft, as reasonably requested by LESSOR.

12.14 LESSOR RIGHTS TO INSPECT AIRCRAFT. On reasonable notice, LESSOR. and/or
its authorized agents or representatives will have the right to inspect the
Aircraft and Aircraft Documentation. LESSOR agrees that such requests will be
coordinated with LESSEE so as to cause the minimum practical disturbance to
LESSEE's operation or its personnel. LESSEE agrees to cooperate with LESSOR in
making the Aircraft and Aircraft Documentation available to such authorized
technical teams. LESSOR will have no duty to make any such inspection and will
not incur any liability or obligation by reason of (and LESSEE's indemnity
obligations pursuant to Article 17 will apply notwithstanding) making or not
making any-such inspection or by reason of any reports it receives or any
reviews it may make of the Aircraft records.


                                       37

<PAGE>

                                   ARTICLE 13

                                 USE OF RESERVES

13.1 AIRFRAME RESERVES. LESSOR will reimburse LESSEE from the Airframe Reserves
for the actual cost of performing all task as described in the MPD (including
systems, zonal, CPCP, SID, structural and lubrication) performed during the
Airframe heavy checks (performed at **Material Redacted** and **Material
Redacted** years) any non-routine tasks and the rectification of and
deficiencies resulting from such inspection (including materials), with work
performed for all other causes excluded, including those causes set forth in
Article 13.5. Subject to Article 16.1 and excluding exchange fees and handling,
packaging and shipping charges, reimbursement will be made up to the amount in
the Airframe Reserves on the commencement date of the structural check.

13.2 ENGINE PERFORMANCE RESTORATION RESERVES.

13.2.1 LESSOR will reimburse LESSEE from the Engine Performance Restoration
     Reserves for the actual cost associated with performance restoration of the
     Basic Engine during completed Engine shop visits (i.e. heavy maintenance
     visits) requiring off-wing teardown and/or disassembly as described in
     Article 12.2.3, with work performed for all other causes excluded,
     including those causes set forth in Article 13.5. Subject to Article 16.1
     and excluding exchange fees and handling, packaging and shipping charges,
     reimbursement for an Engine will be made up to the amount in the Engine
     Performance Restoration Reserves applicable to such Engine at the time of
     removal of such Engine.

13.2.2 Reimbursement from the Engine Performance Restoration Reserves will be
     limited as to each module of such Engine in accordance with the following
     percentages of the remaining total amount in the Engine Performance
     Restoration Reserves for such Engine:

          **Material   Fan and Accessory Gearbox Module
          Redacted**
          **Material   High Pressure Compressor
          Redacted**
          **Material   High Pressure Turbine
          Redacted**
          **Material   Low Pressure Turbine
          Redacted**

13.2.3 LESSEE will not enter into any Engine maintenance cost per flight hour,
     power-by-the-hour or similar agreement for the Engines with the Engine
     manufacturer or any other Engine maintenance facility or organization
     without LESSOR's consent.

13.3 ENGINE LLP RESERVES. LESSOR will reimburse LESSEE from the Engine LLP
Reserves for an Engine for the actual out-of-pocket materials cost without
overhead, LESSEE


                                       38

<PAGE>

mark-up or profit factor associated with the replacement of life-limited Parts
in such Engine during completed Engine shop visits (i.e. heavy maintenance
visits) requiring off-wing teardown and/or disassembly as described in Article
12.2.3, with work performed for all other causes excluded, including those
causes set forth in Article 13.5. Subject to Article 16.1 and excluding exchange
fees and handling, packaging and shipping charges, reimbursement for replacement
of life-limited Parts in an Engine will be made up to the amount in the Engine
LLP Reserves applicable to such Engine at the time of removal of such Engine.

13.4 REIMBURSEMENT. LESSEE will be entitled to reimbursement from the Reserves
after the work is completed and the Airframe or Engine has left the repair
agency, by submitting invoices and proper documentation within six (6) months
after completion of the work. LESSOR shall reimburse LESSEE from the Reserves
promptly and in any event within thirty (30) days after LESSEE has delivered to
LESSOR such invoices and proper documentation. LESSEE may only seek
reimbursement from the Airframe Reserves one time in any calendar year. For the
Airframe, proper documentation includes a list of all routine and non-routine
work cards with corresponding references to the MPD and an itemized labor and
materials report. For the Engine, proper documentation includes a description of
the reason for removal, a shop teardown report, a shop findings report, a full
description of the workscope and complete disk records for the Engine both prior
to and after the shop visit. Both the invoice supplied by the Engine repair
facility and that submitted by LESSEE to LESSOR with respect to an Engine will
state whether or not credits were provided due to life remaining on any removed
Engine Parts and the amount of any such credits will be itemized.

13.5 REIMBURSEMENT ADJUSTMENT. By way of example, among the exclusions from
reimbursement are those items resulting from repairs covered by LESSEE's or a
third party's insurance, (deductibles being for the account of LESSEE) or
warranties or required as a result of an Airworthiness Directive, manufacturers
service bulletin, negligent maintenance or installation, improper operations,
misuse, neglect, accident, incident, ingestion, or other accidental cause.
Reimbursement from the Reserves will not be available for the quick engine
change (QEC) Parts, thrust reversers or any of their associated components. All
invoices subject to reimbursement from LESSOR will be reduced (by adjustment
between LESSEE and LESSOR retroactively if necessary) by the actual amounts
received by LESSEE on account of such work from responsible third parties or
other sources, such as insurance proceeds, manufacturer warranties, guarantees,
concessions and credits (including, with respect to Engines, credits due to life
remaining on any removed Engine Parts). Notwithstanding the foregoing, in the
event that accident, incident or other accidental cause necessitates a repair;
and during the course of such repair the workscope results in performance
restoration to the Engine or installation of LLPs with more life remaining, the
performance restoration portion or LLP life betterment of such repair workscope
may be claimed by LESSEE from Engine Performance Restoration Reserves or Engine
LLP Reserves (as applicable).

13.6 COSTS IN EXCESS OF RESERVES. LESSEE will be responsible for payment of all
costs in excess of the amounts reimbursed hereunder. If on any occasion the
balance in the Airframe Reserves, Engine Performance Restoration Reserves for a
particular Engine or Engine LLP Reserves for a particular Engine (at the time of
the structural check, in the case of the Airframe, or at the time of removal, in
the case of an Engine, the Landing Gear and the APU) is insufficient to satisfy
a claim for reimbursement in respect of the Airframe or such Engine, as


                                       39

<PAGE>

applicable, the shortfall may not be carried forward or made the subject of any
further claim for reimbursement.

13.7 REIMBURSEMENT AFTER TERMINATION DATE. LESSEE may not submit any invoice for
reimbursement from the Reserves after the Termination Date unless on or prior to
such date LESSEE has notified LESSOR in writing that such outstanding invoice
will be submitted after the Termination Date and the anticipated amount of such
invoice. So long as LESSEE has provided such notice to LESSOR, LESSEE may then
submit outstanding invoices at any time within six (6) months after the
Termination Date. Subject to the foregoing, any balance remaining in the
Reserves on the Termination Date will be retained by LESSOR, **Material
Redacted**.


                                       40

<PAGE>

                                   ARTICLE 14

                             TITLE AND REGISTRATION

14.1 TITLE TO THE AIRCRAFT DURING LEASE TERM. Title to the Aircraft will be and
remain vested in LESSOR. LESSOR and LESSEE intend this Lease to be a "true
lease". LESSEE will have no right, title or interest in the Aircraft except as
provided in this Lease.

14.2 REGISTRATION OF AIRCRAFT. LESSEE at its sole cost and expense will (a)
register and maintain registration of the Aircraft in the name of LESSOR at the
register of aircraft in the State of Registration and (b) from time to time take
all other steps then required by Law (including the Geneva Convention if
applicable) or by practice, custom or understanding or as LESSOR may reasonably
request to protect and perfect LESSOR's interest in the Aircraft and this Lease
in the State of Registration or in any other jurisdictions in or over which
LESSEE may operate the Aircraft.

14.3 FILING OF THIS LEASE. To the extent permitted by Law and in accordance with
the requirements of the Law from time to time, LESSEE at its sole cost and
expense will cause this Lease to be kept, filed, recorded and refiled or
rerecorded in the State of Registration and in any other offices necessary to
protect LESSOR's rights hereunder.

14.4 EVIDENCE OF REGISTRATION AND FILINGS. As LESSOR may reasonably request from
time to time (but not more often than once annually unless a Default or Event of
Default shall have occurred and be continuing), LESSEE will furnish to LESSOR an
opinion of counsel or other evidence reasonably satisfactory to LESSOR of the
registrations and filings required hereunder.


                                       41

<PAGE>

                                   ARTICLE 15

                              IDENTIFICATION PLATES

          LESSOR will affix and LESSEE will at all times maintain on the
Airframe, each Engine and the APU the identification plates containing the
following legends or any other legend requested by LESSOR in writing:

15.1 AIRPLANE IDENTIFICATION PLATES.

     Location:   One to he affixed to the Aircraft structure above the forward
                 entry door adjacent to and not less prominent than that of
                 Manufacturer's data plate and another in a prominent place on
                 the flight deck.

     Size:       No smaller than 2" x 3".

     Legend:     "THIS AIRCRAFT IS OWNED BY INTERNATIONAL LEASE FINANCE
                 CORPORATION AND IS OPERATED UNDER LEASE BY COMPANIA PANAMENA DE
                 AVIACION, S.A.

                 MANUFACTURER'S SERIAL NO: 30676
                 OWNER'S ADDRESS:

                 INTERNATIONAL LEASE FINANCE CORPORATION
                 10250 Constellation Boulevard, 34th Floor
                 Los Angeles, California 90067, U.S.A.

                 Fax: (310) 788-1990

15.2 ENGINE IDENTIFICATION PLATES.

     Location:   The legend on the plate must be no less prominent than the
                 Engine data plate and must be visible.

     Size:       No smaller than 1" x 4".

     Legend:     "THIS ENGINE IS OWNED BY INTERNATIONAL LEASE FINANCE
                 CORPORATION, LOS ANGELES, CALIFORNIA, USA AND IS OPERATED UNDER
                 LEASE BY COMPANIA PANAMENA DE AVIACION, S.A."

15.3 APU IDENTIFICATION PLATE.

     Location:   The legend on the plate must be visible.

     Size:       No smaller than 1" x 3"


                                       42

<PAGE>

     Legend:     "THIS APU IS OWNED BY INTERNATIONAL LEASE FINANCE CORPORATION,
                 LOS ANGELES, CALIFORNIA, USA AND IS OPERATED UNDER LEASE BY
                 COMPANIA PANAMENA DE AVIACION, S.A."


                                       43

<PAGE>

                                   ARTICLE 16

                                      TAXES

16.1 GENERAL OBLIGATION OF LESSEE. Except as set forth in Article 16.2, LESSEE
agrees to pay promptly when due, and to indemnify and hold harmless LESSOR on a
full indemnity basis from, all license and registration fees and all taxes,
fees, levies, imposts, duties, charges, deductions or withholdings of any nature
(including without limitation any value added, franchise, transfer, sales, gross
receipts, use, business, excise, turnover, personal property, stamp or other
tax) together with any assessments, penalties, fines, additions to tax or
interest thereon, however or wherever imposed (whether imposed upon LESSEE,
LESSOR, on all or part of the Aircraft, the Engines or otherwise), by any
Government Entity or taxing authority in the U.S., Panama or any foreign country
or by any international taxing authority (including the City or County of Los
Angeles), upon or with respect to, based upon or measured by any of the
following (collectively, "TAXES"):

     (a) the Aircraft, Engines, APU or any Parts;

     (b) the use, operation or maintenance of the Aircraft or carriage of
     passengers or freight during the Lease Term and until the Termination Date,

     (c) this Lease, the payments due hereunder and the terms and conditions
     hereof; and

     (d) the ownership, financing, delivery, import or export, return, sale,
     payment of Total Loss Proceeds or other disposition of the Aircraft.

16.2 EXCEPTIONS TO INDEMNITY. The indemnity provided for in Article 16.1 does
not extend to any of the following Taxes:

     (a) Taxes imposed by the U.S. or the State of California on the net income,
     gross receipts, capital, turnover or net worth and franchise taxes of
     LESSOR;

     (b) Taxes in jurisdictions in which LESSOR would have been subject to Tax
     to the extent that the parties had not consummated this transaction;
     provided, however, that if LESSEE's operation of the Aircraft to a
     jurisdiction and the operation of other aircraft owned by LESSOR to such
     jurisdiction causes LESSOR to be liable for any tax, then LESSEE will pay
     the portion of such Tax attributed to LESSEE's operations in such
     jurisdiction;

     (c) Taxes imposed in connection with a LESSOR's voluntary transfer or other
     disposition of all or any part of its interest in the Aircraft (or any part
     thereof) or this Lease other than resulting from an Event of Default which
     shall have occurred and be continuing or other foreclosure, seizure or sale
     of the Aircraft resulting from LESSEE's action or inaction;

     (d) Taxes imposed as a direct result of any LESSOR Lien;


                                       44

<PAGE>

     (e) any additional or incremental tax which arise solely as a result of
     LESSOR's failure to provide information necessary for LESSEE to properly
     complete and file any tax return or request an otherwise legally available
     exemption;

     (f) Taxes solely attributable a sale or transfer of the Aircraft not
     resulting from an act or omission of LESSEE;

     (g) Taxes attributable to the period prior to Delivery or after the
     Termination Date; or

     (h) Taxes attributable to LESSOR's gross negligence, willful misconduct or
     breach of this Lease.

16.3 AFTER-TAX BASIS. The amount which LESSEE is required to pay with respect to
any Taxes indemnified against under Article 16.1 is an amount sufficient to
restore LESSOR on an after-tax basis to the same position LESSOR would have been
in had such Taxes not been incurred. LESSEE may satisfy its obligations under
this Article 16 by paying and indemnifying LESSOR for Taxes payable by LESSEE
hereunder or grossing up payments made pursuant to this Lease in an amount
sufficient to allow LESSOR to pay such Taxes and receive the full benefit of
this Lease provided LESSEE will not he obligated to pay such Tax obligations
twice as a result of gross-up and indemnity.

16.4 TIMING OF PAYMENT. Any amount payable to LESSOR pursuant to this Article 16
will be paid within thirty (30) days after receipt of a written demand therefor
from LESSOR accompanied by a written statement describing in reasonable detail
the basis for such indemnity and the computation of the amount so payable;
provided, however, that such amount need not be paid by LESSEE prior to the
earlier of (a) the date any Tax is payable to the appropriate Government Entity
or taxing authority or (b) in the case of amounts which are being contested by
LESSEE in good faith or by LESSOR pursuant to Article 16.5, the date such
contest is finally resolved.

16.5 CONTESTS. If a claim is made against LESSOR for Taxes with respect to which
LESSEE is liable for a payment or indemnity under this Lease, LESSOR will
promptly give LESSEE notice in writing of such claim; provided, however, that
LESSOR's failure to give notice will not relieve LESSEE of its obligations
hereunder except to the extent such failure impairs or precludes LESSEE's
ability to contest the claim or to the extent such failure results in additional
liability to LESSEE. So long as (a) a contest of such Taxes does not involve any
danger of the sale, forfeiture or loss of the Aircraft or any interest therein,
(b) if LESSOR so requests, LESSEE has provided LESSOR with an opinion of
independent tax counsel that a reasonable basis exists for contesting such claim
and (c) adequate reserves have been made for such Taxes or, if required, an
adequate bond has been posted, then LESSOR at LESSEE's written request will in
good faith, with due diligence and at LESSEE's expense, contest (or permit
LESSEE to contest in the name of LESSEE or LESSOR) the validity, applicability
or amount of such Taxes.


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<PAGE>

16.6 REFUNDS. Upon receipt by LESSOR of a refund of all or any part of any Taxes
(including any deductions or withholdings referred to in Article 5.8) which
LESSEE has paid, LESSOR will pay to LESSEE the net amount of such Taxes
refunded.

16.7 COOPERATION IN FILING TAX RETURNS. LESSEE and LESSOR will cooperate with
one another in providing information which may be reasonably required to fulfill
each party's tax filing requirements and any audit information request arising
from such filing.

16.8 TAX RESTRUCTURING. In the event that any withholding, value added tax or
similar tax or duty is payable in the State of Registration or any jurisdiction
from which such payments originate in respect of any Rent, Reserves or other
amounts payable pursuant to this Lease, LESSEE and LESSOR will cooperate in good
faith to restructure this Lease in a manner which minimizes or eliminates any
such tax including a synthetic lease through another country which has favorable
tax treatment of such payments.

16.9 SURVIVAL OF OBLIGATIONS. The representations, warranties, indemnities and
agreements of LESSEE provided for in this Article 16 will survive the
Termination Date.


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<PAGE>

                                   ARTICLE 17

                                   INDEMNITIES

17.1 GENERAL INDEMNITY. Except as set forth in Article 17.2, LESSEE agrees to
indemnify and hold harmless LESSOR and its officers, directors, employees,
agents and shareholders (individually an "INDEMNITIES" and collectively
"INDEMNITEES") from any and all liabilities, obligations, losses, damages,
penalties, claims, actions, suits, costs, disbursements and expenses (including
legal fees, costs and related expenses) of every kind and nature, whether or not
any of the transactions contemplated by this Lease are consummated (collectively
"EXPENSES"), which are imposed on, incurred by or asserted against any
Indemnitee and which are in any way relating to, based on or arising out of any
of the following:

     (a) this Lease or any transactions contemplated hereby,

     (b) the operation, possession, use, non-use, control, leasing, subleasing,
     maintenance, storage, overhaul, testing or inspections of the Aircraft, any
     Engine, the APU or any Part (whether by LESSEE, any sublessee or any other
     Person other than LESSOR or any Person claiming by or through LESSOR in
     violation of LESSOR's covenant of quiet enjoyment contained in Article
     21.2) during the Lease Term and until the Termination Date or the
     acceptance flights at return, whether or not the same is in compliance with
     the terms of this Lease, including without limitation claims for death,
     personal injury, property damage, other loss or harm to any Person and
     claims relating to any Laws, including without limitation environmental
     control, noise and pollution laws, rules or regulations;

     (c) the manufacture, design, acceptance, improper rejection, delivery,
     return, sale after an Event of Default, import, export, condition, repair,
     modification, servicing, customer, product support, information or training
     provided by Manufacturer and other vendors, airworthiness, registration,
     reregistration, performance, sublease, merchantability, fitness for use,
     substitution or replacement of an Engine, APU or any Part by LESSEE under
     this Lease or other transfer of use or possession of the Aircraft, an
     Engine, the APU or any Part, including under a pooling or interchange
     arrangement, including without limitation latent and other defects, whether
     or not discoverable and patent, trademark or copyright infringement;

     (d) the prevention or attempt to prevent the arrest, confiscation, seizure,
     taking in execution, impounding, forfeiture or detention of the Aircraft,
     or in securing the release of the Aircraft; or

     (e) as a consequence of any Default or Event of Default by LESSEE.

The foregoing indemnity by LESSEE is intended to include and cover any Expense
to which an Indemnitee may be subject (in contract, tort, strict liability or
under any other theory) regardless of the negligence, active or passive or any
other type, of such Indemnitee, so long as such Expense does not fall within any
of the exceptions listed in Article 17.2.


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<PAGE>

17.2 EXCEPTIONS TO GENERAL INDEMNITIES. The indemnity provided for in Article
17.1 will not extend to Expenses of any Indemnitee to the extent resulting from
or arising out of any of the following:

     (a) Expenses which have resulted from the willful misconduct of such
     Indemnitee;

     (b) Expenses which are attributable to acts or events which occur after the
     Termination Date and return of the Aircraft to LESSOR in the condition
     required hereunder, but in any such case only to the extent not
     attributable to acts or omissions of LESSEE;

     (c) **Material Redacted**;

     (d) **Material Redacted**;

     (e) **Material Redacted**;

     (f) Expenses solely attributable a sale or transfer of the Aircraft not
     resulting from an act or omission of LESSEE;

     (g) Expenses representing Taxes, it being acknowledged that the terms of
     Article 16 apply exclusively to LESSEE's indemnity obligations with respect
     to Taxes; or

     (h) Expenses due to the breach by LESSOR (or any person lawfully claiming
     through LESSOR) of its covenant of quiet enjoyment pursuant to Article 21.2
     (except to the extent covered by the insurances LESSEE is required to carry
     pursuant to Article 18 or other LESSEE insurances).

17.3 AFTER-TAX BASIS. The amount which LESSEE will be required to pay with
respect to any Expense indemnified against under Article 17.1 will be an amount
sufficient to restore the Indemnitee, on an after-tax basis, to the same
position such Indemnitee would have been in had such Expense not been incurred
after taking into account the amount of any credits, deductions or other Tax
benefits or savings realized by such Indemnitee.

17.4 TIMING OF PAYMENT. It is the intent of the parties that each Indemnitee
will have the right to indemnification for Expenses hereunder as soon as a claim
is made and as soon as an Expense is incurred, whether or not such claim is
meritorious and whether or not liability is established (but subject to Article
17.8). LESSEE will pay an Indemnitee for Expenses pursuant to this Article 17
within thirty (30) days after receipt of a written demand therefor from such
Indemnitee accompanied by a written statement describing in reasonable detail
the basis for such indemnity.

17.5 SUBROGATION. Upon the payment in full of any indemnity pursuant to this
Article 17 by LESSEE, LESSEE will be subrogated to any right of the Indemnitee
in respect of the matter against which such indemnity has been made.


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<PAGE>

17.6 NOTICE. Each Indemnitee and LESSEE will give prompt written notice one to
the other of any liability of which such party leas knowledge for which LESSEE
is, or may be, liable under Article 17.1; provided, however, that failure to
give such notice will not terminate any of the rights of Indemnitees under this
Article 17 except to the extent that LESSEE has been prejudiced by the failure
to provide such notice.

17.7 REFUNDS. If any Indemnitee obtains a recovery of all or any part of any
amount which LESSEE has paid to such Indemnitee, such Indemnitee will pay to
LESSEE the net amount recovered by such Indemnitee.

17.8 DEFENSE OF CLAIMS. Unless an Event of Default has occurred and is
continuing LESSEE and its insurers will have the right (in each such case at
LESSEE's sole expense) to investigate or, provided that LESSEE or its insurers
have not reserved the right to dispute liability with respect to any insurance
policies pursuant to which coverage is sought, defend or compromise any claim
covered by insurance for which indemnification is sought pursuant to Article
17.1 and each Indemnitee will cooperate with LESSEE or its insurers with respect
thereto. If LESSEE or its insurers are retaining attorneys to handle such claim,
such counsel must be reasonably satisfactory to the Indemnitees. If not, the
Indemnitees will have the right to retain counsel of their-choice at LESSEE's
expense.

17.9 SURVIVAL OF OBLIGATION. Notwithstanding anything in this Lease to the
contrary, the provisions of this Article 17 will survive the Termination Date
and continue in full force and effect notwithstanding any breach by LESSOR or
LESSEE of the terms of this Lease, the termination of the lease of the Aircraft
to LESSEE under this Lease or the repudiation by LESSOR or LESSEE of this Lease.


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<PAGE>

                                   ARTICLE 18

                                    INSURANCE

18.1 CATEGORIES OF INSURANCE. Throughout the Lease Term and until the
Termination Date, LESSEE will, at its own expense, effect and maintain in full
force and effect the types of insurance and amounts of insurance (including
deductibles) described in Exhibit C through such brokers and with such insurers
as maybe approved by LESSOR (acting reasonably and in consultation with the
other providers of LESSEE's aircraft), such approval not to be unreasonably
withheld, in London or New York or such other insurance markets as mutually
agreed upon by the parties.

18.2 WRITE-BACK OF ANY DATE RECOGNITION EXCLUSION. In the event any of LESSEE's
insurances (either the primary insurance or the reinsurance) contain any date
recognition exclusion clause or similar clause excluding from such insurance
coverage damage to any property (including the Aircraft) or death or injury to
any person on account of accidents, incidents or occurrences caused by date
recognition or other Year 2000-related problems, LESSEE at its cost will obtain
for the benefit of itself and LESSOR the broadest write-back available in the
insurance market where Lessee places its insurance with respect to such
exclusion.

18.3 INSTALLATION OF THIRD PARTY ENGINE. If LESSEE installs an engine not owned
by LESSOR on the Aircraft, either (a) LESSEE's hull insurance on the Aircraft
will automatically increase to such higher amount as is necessary in order to
satisfy both LESSOR's requirement to receive the Agreed Value in the event of a
Total Loss and the amount required by the third party engine owner or (b)
separate additional insurance on such engine will attach in order to satisfy
separately the requirements of the LESSEE to such third party engine owner.

18.4 INSURANCE FOR INDEMNITIES. The insurance referred to in Article 18.1 will
in each case include and insure (to the extent of the risks covered by the
policies) the indemnity provisions of Article 17 and LESSEE will maintain such
insurance of the indemnities for a minimum of two (2) years following the
Termination Date.

18.5 INSURANCE REQUIRED BY MANUFACTURER. During the Lease Term, LESSEE will
carry such insurance as may be required by Manufacturer in connection with
LESSOR's assignment of Manufacturer's warranties and product support to LESSEE.

18.6 RENEWAL. Prior to the expiration or termination date of any insurance
required hereunder, LESSEE will provide LESSOR with fax confirmation from
LESSEE's insurance brokers that renewed certificates of insurance evidencing the
renewal or replacement of such insurance and complying with Exhibit C will be
issued on the termination date of the prior certificate. Within seven (7) days
after such renewal, LESSEE will furnish its brokers' certificates of insurance
to LESSOR.

18.7 ASSIGNMENT OF RIGHTS BY LESSOR. If LESSOR. assigns all or any of its rights
under this Lease as permitted by this Lease or otherwise disposes of any
interest in the Aircraft to any other Person as permitted by this Lease, LESSEE
will, upon request, procure that such


                                       50

<PAGE>

Person hereunder be substituted as loss payee for LESSOR (without duplication in
respect of hull, all risks, hull war and allied perils risk coverage) and/or be
added as an additional assured in the policies effected hereunder and enjoy the
same rights and insurance enjoyed by LESSOR under such policies. LESSOR will
nevertheless continue to be covered by such policies.

18.8 DEDUCTIBLES. If there is a material adverse change in the financial
condition of LESSEE which LESSOR reasonably believes will cause LESSEE to be
unable to pay the deductible upon the occurrence of a partial loss of the
Aircraft or an Engine, then LESSOR (acting reasonably and in consultation with
the other providers of LESSEE's aircraft) may require LESSEE at LESSEE's expense
to lower its deductibles on the insurance maintained hereunder to a level which
is available on commercially reasonable terms in the insurance market.

18.9 INSURANCE FOR WET LEASE OPERATIONS. In the event LESSEE is performing wet
lease operations with the Aircraft pursuant to Article 11.5 and the wet lessee
is carrying the primary passenger, baggage and cargo liability insurance with
respect to the flights, then such insurance must meet the requirements of
Exhibit C, including with respect to the amounts of coverage, naming of LESSOR
as an additional insured and inclusion of the other endorsements set forth in
Exhibit C. Moreover, LESSEE will at such times carry contingent passenger,
baggage and cargo liability insurances for such flights. Prior to commencement
of wet lease operations for a particular wet lessee where wet lessee will
provide such coverage, LESSOR will receive certificates of insurance from the
insurance brokers for LESSEE and, if applicable, the wet lessee evidencing such
coverages.

18.10 OTHER INSURANCE. LESSOR may (acting reasonably and in consultation with
the Other providers of LESSEE's aircraft) from time to time by notice to LESSEE
require LESSEE at LESSEE's expense to effect such other insurance or such
variations to the terms of the existing insurance as may then be customary in
the airline industry for aircraft of the same type as the Aircraft operated by
similarly situated operators and at the time commonly available in the insurance
market.

18.11 INFORMATION. LESSEE will provide LESSOR with any information reasonably
requested by LESSOR from time to time concerning the insurance maintained with
respect to the Aircraft or in connection with any claim being made or proposed
to be made thereunder.

18.12 CURRENCY. All proceeds of insurance pursuant to this Lease will be payable
in Dollars except as may be otherwise agreed by LESSOR except that third party
liability coverage may be payable in the currency of the claim.

18.13 GROUNDING OF AIRCRAFT. If at any time any of the insurance required
pursuant to this Lease will cease to be in full force and effect, LESSEE will
promptly ground the Aircraft and keep the Aircraft grounded until such time as
such insurance is in full force and effect again.

18.14 FAILURE TO INSURE. If at any time LESSEE fails to maintain insurance in
compliance with this Article 18, LESSOR will be entitled but not bound to do any
of the following (without prejudice to any other rights which it may have under
this Lease by reason of such failure):


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<PAGE>

     (a) to pay any premiums due or to effect or maintain insurance meeting the
     requirements hereof or otherwise remedy such failure in such manner as
     LESSOR considers appropriate (and LESSEE will upon demand reimburse LESSOR
     in full for any amount so expended in that connection); 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), proceed to and remain at
     any airport designated by LESSOR, until such fall tire is remedied.

18.15 REINSURANCE. Any reinsurance will be maintained with reinsures and brokers
approved by LESSOR (acting reasonably and in consultation with the other
providers of LESSEE's aircraft). Such reinsurance will contain each of the
-following terms and will in all other respects (including amount) be
satisfactory to LESSOR:

     (a) the same terms as the original insurance;

     (b) a cut-through and assignment clause satisfactory to LESSOR (acting
     reasonably and in consultation with the other providers of LESSEE's
     aircraft) and in accordance with industry practice; and

     (c) payment will be made notwithstanding (i) any bankruptcy, insolvency,
     liquidation or dissolution of any of the original insurers and/or (ii) that
     the original insurers have made no payment under the original insurance
     policies.

18.16 LIMIT ON HULL IN FAVOR OF LESSEE. LESSEE may carry hull all risks or hull
war and allied perils on the Aircraft in excess of the Agreed Value (which is
payable to LESSOR.) only to the extent such excess insurance which would be
payable to LESSEE in the event of a Total Loss does not exceed **Material
Redacted** of the Agreed Value and only to the extent that such additional
insurance will not prejudice the insurances required herein or the recovery by
LESSOR thereunder. LESSEE agrees that it will not create or permit to exist any
liens or encumbrances over the insurances, or its interest therein, except as
constituted by this Lease.


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<PAGE>

                                   ARTICLE 19

                          LOSS, DAMAGE, AND REQUISITION

     Throughout the Lease Term and until the Termination Date, LESSEE will bear
all risk of loss, theft, damage and destruction to the Aircraft.

19.1 DEFINITIONS. In this Article 19 and this Lease:

     "AGREED VALUE" means an amount equal to **Material Redacted**.

     "NET TOTAL LOSS PROCEEDS" means the Total Loss Proceeds actually received
by LESSOR following a Total Loss, less any legal and other out-of-pocket
expenses, taxes or duties incurred by LESSOR in connection with the collection
of such proceeds.

     "TOTAL LOSS" means any of the following in relation to the Aircraft,
Airframe, any Engine or the APU and "TOTAL LOSS DATE" means the date set forth
in parenthesis after each Total Loss:

     (a) destruction, damage beyond repair or being rendered permanently unfit
     for normal use for any reason (the date such event occurs or, if not known,
     the date on which the Aircraft, Airframe, Engine or APU was last heard of);

     (b) actual, constructive, compromised, arranged or agreed total loss (the
     earlier of the date on which the loss is agreed or compromised by the
     insurers or forty five (45) days after the date of notice to LESSEE's
     brokers or insurers claiming such total loss);

     (c) requisition of title, confiscation, forfeiture or any compulsory
     acquisition or other similar event (the date on which the same takes
     effect);

     (d) sequestration, detention, seizure or any similar event for more than
     forty-five (45) consecutive days (the earlier of the date on which insurers
     make payment on the basis of a total loss or the date of expiration of such
     period);

     (e) requisition for use for more than one hundred eighty (180) consecutive
     days, except as set forth in Article 19.9 (the earlier of the date on which
     the insurers make payment on the basis of a total loss or the date of
     expiration of such period);

     (f) in the case of an Engine, the event described in Article 12.8.3 (the
     date on which the same takes effect);

     (g) a proper, lawful sale of the Aircraft in connection with Eurocontrol
     charges owed by LESSEE (the date on which the sale occurs);


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<PAGE>

     (h) any sale of the Aircraft in connection with a LESSEE bankruptcy,
     whether by an administrator, trustee or court (the date on which the intent
     to sell the Aircraft becomes known); or

     (i) any other occurrence not permitted under this Lease (including a
     violation of the covenant of quiet enjoyment contained in Article 21.2)
     which deprives LESSEE of use or possession for a period of ninety (90)
     consecutive days or longer (the 90th day of such period) except where full
     insurance on the Aircraft is in effect or a full indemnity acceptable to
     LESSOR in lieu thereof exists and all other provisions of this Lease are
     being complied with (the ninetieth (90th) day of such period).

     "TOTAL LOSS PROCEEDS" means the proceeds of any insurance or any
compensation or similar payment arising in respect of a Total Loss.

19.2 NOTICE OF TOTAL LOSS. LESSEE will notify LESSOR in writing within three (2)
Business Days after a Total Loss Date of the Aircraft, Airframe, any Engine or
the APU.

19.3 TOTAL LOSS OF AIRCRAFT OR AIRFRAME. If the Total Loss of the Aircraft or
Airframe occurs during the Lease Term, the following will occur:

19.3.1 After the Total Loss Date and until receipt by LESSOR of the Agreed Value
     and all other amounts then due under this Lease, LESSEE will continue to
     pay Rent and the parties will perform all of their other obligations under
     this Lease.

19.3.2 On the date which is the earlier of the following dates:

     (a) the date on which the Total Loss Proceeds of the Aircraft or the
     Airframe are paid by LESSEE's insurance underwriters or brokers and

     (b) the date which falls forty (45) days after the Total Loss Date,

     LESSEE will pay to LESSOR an amount equal to the sum of:

     (a) the Agreed Value and

     (b) all other amounts then accrued under this Lease,

     less an amount equal to the Net Total Loss Proceeds received by LESSOR by
     such date.

19.3.3 LESSOR will apply the Net Total Loss Proceeds and any amounts received
     from LESSEE pursuant to Article 19.3.2 as follows:

     (a) first, in discharge of any unpaid Rent and any other amounts accrued
     and unpaid up to the date of LESSOR's receipt of the Agreed Value;

     (b) second, in discharge of the Agreed Value; and


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<PAGE>

     (c) third, payment of the balance, if any, to LESSEE.

19.3.4 Upon receipt by LESSOR of all monies payable by LESSEE in Article 19.3,
     provided no Default or Event of Default has occurred and is continuing this
     Lease will terminate except for LESSEE's obligations under Articles 10.5,
     16 and 17 which survive the Termination Date.

FOR AVOIDANCE OF DOUBT, THE AGREED VALUE OF THE AIRCRAFT WILL BE PAYABLE TO
LESSOR PURSUANT TO THIS ARTICLE 19.3 WHEN A TOTAL LOSS OF THE AIRFRAME OCCURS
EVEN IF THERE HAS NOT BEEN A TOTAL LOSS OF AN ENGINE, ENGINES OR THE APU.

19.4 SURVIVING ENGINE(S). If a Total Loss of the Airframe occurs and there has
not been a Total Loss of an Engine or Engines, then, provided no Default or
Event of Default has occurred and is continuing, at the request of LESSEE
(subject to agreement of relevant insurers) and on receipt of all monies due
under Article 19.3 and payment by LESSEE of all airport, navigation and other
charges on the Aircraft then due and owing, if any, LESSOR will transfer all its
right, title and interest in the surviving Engine(s) to LESSEE, but without any
responsibility, condition or warranty on the part of LESSOR other than as to
freedom from any LESSOR's Liens.

19.5 TOTAL LOSS OF ENGINE AND NOT AIRFRAME.

19.5.1 Upon a Total Loss of any Engine not installed on the Airframe or a Total
     Loss of an Engine installed on the Airframe not involving a Total Loss of
     the Airframe, LESSEE will replace such Engine as soon as reasonably
     possible by duly conveying or causing to be conveyed to LESSOR title to
     another engine from LESSEE (or another Person with reasonable net worth or
     a guarantee from LESSEE) (a) free and clear of all Security Interests
     (except Permitted Liens) of any kind or description, (b) in airworthy
     condition and of the same or improved model, service bulletin and
     modification status and having a value and utility at least equal to the
     Engine which sustained the Total Loss, (c) not older (by reference to
     serial number or manufacture (date) than the older of the two Engines
     delivered by LESSOR to LESSEE with the Aircraft on the Delivery Date and
     (d) in the same or better operating condition as the Engine which sustained
     a Total Loss, including time in service, hours and cycles since new and
     hours and cycles available to the next inspection, Overhaul or scheduled or
     anticipated removal. Such replacement engine will be an "Engine" as defined
     herein and the Engine which sustained such Total Loss will cease to be an
     "Engine".

19.5.2 LESSEE agrees at its own expense to take such action as LESSOR may
     reasonably request in order that any such replacement Engine becomes the
     property of LESSOR and is leased hereunder on the same terms as the
     destroyed Engine. LESSEE's obligation to pay Rent will continue in full
     force and effect, but an amount equal to the Net Total Loss Proceeds
     received by LESSOR with respect to such destroyed Engine will, subject to
     LESSOR's right to deduct


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<PAGE>

     therefrom any amounts then due and payable by LESSEE under this Lease, be
     promptly paid to LESSEE.

19.5.3 Notwithstanding Articles 19.5.1 and 19.5.2, if at the time of a Total
     Loss of an Engine not installed on the Aircraft or a Total Loss of an
     Engine installed on the Airframe not involving a Total Loss of the
     Airframe, LESSOR and LESSEE are parties to a spare engine lease pursuant to
     which LESSOR is leasing a spare engine to LESSEE of the same model and type
     as the Engine which has suffered such Total Loss, LESSOR will receive from
     LESSEE the replacement cost of the Engine instead of accepting a
     replacement engine. One (1) of such LESSOR spare engines will then be
     substituted under this Lease for the Engine which suffered such Total Loss
     and the applicable spare engine lease will terminate.

19.6 TOTAL LOSS OF APU.

19.6.1 Upon a Total Loss of the APU when not installed on the Airframe or a
     Total Loss of the APU while installed on the Airframe not involving a Total
     Loss of the Airframe, LESSEE will replace such APU as soon as reasonably
     possible by duly conveying or causing to be conveyed to LESSOR title to
     another auxiliary power unit (a) free and clear of all Security Interests
     (except Permitted Liens) of any kind or description, (b) in airworthy
     condition and of the same or improved model, service bulletin and
     modification status and having a value and utility at least equal to the
     APU which sustained the Total Loss, (c) not older (by reference to serial
     number or manufacture date) than the APU delivered by LESSOR to LESSEE with
     the Aircraft on the Delivery Date and (d) in the same or better operating
     condition as the APU which sustained the Total Loss, including time in
     service, hours and cycles since new and hours and cycles available to the
     next inspection, Overhaul or scheduled or anticipated removal. Such
     replacement auxiliary power unit will be the "APU" as defined herein and
     the auxiliary power unit which sustained such Total Loss will cease to be
     the "APU".

19.6.2 LESSEE agrees at its own expense to take such action as LESSOR may
     reasonably request in order that any such replacement APU becomes the
     property of LESSOR and is leased hereunder on the same terms as the
     destroyed APU. LESSEE's obligation to pay Rent will continue in full force
     and effect, but an amount equal to the Net Total Loss Proceeds received by
     LESSOR with respect to such destroyed APU will, subject to LESSOR's right
     to deduct therefrom any amounts then due and payable by LESSEE under this
     Lease, promptly be paid to LESSEE.

19.7 OTHER LOSS OR DAMAGE.

19.7.1 If the Aircraft or any Part thereof suffers loss or damage not
     constituting a Total Loss of the Aircraft or the Airframe or any Engine or
     the APU, all the obligations of LESSEE under this Lease (including payment
     of Rent) will continue in full force.


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<PAGE>

19.7.2 In the event of any loss or damage to the Aircraft or Airframe which does
     not constitute a Total Loss of the Aircraft or the Airframe, or any loss or
     damage to an Engine or the APU which does not constitute a Total Loss of
     such Engine or the APU, LESSEE will at its sole cost and expense fully
     repair the Aircraft, Engine or APU in order that the Aircraft, Engine or
     APU is placed in an airworthy condition and substantially the same
     condition as it was prior to such loss or damage. All repairs will be
     performed in a manner which preserves and maintains all warranties and
     service life policies to the same extent as they existed prior to such loss
     or damage. LESSEE will notify LESSOR promptly of any loss, theft or damage
     to the Aircraft for which the cost of repairs is estimated to exceed
     **Material Redacted**, together with LESSEE's proposal for carrying out the
     repair. In the event that LESSOR does not agree with LESSEE's proposals for
     repair, LESSOR will so notify LESSEE within two (2) Business Days after its
     receipt of such proposal. LESSEE and LESSOR will then consult with
     Manufacturer and LESSEE and LESSOR agree to accept as conclusive, and be
     bound by, Manufacturer's directions or recommendations, as to the manner in
     which to carry out such repairs. If Manufacturer declines to give
     directions or recommendations, LESSEE will carry out the repairs in
     accordance with the reasonable directions of LESSOR.

19.8 COPY OF INSURANCE POLICY. Promptly after the occurrence of a partial loss
or Total Loss of the Aircraft, an Engine or the APU, LESSEE will provide LESSOR
with all reasonable assistance in determining coverage under LESSEE's insurance
policy.

19.9 GOVERNMENT REQUISITION. If the Aircraft, Airframe, any Engine or the APU is
requisitioned for use by any Government Entity, LESSEE will promptly notify
LESSOR of such requisition. All of LESSEE's obligations hereunder will continue
as if such requisition had not occurred. So long as no Default or Event of
Default has occurred and is continuing, all payments received by LESSOR or
LESSEE from such Government Entity will be paid over to or retained by LESSEE.
If a Default or Event of Default has occurred and is continuing all payments
received by LESSEE or LESSOR from such Government Entity may be used by LESSOR
to satisfy any obligations owing by LESSEE.

19.10 LESSOR RETENTION OF RESERVES. **Material Redacted**.


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<PAGE>

                                   ARTICLE 20

               REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE

20.1 REPRESENTATIONS AND WARRANTIES. LESSEE represents and warrants the
following to LESSOR as of the date of execution of this Lease and as of the
Delivery Date:

20.1.1 Corporate Status. LESSEE is a corporation duly incorporated, validly
     existing and in good standing under the Laws of Panama. It has the
     corporate power and authority to carry on its business as presently
     conducted and to perform its obligations hereunder.

20.1.2 Governmental Approvals. No authorization, approval, consent, license or
     order of, or registration with, or the giving of notice to the Aviation
     Authority or any other Government Entity is required for the valid
     authorization, execution, delivery and performance by LESSEE of this Lease,
     except as will have been duly effected as of the Delivery Date.

20.1.3 Binding. LESSEE's Board of Directors has authorized LESSEE to enter into
     this Lease, any Side Letters hereto and any other documentation in
     connection with the leasing of the Aircraft from LESSOR (collectively, the
     "OPERATIVE DOCUMENTS") and perform its obligations under the Operative
     Documents. This Lease and the other Operative Documents have been duly
     executed and delivered by LESSEE and represent the valid and binding
     obligations of LESSEE, enforceable in accordance with their terms except as
     enforceability may be limited by bankruptcy, insolvency, reorganization or
     other Laws of general application affecting creditors' rights and except by
     general principles of equity. When executed by LESSEE at Delivery, the same
     will apply to the Estoppel and Acceptance Certificate.

20.1.4 No Breach. The execution and delivery of the Operative Documents, the
     consummation by LESSEE of the transactions contemplated herein and
     compliance by LESSEE with the terms and provisions hereof do not and will
     not contravene any Law applicable to LESSEE, or result in any breach of or
     constitute any default under or result in the creation of any Security
     Interest upon any property of LESSEE, pursuant to any indenture, mortgage,
     chattel mortgage, deed of trust, conditional sales contract, bank loan or
     credit agreement, corporate charter, by-law or other agreement or
     instrument to which LESSEE is a party or by which LESSEE or its properties
     or assets maybe bound or affected. When executed by LESSEE at Delivery, the
     same will apply to the Estoppel and Acceptance Certificate.

20.1.5 Filings. Except for any filing or recording that may be required by the
     Aviation Authority, no filing or recording of any instrument or document
     (including the filing of any financial statement) is necessary under the
     Laws of the State of Registration and any applicable states in order for
     this Lease to constitute a valid and perfected lease of record relating to
     the Aircraft.


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20.1.6 Translation or Notarization. None of the Lease or any other Operative
     Document needs to be translated, notarized, legalized, apostilled or
     consularized as a condition to the legality, validity, filing,
     enforceability or admissibility in evidence thereof.

20.1.7 Licenses. LESSEE holds all required licenses, certificates and permits
     from applicable Government Entities in Panama for the conduct of its
     business as a certificated air carrier as presently conducted and
     performance of its obligations under this tease.

20.1.8 No Suits. To the knowledge of LESSEE after reasonable inquiry, there are
     no suits, arbitrations or other proceedings pending or threatened before
     any court or administrative agency against or affecting LESSEE which, if
     adversely determined, would have a material adverse effect on LESSEE's
     ability to perform under this Lease, except as described in the financial
     statements provided to LESSOR pursuant to Article 22.

20.1.9 No Withholding. Under the Laws of Panama currently in effect, LESSEE will
     not be required to deduct any withholding or other Tax from any payment it
     may make under this Lease.

20.1.10 No Restrictions on Payments. Under the Laws of Panama, there are no
     present restrictions on LESSEE making the payments required by this Lease.

20.1.11 General Obligations. The obligations of LESSEE under this Lease are
     direct, general and unconditional obligations of LESSEE and rank or will
     rank at least pari passu with all other present and future unsecured and
     unsubordinated obligations (including contingent obligations) of LESSEE,
     with the exception of such obligations as are mandatorily preferred by law
     and not by reason of any contract.

20.1.12 No Sovereign Immunity. LESSEE, under the Laws of Panama or of any other
     jurisdiction affecting LESSEE, is subject to private commercial law and
     suit. Neither LESSEE nor its properties or assets is entitled to sovereign
     immunity under any such Laws. LESSEE's performance of its obligations
     hereunder constitute commercial acts done for commercial purposes.

20.1.13 Tax Returns. All necessary returns have been delivered by LESSEE to all
     relevant taxation authorities in the jurisdiction of its incorporation and
     all taxes due and payable by LESSEE (other than such Taxes the amount or
     imposition of which are being contested by LESSEE by appropriate
     proceedings) have been paid.

20.1.14 No Material Adverse Effect. LESSEE is not in default under any agreement
     to which it is a party or by which it may be bound which default would have
     a material adverse effect on LESSEE's ability to perform under this Lease.

20.1.15 No Default or Event of Default under this Lease. At the time of
     execution of this Lease, no Default or Event of Default has occurred and is
     continuing and the


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     financial statements provided to LESSOR pursuant to Article 22 fairly
     present the financial condition of LESSEE as of the date referenced
     therein.

20.2 COVENANTS. LESSEE covenants to LESSOR that it will comply with the
following throughout the entire Lease Term:

20.2.1 Licensing. LESSEE will hold all required licenses, certificates and
     permits from applicable Government Entities in Panama for the conduct of
     its business as a certificated air carrier and performance of its
     obligations under this Lease. LESSEE will advise LESSOR promptly in the
     event any such licenses, certificates or permits are cancelled, terminated,
     revoked or not renewed.

20.2.2 Payments. If at any time any such restrictions may be applicable, LESSEE
     will obtain all certificates, licenses, permits, exemptions and other
     authorizations which are from time to time required for the making of the
     payments required by this Lease on the dates and in the amounts and
     currency which are stipulated herein, and will maintain the same in full
     force and effect for so long as the same will be required.

20.2.3 Sovereign Immunity. LESSEE, under the Laws of Panama or of any other
     jurisdiction affecting LESSEE, will continue to be subject to private
     commercial law and suit. Neither LESSEE nor its properties or assets are
     currently entitled to sovereign immunity under any such Laws. LESSEE's
     performance of its obligations hereunder will constitute commercial acts
     done for commercial purposes. LESSEE will advise LESSOR promptly of any
     change in the foregoing.

20.2.4 Information about Suits. LESSEE will promptly give to LESSOR a notice in
     writing of any suit, arbitration or proceeding before any court,
     administrative agency or Government Entity which, if adversely determined,
     would materially adversely affect LESSEE's ability to perform under this
     Lease.

20.2.5 Restrictions on Mergers. LESSEE will not sell or convey substantially all
     of its property and assets (except capital asset replacement in the normal
     course of business) or merge or consolidate with or into any other
     corporation unless (a) LESSEE is the surviving entity and, as such, has a
     net worth equivalent to its net worth as of the date hereof, or (b) LESSEE
     has obtained LESSOR's prior written consent which will not be unreasonably
     withheld or delayed.

20.2.6 Restriction on Relinquishment of Possession. LESSEE will not, without the
     prior consent of LESSOR, deliver, transfer or relinquish possession of the
     Aircraft except in accordance with Articles 11 and 12.

20.2.7 No Security Interests. LESSEE will not create or agree to or permit to
     arise any Security Interest (other than Permitted Liens) on or with respect
     to the Aircraft, title thereto or any interest therein. LESSEE will
     promptly, at its own expense, take all action as may be necessary to
     discharge or remove any such Security Interest if it exists at any time.
     LESSEE will within promptly after becoming


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     aware of the existence of any such Security Interest give written notice
     thereof to LESSOR.

20.2.8 Representations to Other Parties. LESSEE will not represent or hold out
     LESSOR as carrying goods or passengers on the Aircraft or as being in any
     way connected or associated with any operation of the Aircraft.


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                                   ARTICLE 21

               REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR

21.1 REPRESENTATIONS AND WARRANTIES. LESSOR represents and warrants the
following to LESSEE as of the date of execution of the Lease and as of the
Delivery Date and ALL OTHER WARRANTIES, EXPRESS OR IMPLIED HAVE BEEN WAIVED IN
ACCORDANCE WITH ARTICLE 8:

21.1.1 Corporate Status. LESSOR is a corporation duly incorporated, validly
     existing and in good standing under the Laws of the State of California. It
     has the corporate power and authority to carry on its business as presently
     conducted and to perform its obligations hereunder.

21.1.2 No Suits. To the knowledge of LESSOR after reasonable inquiry, there are
     no suits, arbitrations or other proceedings pending or threatened before
     any court or administrative agency against or affecting LESSOR which, if
     adversely determined, would have a material adverse effect on LESSOR's
     ability to perform under this Lease.

21.1.3 Governmental Approvals. No authorization, approval, consent, license or
     order of, or registration with, or the giving of notice to any U.S.
     Government Entity is required for the valid authorization, execution,
     delivery and performance by LESSOR of this Lease.

21.1.4 Binding. This Lease and the other Operative Documents have been duly
     authorized, executed and delivered by LESSOR and represent the valid and
     binding obligations of LESSOR, enforceable in accordance with. their terms
     except as enforceability may be limited by bankruptcy, insolvency,
     reorganization or other Laws of general application affecting the
     enforcement of creditors' rights or general principles of equity.

21.1.5 No Breach. The execution and delivery of the Operative Documents, the
     consummation by LESSOR of the transactions contemplated herein and
     compliance by LESSOR with the terms and provisions hereof do not and will
     not contravene any Law applicable to LESSOR, or result in any breach of or
     constitute any default under any indenture, mortgage, chattel mortgage,
     deed of trust, conditional sales contract, bank loan or credit agreement,
     corporate charter, by-law or other agreement or instrument to which LESSOR
     is a party or by which LESSOR or its properties or assets may be bound or
     affected.

21.1.6 Title to Aircraft. On the Delivery Date LESSOR will have good and valid
     title to the Aircraft.

21.1.7 Consents. LESSOR has obtained or will obtain all necessary consents with
     respect to the entry into or performance of its obligations under this
     Lease.


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<PAGE>

21.1.8 No Default. At the time of execution of this Lease, LESSOR is not in
     default under any agreement to which it is a party or by which it may be
     bound which default would have a material adverse effect on LESSOR's
     ability to perform under this Lease.

21.2 COVENANT OF QUIET ENJOYMENT. So long as no Default or Event of Default has
occurred and is continuing hereunder, LESSOR covenants that neither LESSOR nor
any person lawfully claiming by or through LESSOR will interfere with or
otherwise disturb LESSEE's quiet, peaceful use and enjoyment of the Aircraft.


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                                   ARTICLE 22

                         FINANCIAL AND OTHER INFORMATION

LESSEE agrees to furnish each of the following to LESSOR:

(a) within sixty (60) days after the end of each fiscal quarter of LESSEE, three
(3) copies of the unaudited consolidated financial statements (including a
balance sheet and profit and loss statement) prepared for such quarter in
accordance with international generally accepted accounting principles;

(b) within one hundred twenty (120) days after the end of each fiscal year of
LESSEE, three (3) copies of the audited consolidated financial statements
(including a balance sheet and profit and loss statement) prepared as of the
close of such fiscal year in accordance with international generally accepted
accounting principles. LESSEE's chief financial officer will also provide a
certificate stating that no Default or Event of Default exists under this Lease;

(c) promptly after distribution, three (3) copies of all reports and financial
statements which LESSEE sends or makes available to other aircraft lessors; and

(d) from time to time, such other reasonable information as LESSOR or LESSOR's
Lender (subject to the confidentiality restrictions set forth in Article 28.8)
may reasonably request concerning the location, condition, use and operation of
the Aircraft or the financial condition of LESSEE.


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<PAGE>

                                   ARTICLE 23

                               RETURN OF AIRCRAFT

23.1 DATE OF RETURN. LESSEE is obligated to return the Aircraft, Engines, APU,
Parts and Aircraft Documentation to LESSOR on the Expiration Date, unless a
Total Loss of the Aircraft occurred prior to the Expiration Date and this Lease
was terminated early in accordance with Article 19.3. If an Event of Default
occurs hereunder by LESSEE failing to return the Aircraft on the Expiration Date
or if an Event of Default occurs prior to or after the Expiration Date and
LESSOR repossesses the Aircraft, the return requirements set forth in this
Article 23 nonetheless must be met on the date the Aircraft is actually returned
to LESSOR or repossessed by LESSOR.

23.2 LAST ENGINE SHOP VISITS. With respect to the last Engine shop visit of an
Engine prior to return of the Aircraft, LESSEE will submit to LESSOR in advance
the intended workscope of such shop visit. If LESSOR requests, LESSEE will
perform additional work at such shop visit at LESSOR's cost provided that if the
same shall result in delay in redelivery, extension of the Lease Term or cause
the Engine to be removed from service early or for a period in excess of the
period the Engine would have been removed from revenue service absent such
additional work, no Rent or other costs will be payable by LESSEE for the period
which is attributable solely to LESSOR's requested work (unless and to the
extent LESSEE shall have otherwise agreed in writing). In the event that LESSOR
requests LESSEE to remove an Engine from service for additional work, LESSOR
will use reasonable efforts to provide a spare engine or will reimburse LESSEE
for the cost of any spare engine provided or procured by LESSEE.

23.3 TECHNICAL REPORT. Six (6) months prior to the Expiration Date (and in an
updated form at return of the Aircraft), LESSEE will provide LESSOR with a
Technical Evaluation Report in the form and substance of Exhibit M, as revised,
and, in addition upon LESSOR's request, will make copies available of (a)
drawings of the interior configuration of the Aircraft both as it presently
exists and as it will exist at return, (b) an Airworthiness Directive status
list, (c) a service bulletin incorporation list, (d) rotable tracked, hard-time
and life-limited component listings, (e) a list of LESSEE-initiated
modifications and alterations, (f) interior material burn certificates, (g)
access to the Aircraft Maintenance Program, (h) the complete workscope for the
checks, inspections and other work to be performed prior to return, (i) a
forecast of the checks, inspections and other work to be performed within 18
months after return of the Aircraft, (j) a list of all no-charge service
bulletin kits with respect to the Aircraft which were ordered by LESSEE from
Manufacturer or the Engine manufacturer, (k) current Engine disk sheets and a
description of the last shop visit for each Engine and (l) any other data which
is reasonably requested by LESSOR.

23.4 RETURN LOCATION. LESSEE at its expense will return the Aircraft, Engines,
APU, Parts and Aircraft Documentation to LESSOR at Los Angeles, California or to
such other airport as may be mutually agreed to by LESSEE and LESSOR.

23.5 FULL AIRCRAFT DOCUMENTATION REVIEW. For the period commencing at least ten
(10) Business Days prior to the proposed redelivery date and continuing until
the date on which the Aircraft is returned to LESSOR in the condition required
by this Lease, LESSEE will provide


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for the review of LESSOR and/or its representative all of the Aircraft records
and historical documents described in Exhibit L, in one central room with access
to telephone, photocopy, fax and internet connections at the Aircraft return
location.

23.6 COPY OF LESSEE'S MAINTENANCE PROGRAM. At return of the Aircraft and for use
by LESSOR only for the purpose of bridging the Aircraft from LESSEE's
Maintenance Program to the maintenance program of the next operator, LESSEE will
provide LESSOR with a copy of LESSEE's Maintenance Program.

23.7 AIRCRAFT INSPECTION.

23.7.1 During the maintenance checks performed immediately prior to the proposed
     redelivery and at the actual return of the Aircraft, LESSOR and/or its
     representatives will have an opportunity to conduct a systems functional
     and operational inspection of the Aircraft (and other types of reasonable
     inspections based upon the Aircraft type, age, use and other known factors
     with respect to the Aircraft) and a full inspection of the Aircraft
     Documentation (including records and manuals), all to LESSOR's reasonable
     satisfaction. Any deficiencies from the Aircraft return condition
     requirements set forth in this Article 23 will be corrected by LESSEE at
     its cost prior to the acceptance flight described in Article 23.7.2.

23.7.2 Immediately prior to the proposed redelivery of the Aircraft, LESSEE will
     carry out for LESSOR and/or LESSOR's representatives an Aircraft acceptance
     flight in accordance with Manufacturer's standard flight operation check
     flight procedures or, if agreed to in writing by LESSOR, in accordance with
     an airline acceptance flight procedure, either of which will be for the
     duration necessary to perform such check flight procedures but in any event
     not less than two (2) hours. Flight costs and fuel will be furnished by and
     at the expense of LESSEE. Any deficiencies from the Aircraft return
     condition requirements set forth in this Article 23 will be corrected by
     LESSEE at its cost prior to return of the Aircraft.

23.7.3 To the extent that the ground inspection and acceptance flight extend
     beyond the Expiration Date, the Lease Term will be deemed to have been
     automatically extended and the obligations of LESSEE hereunder (including
     Article 23.13.3) will continue on a day-to-day basis until the Aircraft is
     accepted by LESSOR executing the Return Acceptance Receipt in the form of
     Exhibit J. In the event the Lease is extended solely as a result of work
     performed at LESSOR's request pursuant to Article 23.10.1, LESSEE will
     perform such additional work at LESSOR's cost provided that if the same
     shall result in delay in redelivery, extension of the Lease Term or cause
     the Aircraft to be removed from service for a period in excess of the
     period the Aircraft would have been removed to revenue service absent such
     additional work, no Rent or other costs will be payable by LESSEE for the
     period which is attributable solely to LESSOR's requested work (unless and
     to the extent LESSEE shall have otherwise agreed in writing).


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23.8 CERTIFICATE OF AIRWORTHINESS MATTERS.

23.8.1 The Aircraft will possess a current Certificate of Airworthiness issued
     by the Aviation Authority (although this Certificate of Airworthiness may
     later be substituted by the Export Certificate of Airworthiness or
     equivalent if requested by LESSOR pursuant to Article 23.12). In addition,
     even if LESSEE must perform engineering, maintenance and repair work on the
     Aircraft beyond the requirements of Article 12, the Aircraft at return must
     be in the condition required in order to meet the requirements for issuance
     of a U.S. Standard Certificate of Airworthiness for transport category
     aircraft issued by the FAA in accordance with FAR Part 21 and, in addition,
     to meet the operating requirements of FAR Part 121 with no restrictions
     imposed.

23.8.2 At LESSOR's request, LESSEE at its cost will demonstrate that the
     Aircraft meets the requirements for issuance of the U.S. Standard
     Certificate of Airworthiness for transport category aircraft specified in
     Article 23.8.1 by delivering to LESSOR at LESSOR's option either an actual
     U.S. Standard Certificate of Airworthiness (if the Aircraft is to be
     registered in the U.S.) or a letter acceptable to LESSOR signed by an FAA
     Designated Airworthiness Representative (DAR) or another Person acceptable
     to LESSOR stating that the DAR or such Person has inspected the Aircraft
     and Aircraft Documentation (including records and manuals) and has found
     that the Aircraft meets the requirements for issuance of a U.S. Standard
     Certificate of Airworthiness for transport category aircraft in accordance
     with FAR Part 21 and, in addition, meets the operating requirements of FAR
     Part 121 with no restrictions imposed.

23.8.3 If the Aircraft is to be registered in a country other than in the U.S.
     after return from LESSEE, LESSOR may in its sole discretion waive the
     requirements of Article 23.8.2 and instead require that LESSEE at its
     expense (to the extent such expense is no greater than that which LESSEE
     would have incurred pursuant to Articles 23.8.1 and 23.8.2, with any
     additional expenses being for LESSOR's account) put the Aircraft in a
     condition to meet the requirements for issuance of a Certificate of
     Airworthiness of the aviation authority of the next country of register.

23.9 GENERAL CONDITION OF AIRCRAFT AT RETURN.

23.9.1 The Aircraft, Engines, APU and Parts will have been maintained and
     repaired in accordance with the Maintenance Program, the rules and
     regulations of the Aviation Authority and this Lease.

23.9.2 Aircraft Documentation (including records and manuals) will have been
     maintained in an up-to-date status, in accordance with the rules and
     regulations of the Aviation Authority and the FAA and this Lease and in a
     form necessary in order to meet the requirements of Article 23.8.1. The
     records and historical documents set forth in Attachment 1 of Exhibit J
     will be in English. If LESSEE subscribes to Manufacturer's on-line data
     access services, LESSEE must


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     nonetheless return the Aircraft manuals with all current revisions provided
     by Manufacturer in CD, microfilm or other format acceptable to LESSOR.

23.9.3 The Aircraft will be in the same working order and condition as at
     Delivery (subject to the other provisions of this Article 23, reasonable
     wear and tear from normal flight operations excepted), with all pilot
     discrepancies and deferred maintenance items cleared on a terminating
     action basis.

23.9.4 The Aircraft will be airworthy (conform to type design and be in a
     condition for safe operation), with all Aircraft equipment, components and
     systems operating in accordance with their intended use and within limits
     approved by Manufacturer, the Aviation Authority and the FAA.

23.9.5 The Aircraft interior (including cabin and windows) and exterior will be
     clean and cosmetically acceptable to LESSOR, with all compartments free of
     foreign objects, dirt, grease, fluids, stains, grime, cracks, tears and
     rips and ready to be placed into immediate commercial airline operations.

23.9.6 No special or unique Manufacturer, Engine manufacturer or Aviation
     Authority inspection or check requirements which are specific to the
     Aircraft or Engines (as opposed to all aircraft or engines of their types)
     will exist with respect to the Airframe, Engines and Aircraft equipment,
     components and systems.

23.9.7 All repairs to the Aircraft will have been accomplished in accordance
     with Manufacturer's Structural Repair Manual (or FAA-approved data
     supported by FAA Form 8110-3) for the Aircraft.

23.9.8 All modifications and alterations to the Aircraft will have been
     accomplished in accordance with FAA-approved data supported by FAA Form
     8110-3.

23.9.9 The Aircraft will be returned with LESSOR's Engines and APU installed and
     with the same equipment as at Delivery, subject only to those replacements,
     additions and Modifications permitted under this Lease. To the extent
     LESSEE performed a Modification which cost in excess of **Material
     Redacted** and LESSOR did not approve such Modification in accordance with
     Article 12.10.1, LESSOR may require LESSEE to return the Aircraft in its
     original condition prior to such Modification.

23.9.10 All Airworthiness Directives which are issued prior to the date of
     return of the Aircraft and require compliance (either by means of
     repetitive inspections, modifications or terminating action) prior to
     return of the Aircraft to LESSOR or within **Material Redacted** after the
     Termination Date will have been complied with on the Aircraft on a
     terminating action basis at LESSEE's cost. Airworthiness Directives which
     do not have a terminating action will be accomplished at the highest level
     of inspection or modification possible. If, after using best efforts,
     LESSEE is unable to acquire the material, parts or components necessary to
     accomplish such Airworthiness Directive, LESSEE will pay to LESSOR upon
     return of the Aircraft the estimated cost of terminating such


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     Airworthiness Directive. If the estimated cost cannot be mutually agreed
     upon by LESSEE and LESSOR, LESSEE and LESSOR will each obtain an estimate
     from a reputable FAA approved maintenance facility (unaffiliated with
     LESSEE or LESSOR) and the estimated cost will be the average of the two
     estimates.

23.9.11 All modifications which must be performed prior to the date of return of
     the Aircraft or within **Material Redacted** after the Termination Date in
     order to meet the FAA requirements for FAR Part 121 operations will have
     been incorporated on the Aircraft at LESSEE's cost.

23.9.12 The Aircraft will be in compliance with Manufacturer's Corrosion
     Prevention and Control Program (CPCP) specified for the model type by
     Manufacturer.

23.9.13 If any waivers, deviations, dispensations, alternate means of
     compliance, extensions or carry-overs with respect to maintenance or
     operating requirements, repairs or Airworthiness Directives are granted by
     the Aviation Authority or permitted by the Maintenance Program, LESSEE at
     its sole cost and expense will nonetheless perform such maintenance or
     operating requirements, repairs or Airworthiness Directives as if such
     waivers, deviations, dispensations, alternate means of compliance, or
     extensions or carry-overs did not exist.

23.9.14 The Aircraft will be free from any Security Interest except LESSOR's
     Liens and no circumstance will have so arisen whereby the Aircraft is or
     could become subject to any Security Interest or right of detention or sale
     in favor of the Aviation Authority, any airport authority, or any other
     authority.

23.9.15 All no-charge vendor and Manufacturer's service bulletin kits received
     by LESSEE for the Aircraft but not installed thereon will be on board the
     Aircraft as cargo. All no-charge vendor and Manufacturer's service bulletin
     kits ordered by LESSEE but not yet received will, upon receipt by LESSEE,
     be forwarded as instructed by LESSOR. At LESSOR's request, any other
     service bulletin kit which LESSEE paid for will also be delivered to LESSOR
     on board the Aircraft, but LESSOR will reimburse LESSEE for its actual
     out-of-pocket costs for such kit, unless LESSEE purchased such kit as part
     of its implementation of a service bulletin on its fleet of aircraft of the
     same type as the Aircraft but had not yet installed such kit on the
     Aircraft, in which case such kit will be furnished free of charge to
     LESSOR.

23.9.16 The Aircraft will be free of any leaks found to be outside of
     maintenance manual limits and any damage resulting therefrom. All repairs
     will have been performed on a permanent basis in accordance with the
     applicable manufacturer's instructions.

23.9.17 The Aircraft fluid reservoirs (including oil, oxygen, hydraulic and
     water) will be serviced to full and the waste tank serviced in accordance
     with Manufacturer's instructions. Fuel tanks will be at least as full as at
     Delivery.


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23.10 CHECKS PRIOR TO RETURN. Immediately prior to return of the Aircraft to
LESSOR, LESSEE at its expense will do each of the following:

23.10.1 Have performed, by an FAA-approved repair station, a Return Check
     ("RETURN CHECK") means the accomplishment of all work cards specified in
     the Maintenance Program and the MPD which (a) are necessary to clear the
     Aircraft of all such tasks for **Material Redacted**, or (b) are required
     to be performed at lesser intervals than **Material Redacted**. If pursuant
     to the then-current MPD, the performance interval for a task is shorter
     than every **Material Redacted**, then such task will also be performed.

     All non-routine tasks generated as a result of the performance of these
     work cards must also be performed. For avoidance of doubt, if the
     inspection interval pursuant to the then-current MPD for a particular work
     card only refers to one or two of the three measurement tests, then the
     most restrictive measurement test or tests referred to in the then-current
     MPD will be utilized in determining whether the task must be performed.).
     LESSEE will also weigh the Aircraft. Any discrepancies revealed during such
     inspection will be corrected in accordance with Manufacturer's maintenance
     and repair manuals or FAA-approved data. LESSEE agrees to perform during
     such check any other work reasonably required by LESSOR (and not otherwise
     required under this Lease) and LESSOR will reimburse LESSEE for such work
     at LESSEE's preferred customer rates.

23.10.2 Perform an internal and external corrosion inspection and correct any
     discrepancies in accordance with the recommendations of Manufacturer and
     the Structural Repair Manual. In addition, all inspected areas will be
     properly treated with corrosion inhibitor as recommended by Manufacturer.

23.10.3 Remove LESSEE's exterior markings, including all exterior paint, by
     pneumatically scuff sanding (or stripping, if reasonably determined by
     LESSOR taking into account the condition of the exterior paint) the paint
     from the fuselage, empennage and Engine cowlings, and clean, reseal,
     refinish, prepare (including application of alodine or another corrosion
     inhibitor) and prime the surfaces to be painted, all in accordance with
     Manufacturer's and paint manufacturer's recommendations. LESSEE will then
     repaint the fuselage, empennage and Engine cowlings in the colors and logo
     specified by LESSOR. Such painting will be accomplished in such a manner as
     to result in a uniformly smooth and cosmetically acceptable aerodynamic
     surface. All external placards, signs and markings will be properly
     attached, free from damage, clean and legible. **Material Redacted**.

23.10.4 Clean the exterior and interior of the Aircraft.

23.10.5 If reasonably required by LESSOR, apply touch tip paint to the interior
     of the Aircraft, including flight deck, and replace missing, broken or
     illegible placards.


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23.10.6 In accordance with Article 23.9.7, permanently repair damage to the
     Aircraft that exceeds Manufacturer's limits and replace any non-flush
     structural patch repairs installed on the Aircraft with flush-type repairs
     unless a flush type repair is unavailable.

23.10.7 With LESSOR and/or its representatives present, perform a full and
     complete hot and cold section videotape borescope on each Engine and its
     modules in accordance with the Engine manufacturer's maintenance manual.

23.10.8 If the Engine historical and technical records and/or condition trend
     monitoring data of any Engine indicate an acceleration in the rate of
     deterioration in the performance of an Engine, LESSEE will correct, to
     LESSOR's reasonable satisfaction, such conditions which are determined to
     be causing such accelerated rate of deterioration.

23.10.9 With LESSOR and/or its representatives present, accomplish a power
     assurance run on the Engines. LESSEE will evaluate the Engine performance
     and record the Engine power assurance test conditions and results on the
     Return Acceptance Receipt.

23.10.10 LESSEE will provide evidence to LESSOR's reasonable satisfaction that
     the Engine historical and technical records, borescope inspection, trend
     monitoring and other checks specified in Article 23.10.9 do not reveal any
     condition which would cause the Engines or any module to be unserviceable,
     beyond serviceable limits or serviceable with an increased frequency of
     inspection or with calendar time, flight hour or flight cycle restrictions
     under the Engine manufacturer's maintenance manual. LESSEE will correct any
     discrepancies in accordance with the guidelines set out by the Engine
     manufacturer which maybe discovered during such inspection.

23.10.11 In the event the Engine historical and technical records, borescope
     inspection, trend monitoring and other checks specified in Article 23.10.9
     result in a dispute regarding the conformity of an Engine with the
     requirements of this Article 23, LESSEE and LESSOR will consult with the
     Engine manufacturer and follow the Engine manufacturer's recommendations
     (including the accomplishment of an Engine test cell operational check)
     with regard to determining if such Engine complies with the requirements of
     this Article 23 and the manner in which any discrepancies from the
     requirements of this Article 23 will be rectified.

23.10.12 If the APU historical and technical records and/or condition trend
     monitoring data indicate an acceleration in the rate of deterioration in
     the performance of the APU, LESSEE will correct, to LESSOR's reasonable
     satisfaction, such conditions which are determined to be causing such
     accelerated rate of deterioration.

23.10.13 With LESSOR and/or its representatives present, perform a full and
     complete hot and cold section videotape borescope on the APU in accordance
     with the APU manufacturer's procedures. LESSEE will provide evidence to
     LESSOR's


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     satisfaction that the borescope inspection does not reveal any condition
     which would cause the APU to be unserviceable, beyond serviceable limits or
     serviceable with an increased frequency of inspection or with calendar
     time, flight hour or flight cycle restrictions. LESSEE will correct any
     discrepancies in accordance with the guidelines set out by the APU
     manufacturer which may be discovered during such inspection.

23.11 PART LIVES. At return, the condition of the Aircraft will be as follows:

23.11.1 The Aircraft will have zero (0) hours consumed since the last Return
     Check or equivalent check per the MPD (excluding hours consumed on the
     acceptance flight and any ferry flight) sufficient to clear the Aircraft
     for **Material Redacted** of operation.

23.11.2 Each Engine will meet all of the following:

     (a) Each Engine will have **Material Redacted** remaining until its next
     anticipated removal (based upon the Engine manufacturer's estimated mean
     time between removals for engines of the same type as the Engines).

     (b) Each Engine will have a remaining EGT margin sufficient to permit the
     operation of such Engine for the hours and cycles set forth in the
     preceding subparagraph, based upon the historical experience of LESSEE.

     (c) Each Part of an Engine which has a hard time limit will have **Material
     Redacted** of such Part's full allotment of hours and cycles remaining to
     operate until its next scheduled Overhaul or removal. However, if
     **Material Redacted** of such hard time Part's full allotment of hours and
     cycles remaining is less than **Material Redacted**, then such hard time
     Part will be returned with at least **Material Redacted** remaining. If
     such hard time Part's full allotment of hours and cycles is less than
     **Material Redacted**, then such hard time Part will be returned with zero
     (0) hours and cycles since its last Overhaul or refurbishment, as
     applicable.

     (d) Each Part of an Engine which has a life-limit will have at least
     **Material Redacted** remaining until removal. If such life-limited Part's
     full allotment of hours and cycles is less than **Material Redacted**, then
     such life-limited Part will be returned new.

     (e) No life-limited Part of an Engine or APU will have more hours or cycles
     consumed than such Engine's data plate.

23.11.3 The APU will have **Material Redacted** consumed since the last hot
     section refurbishment (excluding hours consumed on the acceptance flight
     and any ferry flight).


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     In addition, at return LESSEE will pay LESSOR an amount equal to the number
     of hours consumed on the APU at return since the last hot section
     refurbishment multiplied by an APU hot section refurbishment calculated as
     follows:

          such APU hot section refurbishment cost price per hour will be the
          quotient obtained by dividing (a) the expected cost of the next APU
          hot section refurbishment cost by (b) the full allotment of hones
          between hot section refurbishments as approved by the MPD. If LESSEE
          and LESSOR are unable to agree on the expected cost of the next
          scheduled APU hot section refurbishment, such cost will be established
          by taking the average of the price quotes submitted by two (2)
          reputable FAA-approved APU hot section refurbishment cost facilities
          (unaffiliated with LESSEE or LESSOR), one selected by LESSEE and the
          other selected by LESSOR.

23.11.4 The Landing Gear will have **Material Redacted** of hours/cycles/
     calendar time (whichever is the more limiting factor) pursuant to the MPD
     remaining until the next Overhaul or scheduled removal

     In addition, at return LESSEE will pay LESSOR an amount equal to the number
     of hours/cycles/days (whichever is the more limiting factor) consumed on
     each Landing Gear at return since the last Overhaul multiplied by a Landing
     Gear Overhaul cost per hour/cycle/day calculated as follows:

          such Landing Gear Overhaul cost price per hour/cycle/day will be the
          quotient obtained by dividing (a) the expected cost of the next
          Landing Gear Overhaul by (b) the full allotment of hours/cycles/days
          between scheduled Overhauls for such Landing Gear as approved by the
          MPD. If LESSEE and LESSOR are unable to agree on the expected cost of
          the next scheduled Landing Gear Overhaul, such cost will
          be-established by taking the average of the price quotes submitted by
          two (2) reputable FAA-approved landing gear Overhaul facilities
          (unaffiliated with LESSEE or LESSOR), one selected by LESSEE and the
          other selected by LESSOR.

23.11.5 Each Part of the Airframe or the APU which has a hard time (hour/cycle)
     limit to Overhaul or removal pursuant to the MPD will have **Material
     Redacted** of such Part's full allotment of hours and cycles remaining to
     operate until its next scheduled Overhaul or removal pursuant to the MPD.
     However, if **Material Redacted** of such hard time Part's full allotment
     of hours and cycles remaining is less than **Material Redacted**, then such
     hard time Part will be returned with at least **Material Redacted**
     remaining to operate until its next scheduled Overhaul or refurbishment
     pursuant to the MPD. If such hard time Part's full allotment of hours and
     cycles between Overhauls or refurbishment pursuant to the MPD is less than
     **Material Redacted**, then such hard time Part will be returned zero (0)
     hours and zero (0) cycles out of Overhaul (except hours accumulated on any
     acceptance or ferry flight).


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23.11.6 Each life-limited Part of the Airframe or the APU will have **Material
     Redacted** of such Part's full allotment of hours and cycles remaining to
     operate until removal pursuant to the MPD. However, if **Material
     Redacted** of such life-limited Part's full allotment of hours and cycles
     remaining is less than **Material Redacted**, then such life-limited Part
     will be returned with at least **Material Redacted** remaining to operate
     pursuant to the MPD. If such life-limited Part's full allotment of hours
     and cycles remaining to operate pursuant to the MP[) is less than
     **Material Redacted**, then such life-limited Part will be returned with
     100% of its total approved hours and cycles remaining.

23.11.7 Each Part which has a calendar limit will have **Material Redacted**
     remaining to operate pursuant to the MPD after return of the Aircraft to
     LESSOR. If a Part has a total approved life pursuant to the MPD **Material
     Redacted**, then such Part will be returned with 100% of its total approved
     life remaining.

23.11.8 No Part of the Aircraft or Engine (excluding life-limited Parts on the
     Engine, which are covered by Article 23.11 2(e)) will have total hours and
     total cycles since new greater than **Material Redacted** of that of the
     Airframe **Material Redacted**.

23.11.9 Each Aircraft tire and brake will **Material Redacted** (except for the
     acceptance flight and any ferry flight).

23.12 EXPORT AND DEREGISTRATION OF AIRCRAFT. At LESSOR's request, LESSEE at its
cost will (a) provide an Export Certificate of Airworthiness or its equivalent
from the State of Registration so that the Aircraft can be exported to the
country designated by LESSOR, (b) assist with deregistration of the Aircraft
from the register of aircraft in the State of Registration, (c) assist with
arranging for prompt confirmation of such deregistration to be sent by the
registry in the State off Registration to the next country of registration and
(d) perform any other acts reasonably required by LESSOR in connection with the
foregoing. **Material Redacted**

23.13 LESSEE'S CONTINUING OBLIGATIONS. In the event that LESSEE does not return
the Aircraft to LESSOR on the Expiration Date and in the condition required by
this Article 23 for any reason (whether or not the reason is within LESSEE's
control) unless such delay is as a result of work performed at the request of
LESSOR pursuant to Article 23.10.1 or is otherwise over and above LESSEE's
obligations pursuant to this Article 21:

23.13.1 the obligations of LESSEE under this Lease will continue in full force
     and effect on a day-to-day basis until such return. This will not be
     considered a waiver of LESSEE's Event of Default or any right of LESSOR
     hereunder.

23.13.2 **Material Redacted**.

23.13.3 LESSEE will fully indemnify LESSOR on demand for all losses (including
     consequential damages), liabilities, actions, proceedings, costs and
     expenses thereby suffered or incurred by LESSOR and, in addition, until
     such time as the Aircraft is redelivered to LESSOR and put into the
     condition required by this Article 23, instead of paying the Rent specified
     in Article 5.3, LESSEE will pay


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     twice the amount of Rent for each clay from the scheduled Expiration Date
     until the Termination Date (the monthly Rent payable under Article 5.3 1
     will be prorated based on the actual number of days in the applicable
     month). Payment will be made upon presentation of LESSOR's invoice.

23.13.4 LESSOR may elect, in its sole and absolute discretion, to accept the
     return of the Aircraft prior to the Aircraft being put in the condition
     required by this Article 23 and thereafter have any such non-conformance
     corrected at such time as LESSOR may deem appropriate (but within ninety
     (90) days following the return of the Aircraft) and at commercial rates
     then-charged by the Person selected by LESSOR to perform such correction.
     Any direct expenses incurred by LESSOR for such correction will be payable
     by LESSEE within fifteen (15) days following the submission of a written
     statement by LESSOR to LESSEE, identifying the items corrected and setting
     forth the expense of such corrections. LESSEE's obligation to pay such
     amounts will survive the Termination Date.

23.14 AIRPORT AND NAVIGATION CHARGES. LESSEE will ensure that at return of the
Aircraft any and all airport, navigation and other charges which give rise or
may if unpaid give rise to any lien, right of detention, right of sale or other
Security Interest in relation to the Aircraft, Engine, APU or any Part have been
paid and discharged in full and will at LESSOR's request produce evidence
thereof satisfactory to LESSOR, except to the extent being contested in good
faith provided LESSEE shall have agreed in writing to pay any such charges
determined pursuant to such contest to be due and owing to the relevant
authority.

23.15 RETURN ACCEPTANCE RECEIPT. Upon return of the Aircraft in accordance with
the terms of this Lease, LESSEE will prepare and execute two (2) Return
Acceptance Receipts in the form and substance of Exhibit J and LESSOR will
countersign and return one such Return Acceptance Receipt to LESSEE. In
addition, LESSEE and LESSOR will execute a Lease Termination for filing with the
FAA evidencing termination of this Lease.

23.16 INDEMNITIES AND INSURANCE. The indemnities and insurance requirements set
forth in Articles 17 and 18, respectively, will apply to Indemnitees and
LESSOR's representatives during return of the Aircraft, including the ground
inspection and acceptance flight. With respect to the acceptance flight,
LESSOR's representatives will receive the same protections as LESSOR on LESSEE's
Aviation and Airline General Third Party Liability Insurance.

23.17 STORAGE. At LESSOR's request, LESSEE will continue to lease the Aircraft
under this Lease for a period not to exceed thirty (30) days. During this
period, LESSEE will have no obligations under this Lease except, at LESSOR's
cost, to park and store the Aircraft in accordance with Manufacturer's
recommended short term storage program at one of LESSEE's principal maintenance
facilities in the State of Registration and to maintain all insurance on the
Aircraft. LESSEE will not utilize the Aircraft for any reason during this
period.


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                                   ARTICLE 24

                                   ASSIGNMENT

24.1 NO ASSIGNMENT BY LESSEE. EXCEPT AS OTHERWISE PROVIDED HEREIN, NO
ASSIGNMENT, NOVATION, TRANSFER, MORTGAGE OR OTHER CHARGE MAY BE MADE BY LESSEE
OF ANY OF ITS RIGHTS OR OBLIGATIONS WITH RESPECT TO THE AIRCRAFT, ANY ENGINE OR
PART, OR THIS LEASE.

24.2 SATE OR ASSIGNMENT BY LESSOR.

24.2.1 Subject to LESSEE's rights pursuant to this Lease, LESSOR may at any time
     and without LESSEE's consent sell, assign or transfer its rights, interest
     and obligations hereunder or with respect to the Aircraft to a third party
     ("LESSOR'S ASSIGNEE"). For a period of two (2) years after such sale or
     assignment and at LESSEE's cost, LESSEE will continue to name LESSOR as an
     additional insured under the Aviation and Airline General Third Party
     Liability Insurance specified in Exhibit C.

24.2.2 The term "LESSOR" as used in this Lease means the lessor of the Aircraft
     at the time in question. In the event of the proper sale of the Aircraft
     and transfer of LESSOR's rights and obligations under this Lease, LESSOR's
     Assignee will become "LESSOR" of the Aircraft under this Lease and the
     transferring party (the prior "LESSOR") will be relieved of all liability
     to LESSEE under this Lease for obligations arising on and after the date
     the Aircraft is sold. LESSEE will acknowledge and accept LESSOR's Assignee
     as the new "LESSOR" under this Lease and will look solely to LESSOR's
     Assignee for the performance of all LESSOR obligations and covenants under
     this Lease arising on and after the Aircraft sale date provided such
     transfer, sale or assignment is in conformity with the requirements of this
     Article 24.

24.3 LESSOR'S LENDER. Subject to LESSEE's rights pursuant to this Lease, LESSOR
may at any time and without LESSEE's consent grant security interests over the
Aircraft and assign the benefit of this Lease to a lender ("LESSOR'S LENDER") as
security for LESSOR's obligations to LESSOR's Lender. Accordingly, if LESSOR's
Lender requires, as a condition to providing financing, any reasonable,
nonsubstantive modification of this Lease, LESSEE agrees to enter into an
agreement so modifying this Lease.

24.4 LESSEE COOPERATION. On request by LESSOR, LESSOR's Assignee or LESSOR's
Lender, LESSEE will execute all such documents (such as a lease assignment
agreement) as LESSOR, LESSOR's Assignee or LESSOR's Lender may reasonably
require to confirm LESSEE's obligations under this Lease and obtain LESSEE's
acknowledgment that LESSOR is not in breach of the Lease. LESSEE will provide
all other reasonable assistance and cooperation to LESSOR, LESSOR's Assignee and
LESSOR's Lender in connection with any such sale or assignment or the perfection
and maintenance of any such security interest, including, at LESSOR's cost,
making all necessary filings and registrations in the State of Registration and
providing all opinions of counsel with respect to matters reasonably requested


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by LESSOR, LESSOR's Lender or LESSOR's Assignee. LESSOR will reimburse LESSEE
for its reasonable out-of-pocket costs in reviewing documents required by LESSOR
or LESSOR's Lender.

24.5 PROTECTIONS.

24.5.1 **Material Redacted**.

24.5.2 LESSOR will obtain for the benefit of LESSEE an acknowledgment from any
     LESSOR's Assignee or LESSOR's Lender that, so long as no Event of Default
     has occurred and is continuing hereunder, such Person and any Person
     lawfully claiming through such Person will not interfere with LESSEE's
     quiet, peaceful use and enjoyment of the Aircraft.

24.5.3 **Material Redacted**.

24.5.4 LESSOR agrees that any LESSOR's Assignee or LESSOR's Lender will not be
     an international scheduled air carrier which competes with LESSEE.

24.5.5 **Material Redacted**.

24.5.6 **Material Redacted**.

24.5.7 Wherever the term "LESSOR" is used in this Lease in relation to any of
     the provisions relating to disclaimer, title and registration, indemnity
     and insurance contained in Articles 8, 14, 17 and 18, respectively, or with
     respect to Article 20.2.8, the term "LESSOR" will be deemed to include
     LESSOR's Assignee and LESSOR's Lender, if applicable. For avoidance of
     doubt, in the event of LESSOR's sale or financing of the Aircraft, the
     disclaimer and indemnity provisions contained in Articles 8 and 17 will
     continue to be applicable after the sale or assignment to International
     Lease Finance Corporation, as well as being applicable to LESSOR's Assignee
     and LESSOR's Lender.


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                                   ARTICLE 25

                                DEFAULT ON LESSEE

25.1 LESSEE NOTICE TO LESSOR. LESSEE will promptly notify LESSOR if LESSEE
becomes aware of the occurrence of any Default or Event of Default.

25.2 EVENTS OF DEFAULT. The occurrence of any of the following will constitute
an Event of Default and material breach of this Lease by LESSEE:

     (a) LESSEE fails to take delivery of the Aircraft when obligated to do so
     under the terms of this Lease;

     (b) LESSEE fails to make a Rent or other scheduled payment due hereunder in
     the manner and by the date provided herein and fails to make such payment
     within three (3) Business Days after the date such payment is due;

     (c) LESSEE fails to obtain or maintain the insurance required by Article
     18;

     (d) LESSEE fails to return the Aircraft to LESSOR on the Expiration Date in
     accordance with Article 23;

     (e) LESSEE fails to observe or perform any of its other obligations
     hereunder and fails to cure the same within thirty (30) days after written
     notice thereof to LESSEE. If such failure cannot by its nature be cured
     within thirty (30) days, LESSEE will have the reasonable number of days
     necessary to cure such failure (not to exceed a period of ninety (90) days)
     so long as it uses diligent efforts to do so;

     (f) any representation or warranty of LESSEE herein proves to be untrue in
     any material respect and if the effect of such misrepresentation is
     curable, will not have been cured within thirty (30) days after LESSEE
     learns of such misrepresentation including by written notice from LESSOR;

     (g) the registration of the Aircraft is cancelled other than as a result of
     an act or omission of LESSOR;

     (h) LESSEE abandons the Aircraft or Engines;

     (i) LESSEE temporarily discontinues (in the absence of other Defaults) or
     permanently discontinues business or sells or otherwise disposes of all or
     substantially all of its assets other than as permitted hereunder;

     (j) a material adverse change occurs in the financial condition of LESSEE
     which effects LESSEE's ability to perform its obligations hereunder;


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     (k) LESSEE no longer possesses the licenses, certificates and permits
     required for the conduct of its business as a certificated air carrier in
     Panama and the failure to possess the same is not cured within sixty (60)
     days;

     (l) LESSEE (i) suspends payment on its debts or other material obligations,
     (ii) is unable to or admits its inability to pay its debts or other
     material obligations as they fall due, (iii) is adjudicated or becomes
     bankrupt or insolvent or (iv) proposes or enters into any composition or
     other arrangement for the benefit of its creditors generally;

     (m) any proceedings, resolutions, filings or other steps are instituted or
     threatened with respect to LESSEE relating to the bankruptcy, liquidation,
     reorganization or protection from creditors of LESSEE or a substantial part
     of LESSEE's property. If instituted by LESSEE, the same will be an
     immediate Event of Default. If instituted by another Person, the same will
     be an Event of Default if not dismissed, remedied or relinquished within
     sixty (60) days;

     (n) any order, judgment or decree is entered by any court of competent
     jurisdiction appointing a receiver, trustee or liquidator of LESSEE or a
     substantial part of its property, or if a substantial part of LESSEE's
     property is to be sequestered. If a instituted by or done with the consent
     of LESSEE, the same will be an immediate Event of Default. If instituted by
     another Person, the same will bean Event of Default if not dismissed,
     remedied or relinquished within sixty (60) days;

     (o) any indebtedness for borrowed moneys or a guarantee or similar
     obligation owed by LESSEE with an unpaid balance of at least **Material
     Redacted** is properly declared due before its stated maturity or LESSEE is
     properly in default beyond any applicable grace period under any agreement
     pursuant to which LESSEE has the right to possess and operate any aircraft;
     or

     (p) LESSEE is in default under any other lease or agreement between LESSEE
     and LESSOR and the same is not cured within its specified cure period.

25.3 LESSOR'S GENERAL RIGHTS. Upon the occurrence of any Event of Default,
LESSOR may do all or any of the following at its option (in addition to such
other rights and remedies which LESSOR may have by statute or otherwise but
subject to any requirements of applicable Law):

     (a) terminate this Lease by giving written notice to LESSEE;

     (b) require that LESSEE immediately cease flying the Aircraft and leave it
     parked in its then-current location by giving written notice to LESSEE, in
     which case LESSEE's obligations under this Lease will continue (including
     the obligations set forth in Articles 17 and 18);

     (c) require that LESSEE immediately move the Aircraft to an airport or
     other location designated by LESSOR and park the Aircraft there by giving
     written


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     notice to LESSEE, in which case LESSEE's obligations under this Lease will
     continue (including the obligations set forth in Articles 17 and 18);

     (d) take possession of the Aircraft. If LESSOR takes possession of the
     Aircraft, it may enter upon LESSEE's premises where the Aircraft is located
     without liability. Upon repossession of the Aircraft, LESSOR will then be
     entitled to sell, lease or otherwise deal with the Aircraft as if this
     Lease had never been made. LESSOR will be entitled to the full benefit of
     its bargain with LESSEE;

     (e) for LESSEE's account, do anything that may reasonably be required to
     cure any default and recover from LESSEE all reasonable costs, including
     legal fees and expenses incurred in doing so and Default Interest;

     (f) proceed as appropriate to enforce performance of this Lease and to
     recover any damages for the breach hereof, including the amounts specified
     in Article 25.5; or

     (g) apply all or any portion of the Security Deposit and any other security
     deposits held by LESSOR pursuant to any other agreements between LESSOR and
     LESSEE to any amounts due.

25.4 DEREGISTRATION AND EXPORT OF AIRCRAFT. If an Event of Default has occurred
and is continuing, LESSOR may take all steps necessary to deregister the
Aircraft in and export the Aircraft from the State of Registration.

25.5 LESSEE LIABILITY FOR DAMAGES. If an Event of Default occurs, in addition to
all other remedies available at law or in equity, LESSOR has the right to
recover from LESSEE and LESSEE will pay LESSOR within two (2) Business Days
after LESSOR's written demand, all of the following:

     (a) all amounts which are then due and unpaid hereunder and which become
     due prior to the earlier of LESSOR's recovery of possession of the Aircraft
     or LESSEE making an effective tender thereof;

     (b) any losses suffered by LESSOR because of LESSOR's inability to place
     the Aircraft on lease with another lessee or to otherwise utilize the
     Aircraft on financial terms as favorable to LESSOR as the terms hereof or,
     if LESSOR elects to dispose of the Aircraft, the funds arising from a sale
     or other disposition of the Aircraft are not as profitable to LESSOR as
     leasing the Aircraft in accordance with the terms hereof would have been
     (and LESSOR will be entitled to accelerate any and all Rent which would
     have been due from the date of LESSOR's recovery or repossession of the
     Aircraft through the Expiration Date) which rent shall be discounted to
     present value less any amounts (i) in respect of a lease, which over its
     term shall be received by LESSOR discounted to present value as set forth
     above or (ii) in the case of a sale or other disposition, the amounts which
     were received by LESSOR is a result of such sale or other disposition (or
     if not relet or sold, less an amount equal to the fair market rental


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     value of the aircraft for the balance of the Lease Term determined by an
     independent appraiser acceptable to LESSOR and LESSEE or chosen by a
     court);

     (c) all costs associated with LESSOR's exercise of its remedies hereunder,
     including but not limited to repossession costs, legal fees, Aircraft
     storage costs, Aircraft re-lease or sale costs;

     (d) any amount of principal, interest, fees or other sums paid or payable
     on account of funds borrowed in order to carry any unpaid amount;

     (e) any loss, premium, penalty or expense which may be incurred in repaying
     funds raised to finance the Aircraft. or in unwinding any financial
     instrument relating in whole or in part to LESSOR's financing of the
     Aircraft;

     (f) any loss, cost, expense or liability sustained by LESSOR due to
     LESSEE's failure to redeliver the Aircraft in the condition required by
     this Lease; and

     (g) any other loss, damage, expense, cost or liability which LESSOR suffers
     or incurs as, a direct result of the Event of Default and/or termination of
     this base, including (but without duplication of amounts due and payable
     pursuant to (f) above) an amount sufficient to compensate LESSOR for any
     loss of LESSOR's residual interest in the Aircraft caused by LESSEE's
     default.

25.6 WAIVER OF DEFAULT. By written notice to LESSEE, LESSOR may at its election
waive any Default or Event of Default and its consequences and rescind and annul
any prior notice of termination of this Lease. The respective rights of the
parties will then be as they would have been had no Default or Event of Default
occurred and no such notice been given.

25.7 PRESENT VALUE OF PAYMENTS. In calculating LESSOR's damages hereunder, upon
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 will be
calculated on a present value basis using a discounting rate of **Material
Redacted** per annum discounted to the earlier of the date on which LESSOR
obtains possession of the Aircraft or LESSEE makes an effective tender thereof.

25.8 USE OF "TERMINATION DATE". For avoidance of doubt, it is agreed that if
this Lease terminates and the Aircraft is repossessed by LESSOR due to an Event
of Default, then, notwithstanding the use of the term "Termination Date" in this
Lease, the period of the Lease Term and the "Expiration Date" will be utilized
in calculating the damages to which LESSOR is entitled pursuant to Article 25.5.
For example, it is agreed and understood that LESSOR is entitled to receive from
LESSEE the Rent and the benefit of LESSEE's insurance and maintenance of the
Aircraft until expiration of the Lease Term.


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                                   ARTICLE 26

                                     NOTICES

26.1 MANNER OF SENDING NOTICES. Any notice, request or information required or
permissible under this Lease will be in writing and in English. Notices will be
delivered in person or sent by fax, letter (mailed airmail, certified and return
receipt requested), or by expedited delivery addressed to the parties as set
forth in Article 26.2. In the case of a fax, notice will be deemed received on
the date set forth on the confirmation of receipt produced by the sender's fax
machine immediately after the fax is sent. In the case of a mailed letter,
notice will be deemed received upon actual receipt. In the case of a notice sent
by expedited delivery, notice will be deemed received on the date of delivery
set forth in the records of the Person which accomplished the delivery. If any
notice is sent by more than one of the above listed methods, notice will be
deemed received on the earliest possible date in accordance with the above
provisions.

26.2 NOTICE INFORMATION. Notices will be sent:

     If to LESSOR: INTERNATIONAL LEASE FINANCE CORPORATION
                   Until February 28, 2004:
                   1999 Avenue of the Stars, 39th Floor
                   Los Angeles, California 90067, U.S.A.
                   On and after March 1, 2004:
                   10250 Constellation Boulevard, 34th Floor
                   Los Angeles, California 90067, U.S.A.

                   Attention: Legal Department

                   Fax:       310-788-1990
                   Telephone: 310-788-1999

     If to LESSEE: COMPANIA PANAMENA DE AVIACION, S.A. (COPA)
                   Avenida Justo Arosemena y Calle 39
                   Apartado 1572
                   Panama 1, Panama

                   Attention: Chief Executive Officer

                   Fax:       507-227-1952
                   Telephone: 570-207-6170

     or to such other places and numbers as either party directs in writing to
     the other party.


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                                   ARTICLE 27

                         GOVERNING LAW AND JURISDICTION

27.1 CALIFORNIA LAW. This Lease is being delivered in the State of California
and the Lease and all other Operative Documents will in all respects be governed
by and construed in accordance with the Laws of the State of California
(notwithstanding the conflict Laws of the State of California).

27.2 NON-EXCLUSIVE JURISDICTION IN CALIFORNIA. As permitted by Section 410.40 of
the California Code of Civil Procedure, the parties hereby irrevocably submit to
the non-exclusive jurisdiction of the Federal District Court for the Central
District of California and the State of California Superior or Municipal Court
in Los Angeles, California. Nothing herein will prevent either party from
bringing suit in any other appropriate jurisdiction.

27.3 SERVICE OF PROCESS. The parties hereby consent to the service of process
(a) in the manner directed by any of the courts referred to above, (b) in
accordance with Section 415.40 of the California Code of Civil Procedure by
mailing copies of the summons and complaint to the person to be served by
first-class mail to the address set forth in Article 26.2, postage prepaid,
return receipt requested, (c) in one of the manners specified in Article 26.1 or
(d) in accordance with the Hague Convention, if applicable.

27.4 PREVAILING PARTY IN DISPUTE. If any legal action or other proceeding is
brought in connection with or arises out of any provisions in this Lease, the
prevailing party will be entitled to recover reasonable attorneys' fees and
other costs incurred in such action or proceedings. The prevailing party will
also, to the extent permissible by Law, be entitled to receive pre- and
post-judgment Default Interest.

27.5 WAIVER. EACH OF LESSEE AND LESSOR HEREBY WAIVES THE RIGHT TO A TRIAL BY
JURY. EACH OF LESSEE AND LESSOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
EITHER OF THEM MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS LEASE BROUGHT IN ANY OF
THE COURTS REFERRED TO IN ARTICLE 27.2, AND HEREBY FURTHER IRREVOCABLY WAIVES
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.


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                                   ARTICLE 28

                                  MISCELLANEOUS

28.1 PRESS RELEASES. The parties will give copies to one another, in advance if
possible, of all news, articles and other releases provided to the public media
regarding this Lease or the Aircraft.

28.2 POWER OF ATTORNEY. LESSEE hereby irrevocably appoints LESSOR as its
attorney for the purpose of putting into effect the intent of this Lease
following an Event of Default, including without limitation, the return,
repossession, deregistration and exportation of the Aircraft. To evidence this
appointment, LESSEE has executed the Power of Attorney in the form of Exhibit G.
LESSEE will take all steps required under the Laws of the State of Registration
to provide such power of attorney to LESSOR.

28.3 LESSOR PERFORMANCE FOR LESSEE. The exercise by LESSOR of its remedy of
performing a LESSEE obligation hereunder is not a waiver of and will not relieve
LESSEE from the performance of such obligation at any subsequent time or from
the performance of any of its other obligations hereunder.

28.4 LESSOR'S PAYMENT OBLIGATIONS. Any obligation of LESSOR under this Lease to
pay or release any amount to LESSEE is conditioned upon (a) all amounts then due
and payable by LESSEE to LESSOR under this Lease or under any other agreement
between LESSOR and LESSEE having been paid in full and (b) no Default or Event
of Default having occurred and continuing hereunder at the time such payment or
release of payment is payable to LESSEE.

28.5 APPLICATION OF PAYMENTS. Any amounts paid or recovered in respect of LESSEE
liabilities hereunder may be applied to Rent, Default Interest, fees or any
other amount due hereunder in such proportions, order and manner as LESSOR
determines.

28.6 USURY LAWS. The parties intend to contract in strict compliance with the
usury Laws of the State of California and, to the extent applicable, the U.S.
Notwithstanding anything to the contrary in the Operative Documents, LESSEE will
not be obligated to pay Default Interest or other interest in excess of the
maximum non-usurious interest rate, as in effect from time to time, which may by
applicable Law be charged, contracted for, reserved, received or collected by
LESSOR in connection with the Operative Documents. During any period of time in
which the then-applicable highest lawful rate is lower than the Default Interest
rate, Default Interest will accrue and be payable at such highest lawful rate;
however, if at later times such highest lawful rate is greater than the Default
Interest rate, then LESSEE will pay Default Interest at the highest lawful rate
until the Default Interest which is paid by LESSEE equals the amount of interest
that would have been payable in accordance with the interest rate set forth in
Article 5.7.

28.7 DELEGATION OF AUTHORITY BY LESSOR. LESSOR may delegate to any Person(s) all
or any of its authority to perform or exercise powers or discretion vested in it
by this Lease according to the terms of the Lease in LESSOR's reasonable
discretion.


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28.8 CONFIDENTIALITY. The Operative Documents and all non-public information
(including financial information obtained pursuant to Article 22) obtained by
either party about the other are confidential and are between LESSOR and LESSEE
only and will not be disclosed by a party to third parties (other than to such
party's auditors or legal advisors; as required in connection with any filings
of this Lease in accordance with Article 14; in connection with LESSOR's
potential sale of the Aircraft or assignment of this Lease; as required for
enforcement by either party of its rights and remedies with respect to this
Lease or as required by applicable Law Including Tax law; or to a LESSOR's
Lender which agrees in writing to be bound by the terms of this Article 28.8 or
similar confidentiality provisions) without the prior written consent of the
other party. If any disclosure will result in an Operative Document becoming
publicly available, LESSEE and LESSOR will cooperate with one another to obtain
confidential treatment as to the commercial, terms and other material provisions
of such Operative Document.

28.9 PERMITS OF PARTIES. The rights of the parties hereunder are cumulative, not
exclusive, may be exercised as often as each party considers appropriate and are
in addition to its rights under general Law. The rights of one party against the
other party are not capable of being waived or amended except by an express
waiver or amendment in writing. Any failure to exercise or any delay in
exercising any of such rights will not operate as a waiver or amendment of that
or any other such right. Any defective or partial exercise of any such rights
will not preclude any other or further exercise of that or any other such right
and no act or course of conduct or negotiation on a party's part or on its
behalf will in any way preclude such party from exercising any such right or
constitute a suspension or any amendment of any such right.

28.10 FURTHER ASSURANCES. Each party agrees from time to time to do and perform
such other and further acts and execute and deliver any and all such other
instruments as may be required by Law, reasonably requested by the auditors of
the other party or requested by the other party to establish, maintain or
protect the rights and remedies of the requesting party or to carry out and
effect the intent and purpose of this Lease.

28.11 TRANSLATIONS OF LEASE. If this Lease is translated into another language,
whether or not signed by LESSEE and LESSOR in such other language, solely the
terms and provisions of this English version of the Lease will prevail in any
dispute.

28.12 USE OF WORD "INCLUDING". The term "INCLUDING" is used herein without
limitation.

28.13 HEADINGS. All article and paragraph headings and captions are purely for
convenience and will not affect the interpretation of this Lease. Any reference
to a specific article, paragraph or section will be interpreted as a reference
to such article, paragraph or section of this Lease.

28.14 INVALIDITY OF ANY PROVISION. If any of the provisions of this Lease become
invalid, illegal or unenforceable in any respect under any Law, the validity,
legality and enforceability of the remaining provisions will not in any way be
affected or impaired.


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28.15 NEGOTIATION. The terms of this Lease are agreed by LESSOR from its
principal place of business in Los Angeles, California.

28.16 TIME IS OF THE ESSENCE. Time is of the essence in the performance of all
obligations of the parties under this Lease and, consequently, all time
limitations set forth in the provisions of this Lease will be strictly observed.

28.17 AMENDMENTS IN WRITING. The provisions of this Lease may only be amended or
modified by a writing executed by LESSOR and LESSEE.

28.18 COUNTERPARTS. This Lease may be executed in any number of identical
counterparts, each of which will be deemed to be an original, and all of which
together will be deemed to be one and the same instrument when each party has
signed and delivered one such counterpart to the other party.

28.19 DELIVERY OF DOCUMENTS BY FAX. Delivery of an executed counterpart of this
Lease or of any other documents in connection with this Lease by fax 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 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.

28.20 ENTIRE AGREEMENT. The Operative Documents constitute the entire agreement
between the parties in relation to the leasing of the Aircraft by LESSOR to
LESSEE and supersede all previous proposals, agreements and other written and
oral communications in relation hereto. The parties acknowledge that there have
been no representations, warranties, promises, guarantees or agreements, express
or implied, except as set forth herein.

28.21 **Material Redacted**


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<PAGE>

     IN WITNESS WHEREOF, LESSEE and LESSOR have caused this Lease to be executed
by their respective officers as of November 30, 2003.

INTERNATIONAL LEASE FINANCE             COMPANIA PANAMENA DE AVIACION, S.A.
CORPORATION                             (COPA)


By: /s/ David R. De Mars                By: /s/ Pedro Heilbron
    ---------------------------------       ------------------------------------
Its: Assistant Vice President           Its: CEO