Document:

Exhibit
10.16

     

    CONFIDENTIAL
TREATMENT

    REQUESTED
PURSUANT TO RULE 24b-2

    

    

    

    Certain
portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 under the Securities Exchange Act of
1934. The omitted materials have been filed separately with the Securities and
Exchange Commission.

    

    

    

    AIRCRAFT
MANAGEMENT AGREEMENT

    

    BETWEEN

    

    

    LW
AIR I LLC

    as
Owner

    

    

    AND

    

    

    

    AVANTAIR,
INC.

    as
Manager

    

    

    

    

    

    Dated as
of the 19th day
of October, 2009

    

    

    

    

    

    

    

    

    

    Management
of One (1) Piaggio Avanti P-180 aircraft

    Manufacturers
Serial Number 1181

    FAA
Registration No. N189SL

     

     

    
      [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    TABLE OF
CONTENTS

     

    
      
        	
                1.

              	
                Management
      and Support of Aircraft

              	
                1

              
	
                2.

              	
                Definitions

              	
                1

              
	
                3.

              	
                Term

              	
                4

              
	
                4.

              	
                Management
      Fee

              	
                4

              
	
                5.

              	
                Disclaimer;
      Assignment of Warranties

              	
                5

              
	
                6.

              	
                Delivery;
      Return

              	
                6

              
	
                7.

              	
                Representations
      and Warranties

              	
                8

              
	
                8.

              	
                Liens

              	
                9

              
	
                9.

              	
                Insurance

              	
                9

              
	
                10.

              	
                Taxes

              	
                10

              
	
                11.

              	
                Compliance
      with Laws; Location, Operation and Maintenance; Additions

              	
                10

              
	
                12.

              	
                Flight
      Crew

              	
                12

              
	
                13.

              	
                Inspection

              	
                13

              
	
                14.

              	
                Identification

              	
                13

              
	
                15.

              	
                Loss
      or Damage

              	
                13

              
	
                16.

              	
                General
      Indemnity

              	
                14

              
	
                17.

              	
                Events
      of Default

              	
                15

              
	
                18.

              	
                Remedies

              	
                16

              
	
                19.

              	
                Owner's
      Right to Perform

              	
                17

              
	
                20.

              	
                Assignment

              	
                17

              
	
                21.

              	
                Notices

              	
                18

              
	
                22.

              	
                Conditions
      Precedent

              	
                18

              
	
                23.

              	
                Miscellaneous

              	
                19

              

      

    

    

    EXHIBIT "A" - ACCEPTANCE
SUPPLEMENT

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

    

    AIRCRAFT MANAGEMENT
AGREEMENT

    

    

    This Aircraft Management Agreement
(this “Management Agreement”), dated as of the 16th day of
October, 2009 between LW Air I LLC, a Delaware limited liability company, which
is the Trustor under that certain Trust Agreement dated October 19, 2009 between
Owner and Wells Fargo Bank Northwest, National Association (“Owner”) and
Avantair, Inc., a Delaware corporation ("Manager”).

    

    1.  Management and Support of
Aircraft.

    

    a. Manager agrees to manage,
and furnish certain aviation support services described herein in respect of,
the aircraft which is described in Section 2(a) hereof (the “Aircraft”) during
the Term.  Owner agrees that Manager shall be the exclusive manager
and provider of such services to Owner during the Term, including periods when
the Aircraft may be leased to Manager, to fractional aircraft owners
participating in Manager’s fractional aircraft program, or to any other third
party approved by Owner pursuant to leases in customary forms approved by Owner
(each, a “Permitted Lease”).  The execution by the parties hereto of
an Acceptance Supplement in the form of Exhibit "A" attached hereto (the
"Supplement") shall constitute Manager's irrevocable acceptance of the Aircraft
for all purposes of this Management Agreement.  The Supplement shall
incorporate therein all of the terms and conditions of this Management Agreement
and shall constitute a part of this Management Agreement to the same extent as
if the provisions thereof were set forth in full herein.

    

    b.  Owner shall not
be obligated to accept or execute the Supplement unless all of the conditions
set forth in Section 22 hereof shall have been fulfilled to the satisfaction of
Owner.

    

    2.  Definitions.

    

    a.  As used in this
Management Agreement, the following terms shall have the following meanings
(such definitions to be equally applicable to both the singular and plural forms
of the terms defined):

    

    "Affiliate" shall mean
with respect to any Person, any Person which, directly or indirectly, controls,
is controlled by, or is under common control with such Person.  For
purposes of this definition, "control" of a Person means the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such person, whether by contract or otherwise.

    “Affiliated Management
Agreement” shall mean any management agreement entered into, on or after
the date hereof, between Manager and any Affiliate of Owner.

    "Aircraft" shall mean
the Airframe to be operated hereunder together with the Engine(s) to be operated
hereunder whether or not any of the Engines may at the time of determination be
installed on the Airframe or any other airframe.

    "Airframe" shall mean
one (1) Piaggio Avanti P-180 aircraft, bearing manufacturer's serial number
1181, FAA Registration No. N189SL, together with any and all parts, components,
accessories, radio’s and navigational devices (but excluding the Engines
installed thereon) from time to time installed thereon or affixed
thereto.

    "Aviation Act" means
the Federal aviation laws codified in title 49, U.S. Code (previously the
Federal Aviation Act of 1958).

    "Bill of Sale" shall
mean an FAA Bill of Sale whereby title to the Aircraft is in possession of the
Owner.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    "Business Day" shall
mean a day other than a Saturday, Sunday or legal holiday under the laws of the
State of Florida.

    “Cape Town Convention” shall
mean the Convention and the Protocol.

    "Code" shall mean the
Internal Revenue Code of 1986, as it may be amended hereafter, or any comparable
successor law.

    "Commencement Date"
shall mean October 19, 2009.

    “Convention” shall
mean the Convention on International Interests in Mobile Equipment concluded in
Cape Town in November 2001.

    "Default" shall mean
any event or condition which with notice, lapse of time or both would constitute
an Event of Default.

    "Engine(s)" shall
mean two (2) Pratt & Whitney aircraft engines (respectively bearing
manufacturer’s serial numbers PCE-RW0092 and PCE-RW0091) each of which shall be
installed on the Airframe as of the Commencement Date, together with any and all
Parts thereof.  Each engine is rated at greater than seven hundred
fifty (750) or more take off horsepower or its equivalent.

    "Event of Default"
shall have the meaning specified in Section 17 hereof.

    "Event of Loss" shall
mean, with respect to the Aircraft, an Engine or any Part thereof, any damage
requiring the completion of an FAA Form 337, "Major Repair and Alteration
Statement," which results in the payment of an insurance settlement for the
actual or constructive total loss of the Aircraft, Engine or any such Part or
the loss of use thereof due to the theft, destruction, damage beyond repair or
rendition thereof permanently unfit for normal use for any reason whatsoever, or
confiscation or seizure of, or requisition of title to or use of the
Aircraft.

    “Excess Income” shall
mean, in any particular month, rental income generated by the Aircraft in excess
of the Monthly Owner Proceeds, net of any amounts outstanding and payable to
Owner in respect of previous months due to the full amount of Monthly Owner
Proceeds not having been remitted to Owner by Manager (any such amount, a “Shortfall
Amount”).

    "FAA" shall mean the
Federal Aviation Administration of the United States or any applicable successor
governmental authority charged with the administration or enforcement of United
States aviation law.

    "Fair Market Sale
Value" shall, at any time with respect to the Aircraft, be determined by
a recognized independent appraiser selected by Owner, and reasonably
satisfactory to Manager, which determination shall be made on the assumption
that the aircraft is free and clear of all Liens and is in the condition and
repair in which it is required to be returned pursuant to Section 6(a)
hereof.

    “International
Interest” shall have the meaning set forth in the Cape Town
Convention.

    "Late Charge Rate"
shall mean an interest rate per annum equal to the Reference Rate plus two
percent (2%) per annum but not to exceed the highest rate permitted by
applicable law.

    "Lease", when used in
this Management Agreement, shall mean and include any applicable lease agreement
with respect to the Aircraft  which may be in effect from time to
time.

    "Liens" shall mean any
mortgage, pledge, lien, security interest, charge, encumbrance, financing
statement, title retention or any other right or claim of any person with
respect to the Aircraft, other than any Owner's Liens or Permitted
Liens.

    "Loss Payment Date"
shall mean with respect to the Aircraft the date on which payment, as described
in Section 15(b) hereof, is made to the Owner by the Manager as the result of an
Event of Loss with respect to the Aircraft.  The Loss Payment Date
shall be within one hundred twenty (120) days of the Payment Date immediately
following said Event of Loss.

    “Management Agreement”
has the meaning set forth in the preamble, and the terms "hereof", "herein",
"hereto" and "hereunder" when used in this Management Agreement, shall refer to
this Management Agreement.

    “Manager” shall have
the meaning set forth in the preamble.

    “Monthly Owner
Proceeds” shall mean $[***] per month.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    “Owner” shall have the
meaning set forth in the preamble.

    "Owner's Liens" shall
mean any mortgage, pledge, lien, security interest, charge, encumbrance,
financing statement, title retention, taxes or any other right or claim of any
person claiming through or under Owner other than the interest of Owner as Owner
and Owner of the Aircraft hereunder.

    "Parts" shall mean any
and all avionics, instruments, appliances, furnishings, repairs, parts,
appurtenances, accessories and other equipment and attachments incorporated or
installed in or attached to the Airframe or any Engine and from time to time
incorporated or installed in or attached to the Airframe or any Engine, together
with all additions, attachments or accessions to any of the foregoing and all
replacements and substitutions for any of the foregoing.

    “Patriot
Act”  means the USA PATRIOT Act of 2001, Pub. L. No.
107-56.

    "Permitted Act" shall
mean (a) the execution and delivery by Manager of this Management Agreement and
any proper attachment hereto; and any act that Manager is required or expressly
permitted to do pursuant to this Management Agreement or other agreement
executed in connection herewith.

    “Permitted Leases”
shall have the meaning set forth in Section 1(a) hereof.

    "Permitted Liens"
shall mean any of the following: (a) the respective rights of Owner and Manager
as herein provided; (b) the rights of others under agreements or arrangements
only to the extent expressly permitted by the terms of Section 20; (c) Owner's
Liens; (d) Liens for taxes either not yet due or being contested in good faith
(and for payment of which, to the extent required by GAAP, adequate reserves
have been provided) by appropriate proceedings conducted with due diligence so
long as such proceedings do not involve any material danger of the sale,
forfeiture or loss of the Airframe or any Engine or interest therein; (e)
materialmen's, mechanics', workmen's, repairmen's, or other like Liens arising
in the ordinary course of business for amounts the payment of which is either
not yet delinquent or is being contested in good faith (and for the payment of
which adequate reserves had been provided) by appropriate proceedings so long as
such proceedings do not involve any material danger of the sale, forfeiture or
loss of the Airframe or any Engine or interest therein; (f) salvage rights of
insurers under insurance policies maintained pursuant to Section 9; (g) Liens
arising out of judgments or awards against Manager with respect to which at the
time there shall have been secured a stay of execution and; (h) any other Lien
with respect to which Manager shall have provided a bond or other security in an
amount and under terms reasonably satisfactory to Owner.  Manager will
promptly at its own expense, take such action as may be necessary duly to
discharge (by bonding or otherwise) any such Lien not accepted above if the same
shall arise at any time.

    "Person" shall mean an
individual, partnership, corporation, limited liability company, business trust,
joint stock company, trust, incorporated association, joint venture,
governmental authority or other entity of whatever nature.

    “Protocol” shall mean
the protocol to the Convention on Matters Specific to Aircraft
Equipment.

    "Payment Date" shall
mean each date on which a payment is payable pursuant to Section 4(a) and (b)
hereof.

    “Reference Rate” shall mean, as of any time
of determination, a fluctuating per annum rate of interest equal at all times to
the rate of interest announced publicly from time to time by Citibank N.A. as
its base rate.

    “Shortfall Amount” has
the meaning set forth in the definition of Excess Amounts.

    “Specially Designated
National and Blocked Persons” means those Persons that have been
designated by executive order or by the sanction regulations of OFAC as Persons
with whom U.S. Persons may not transact business or must limit their
interactions to types approved by OFAC.

    "Stipulated Loss
Value" shall mean [***] United States Dollars; provided, that for
purposes of Section 15(b) and Section 18(c) hereof, any determination of
Stipulated Loss Value as of a date occurring after the final Payment Date shall
be made as of such final Payment Date.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    "Term" shall mean the
term of this Management Agreement specified in Section 3 hereof.

    

    b.  All accounting
terms not specifically defined herein shall be construed in accordance with
generally accepted accounting principles ("GAAP") consistently
applied.

    

    3.  Term.  The term of this
Management Agreement shall commence on the Commencement Date and, unless earlier
terminated pursuant to the provisions hereof, shall continue for a term of
ninety-six months (96) months from the Commencement Date. Owner may terminate
this Agreement upon ninety (90) days written notice to the Manager at any time
after twelve (12) months from the Commencement Date.

    

    4.  Management
Fee.

    

    a.  Manager shall
collect, as agent for Owner, all amounts due under Permitted Leases and from
such amounts shall, subject to clause (c), and the last sentence of this clause
(a), retain, as consideration for Manager’s responsibilities pursuant to this
Agreement, a monthly fee for the management of the Aircraft in an amount equal
to the lesser of, in any particular month, (i) the Excess Income and (ii)
Fifty-Six Thousand, Five Hundred Dollars ($56,500.00) (the “Management
Fee”).  Should payments for use of the Aircraft collected and
remitted by Manager to Owner result in an aggregate Shortfall Amount greater
than Fifteen Thousand Dollars ($15,000.00), then Manager shall advance to Owner
such Shortfall Amount within thirty (30) days of the end of such monthly payment
period.  The proceeds collected by Manager, as agent for Owner, for
the use of the Aircraft pursuant to this Agreement and attributable to Owner
shall be paid to Owner on a monthly basis, with the first payment being due one
month after the Commencement Date, unless such date does not fall on a Business
Day, otherwise the payment shall be made on the Business Day immediately
preceding such date.   Any amounts paid pursuant to this Section
4 may exclude taxes and other charges attributable to or payable by either party
hereunder.  For each hour, if any, by which usage of the Aircraft
under Permitted Leases pursuant to this Management Agreement exceeds [***] hours
in any twelve-month period, the Management Fee otherwise due hereunder shall be
reduced by $[***] per hour
flown over [***] hours, and if no Management Fee is then due, Manager shall
promptly pay Owner such amount.

    

    b.  Any amounts
advanced to Owner pursuant to clause (a), above, shall, subject to clause (c)
below, be repaid by Owner solely from future income from Permitted Leases in
excess of the Monthly Proceeds.  In addition, during the period that
any advance is outstanding, Manager, at Owner’s request, shall cooperate with
Owner in furthering steps to increase Lease activity for the Aircraft, including
arranging to lease the Aircraft to any person introduced or referred to Manager
by Owner (or to Owner itself) at such lease rate (not less than 75% of the lease
rate otherwise applicable) as Owner may specify and otherwise in accordance with
the form of Leases already being used for the Aircraft at such
time.  At Manager’s option, in lieu of advancing the Shortfall Amount,
Manager may pay Owner an amount equal to the Shortfall Amount.  In
such event, the discounted flight arrangement described in this section shall
not be applicable.

    

    c.  Notwithstanding
anything to the contrary, if a management fee is payable to Manager under any
Affiliated Management Agreement at a time when there is a Shortfall Amount or an
outstanding advance to Owner from Manager pursuant to clause (a) above, then
Manager shall reduce its management fee payable thereunder and treat the amount
of such reduction as a payment with respect to the Shortfall Amount and/or a
repayment of the advance, as applicable.  Similarly, if a Management
Fee is otherwise payable hereunder at a time when there is a Shortfall Amount or
outstanding amount under any Affiliated Management Agreement, the management fee
payable under clause (a) hereof shall be reduced.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    d. The date the Aircraft is
delivered to Manager shall be defined as the date the Acceptance Supplement
(Exhibit “A”) is executed.  Manager shall provide promptly to Owner a
detailed report (including bills, receipts and all other supporting
documentation) pertaining to the use, operation and maintenance of the Aircraft
for the preceding month (including, without limitation, flight logs, maintenance
records, fuel receipts, landing charges, customs fees and access to all
supporting records and data to verify actual flight hours and costs of operation
of the Aircraft).

    

    e.  Owner shall be
permitted to utilize the Aircraft pursuant to the terms of the Management Use
& Cross Lease Exchange Agreement attached hereto as Exhibit
B.  Any applicable fees for the usage of the Aircraft pursuant to the
attached Exhibit B may be deducted from any fees owed to Owner by
Manager.

     

    5.  Disclaimer; Assignment of
Warranties.

    

    a.  OWNER NEITHER
MAKES NOR SHALL BE DEEMED TO HAVE MADE AND MANAGER HEREBY EXPRESSLY WAIVES ANY
WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE AIRCRAFT
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OR REPRESENTATION AS TO THE DESIGN,
QUALITY OR CONDITION OF THE AIRCRAFT OR ANY WARRANTY OF MERCHANTABILITY OR
FITNESS OF THE AIRCRAFT FOR ANY PARTICULAR PURPOSE OR TO AS TO ANY OTHER MATTER
RELATING TO THE AIRCRAFT OR ANY PART THEREOF, EXCEPT THAT OWNER WARRANTS THAT ON
THE COMMENCEMENT DATE OWNER HAS GOOD AND MARKETABLE TITLE TO THE
AIRCRAFT.  OWNER SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR DAMAGE
SUSTAINED OR INCURRED DURING OR AFTER THE TERM HEREOF ARISING OUT OF THE USE OR
OPERATION OF THE AIRCRAFT.  MANAGER, FOR ITSELF, ITS SUCCESSORS,
ASSIGNS AND INVITEES WAIVES, RELINQUISHES AND RENOUNCES ANY AND ALL DAMAGE
CLAIMS AGAINST OWNER WHICH MANAGER, ITS SUCCESSORS, ASSIGNS AND INVITEES CAN OR
MAY HAVE AGAINST OWNER ARISING FROM THE USE OR OPERATION OF THE
AIRCRAFT.

    

    OWNER NEITHER MAKES NOR SHALL BE DEEMED
TO HAVE MADE ANY REPRESENTATION OR WARRANTY AS TO THE ACCOUNTING TREATMENT TO BE
ACCORDED TO THE TRANSACTIONS CONTEMPLATED BY THIS MANAGEMENT AGREEMENT OR AS TO
ANY TAX CONSEQUENCES AND/OR TAX TREATMENT THEREOF.

    

    b.  Owner hereby
assigns to Manager such right as Owner may have (to the extent Owner may validly
assign such rights, and to the extent same exist - no warranty or representation
as to whether such warranties exist shall be deemed to have been made by Owner)
under all manufacturers' and suppliers' warranties with respect to the Aircraft
provided, however, that the foregoing rights shall automatically revert to Owner
upon the occurrence and during the continuance of any Event of Default
hereunder, or upon the return of the Aircraft to Owner at termination of this
Agreement.  Manager agrees to settle all claims with respect to the
Aircraft directly with the manufacturers or suppliers thereof, and to give Owner
prompt notice of any such settlement and the details of such
settlement.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    c. Owner covenants that during
the Term, as long as no Event of Default shall have occurred and be continuing,
Owner shall not interrupt the use and quiet enjoyment of the Aircraft pursuant
to Permitted Leases or the activities of Manager under this
Agreement.

     

    6.  Delivery;
Return.

    

    a. The Aircraft shall be
delivered to Manager at an agreed upon location, but not within the State of
Florida, and, subject to Manager’s purchase option in Section 6(d) below, upon
termination hereof shall be returned to Owner at a location that shall be agreed
upon by the parties.  Manager has inspected the Aircraft utilizing the
services of experts selected by Manager, and at the time of delivery Manager
shall be deemed to accept delivery of the Aircraft “AS IS, WHERE IS” and
with all faults.  Owner makes no warranty concerning the Aircraft of
any type, express or implied, including any warranty of fitness for a particular
use or otherwise.

    

    Manager shall cause to be affixed to
the Airframe and each Engine a placard identifying the Airframe and each Engine
as the property of Owner, and Manager shall make the Aircraft and all parts and
components thereof available to Owner for this purpose.  The placard
for the Airframe shall be affixed in the vicinity of the Aircraft door on the
interior of the Aircraft and shall be clearly and prominently visible to all
persons entering or exiting the Aircraft.  The placard for each Engine
shall be affixed to each Engine so that it shall not impair such Engine but
shall be located within the engine nacelle of each Engine and shall be clearly
visible to all persons removing each engine nacelle to perform work or service
on each Engine.

    

    In the event that the Aircraft is
returned to Owner for any reason, the Manager shall: (I) Insure that any and all
distinctive markings placed on the Aircraft by Manager or its agents are
removed, painted over and blended in a workmanlike manner at the expense of
Manager; (ii) Insure that the Aircraft is fully equipped and have installed
thereon the Engines and any and all Parts as were installed or incorporated in
or attached to the Aircraft as of the Commencement Date (or subject to such
replacements, substitutions and changes permitted by or required pursuant to the
terms hereof); (iii) Insure that the Aircraft shall be duly certified as an
airworthy aircraft by the FAA and be returned with a valid certificate of
airworthiness issued under the Federal Aviation Regulations, or its equivalent
and that the Aircraft will be in full compliance with the original type
certificate data sheet; (iv) Insure that the Aircraft shall be in the condition
and repair required to be maintained by Section 11 hereof, free and clear of all
Liens; (v) Insure that Owner shall receive all logs, manuals and data and all
inspection, modification and overhaul records required to be maintained with
respect to the Aircraft under applicable rules and regulations of the FAA and
any other governmental authority having jurisdiction; (vi) Transfer to the Owner
at the sole cost of the Manager the engine maintenance program(s), if any (i.e.,
MSP Gold, JSSI, Dallas Airmotive, etc.), applicable to the Aircraft as well as
any computerized maintenance program; (vii) in the event Manager desires to
change and/or retain the United States "N" registration number that is currently
on the airframe or engine nacelles or any subsequent "N" registration assigned
to the Aircraft at the time of return, Manager, at its sole expense, shall make
application to the FAA for a new "N" registration number designated by Owner,
and shall have such new number painted on the Aircraft in such a location and to
such specifications as Owner shall reasonably direct; (viii) insure (if the
engine maintenance program applicable to the Aircraft is not then in full force
and effect) the completion within thirty (30) days prior to the return of the
Aircraft the next required and/or scheduled airframe inspection; (ix) insure
that all Airframe, Engine and related systems components have a minimum of fifty
percent (50%) of the scheduled and/or required hourly, cycle or calendar life
limitations and or inspection interval remaining if the engine maintenance
programs applicable to the Airframe and Engines are not then in full force and
effect.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    b.  In the event
systems components do not meet the conditions set forth in Paragraph (a)(ix)
herein above and the engine maintenance programs applicable to the Airframe and
Engines are not then in full force and effect, Manager shall pay Owner an amount
equal to the sum of (i) for each Engine, the product of the current estimated
cost of the next anticipated or recommend hot section inspection ("HSI") or
major periodic inspection ("MPI") (including in such estimated cost all required
replacement of life limited parts) multiplied by the fraction wherein the
numerator shall be the remainder (zero "O" if negative) of (x) the actual number
of hours (cycles or calendar increment should that be the limiting factor) of
operation since the previous HSI or MPI, minus (y) fifty percent (50%) of the
manufacturer's recommended total operating hours, cycles or calendar increment
between HSI or MPI inspections, and the denominator shall be the total operating
hours, cycles or calendar time between HSI or MPI inspections, plus (ii) for
each Engine the product of the current estimated cost of the next anticipated or
recommended overhaul ("OH") or core zone inspection ("CZI") (including in such
estimated cost all required replacement of life limited parts) multiplied by the
fraction wherein the numerator shall be the remainder (zero "O" if negative) of
(x) the actual number of hours (cycles or calendar increment should that be the
limiting factor) of operation since the previous OH or CZI, minus (y) fifty
percent (50%) of the manufacturer's recommended total operating hours, cycles or
calendar increment between OH or CZI inspections, and the denominator shall be
the total operating hours, cycles or calendar time between OH or CZI
inspections, plus (iii) for any Airframe inspections and/or related systems
components the product of the current estimated cost of the next anticipated or
recommend Airframe or related systems components inspection(s) (to include x-ray
and non-destructive testing ("NDT") inspections) or component overhaul
(including in such estimated cost all required replacement of life limited
parts) multiplied by the fraction wherein the numerator shall be the remainder
(zero "O" if negative) of (x) the actual number of hours (cycles or calendar
increment should that be the limiting factor) of operation since the previous
Airframe or related systems components inspection(s) (to include x-ray and NDT
inspections) or component overhaul minus (y) fifty percent (50%) of the
manufacturer's recommended total operating hours, cycles or calendar increment
between Airframe ore related systems components inspections (to include x-ray
and NDT inspections) or component overhaul, and the denominator shall be the
total operating hours, cycles or calendar time between Airframe or related
systems components inspections (to include x-ray and NDT inspections) or
component overhaul.  All the foregoing shall be considered as
supplemental rent and shall be due upon presentation to Manager of an invoice
setting forth in reasonable detail he calculation of such amounts due including
the names of all sources used for the required cost estimates.  Unless
Owner and Manager agree to alternate source(s), the manufacture of the Airframe,
Engines and related systems components shall be used as the source for all
inspection, repair and overhaul costs.

    

    c. Overhaul.  In
the event that the Aircraft is returned to the Owner for any reason, Manager
will arrange for the Airframe and each Engine to be inspected and/or
overhauled.

    

    d.  Manager Right of First
Refusal.  Unless this Agreement is terminated prior to the end
of the ninety-six (96) month term of this Agreement, Manager shall have a right
of first refusal to purchase the Aircraft at the end of the term of this
Agreement from Owner at a price to be negotiated in good faith between the
parties. Manager and Owner shall meet to discuss any such purchase no later than
ninety (90) days before the end of the Term.

     

    
      
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Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    7.  Representations
and Warranties.  In order to
induce Owner and Manager to respectively enter into this Management Agreement,
and for Manager to manage the Aircraft for Owner, Owner represents with respect
to Owner, and Manager represents and warrants with respect to Manager,
that:

    

    a.  Organization.  Owner
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware.  Manager is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware.   For purposes of the Cape Town
Convention, Owner and Manager are each situated in the “Contracting State”
(as defined in the Cape Town Convention) of the United States of
America.

    

    b. Power and
Authority.  Owner and Manager each has full limited liability
company or corporate power, authority and legal right, respectively, to execute,
deliver and perform this Management Agreement and the execution, delivery and
performance of this Management Agreement have been duly authorized by all
necessary action of Owner and Manager respectively.

    

    c. Enforceability.  This
Management Agreement has been duly executed and delivered by each of Owner and
Manager and constitutes the legal, valid and binding obligation of Owner and
Manager, respectively, enforceable in accordance with its terms.

    

    d. Consents and
Permits.  The execution, delivery and performance of this
Management Agreement does not require any stockholder or member approval or
approval or consent of any trustee or holders of any indebtedness or obligations
of Owner or Manager; and will not contravene any law, regulation, judgment or
decree applicable to Owner or Manager, or the certificate of
incorporation/organization/formation or by-laws/regulations/Management Agreement
of Owner or Manager; and will not contravene the provisions of, or constitute a
default under, or result in the creation of any Lien upon any property of Owner
or Manager under any mortgage, instrument or other agreement to which Owner or
Manager is a party or by which Owner or Manager or its respective assets may be
bound or affected.

    

    e. No
Litigation.  There is no action, suit, investigation, or
proceeding by or before any court, arbitrator, administrative agency, or other
governmental authority pending or threatened against or affecting Owner or
Manager (a) which involves the transactions contemplated by this Management
Agreement or the Aircraft; or (b) which, if adversely determined, would
reasonably be expected to have a material adverse effect on the financial
condition, business or operations of Owner or Manager.

    

    f. No
Defaults.  Neither Owner nor Manager is in default, and no
event or condition exists which after giving of notice or lapse of time or both
would constitute an event of default, under any mortgage, indenture, contract,
agreement, judgment or other undertaking to which Owner or Manager is a party or
which purports to be binding upon Owner or Manager or upon any of their
respective assets, except for any such default, event or condition which,
individually or in the aggregate, would not materially affect Owner’s or
Manager's ability to perform its obligations under this Management
Agreement.

    

    g. Information.  All
information supplied by Manager or any Affiliate of Manager, to Owner or any
appraiser, with respect to the Aircraft or any part thereof, was accurate and
complete at the time given and Manager has notified Owner of any material change
in any information so supplied.

    

    h. No
Warranties:  Manager has inspected the Aircraft utilizing the
services of experts selected by Manager, and at the time of delivery Manager
shall be deemed to accept delivery of the Aircraft “AS IS, WHERE IS” and with
all faults.  Owner makes no warranty concerning the Aircraft of any
type, express or implied, including any warranty of fitness for a particular use
or otherwise.  Manager is knowledgeable and sophisticated in the use,
maintenance and operation of aircraft and has selected this Aircraft based upon
its own expertise, or the use of experts of its own selection, and is not
relying upon any statement, representation or warranty of Owner, all of which
are expressly excluded and disclaimed and all claims related thereto or arising
therefrom are waived, relinquished and renounced by Manager.

     

    
      
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request.

      

       

      
        
          
          

        

        
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    8.  Liens.  Manager will not
directly or indirectly create, incur, assume or suffer to exist any Lien on or
with respect to the Aircraft.  At the time of execution hereof, there
are no Liens, security interests, mortgages, claims, charges, “international
interests” (as defined in the Cape Town Convention or other encumbrances
(whether or not registered or filed at the FAA or the International Registry or
elsewhere) in or on the Aircraft, other than Liens in favor of Owner or Owner’s
lender.

    

    9.  Insurance.  On or before the
Commencement Date, and throughout the Term of this Agreement, or throughout the
term of any Permitted Lease, and until such time as physical possession and
control of the Aircraft is returned to Owner as provided herein, Manager shall
obtain and maintain, at all times on the Aircraft (including the Airframe and
Engines), at its sole expense, "all-risk" aircraft physical damage insurance
(covering ground, flight and taxiing exposures) and comprehensive general and
aircraft liability insurance (covering bodily injury and property damage
exposures) including, but not limited to, passenger liability, third party
liability, contractual liability insurance in such amounts against such risks
and in such form, as is customary for corporations similarly situated as Manager
or otherwise as shall be reasonably satisfactory to Owner and with insurers or
recognized responsibility; provided, that such
insurance shall include, without limitation, the following: (i) "all-risk"
physical damage insurance on the Aircraft in an amount which shall not on any
date be less than Five Million Six Hundred Thousand ($US 5,600,000.00) United
States Dollars with war risk coverage (to include seizure, detention and
confiscation coverage) as well as legal liability and hijacking coverage; (ii)
comprehensive aircraft liability insurance in an amount which shall not on any
date be less than One Hundred Million ($US 100,000,000.00) United States Dollars
and which shall name Owner as additional insured; and (iii) coverage against
hijacking and acts of terrorism exposures in an amount which will be not less
than One Hundred Million ($US 100,000,000.00) United States Dollars and which
shall name Owner, as well as any lien holder designated by Owner, as loss payee
and which, for liability purposes, shall name Owner as additional
insured.  If the Aircraft is operated outside the continental United
States, in addition to the above requirements, War Risk Insurance, including
Confiscation, Expropriation, Nationalization and Seizure is required to be
maintained.  Additionally, each insurance policy shall, among other
things, require that the insurer give Owner at least thirty (30) days prior
written notice (or such lesser period as may be applicable in case of war risk
insurance)(at each of the addresses of notice to Owner set forth in Section 22
hereof) of any alteration in or cancellation of the terms of such policy, and
require that the interest of Owner (and Owner’s lender, if any) be continued
insured regardless of any breach of or violation by Manager of any warranties,
declarations or conditions contained in such insurance policy.  In no
event shall Owner be responsible for premiums, warranties, conditions or
representations to any insurer or any agent thereof.  The insurance
maintained by Manager shall be primary without any right of contribution from
insurance which may be maintained by Owner.  Manager shall furnish to
Owner a certificate or other evidence reasonably satisfactory to Owner that such
insurance coverage is in effect; provided, however, that Owner shall be under no
duty to ascertain the existence or adequacy of such insurance.  An
agreement by the United States government or any subdivision or agency thereof
to insure against or indemnify for substantially the same risks to the same
amount will satisfy the requirements of this Section 9.

     

    
      
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Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    10. Taxes.

    

    a. General Tax
Indemnity. Manager
shall be liable for, and shall indemnify and hold harmless Owner against, any
and all federal, state or local income, excise, sales, use, ad valorem,
property, luxury, value added, rental or other taxes, charges or assessments of
any nature whatsoever (other than any income tax measured solely by Owner’s net
income), together with any and all additions to tax, interest, penalties or
fines thereon, arising, incurred, or imposed at any time in connection with (i)
the use and operation of the Aircraft by Manager, (ii) the lease of the Aircraft
to any of Manager’s program participants, (iii) the payment of any amounts due
and payable under this Agreement, or (iv) compliance with any provision of this
Agreement.  Neither party to this Agreement makes no warranty to the
other as to any potential tax benefits or tax liabilities of this Agreement or
any agreements related to this Agreement or transaction.

    

    b.  Notwithstanding
anything to the contrary in this Section 10, no amount shall be payable to Owner
as an indemnity under Section 10, to the extent such indemnity is the result of
one or more of the following:

    

     i.  Any event as a
result of which Manager has paid in full in accordance with this Operating
Stipulated Loss Value, but only to the extent that the loss of deductions or
inclusion shall have been taken into account in calculating the Stipulated Loss
Value;

     ii.  Any change in
Tax Law (other than a change in applicable rates);

     iii. The willful misconduct or
gross negligence of Owner;

     iv.  Any
misrepresentation by Owner in this Management Agreement;

     v.  The failure by
Manager to provide information requested by Owner and needed by Owner to prepare
its Federal, state or local income tax returns;

     vi. The applicability to Owner
of Section 55, 56, 57, 58, 291, 465, 467 or 469 of the Code or any successor
provision or any treasury regulations thereunder;

     vii. The treatment of an Item
of Equipment as either public utility property within the meaning of Section
168(i)(10) of the Code as a result of the identity of Owner or any activity of
Owner that is unrelated to the transactions contemplated by this Management
Agreement;

     viii. Any change in the
Owner's taxable year; or

     ix.  Any inaccuracy
in the conclusions expressed in the appraisal report referred to in Section 22
hereof unless the inaccuracy is attributable to the inaccuracy of any
information provided by Manager to the appraiser.

    

    c.  For the purposes
of this Section 10 only, the term "Owner" shall include LW Air I LLC, any
assignee and each other member, limited liability company, or corporation of
which is included in LW Air I LLC, if consolidated or combined Federal, state or
local income tax returns are filed for such group.

    

    11. Management of the Aircraft
and Aviation Support Services.

    

    a.  Limitations on Aircraft
Use.  Owner and Manager each agree that, while the Aircraft is
under the control of either party, each will: use the Aircraft in a careful and
proper manner; comply with and conform to all applicable governmental laws,
rules, regulations and orders thereto; cause the Aircraft to be operated in
accordance with the manufacturer's or supplier's instructions or manuals; and
conduct, or cause to be conducted, a thorough pre-flight inspection of the
Aircraft and all pre-flight action required by the Federal Aviation
Regulations.  Owner and Manager further agree that, while the Aircraft
is under the control of either party, neither will: operate, use or maintain the
Aircraft in violation of any airworthiness certificate, license, law, statute,
rule, regulation or registration relating to the Aircraft or aviation nor use
the Aircraft (or permit the Aircraft to be used) in violation of any criminal
law, rule, statute or regulation of the United States of America or any other
nation state or sub-division thereof; or use the Aircraft to carry or transport
contraband or unauthorized persons.

     

    
      
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Securities and Exchange Commission pursuant to a confidential treatment
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    b.  Geographic
Limits.  Owner and Manager each agree to limit operation of the
Aircraft to the continental United States, Canada, Mexico, and the Caribbean
Basin and further to limit such operation to geographic areas that Owner may
from time to time designate; provided that under no circumstances will either
party permit the Aircraft to be operated in  any area excluded from
coverage by any insurance required by the terms of Section 9 hereof (or not
specifically and fully covered by such insurance), or any recognized or
threatened area of hostilities unless fully covered, without limitation, to
Owner's satisfaction by hull, political, expropriation, hijacking and war risk
insurance, in each case unless the Aircraft is operated or used under contract
with the government of the United States or any agency or instrumentality
thereof under which contract the government assumes the liability in form and
substance acceptable to Owner for substantially the same risk in at least the
same amounts as would be covered by such insurance.

    

    c. Management
Services.  Manager, at its sole cost and expense, shall at all
times:

    

       i.  cause
the Aircraft to be and remain duly registered under the laws of the United
States of America in the name of Owner as owner;

    

      ii.  keep, service,
repair, maintain and overhaul the Aircraft utilizing the services of FAA
approved maintenance facilities and FAA licensed personnel (A) in compliance
with the FARs and with all FAA Airworthiness Directive and manufacturers'
recommended and mandatory Service Bulletins, (B) in compliance with the
applicable manufacturer's or supplier's recommended maintenance, service and
overhaul procedures and schedules and in compliance with Manager’s FAA-approved
FAR Part 135 maintenance program, and comply with all applicable engine
maintenance programs, if any, and keep same in full force and effect (at
Manager’s sole cost and expense), and good standing making all reports required
to the engine program administrator and pay all remittances due, (C) with
respect to the Engines enroll, and maintain current and in good standing in
accordance with the engine manufacturers requirements and in compliance with the
recommended procedures and schedules of any overhaul, service or maintenance
contract relating to the Engines and Manager’s FAA-approved FAR Part 135
maintenance program, (D) so as to keep the Aircraft in as good repair and
operating condition (and to furnish all parts, replacements, mechanisms, devices
and services required therefore) as when delivered to Owner, reasonable wear and
tear excepted, and (E) so as to keep the Aircraft in such operating condition as
may be necessary to enable the airworthiness certification of the Aircraft to be
maintained in good standing at all times under the Aviation Act and so as to
comply with the original type certification data sheet; provided, however, if
the airworthiness certificate is withdrawn, then, subject to Section 15 hereof,
so long as Manager is taking or causing to be taken all necessary action to
promptly correct the condition which caused such withdrawal, no Event of Default
shall arise from such withdrawal.  Owner, which represents that it employs no
maintenance personnel, may in its sole discretion refuse to permit any person to
perform maintenance on the Aircraft for any reason or no reason; this power is
not intended, and shall not be used by Owner, to influence operational control
of the Aircraft.  Nothing herein shall prevent Manager from
taking the Aircraft out of service for maintenance or modification permitted
hereunder or for storage in accordance with applicable FAA
requirements;

    

      iii.  maintain all
records, logs and other materials required by the FAA to be maintained in
respect of the Aircraft.  All repairs, parts, replacements,
mechanisms, devices and services installed or made under this Subsection 11(c)
shall be and remain free and clear of any Liens and shall immediately, without
further act, become the property of Owner and part of the Aircraft;

     

    
      
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Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    iv. arrange for and coordinate
and schedule all use of the Aircraft, whether by Owner or Manager or under
Permitted Leases; and

    

    v. use best efforts to market the
Aircraft for lease pursuant to Permitted Leases.
All lease payments payable to Owner pursuant to this Agreement
collected by Manager as agent for Owner and remitted to Owner (net of the
Management Fee applicable thereto) shall be made monthly.

    

    d.  Manager will not
make or authorize any improvement, change, addition or alteration to the
Aircraft (i) if such improvement, change, addition or alteration will impair the
originally intended function or use of the Aircraft or impair the value, utility
or remaining useful life of the Aircraft as it existed immediately prior to such
improvement, change, addition or alteration, except that the value (but not the
utility, condition, remaining useful life or airworthiness) of the Aircraft may
be reduced by the value of the Parts that Manager deems obsolete or no longer
suitable or appropriate for use in the Airframe if replaced by an equivalent
Part of equal or greater value, utility, condition and airworthiness. If any
parts installed in or attached to or otherwise becoming a part of the Aircraft
as a result of any such improvement, change, addition or alteration shall not be
readily removable without damage to the Aircraft, such Parts shall become
property of Owner.  If no Event of Default shall have occurred and be
continuing, any Part which is added to the Aircraft not described in the
immediately preceding sentence and which is not a replacement or substitution
for any property which was a Part of the Aircraft, shall remain the property of
Manager and may be removed by Manager at any time prior to the expiration or
other termination of the Operating Term.  All such parts shall be and
remain free and clear of any Liens.  Any such Part which is not so
removed prior to the expiration or other termination of the Operating Term
shall, without further act, become the property of Owner.  In the
event that any law, rule or regulation or order applicable to the Aircraft
requires alteration, repair or modification of the Aircraft during the Term,
Manager will, at Manager's sole expense (utilizing the services of FAA approved
maintenance facilities and personnel), conform thereto, or obtain conformance
therewith, maintain the same in proper operating condition under such laws,
rules, regulations and orders, and such alterations, repairs and modifications
shall immediately, without further act, become the property of Owner and part of
the Aircraft.

    

    e.  Manager agrees
that all service, repair, maintenance and overhauls of the Aircraft or any part
thereof undertaken or performed during the Term shall be performed solely by FAA
approved maintenance facilities and FAA approved service personnel to the extent
required by applicable law or regulation.

    

    f.  The parties
intend that the primary base of the Aircraft be [location.]  Notwithstanding
any Permitted Lease, Owner shall provide Manager with reasonable access to and
use of the Aircraft, at Manager’s operating bases, for the purposes of
conducting all training, testing, and maintenance that is necessary for
compliance with the FARs and Manager’s manuals, policies, and
procedures.

    

    12.  Operational Control and
Flight Crews.

    

    a.  Owner Retains Operational
Control.  Except when a transfer of operational control occurs
pursuant to a Permitted Lease, Owner shall have and retain operational control
of the Aircraft and possession, command, and control thereof and holds sole
authority over initiating, conducting, or terminating a flight.

     

    
      
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    b.  Provision of Flight
Crew.  Owner shall only operate the Aircraft, or cause or
permit the Aircraft to be operated, with professionally trained and qualified
pilots, including at least one pilot-in-command and one second-in-command,
commonly defined as “Flight
Crew,” that are provided or caused to be provided by
Manager.  During all flights on the Aircraft during the Term, the
Pilot-in-Command (as defined in FAR 1.1) shall have full authority to take all
actions necessary, in the sole discretion of the Pilot-in-Command, to (i)
provide for the safety of the Aircraft and the passengers, crew or cargo
thereon, and (ii) enable the safe operation of each such
flight.  Owner, which
represents that it employs no such pilots, may in its sole discretion reject any
flight crewmember for any reason or no reason; this power is not intended to and
shall not be used to influence operational control of the
Aircraft.

    

    13. Identification.  Manager shall, at
Owner's expense, attach to the Aircraft or any part of the Aircraft a notice
reasonably satisfactory to Owner disclosing Owner's ownership
thereof.

    

    14. Inspection. Owner or its authorized
representative may, at such time as the Aircraft is in the possession of the
Manager, at any reasonable time or times during business hours, inspect the
aircraft and the books and records of Manager.

    

    15. Loss or
Damage.

    

    a.  All risk of
loss, theft, damage or destruction to the Aircraft or any part thereof, however
incurred or occasioned, shall be borne by Manager and, unless such occurrence
constitutes an Event of Loss pursuant to paragraph (b) of this Section 15,
Manager shall promptly cause the affected part or parts of the Aircraft to be
replaced or restored to the condition and repair required to be maintained by
Section 11 hereof.  Upon the occurrence of an Event of Loss with
respect to an Engine or a Part not resulting in an Event of Loss with respect to
the Airframe, Manager will promptly substitute such Engine or Part with an
Engine or part having the equivalent value, utility and economic
life.

    

    b.  If an Event of
Loss with respect to the Aircraft shall occur, at Manager's election, Manager
shall (i) promptly give Owner written notice thereof, and Manager shall pay to
Owner on the Loss Payment Date an amount equal to the sum of (x) the Stipulated
Loss Value of the Aircraft computed as of the Payment Date with respect to the
Aircraft on or immediately preceding the Loss Payment Date; and (y) all rent and
other amounts due to be remitted to Owner hereunder for the Aircraft on or prior
to the Loss Payment Date or (ii) within sixty (60) days after the occurrence of
an Event of Loss give written notice to Owner of its intention to substitute
within one hundred twenty (120) days of an occurrence of an Event of Loss an
aircraft of identical make and model having the equivalent value, utility and
economic life as the Aircraft.  In the event Manager exercises its
option under clause (i) of this paragraph, upon payment of such amount to Owner,
this Management Agreement shall terminate, and Owner will transfer to Manager
all of Owner's right, title and interest in and to the Aircraft on an "as is, where is" basis,
without recourse and without representation or warranty, express or implied,
other than a representation and warranty that the Aircraft is free and clear of
any Owner's Liens.

    

    c.  Any payments
received at any time by Owner or Manager from any insurer with respect to loss
or damage to the Aircraft shall be applied as follows: (i) if such payments are
received with respect to an Event of Loss they shall be paid to Owner, but to
the extent received by Owner, (x) they shall reduce or discharge, as the case
may be, Manager's obligation to pay the amounts due to Owner under Section 15(b)
hereof with respect to such Event of Loss, or (y) if the Aircraft is being
replaced pursuant to Section 15(b) they shall be paid to Manager on the
consummation of the closing for such replacement; and any excess above
Stipulated Loss Value shall be paid to Manager; or (ii) if such payments are
received with respect to any loss of or damage to the Aircraft other than an
Event of Loss, such payment shall, unless a Default or an Event of Default shall
have occurred and be continuing, be applied to the repair of the Aircraft or
paid to Manager forthwith upon completion of such repairs.

     

    
      
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Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
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    If an Event of Default shall have
occurred and be continuing, such payments shall be paid to Owner and applied to
any amount due and payable to Owner hereunder.  Both Owner and Manager
agree to cooperate with each other to ensure that any payments from insurers are
paid in accordance with this subsection.

    

    16. General
Indemnity.

    

    a. Claims
Indemnified.  Subject to the exclusions stated in Section 16(b)
below, Manager assumes liability for, and shall indemnify, protect, save and
keep harmless Owner and its agents, servants, successors and assigns (an
"Indemnitee") from and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, suits, costs and expenses, including
reasonable legal expense, of whatsoever kind and nature, imposed on, incurred by
or asserted against any Indemnitee, in any way relating to or arising out of
this Management Agreement or the enforcement hereof, or the manufacture,
ordering, purchase, acceptance, rejection, ownership, possession, use,
selection, delivery, lease, operation, condition, sale, return or other
disposition of the Aircraft or any part thereof (including, without limitation,
latent or other defects, whether or not discoverable by Manager or any other
person, any claim in tort for strict liability and any claim for patent,
trademark or copyright infringement); provided, however, that Manager shall not
be required to indemnify any Indemnitee for loss or liability arising from acts
or events which occur after the Aircraft has been returned to Owner in
accordance with this Management Agreement, or for loss or liability resulting
solely from the willful misconduct or gross negligence or sole negligence of
such Indemnitee.  The provisions this Section shall survive the
expiration or earlier terminating of this Management Agreement.

    

    b. Claims
Excluded.  Notwithstanding Section 16(a) above, Manager shall
not be obligated to indemnify any Indemnitee for:

    

      i.  Any claim that
is a tax;

    

      ii.  Any claim to
the extent attributable to the gross negligence or willful misconduct of, or the
breach of any contractual obligation by, or the falsity or inaccuracy or breach
of any representation or warranty by such lndemnitee;

    

      iii.  Any claims
attributable to acts or events occurring after the expiration of the Term unless
the Aircraft is not returned in circumstances where Manager is required by the
terms hereof to return the Aircraft, in which case the foregoing exclusions
shall apply only to claims attributable to acts or events occurring after any
such return;

    

      iv.  Any claims
attributable to the voluntary offer, sale or disposition by or on behalf of such
Indemnitee of its interest in the Aircraft or any part thereof or any security,
or except pursuant to this Management Agreement;

    

      v.  Any claims that
are ordinary and usual operating or overhead expenses;

    

      vi.  Any claims that
constitute costs and expenses of any Indemnitee that Manager is not required to
pay pursuant to any other provision of this Management Agreement, unless such
costs and expenses are indemnified as part of a claim under this
indemnity;

     

    
      
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Securities and Exchange Commission pursuant to a confidential treatment
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      vii.  Any claims for
a diminution in value of the Aircraft that results from the existence during the
Term of any Owner's Lien;

    

      viii. Any claims attributable
to any loan transaction relating to the Aircraft;

    

      ix.  Any claims
attributable to the authorization or giving or withholding of consent to, or to
the preparation, execution, delivery or filing of, any future amendments,
supplements, waivers, or consents with respect to any of the documents relating
to this Management Agreement other than (a) as have been requested by Manager,
(b) as are required or contemplated by (and, if contemplated by, in compliance
with) the provisions of this Management Agreement in order to give effect
thereto or necessary to accomplish the purposes thereof, (c) as are required by
applicable law or (d) after the occurrence of an Event of Default;

    

      x.  Any claim
attributable to any "prohibited transaction" within the meaning of Section
4975(c)(i) of the Code;

    

      xi.  Any claim
attributable to the bankruptcy or insolvency of any Person other than
Manager;

    

      xii.  Any claim that
is a fee or expense of any trustee appointed without the consent of Manager
unless such fee or expense is attributable to an Event of Default;
or

    

      xiii.  Any claim
relating to insurance maintained by or for the benefit of an Indemnitee that
Manager is not required to maintain at its own cost and expense pursuant to
Section 9 of this Management Agreement.

    

    17. Events of
Default. The
following events shall each constitute an event of default (herein called "Event
of Default") under this Management Agreement:

    

    a.  Manager shall
fail to remit to Owner or make any payment of rent collected by Manager as agent
for Owner or other amount owing hereunder, including the failure to accurately
report hours of operation of the Aircraft and remit the appropriate maintenance
reserve, within ten (10) days after the date when due; or

    

    b.  Manager shall
fail to maintain the insurance required by Section 9 hereof or to perform or
observe any of the covenants contained in Sections 11 (a), (b) & (c), 14 or
20 hereof; or

    

    c.  Manager shall
fail to perform or observe any other covenant, condition or agreement to be
performed or observed by it with respect to this Management Agreement and such
failure shall continue unremedied for thirty (30) days after the date on which
such performance was due; or

    

    d.  Manager shall
fail to maintain the Engines in accordance with the Engine manufacturers
maintenance program and provide monthly reports and proof that the Engines have
been maintained in accordance with the requirements and recommendations of the
Engine manufacturer; or

    

    e.  Any material
representation or warranty made by Manager herein shall prove at any time to
have been untrue or misleading in any material respect as of the time when made
and such incorrectness shall continue to be material and unremedied for a period
of thirty (30) days after written notice thereof by Owner; or

     

    
      
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Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

     

    f.  The entry of a
decree or order for relief by a court having jurisdiction in respect of Manager,
adjudging Manager a bankrupt or insolvent, or approving as properly filed a
petition seeking a reorganization, arrangement, adjustment, or composition of or
in respect of Manager in an involuntary proceeding or case under the federal
bankruptcy laws, as now or hereafter constituted or any other applicable federal
or state bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee, or sequestrator (or other similar
official) of Manager or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such decree
or order unstayed and in effect for a period of ninety (90) days;
or

    

    g.  The institution
by Manager of proceedings to be adjudicated a bankrupt or insolvent, or the
consent by Manager or Guarantor to the institution of bankruptcy or insolvency
proceedings against it or him, or the commencement by Manager of a voluntary
proceeding or case under the federal bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy, insolvency or
other similar law, or the consent by Manager to the filing of any such petition
or to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, of sequestrator (or other similar official of
Manager or of any substantial part of Manager’s property, or the making by
Manager of any assignment for the benefit of creditors or the admission by
Manager of inability to pay debts generally as they become due or willingness to
be adjudicated a bankrupt or the failure of Manager generally to pay debts as
they become due or the taking of corporate action by Manager in furtherance of
any of the foregoing; or

    

    Provided that, notwithstanding anything
to the contrary contained in this Management Agreement, any failure of Manager
to perform or observe any covenant, condition, or agreement herein shall not
constitute an Event of Default if such failure is caused solely by reason of an
event referred to in the definition of Event of Loss so long as Manager
continues to comply with the applicable terms of Section 15.

    

    18. Remedies.  Subject to
applicable local law requirements, upon the occurrence of any Event of Default
hereunder and so long as the same shall be continuing, Owner may, at its option,
declare this Management Agreement to be in default, and at any time thereafter
so long as the Event of Default shall be continuing, Owner may terminate this
Management Agreement and exercise one or more of the following remedies, as
Owner in its sole discretion shall lawfully elect:

    

    a.  Demand that
Manager, and Manager shall at its expense upon such demand, return the Aircraft
promptly to Owner, in the condition required by Section 6 of this Management
Agreement, at such place in the continental United States of America as Owner
shall specify, or Owner, at its option, may enter upon the premises where the
Aircraft is located and take immediate possession of the Aircraft and remove the
same by summary proceedings or otherwise, all without liability for or by reason
of such entry or taking of possession, whether for the restoration of damage to
property caused by such taking or otherwise;

    

    b.  Owner may
exercise any other right or remedy which may be available to it under applicable
law or proceed by appropriate court action to enforce the terms hereof or to
recover damages for the breach hereof or to rescind this Management
Agreement.

    

    In addition, Manager shall be liable
for any and all lease payments under Permitted Leases collected by Manager as
agent for Owner and not yet remitted to Owner and other amounts due hereunder
before or during the exercise of any of the foregoing remedies and for all
reasonable legal fees and other costs and expense incurred by reason of the
occurrence of any Event of Default or the exercise of Owner's remedies with
respect thereto, including all costs and expenses incurred in connection with
the placing of the Aircraft in the condition required by Sections 6(a) and 11
hereof.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

    

     

    No remedy referred to in this Section
18 is intended to be exclusive but each shall be cumulative and in addition to
any other remedy referred to herein or otherwise available to Owner at law or in
equity; and the exercise or beginning of exercise by Owner of any one or more of
such remedies shall not preclude the simultaneous or later exercise by Owner of
any or all such other remedies.  No express or implied waiver by Owner
of an Event of Default shall in any way be, or be construed to be, a waiver of
any future or subsequent Event of Default.  To the extent permitted by
applicable law, Manager hereby waives any rights now or hereafter conferred by
statute or otherwise which may require Owner to retain a new manager or to sell,
or lease  or otherwise use the Aircraft in mitigation of Owner's
damages or losses or which may otherwise limit or modify any of Owner's rights
or remedies under this Management Agreement.

    

    19. Owner's
Right To Perform.  If Manager fails
to make any payment required to be made by it hereunder or fails to perform or
comply with any of its other agreements contained herein, Owner may itself make
such payment or perform or comply with such agreement, and the amount of such
payment and the amount of reasonable expenses of Owner incurred in connection
with such payment or the performance of or compliance with such agreement, as
the case may be (together with interest thereon at the Late Charge Rate), shall
be payable by Manager to Owner on demand.

    

    20. Assignment.  Manager shall not
attempt to sell, assign or dispose of the Aircraft, or any interest herein or
therein, or any part thereof, without Owner's prior written consent and, without
making all filings and registrations with the International Registry maintained
pursuant to the Cape Town Convention deemed necessary or advisable by Owner to
protect its interest herein and in the Aircraft.  Manager will not,
without the prior written consent of Owner, assign this Management Agreement or
any interest herein.

    

    Manager shall warrant and defend title
to the Aircraft in favor of Owner against all claims and demands of all other
persons claiming any interest therein by, through or under Manager and shall not
create, incur or suffer to exist any Lien or any Irrevocable De-Registration and
Export Request Authorization ("IDERA") with respect to the Aircraft filed or to
be filed with the International Registry, the FAA or elsewhere, other than those
in favor of Owner or Owner’s lender.

    

    Notwithstanding the foregoing, Manager
shall at any time during the Term be entitled to (i) deliver possession of the
Airframe or any Engine or any Part to the manufacturer thereof or to any
organization for testing, service, repair, maintenance, overhaul work or other
similar purposes or for alterations or modifications or additions required or
permitted by the terms of this Management Agreement and (ii) transfer possession
of the Airframe or any Engine to the United States of America as required by
applicable law.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

    

     

    21. Notices.  Notices sent by
acceptable courier services shall be deemed received when delivered and
evidenced by proper receipt.  All other notices, demands and other
communications hereunder shall be in writing, and shall be deemed to have been
given or made when sent by telefacsimile or ten (10) days after deposited in the
United States mail, first class postage prepaid, addressed as follows or to such
other address as any of the following persons may from time to time designate in
writing to the other persons listed below: A copy of all notices sent to Owner
shall be sent to Owner’s Counsel, [***]

    

    
      	
            	
              Owner:

            	
              LW
      AIR I LLC

            

    

    750
Lexington Ave, 25th Floor

    New York, NY 10022

    ATTN: Lorne Weil

    

    
      	
            	
              Manager:

            	
              Avantair,
      Inc.

            

    

    4311
General Howard Drive

    Clearwater,
Florida 33764

    ATTN: Tom
Palmiero

    

    22. Conditions Precedent to
Owner’s Obligations.  Owner shall not be obligated to accept
and execute the Management Agreement hereunder unless:

    

    a. Insurance.  Owner
shall have received evidence satisfactory to it as to the due compliance by
Manager with the provisions regarding insurance contained in Section 9
hereof.

    

    b. Owner's
Title.  Owner shall have received good and marketable title to
the Aircraft, free and clear of any Liens, and all filings, recordings and other
actions that are necessary or desirable in order to establish, protect and
preserve Owner's title to and ownership of the Aircraft shall have been duly
effected, including, without limitation, the receipt by Owner of a duly
completed, executed and delivered FAA Bill of Sale.  In addition,
Owner shall have received evidence satisfactory to it that, immediately prior to
the transfer of the title to the Aircraft to Owner by the seller thereof, such
seller has good and marketable title to the Aircraft.  The
international interest created hereby in the Aircraft pursuant to the provisions
of the Cape Town Convention shall be registered with the International Registry,
and Manager hereby consents to such registration and authorizes Owner to effect
all such registrations with the International Registry.  No
international interest created in favor of Owner shall be discharged without the
prior written consent of Owner.

    

    c. Airworthiness
Certificate.  Owner shall have received a copy of the FAA
airworthiness certificate for the Aircraft.

    

    d. FAA Registration; FAA
Filings; International Interest.  Owner shall have received
evidence satisfactory to it and its special FAA counsel that the Aircraft is
currently properly registered (including, without limitation, a copy of the
current Certificate of Aircraft Registration), that a proper Application for
Registration for the Aircraft in Owner's name has been submitted to the FAA and
that the FAA Bill of Sale covering the Aircraft from the seller thereof has been
properly filed for record.  The international interest created hereby
in the Aircraft pursuant to the provisions of the Cape Town Convention shall be
registered with the International Registry.

    

    e. Representations True; No
Default or Event of Default.  All representations and
warranties of Manager contained herein or in any certificate furnished to Owner
in connection herewith shall be true and correct on and as of the date of the
Supplement with the same force and effect as if made on and as of such date; no
Event of Default or Default shall be in existence on such date or shall occur as
a result of the management by Manager of the Aircraft specified in the
Supplement.

    

    f. No Material Adverse
Change.  In the reasonable judgment of Owner, there shall have
been no material adverse change in the financial condition or business of
Manager from December 31 of the year preceding the year of execution of this
Management Agreement.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

     

    g.  Other Documents and
Information.  Owner shall have received from Manager, in form
and substance satisfactory to Owner, such other documents and information, as
Owner shall reasonably request.

    

    h. Legal Matters;
Proceedings.  All legal matters and all proceedings in
connection with the transactions contemplated by this Management Agreement, and
all documents incidental thereto, shall be satisfactory to Owner's
counsel.

    

    i.  Further
Assurances.  In the event that the FAA deems any provision of
this Management Agreement, or a provision in any Permitted Lease during the Term
of this Management Agreement, invalid or otherwise unenforceable pursuant to the
Aviation Act or regulations or policies thereunder and the result of such
determination materially impairs the terms and implementation of the
transactions contemplated herein, then this Management Agreement shall be
immediately terminable by either party hereto; provided, however,
that Owner, on the one hand, and Manager, on the other, hereby agree that they
shall use their best efforts to cooperate with each other in resolving the
issues concerning such FAA determination to effectuate the transactions
contemplated hereunder as originally intended by the parties.

    

    23. Conditions Precedent to
Manager’s Obligations.  Manager shall not be obligated to
accept and execute the Management Agreement hereunder unless:

    

    a.  Representations
True.  All representations and warranties of Owner contained
herein or in any document furnished to Manager in connection herewith shall be
true and correct on and as of the date of such document with the same force and
effect as if made on and as of such date.

    

    b.   Acceptance of Aircraft by
FAA:  At all times prior to and during the Term hereof, this
Management Agreement and each Permitted Lease during the Term hereof shall be
contingent on: (i) FAA approval or acceptance, as the case may be, of all
provisions that relate to the operation and maintenance of the Aircraft and such
other issues as may be regulated under the Aviation Act; and (ii) the FAA’s
authorization for Manager to operate the Aircraft under Manager’s Part 135
operations specifications and to manage the Aircraft under Manager’s Part 91 K
management specifications.  In the event that the FAA fails to grant
or withdraws any approval, acceptance, or authorization described above, both
parties shall use their best efforts to modify the relevant provisions of this
Agreement or any Permitted Lease from time to time as needed to cause the FAA to
grant or restore such approval, acceptance, or authorization, provided that should
the FAA fail to grant or restore such approval, acceptance, or authorization
within thirty (30) days of the FAA’s initial notice to either party of its
intent in respect thereof, this Management Agreement shall terminate
immediately.

    

    24. Miscellaneous.

    

    a.  Any provision of
this Management Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.  To the extent permitted by applicable law,
Manager hereby waives any provision of law which renders any provision hereof
prohibited or unenforceable in any respect.

    

    b. No terms or provisions of
this Management Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by the party against which
the enforcement of the change, waiver, discharge or termination is
sought.  No delay or failure on the part of Owner to exercise any
power or right hereunder shall operate as a waiver thereof, nor as an
acquiescence in any default, nor shall any single or partial exercise of any
power or right preclude any other or further exercise thereof, or the exercise
of any other power or right.  After the occurrence of any Default or
Event of Default, regardless of Owner's knowledge or lack of knowledge thereof
at the time of acceptance of any such payment, and shall not constitute a
reinstatement of this Management Agreement if this Management Agreement shall
have been declared in default by Owner pursuant to Section 18 hereof or
otherwise, unless Owner shall have agreed in writing to reinstate the Management
Agreement and to waive the Default or Event of Default.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

     

    c.  This Management
Agreement contains the full, final and exclusive statement of the agreement
between Owner and Manager relating to the maintenance and operation of the
Aircraft.

    

    d.  This Management
Agreement shall constitute an agreement solely for managing and providing
support services in respect of the Aircraft, and nothing herein shall be
construed as conveying to Manager any right, title or interest in the Aircraft
except as set forth in this Agreement or any of the applicable agreements
between the parties.

    

    e.  This Management
Agreement and the covenants and agreements contained herein shall be binding
upon, and inure to the benefit of, Owner and its successors and assigns and
Manager and, to the extent permitted by Section 20 hereof, its successors and
assigns.

    

    f.  The headings of
the Sections are for convenience of reference only, are not a part of this
Management Agreement and shall not be deemed to affect the meaning or
construction of any of the provisions hereof.

    

    g.  This Management
Agreement may be executed by the parties hereto on any number of separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same
instrument.

    

    h.  This Management
Agreement shall be governed by and construed in accordance with the laws of the
State of Florida (excluding its choice of law rules, it being the intent of the
parties that the laws of Florida or, where applicable, United States Federal
Aviation Law apply to this Management Agreement).  Any legal action
brought to enforce or construe this Agreement shall be brought only in state
courts located in Pinellas County, Florida or New York, New York and Owner and
Manager hereby agree to the exclusive jurisdiction of such courts and agree that
they will not invoke the doctrine of forum non conveniens or other similar
defenses (except that Owner may seek the replevin in any court in any
jurisdiction and Manager may not interpose a counterclaim therein, but rather,
may only assert claims against Owner in a state court of competent jurisdiction
in Pinellas County, Florida or New York, New York).

    

    i.  OWNER AND
MANAGER IN ANY LITIGATION RELATING TO OR IN CONNECTION WITH THIS MANAGEMENT
AGREEMENT IN WHICH THEY SHALL BE ADVERSE PARTIES WAIVE TRIAL BY
JURY.

    

    j.  Regardless of
place of execution, this Agreement is deemed executed at Manager's place of
business in Pinellas County, Florida.

    

    k.  Attorney's
Fees.  Owner and Manager shall be responsible for their own
legal costs incurred in completion of this Management Agreement.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

     

    IN WITNESS WHEREOF, Owner and
Manager have each caused this Aircraft Management Agreement to be duly executed
as of the day and year first above written.

     

    
      
        	Owner:       	LW Air I
      LLC	 
	 	 	 
	 	 	 	 
	 	
                By:
      

              	/s/ Lorne
      Weil      	 
	 	Name:
      Lorne Weil	 
	 	Title:
      Managing Member	 
	 	 	 	 

      

       

      
        
          	Manager:   	Avantair,
      Inc.	 
	 	 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Steven
      F. Santo	 
	 	Name:
      Steven F. Santo	 
	 	Title:
      CEO	 
	 	 	 	 

        

        
          
             

            [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

          

           

          
            
              
              

            

            
              21

              
                

              

            

            
              
              

            

             

          

        

      

    

    EXHIBIT
"A"

    

    ACCEPTANCE
SUPPLEMENT

    

    

    Aircraft Management Agreement dated as
of the 19th day of
October, 2009 between LW Air I LLC, as Owner (the "Owner") and Avantair, Inc.,
as Manager (the "Manager") (the "Management Agreement").

    

    

    (A)           The
Aircraft.

    

    The Manager hereby certifies that the
Aircraft set forth and described in Schedule 1 hereto:

    

    (i) has
been delivered to Manager, inspected by a qualified agent of the Manager, found
to be in good order, operating condition and repair and accepted under this
Management Agreement;

    

    (ii)
meets all recommended or applicable safety standards; and

    

    (iii) is
available for use and service by the Manager and the Owner, all on the date
hereof.

    

    (B)           Representations
by the Manager.

    

    The Manager hereby represents and
warrants to the Owner that on the date hereof:

    

    (i) The
representations and warranties of the Manager set forth in the Management
Agreement are true and correct in all material respects as though made on and as
of the date hereof;

    

    (ii) The
Manager has satisfied or complied with all requirements set forth in any
certificate of the Manager and in the Management Agreement to be satisfied or
complied with on or prior to the date hereof;

    

    (iii) No
Default or Event of Default under the Management Agreement has occurred and is
continuing on the date hereof; and

    

    (iv) The
Manager has obtained, and there are in full force and effect, such insurance
policies with respect to the Aircraft, as such term in defined in the Management
Agreement, as are required to be obtained under the terms of the Management
Agreement.

    

    (C)           Delivery
Date.

    

    The
Delivery Date as that term is defined in the Management Agreement, shall be the
19th
day of October, 2009

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

         

      

    

    (D)           Use
of Defined Terms.

    

    Terms defined or referred to in the
Management Agreement and not otherwise defined in this Acceptance Supplement are
used herein with the meanings set forth or referred to in the Management
Agreement.

     

    
      [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

    

    IN WITNESS WHEREOF, the
parties hereto each have caused this Operating Supplement to be duly executed by
their respective officers thereunto duly authorized this 19th day of
October , 2009.

     

    
      
        	Owner:       	LW Air I
      LLC	 
	 	 	 
	 	 	 	 
	 	
                By:
      

              	/s/ Lorne
      Weil      	 
	 	Name:
      Lorne Weil	 
	 	Title:
      Managing Member	 
	 	 	 	 

      

       

      
        
          	Manager:   	Avantair,
      Inc.	 
	 	 	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Steven
      F. Santo	 
	 	Name:
      Steven F. Santo	 
	 	Title:
      CEO	 
	 	 	 	 

        

        
          [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

           

          
            
              
              

            

            
              23

              
                

              

            

            
              
              

            

          

        

      

       

    

     

    SCHEDULE
1

    

    To the Acceptance Supplement to the
Aircraft Management Agreement dated the 19th day of
October, 2009 between LW Air I LLC, as Owner, and Avantair, Inc., as
Manager.

    

    

    One (1) Piaggio Avanti P-180
aircraft, Manufacturers Serial No. , FAA Registration Number N (the "Aircraft")
together with two (2) Pratt & Whitney aircraft engines respectively bearing
manufacturers serial numbers PCE-RW and PCE-RW (the "Engines") and any and all
Parts to the Aircraft or the Engines as defined in the Aircraft Management
Agreement.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

         

        
          
            
            

          

          
            24Unassociated Document

    Exhibit
10.17

     

    CONFIDENTIAL
TREATMENT

    REQUESTED
PURSUANT TO RULE 24b-2

    

    

    Certain
portions of this exhibit have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 under the Securities Exchange Act of
1934. The omitted materials have been filed separately with the Securities and
Exchange Commission.

    

    

    

    AIRCRAFT LEASE
AGREEMENT

    

    Dated as
of the 19th day of
October, 2009.

    between

    LW Air I
LLC,

    as
Owner,

    and

    Avantair,
Inc.

    as
Lessee,

    

    concerning
one Piaggio Avanti P-180 aircraft bearing

    

    U.S.
registration number N189SL,

    and

    Manufacturer’s
serial number 1181.

    

    *     *     *

    

    INSTRUCTIONS
FOR COMPLIANCE WITH

    "TRUTH
IN LEASING" REQUIREMENTS UNDER FAR § 91.23

    

    Within
24 hours after execution of this Aircraft Lease Agreement:

    Mail a
copy of the executed document, without Exhibit B, to
the

    following
address via certified mail, return receipt requested:

    

    Federal
Aviation Administration

    Aircraft
Registration Branch

    ATTN:
Technical Section

    P.O. Box
25724

    Oklahoma
City, Oklahoma 73125

    

    

    A  copy
of this Aircraft Lease Agreement must remain  in the aircraft at all
times.

    

    *     *     *

    

    Exhibit
B  is

    intentionally
omitted for FAA submission purposes.

     

     

    
      [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    This AIRCRAFT LEASE AGREEMENT (the
"Agreement") is entered into as of this 19th day of
October, 2009 (the "Effective Date"), by and between Avantair, Inc. ("Lessee"),
and LW Air I LLC ("Owner").

    

    W
I T N E S S E T H :

    

    WHEREAS, Owner holds title in
and to the Aircraft described and referred to herein;

    

    WHEREAS, Lessee desires to
lease from Owner, and Owner desires to lease to Lessee, the Aircraft, on a
non-exclusive basis, upon and subject to the terms and conditions of this
Agreement; and

    

    WHEREAS, during the term of
this Agreement, the Aircraft may be subject to concurrent leases to other
lessees.

    

    NOW, THEREFORE, in
consideration of the mutual promises herein contained and other good and valid
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties agree as follows:

    

    
      	
              SECTION
      1. 

            	
              DEFINITIONS

            

    

    

    
      	
              1.1

            	
              The
      following terms shall have the following meanings for all purposes of this
      Agreement:

            

    

    

    "Aircraft" means the Airframe,
the Engines, and the Aircraft Documents.  Such Engines shall be deemed
part of the "Aircraft" whether or not from time to time attached to the Airframe
or on the ground.

    

    "Aircraft Documents" means all
flight records, maintenance records, historical records, modification records,
overhaul records, manuals, logbooks, authorizations, drawings and data relating
to the Airframe, any Engine, or any Part, that have been provided to Lessee by
Owner, or are required by Applicable Law to be created or maintained with
respect to the maintenance and/or operation of the Aircraft.

    

    "Airframe" means the aircraft
specified in Exhibit
A, together with any and all Parts (including, but not limited to,
landing gear and auxiliary power units but excluding Engines or engines) so long
as such Parts shall be either incorporated or installed in or attached to the
Airframe.

    

    "Applicable Law" means,
without limitation, all applicable laws, treaties, international agreements,
decisions and orders of any court, arbitration or governmental agency or
authority and rules, regulations, orders, directives, licenses and permits of
any governmental body, instrumentality, agency or authority, including, without
limitation, the FAR and 49 U.S.C. § 41101, et seq., as
amended.

    

    "Business Day" means any day
of the year in which banks are not authorized or required to close in the state
identified as Controlling State Law on Exhibit
A.

    

    "Event of Loss" shall mean any
of the following events with respect to any property:

    

    
      	
               
      

            	
              (i)

            	
              loss
      of such property or of the use thereof due to theft or disappearance (with
      loss being conclusive following 30 days or such other period specified in
      applicable insurance), destruction, damage beyond economic repair or
      rendition of such property permanently unfit for normal use for any
      reason;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              any
      damage to such property which results in an insurance settlement with
      respect to such property on the basis of an actual, constructive or
      compromised total loss; or

            

    

    

    
      	
               
      

            	
              (iii)

            	
              the
      condemnation, confiscation or seizure of, or requisition of title to or
      use of, such property by private persons or by any governmental or
      purported governmental authority.

            

    

    

    "FAA" means the Federal
Aviation Administration or any successor agency.

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

     

    "FAR" means collectively the
Aeronautics Regulations of the Federal Aviation Administration and the
Department of Transportation, as codified at Title 14, Parts 1 to 399 of the
United States Code of Federal Regulations.

    

    "Flight Hour" means each
flight hour of use of the Aircraft by Lessee, as recorded on the Aircraft hour
meter and measured from the time the Aircraft takes off at the beginning of a
flight, to the time the Aircraft lands at the end of a flight in one-tenth
(1/10th) of an
hour increments.

    

    “Lease Period” each lease
period shall commence with delivery and conclude with the return of the
Aircraft.

    

    "Lien" means any mortgage,
security interest, lease or other charge or encumbrance or claim or right of
others, including, without limitation, rights of others under any airframe or
engine interchange or pooling agreement.

    

    "Operating Base" means that
base airport described in Exhibit
A.

    

    "Operational Control" has the
same meaning given the term in Section 1.1 of the FAR.

    

    "Parts" means all appliances,
components, parts, instruments, appurtenances, accessories, furnishings or other
equipment of whatever nature (other than complete engines) which may from time
to time be incorporated or installed in or attached to the Airframe or any
Engine and includes replacement parts.

    

    "Pilot in Command" has the
same meaning given the term in Section 1.1 of the FAR.

    

    "Rent Payment Date" means the
payments dates as outlined in Exhibit
B.

    

    "Taxes" means all sales taxes,
use taxes, retailer taxes, duties, fees, excise taxes (including, without
limitation, federal transportation excise taxes), or other taxes of any kind
which may be assessed or levied by any Taxing Jurisdiction as a result of the
lease of the Aircraft to Lessee, or the use of the Aircraft  by
Lessee, or the provision of a taxable transportation service by Lessee using the
Aircraft.

    

    "Taxing Jurisdictions" means
any federal, state, county, local, airport, district, foreign, or other
governmental authority that imposes Taxes.

    

    "Term" means the term of this
Agreement set forth in Section 3.1.

    

    
      	
              SECTION
      2. 

            	
              LEASE AND DELIVERY OF
      THE AIRCRAFT

            

    

    

    
      	
              2.1

            	
              Lease.  Owner
      agrees to lease to Lessee, and Lessee agrees to lease from Owner, the
      Aircraft, on the terms and conditions of this
  Agreement.

            

    

    

    
      	
              2.2

            	
              Delivery.  The
      Aircraft shall be delivered to Lessee on a mutually agreed date (the
      "Delivery Date") at the Operating Base on an "AS IS," "WHERE IS," BASIS
      AND SUBJECT TO EACH AND EVERY DISCLAIMER OF WARRANTY AND REPRESENTATION AS
      SET FORTH IN SECTION 4 HEREOF.  Owner shall not be liable for
      delay or failure to furnish the Aircraft pursuant to this Agreement when
      such failure is caused by government regulation or authority, mechanical
      difficulty, war, civil commotion, strikes or labor disputes, weather
      conditions, or acts of God.

            

    

    

    
      	
              2.3

            	
              Non-Exclusivity.  Lessee
      and Owner acknowledge that the Aircraft is leased to Lessee on a
      non-exclusive basis, and that the Aircraft may be subject to by other
      lessees during the Term.

            

    

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

    

     

    
      	
              SECTION
      3. 

            	
              TERM, SCHEDULING, AND
      RENT

            

    

    

    
      	
              3.1

            	
              Term.  The
      term (“Term”) of this
      Agreement shall: (A) in the event of a trip solely to reposition the
      Aircraft (i) commence immediately prior to any repositioning of the
      Aircraft by Lessee and (ii) end at the completion of such repositioning
      flight, or (B) in the event of any other trip on the Aircraft governed by
      this Agreement, (i) commence immediately prior to Lessee’s trip on the
      Aircraft governed by this Agreement and (ii) end at the completion of such
      Lessee’s trip upon the Aircraft, as the case may be.  Lessee
      shall adhere to the terms and conditions of this Agreement each time that
      the Aircraft is used by Lessee. [Mark which
      term applies at execution of
Lease].

            

    

    

    
      	
              3.2

            	
              Scheduling.  Each
      use of the Aircraft by Lessee shall be subject to Owner’s approval. If
      requested by Owner, Lessee shall submit flight scheduling request to Owner
      as far in advance as reasonably
possible.

            

    

    

    
      	
              3.3

            	
              Rent.  Lessee
      shall pay rent in an amount equal to the Hourly Rent specified in Exhibit B
      attached hereto, which amount may be amended in writing by mutual
      agreement of the parties from time to time, for each Flight Hour of use of
      the Aircraft by Lessee.  All rent shall be paid to the Owner in
      immediately available U.S. funds and in form and manner as set forth on
      Exhibit
      B.

            
	 	 
	
              3.4

            	
              Taxes. (a)  Neither
      rent nor any other payments to be made by Lessee under this Agreement
      includes the amount of any Taxes which may be assessed or levied by any
      Taxing Jurisdictions as a result of the lease of the Aircraft to Lessee,
      or the use of the Aircraft by Lessee, or the provision of a taxable
      transportation service by Lessee using the Aircraft. Lessee shall be
      responsible for, shall indemnify and hold Owner harmless against, and,
      except as provided in Section 3.4(b), Lessee shall remit to Owner all such
      Taxes together with each payment of rent pursuant to Section 3.3;
      provided, however, that if any such Taxes shall be due and payable at an
      earlier time as a matter of Applicable Law, Lessee shall remit such Taxes
      to Owner at the time required by Applicable
      Law.

            

    

     

    (b)           If
any Taxes shall be required by Applicable Law to be paid by Lessee directly to
the appropriate Taxing Jurisdiction, Lessee shall remit such Taxes directly to
the appropriate Taxing Jurisdiction promptly at the time required by Applicable
Law, and shall provide evidence of such payment to Owner.

    

    
      	
              SECTION
      4.  

            	
              DISCLAIMER OF
      WARRANTIES

            

    

    

    
      	
              4.1

            	
              THE
      AIRCRAFT IS BEING LEASED BY THE OWNER TO THE LESSEE HEREUNDER ON A
      COMPLETELY "AS IS," "WHERE IS," BASIS, WHICH IS ACKNOWLEDGED AND AGREED TO
      BY THE LESSEE.  THE WARRANTIES AND REPRESENTATIONS SET FORTH IN
      THIS SECTION 4 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR
      WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND OWNER HAS NOT MADE AND
      SHALL NOT BE CONSIDERED OR DEEMED TO HAVE MADE (WHETHER BY VIRTUE OF
      HAVING LEASED THE AIRCRAFT UNDER THIS AGREEMENT, OR HAVING ACQUIRED THE
      AIRCRAFT, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR
      FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS AGREEMENT OR
      OTHERWISE) ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR
      IMPLIED, WITH RESPECT TO THE AIRCRAFT OR TO ANY PART THEREOF, AND
      SPECIFICALLY, WITHOUT LIMITATION, IN THIS RESPECT DISCLAIMS AS TO THE
      TITLE, AIRWORTHINESS, VALUE, CONDITION, DESIGN, MERCHANTABILITY,
      COMPLIANCE WITH SPECIFICATIONS, CONSTRUCTION AND CONDITION OF THE AIRCRAFT
      OPERATION, OR FITNESS FOR A PARTICULAR USE OF THE AIRCRAFT AND AS TO THE
      ABSENCE OF LATENT AND OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, AS TO
      THE ABSENCE OF ANY INFRINGEMENT OR THE LIKE, HEREUNDER OF ANY PATENT,
      TRADEMARK OR COPYRIGHT, AS TO THE ABSENCE OF OBLIGATIONS BASED ON STRICT
      LIABILITY IN TORT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP OF
      THE AIRCRAFT OR ANY PART THEREOF OR ANY OTHER REPRESENTATION OR WARRANTY
      WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING
      FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT
      TO THE AIRCRAFT OR ANY PART THEREOF.  THE LESSEE HEREBY WAIVES,
      RELEASES, DISCLAIMS AND RENOUNCES ALL EXPECTATION OF OR RELIANCE UPON ANY
      SUCH AND OTHER WARRANTIES, OBLIGATIONS AND LIABILITIES OF OWNER AND
      RIGHTS, CLAIMS AND REMEDIES OF THE LESSEE AGAINST OWNER, EXPRESS OR
      IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING BUT NOT LIMITED TO (I) ANY
      IMPLIED WARRANTY OF MERCHANTABILITY OF FITNESS FOR ANY PARTICULAR USE,
      (II) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF
      DEALING OR USAGE OF TRADE, (III) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM
      OR REMEDY IN TORT, WHETHER OR NOT ARISING FROM THE NEGLIGENCE OF OWNER,
      ACTUAL OR IMPUTED, AND (IV) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR
      REMEDY FOR LOSS OF OR DAMAGE TO THE AIRCRAFT, FOR LOSS OF USE, REVENUE OR
      PROFIT WITH RESPECT TO THE AIRCRAFT, OR FOR ANY OTHER DIRECT, INCIDENTAL
      OR CONSEQUENTIAL DAMAGES.

            

    

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

    

     

    
      	
              SECTION
      5.   

            	
              REGISTRATION, USE,
      OPERATION, MAINTENANCE AND
POSSESSION

            

    

    

    
      	
              5.1

            	
              Title and Registration;
      Subordination.  Owner has exclusive and equitable title
      to the Aircraft, and exclusive leasehold possessory rights to the
      Aircraft.  Lessee acknowledges that title to the Aircraft shall
      remain vested in Owner, and Lessee undertakes, to the extent permitted by
      Applicable Law, to do all such further acts, deeds, assurances or things
      as may, (i) in the reasonable opinion of the Owner, be necessary or
      desirable in order to protect or preserve Owner’s right, title and
      interest in the Aircraft, and (ii) in the reasonable opinion of the Owner,
      be necessary or desirable in order to protect or preserve Owner’s
      rights.  Notwithstanding anything in this Agreement to the
      contrary, any rights Lessee may have in or to the Aircraft by virtue of
      this Agreement, including Lessee’s rights to possession and use of the
      Aircraft, are in all respects subordinate, junior, and subject to Owner's
      rights and interests.

            

    

    

    
      	
              5.2

            	
              Use and
      Operation.  Except as otherwise expressly provided
      herein, Lessee shall be solely and exclusively responsible for the use,
      operation and control of the Aircraft while in its possession during each
      Lease Period of this Agreement.  Lessee (i) shall operate the
      Aircraft in accordance with the provisions of Part 91 of the FAR, (ii)
      shall not operate the Aircraft in commercial service, as a common carrier,
      or otherwise on a compensatory or "for hire" basis except to the limited
      extent permitted under Subpart F of Part 91 of the FAR, if applicable,
      (iii) shall not operate or locate the Airframe or any Engine, or suffer
      the Airframe or any Engine to be operated or located, in any area excluded
      from coverage by any insurance policy in effect or required to be
      maintained hereunder with respect to the Airframe or Engines, or in any
      war zone, (iv) shall not operate the Airframe or any Engine or permit the
      Airframe or any Engine to be operated during each Lease Period except in
      operations for which Lessee is duly authorized, or use or permit the
      Aircraft to be used for a purpose for which the Aircraft is not designed
      or reasonably suitable, (v) shall not permit the Airframe or any Engine to
      be maintained, used or operated during each Lease Period in violation of
      any Applicable Law, or contrary to any manufacturer's operating manuals or
      instructions, and (vi) shall not knowingly permit the Aircraft to be used
      for the carriage of any persons or property prohibited by law, nor
      knowingly permit the Aircraft to be used during the existence of any known
      defect except in accordance with the FAR.  Notwithstanding
      anything in this Agreement to the contrary, Lessee shall at all times
      retain the services of Avantair, Inc. to manage and operate the Aircraft
      on its behalf.

            

    

    

    
      	
              5.3

            	
              Lessee to Pay All Operating
      Costs.  Other than as expressly provided herein, Lessee
      shall arrange for and pay all operating costs associated with Lessee’s use
      and incurred during each Lease Period, including, without limitation,
      costs of  pilots, cabin personnel, mechanics, and other ground
      support personnel (the foregoing collectively, the "Flight Crew"); fuel;
      oil; lubricants; landing and navigation fees; airport charges; passenger
      service and any and all other expenses of any kind or nature, arising
      directly or indirectly in connection with or related to the use, movement
      and operation of the Aircraft by Lessee during each Lease
      Period.  The obligations of Lessee under this provision shall
      survive the end of the Term.

            

    

    

    
      	
              5.4

            	
              Maintenance of
      Aircraft.   Owner agrees to deliver the Aircraft to
      Lessee in a good and airworthy operating condition and in compliance with
      applicable maintenance standards and practices.  Owner shall
      thereafter be solely responsible for any repairs or maintenance of the
      Aircraft that shall be required during the Term of this
      Agreement.  The term "repairs" shall include all necessary
      service, repairs, tests, and maintenance (both routine and extraordinary)
      of Aircraft as appropriate to maintain the Aircraft in accordance with
      Applicable Law.  Owner shall maintain or cause to be maintained
      all Aircraft Documents required by the FAA, the Airframe manufacturer, the
      Engine manufacturer, and the manufacturers of component Parts, and said
      Aircraft Documents shall be maintained in a current, accurate, and
      complete manner.  Lessee agrees to use its best efforts promptly
      to furnish Owner such information with respect to its use of the Aircraft
      as to enable Owner to file all reports required by any government
      authority relating to Owner’s ownership of Aircraft.  Owner
      shall have no expense or liability for repair or maintenance delays and
      shall not be liable to Lessee for any damage from loss of profit or loss
      of use of Aircraft, either before or after delivery of Aircraft to
      Lessee.

            

    

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

    

     

    
      	
              5.5

            	
              Flight
      Crew.  Lessee, at its sole expense, shall retain the the
      Flight Crew.  All members of the Flight Crew shall be fully
      competent and experienced, duly licensed, and qualified in accordance with
      the requirements of Applicable Law and all insurance policies covering the
      Aircraft.  All members of the Flight Crew who are pilots shall
      be fully trained in accordance with an FAA-approved training program,
      including initial and recurrent training and, where appropriate,
      contractor-provided simulator
training.

            

    

    

    
      	
              5.6

            	
              Operational
      Control.   THE PARTIES EXPRESSLY AGREE THAT LESSEE
      SHALL AT ALL TIMES WHILE THE AIRCRAFT IS IN ITS POSSESSION DURING EACH
      LEASE PERIOD MAINTAIN OPERATIONAL CONTROL OF THE AIRCRAFT, AND THAT THE
      INTENT OF THE PARTIES IS THAT THIS AGREEMENT CONSTITUTE A "DRY" OPERATING
      LEASE.  Lessee shall exercise exclusive authority over
      initiating, conducting, or terminating any flight conducted pursuant to
      this Agreement, and the Flight Crew shall be under the exclusive command
      and control of Lessee in all phases of such
  flights.

            

    

    

    
      	
              5.7

            	
              Authority of Pilot in
      Command.   Notwithstanding that Lessee shall have
      operational control of the Aircraft during any flight conducted pursuant
      to this Agreement, Owner and Lessee expressly agree that the Pilot in
      Command, in his or her sole discretion, may terminate any flight, refuse
      to commence any flight, or take any other flight-related action which in
      the judgment of the Pilot in Command is necessitated by considerations of
      safety. The Pilot in Command shall have final and complete authority to
      postpone or cancel any flight for any reason or condition which in his or
      her judgment would compromise the safety of the flight. No such action of
      the Pilot in Command shall create or support any liability for loss,
      injury, damage or delay to Owner.

            

    

    

    
      	
              5.8

            	
              Aircraft Documents.
      Owner shall, at its expense, maintain and preserve, or cause to be
      maintained and preserved, in the English language, all Aircraft Documents
      in a complete, accurate, and up-to-date
manner.

            

    

    

    
      	
              SECTION
      6.

            	
              CONDITION DURING TERM
      AND RETURN OF AIRCRAFT

            

    

    

    
      	
              6.1

            	
              Return.  Upon
      termination of each Lease Period, Lessee shall return the Aircraft to the
      Owner by delivering the same, at the Lessee’s own risk and expense, to the
      Operating Base.  The Aircraft at the time of its return shall be
      in the condition set forth in this Section 6 and shall be free and
      clear of all Liens.

            

    

    

    
      	
              6.2

            	
              Condition of
      Aircraft.  The Aircraft at the time of its return to
      Owner shall have been maintained and repaired in accordance with the
      provisions of this Agreement with the same care and consideration for the
      technical condition of the Aircraft as if it were to have been kept in
      continued regular service by the Owner, and shall meet the following
      requirements:

            

    

    

    
      	
               
      

            	
              (a)

            	
              Operating
      Condition.  The Aircraft shall be in as good operating
      condition as on the Delivery Date, ordinary wear and tear
      excepted.

            

    

    

    
      	
               
      

            	
              (b)

            	
              Certificate of
      Airworthiness.  The Aircraft shall have, and be in
      compliance with, a current valid certificate of airworthiness issued by
      the FAA, and shall be airworthy according to manufacturer's specifications
      and FAA regulations.

            

    

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

         

      

    

    
      	
              SECTION
      7.  

            	
              LIENS

            

    

    

    
      	
              7.1

            	
              Lessee
      shall ensure that no Liens are created or placed against the Aircraft by
      Lessee or third parties as a result of Lessee’s actions.  Lessee
      shall notify Owner promptly upon learning of any Liens not permitted under
      the terms of this Agreement.  Lessee shall, at its own cost and
      expense, take all such actions as may be necessary to discharge and
      satisfy in full any such Lien promptly after the same becomes known to
      it.  Lessee shall pay all charges related to the Aircraft as
      they become due and payable.

            

    

    

    
      	
              SECTION
      8.  

            	
              INSURANCE

            

    

    

    
      	
              8.1

            	
              Liability.  Owner
      shall maintain, or cause to be maintained, bodily injury and property
      damage, liability insurance in connection with the use of the
      Aircraft.  Said policy shall be an occurrence policy naming
      Owner and Lessee as Named Insureds.  The cost of such insurance
      shall be borne by the Lessee.

            

    

    

    
      	
              8.2

            	
              Hull.  Owner
      shall maintain, or cause to be maintained, all risks aircraft hull
      insurance in an amount equal to the fair market value of the Aircraft and
      such insurance shall name Owner as loss payee.  The cost of such
      insurance shall be borne by the
Lessee.

            

    

    

    
      	
              8.3

            	
              Insurance
      Certificates.  Upon request, Owner will provide Lessee
      with a Certificate of Insurance following execution of this
      Agreement.

            

    

    

    
      	
              SECTION
      9.  

            	
              DEFAULTS AND
      REMEDIES

            

    

    

    
      	
              9.1

            	
              Upon
      the occurrence of any failure of Lessee to duly observe or perform any of
      its obligations hereunder and at any time thereafter so long as the same
      shall be continuing, the Owner may, at its option, declare in writing to
      the Lessee that this Agreement is in default; and at any time thereafter,
      so long as the Lessee shall not have remedied the outstanding default, the
      Owner may cancel, terminate, or rescind this
  Agreement.

            

    

    

    
      	
              SECTION
      10.  

            	
              NOTICES

            

    

    

    
      	
              10.1

            	
              All
      communications, declarations, demands, consents, directions, approvals,
      instructions, requests and notices required or permitted by this Agreement
      shall be in writing and shall be deemed to have been duly given or made
      when delivered personally or transmitted electronically by e-mail or
      facsimile, receipt acknowledged, or in the case of documented overnight
      delivery service or registered or certified mail, return receipt
      requested, delivery charge or postage prepaid, on the date shown on the
      receipt thereof, in each case at the address set forth
    below:

            

    

     

    
      
        	
                If
      to Owner:

              	
                LW
      Air I LLC

              	
                Tel:

              	 
      
	 
      	 
      	
                Fax:

              	
                 

              
	 	 	 	 
	 
      	 
      	 
      	 
      
	
                If
      to Lessee:

              	
                Avantair,
      Inc.

              	
                Tel:

              	
                727-538-7910

              
	 
      	
                4311
      General Howard Drive

              	
                
                  Fax:

                

              	
                
                  727-683-9811

                

              
	 
      	
                Clearwater,
      FL  33762

              	
                 

              	 
      

      

    

     

    
      	
              SECTION
      11.  

            	
              RISK OF DAMAGE OR
      LOSS

            

    

    

    
      	
              11.1

            	
              Risk of
      Loss.  At all times while the Aircraft is in under the
      Operational Control of Lessee during the Term, Lessee shall bear the
      entire risk of an Event of Loss to the Aircraft, and shall indemnify and
      hold Owner harmless from and against any Event of Loss (including, without
      limitation, destruction, loss, theft, requisition of title, or use,
      confiscation, taking or damage of or to the Aircraft from any cause), and
      all damages (including consequential, direct and punitive), claims (in
      contract, tort or otherwise), suits, actions or proceedings arising from
      the use, operation or storage of the Aircraft.  In the event of
      an Event of Loss to the Aircraft, Lessee shall immediately (i) report the
      Event of Loss to Owner, the insurance company or companies, and to any and
      all applicable governmental agencies, and (ii) furnish such information
      and execute such documents as may be required and necessary to collect the
      proceeds from any insurance
policies.

            

    

     

    
      
        [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

      

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

    

     

    
      	
              SECTION
      12.  

            	
              MISCELLANEOUS

            

    

    

    
      	
              12.1

            	
              Entire
      Agreement.  This Agreement, and all terms, conditions,
      warranties, and representations herein, are for the sole and exclusive
      benefit of the signatories hereto.  This Agreement constitutes
      the entire agreement of the parties as of its Effective Date and
      supersedes all prior or independent, oral or written agreements,
      understandings, statements, representations, commitments, promises, and
      warranties made with respect to the subject matter of this
      Agreement.

            

    

    

    
      	
              12.2

            	
              Other
      Transactions.  Except as specifically provided in this
      Agreement, none of the provisions of this Agreement, nor any oral or
      written statements, representations, commitments, promises, or warranties
      made with respect to the subject matter of this Agreement shall be
      construed or relied upon by any party as the basis of, consideration for,
      or inducement to engage in, any separate agreement, transaction or
      commitment for any purpose
whatsoever.

            

    

    

    
      	
              12.3

            	
              Prohibited and Unenforceable
      Provisions.  Any provision of this Agreement which is
      prohibited or unenforceable in any jurisdiction shall, as to such
      jurisdiction, be ineffective to the extent of such prohibition or
      unenforceability without invalidating the remaining provisions hereof, and
      any such prohibitions or unenforceability in any
      jurisdiction.  To the extent permitted by applicable law, each
      of Owner and Lessee hereby waives any provision of applicable law which
      renders any provision hereof prohibited or unenforceable in any
      respect.

            

    

    

    
      	
              12.4

            	
              Enforcement.  This
      Agreement, including all agreements, covenants, representations and
      warranties, shall be binding upon and inure to the benefit of, and may be
      enforced by Owner, Lessee, and each of their agents, servants and personal
      representatives.

            

    

    

    
      	
              12.5

            	
              Headings.  The
      section and subsection headings in this Agreement are for convenience of
      reference only and shall not modify, define, expand, or limit any of the
      terms or provisions hereof.

            

    

    

    
      	
              12.6

            	
              Counterparts.  This
      Agreement may be executed by the parties hereto in separate counterparts,
      each of which when so executed and delivered shall be an original, but all
      such counterparts shall together constitute but one and the same
      instrument.

            

    

    

    
      	
              12.7

            	
              Amendments.  No
      term or provision of this Agreement may be amended, changed, waived,
      discharged, or terminated orally, but only by an instrument in writing
      signed by the party against which the enforcement of the change, waiver,
      discharge, or termination is
sought.

            

    

    

    
      	
              12.8

            	
              No Waiver.  No
      delay or omission in the exercise or enforcement or any right or remedy
      hereunder by either party shall be construed as a waiver of such right or
      remedy.  All remedies, rights, undertakings, obligations, and
      agreements contained herein shall be cumulative and not mutually
      exclusive, and in addition to all other rights and remedies which either
      party possesses at law or in
equity.

            

    

    

    
      	
              12.9

            	
              No
      Assignments.  Neither party may assign its rights or
      obligations under this Agreement without the prior written permission of
      the other.

            

    

    

    
      	
              12.10

            	
              Governing
      Law.  This Agreement shall in all respects be governed
      by, and construed in accordance with, the laws of the state designated in
      Exhibit
      A, including all matters of construction, validity and performance,
      without giving effect to its conflict of laws
  provisions.

            

    

     

    REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK.

     

    
      
        
          [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

        

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

      

    

     

    
      	
              SECTION
      13.  

            	
              TRUTH IN
      LEASING

            

    

    

    
      	
              13.1

            	
              TRUTH
      IN LEASING STATEMENT UNDER SECTION 91.23 OF THE
  FAR's.

            

    

    

    WITHIN
THE TWELVE (12) MONTH PERIOD PRECEDING THE DATE OF THIS AGREEMENT, THE AIRCRAFT
HAS BEEN INSPECTED AND MAINTAINED AND IN ACCORDANCE WITH THE FOLLOWING
PROVISIONS OF FAR:

    

    CHECK
ONE:

    

    
      
        
          
            	
                    o

                  	
                    91.409
      (f) (1): A continuous airworthiness inspection program that is part of a
      continuous airworthiness maintenance program currently in use by a person
      holding an air carrier operating certificate or an operating certificate
      issued under FAR Part 121, 127, or 135 and operating that make and model
      aircraft under FAR Part 121 or operating that make and model under FAR
      Part 135 and maintaining it under FAR
  135.411(a)(2)

                  

          

        

         

        
          
            
              
                	
                        x

                      	
                        91.409
      (f) (2): An approved aircraft inspection program approved under FAR
      135.419 and currently in use by a person holding an operating certificate
      issued under FAR Part
135.

                      

              

            

          

        

         

        
          
            	
                    o

                  	
                    91.409
      (f) (3): A current inspection program recommended by the
      manufacturer.

                  

          

        

         

        
          
            	
                    o

                  	
                    91.409
      (f) (4): Any other inspection program established by the registered owner
      or operator of the Aircraft and approved by the Administrator of the
      Federal Aviation Administration in accordance with FAR 91.409
      (g).

                  

          

        

      

    

    

    THE
PARTIES HERETO CERTIFY THAT DURING THE TERM OF THIS AGREEMENT AND FOR OPERATIONS
CONDUCTED HEREUNDER, THE AIRCRAFT WILL BE MAINTAINED AND INSPECTED IN ACCORDANCE
WITH THE PROVISIONS OF FAR:

    

    CHECK
ONE:

    

    o    91.409
(f)
(1)             x    91.409
(f)
(2)             o   91.409
(f)
(3)             o    91.409
(f) (4)

    

    LESSEE
ACKNOWLEDGES THAT WHEN IT OPERATES THE AIRCRAFT UNDER THIS AGREEMENT, IT SHALL
BE KNOWN AS, CONSIDERED, AND IN FACT WILL BE THE OPERATOR OF SUCH
AIRCRAFT.  EACH PARTY HERETO CERTIFIES THAT IT UNDERSTANDS THE EXTENT
OF ITS RESPONSIBILITIES, SET FORTH HEREIN, FOR COMPLIANCE WITH APPLICABLE
FEDERAL AVIATION REGULATIONS.

    

    AN
EXPLANATION OF FACTORS BEARING ON OPERATIONAL CONTROL AND PERTINENT FEDERAL
AVIATION REGULATIONS CAN BE OBTAINED FROM THE NEAREST FEDERAL AVIATION
ADMINISTRATION FLIGHT STANDARDS DISTRICT OFFICE, GENERAL AVIATION DISTRICT
OFFICE, OR AIR CARRIER DISTRICT OFFICE.

    

    THE
PARTIES HERETO CERTIFY THAT A TRUE COPY OF THIS AGREEMENT SHALL BE CARRIED ON
THE AIRCRAFT AT ALL TIMES, AND SHALL BE MADE AVAILABLE FOR INSPECTION UPON
REQUEST BY AN APPROPRIATELY CONSTITUTED IDENTIFIED REPRESENTATIVE OF THE
ADMINISTRATOR OF THE FAA.

    

    *     *     *

     

    
      
        
          [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

        

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

      

    

    

    IN WITNESS WHEREOF, the Owner
and the Lessee have each caused this Aircraft Lease Agreement to be
duly executed as of the Effective Date.

     

    
      
        	 	
                OWNER:

                 

                LW
      AIR I LLC

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Lorne
      Weil      	 
	 	Print:     	Lorne
      Weil	 
	 	Title:    	Managing
      Member	 
	 	 	 	 

      

       

      
        
          	 	
                  
                    LESSEE:

                    

                    AVANTAIR,
      INC.

                  

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/ Steven
      F. Santo     	 
	 	Print:     	Steven F.
      Santo	 

        

         

      

    

    
      
        
          [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

        

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

           

        

      

    

    AIRCRAFT LEASE
AGREEMENT

    

    Exhibit
A

    

    

    Aircraft
Make/Model

    Piaggio
P-180

    

    

    FAA Registration
No.

    N189SL

    

    

    Serial
Number

    1181

    

    

    Operating Base
Airport

    KPIE

    

    

    Controlling State
Law

    Florida

     

    
      
        
          [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

        

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

      

    

     

    AIRCRAFT LEASE
AGREEMENT

    

    Exhibit
B

    

    

    Hourly
Rent:  $[***] per hour.

    

    Rent Payment
Date:  Rent shall be paid monthly by Lessee to Owner within 5
Business Days of the conclusion of each month or as otherwise agreed to by the
parties.

     

    
      
        
          [***]
Confidential information has been omitted and filed separately with the
Securities and Exchange Commission pursuant to a confidential treatment
request.

        

         

        
          
            
            

          

          
            12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00167-of-00352.parquet"}]]