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F-1/A

As filed with the Securities and Exchange Commission on December 1, 2005

Registration No. 333-129967

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

Form F-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

COPA HOLDINGS, S.A.

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)


Republic of Panama	4512	Not Applicable
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

Boulevard Costa del Este, Avenida Principal y Avenida de la Rotonda

Urbanización Costa del Este

Complejo Business Park, Torre Norte

Parque Lefevre

Panama City, Panama

(+507 303-3348)

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Puglisi & Associates

850 Library Avenue, Suite 204

Newark, Delaware 19711

(1-302-738-6680)

(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:


David L. Williams Simpson Thacher & Bartlett LLP 425 Lexington Avenue New York, New York 10017		Francesca Lavin Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, New York 10006

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, please check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. o

CALCULATION OF REGISTRATION FEE

Proposed Maximum

Amount of

Title of Each Class of

Amount to be

Offering

Aggregate

Registration

Securities to be Registered

Registered⁽¹⁾

Price per Share⁽²⁾

Offering Price

Fee⁽³⁾

Class A common shares, without par value

16,100,000 shares

$17

$273,700,000

$29,285.90


(1)	Includes Class A common shares that the underwriters may purchase solely to cover over-allotments, if any.

(2)	Estimated solely for purposes of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act.


(3)	Previously paid.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

This Amendment No. 1 to the Registration Statement on Form F-1 of the Copa Holdings, S.A. is being filed solely for the purpose of filing exhibits, including the consent of Ernst & Young, Panama, which exhibit corrects a typographical error in the previous consent and updates such consent for this Amendment No. 1.

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS


Item 6.	*Indemnification of Directors and Officers*

According to the Registrant’s Articles of Incorporation and so far as may be permitted by the Law, every Director or Officer of the Company shall be entitled to be indemnified by the Company against all costs, charges, losses, expenses and liabilities incurred by him in the execution and discharge of his duties or in relation thereto, including any liability incurred by him in defending any proceeding which relate to anything done or omitted or alleged to have been done or omitted by him as an officer or employee of the Company and in which judgment is rendered in his favor (or the proceedings are otherwise disposed of without any finding or admission of any material breach of duty on his part) or in which he is acquitted or in connection with any application under any statute/regulation for relief from liability in respect of any such act or omission in which relief is granted to him by a court of law or similar tribunal. The Registrant intends to enter into indemnity agreements with its directors and officers and to purchase insurance for the benefit of the directors and officers prior to the offering.


Item 7.	*Recent Sales of Unregistered Securities*

None.


Item 8.	*Exhibits*

(a) The following documents are filed as part of this Registration Statement:


1	.1**	Form of Underwriting Agreement

3	.1*	Articles of Incorporation (Pacto Social) of the Registrant

5	.1*	Opinion of Galindo, Arias & Lopez, Panamanian legal counsel of the Registrant, as to the legality of the Class A shares

8	.1*	Opinion of Galindo, Arias & Lopez, as to tax matters

8	.2*	Opinion of Simpson Thacher & Bartlett LLP, as to tax matters

10	.1†	Aircraft Lease Agreement, dated as of October 1, 1998, between First Security Bank and Compañía Panameña de Aviación, S.A., in respect of Boeing Model 737-71Q Aircraft, Serial No. 29047

10	.2†	Letter Agreement dated as of November 6, 1998 amending Aircraft Lease Agreement, dated October 1, 1998, between First Security Bank and Compañía Panameña de Aviación, S.A., in respect of One Boeing Model 737-71Q Aircraft, Manufacturer’s Serial No. 29047

10	.3†	Aircraft Lease Amendment Agreement dated as of May 21, 2004 to Aircraft Lease Agreement, dated October 1, 1998, between First Security Bank and Compañía Panameña de Aviación, S.A., in respect of Boeing Model 737-71Q Aircraft, Serial No. 29047

10	.4†	Aircraft Lease Agreement, dated as of October 1, 1998, between First Security Bank and Compañía Panameña de Aviación, S.A., in respect of Boeing Model 737-71Q Aircraft, Serial No. 29048

10	.5†	Letter Agreement dated as of November 6, 1998 amending Aircraft Lease Agreement, dated as of October 1, 1998, between First Security Bank and Compañía Panameña de Aviación, S.A., in respect of Boeing Model 737-71Q Aircraft, Serial No. 29048

10	.6†	Aircraft Lease Amendment Agreement dated as of May 21, 2003 to Aircraft Lease Agreement, dated October 1, 1998, between First Security Bank and Compañía Panameña de Aviación, S.A., in respect of Boeing Model 737-71Q Aircraft, Serial No. 29048

10	.7†	Aircraft Lease Agreement, dated as of November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 28607

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10	.8†	Letter Agreement No. 1 dated as of November 18, 1998 to Aircraft Lease Agreement, dated November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 28607

10	.9†	Letter Agreement No. 2 dated as of March 8, 1999 to Aircraft Lease Agreement, dated November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 28607

10	.10†	Lease Extension and Amendment Agreement dated as of April 30, 2003, to Aircraft Lease Agreement, dated November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 28607

10	.11†	Aircraft Lease Agreement, dated as of November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 30049

10	.12†	Letter Agreement No. 1 dated as of November 18, 1998 to Aircraft Lease Agreement, dated November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 30049

10	.13†	Letter Agreement No. 2 dated as of March 8, 1999 to Aircraft Lease Agreement, dated November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 30049

10	.14†	Lease Extension and Amendment Agreement dated as of April 30, 2003, to Aircraft Lease Agreement, dated November 18, 1998, between Aviation Financial Services Inc. and Compañía Panameña de Aviación, S.A., Boeing Model 737-700 Aircraft, Serial No. 30049

10	.15†	Aircraft Lease Agreement, dated as of November 30, 2003, between International Lease Finance Corporation and Compañía Panameña de Aviación, S.A., New B737-700 or 800, Serial No. 30676

10	.16†	Aircraft Lease Agreement, dated as of March 4, 2004, between International Lease Finance Corporation and Compañía Panameña de Aviación, S.A., New B737-700 or 800, Serial No. 32800

10	.17†	Aircraft Lease Agreement dated as of December 23, 2004, between Wells Fargo Bank Northwest, N.A. and Compañía Panameña de Aviación, S.A., in respect of Boeing B737- 800 Aircraft, Serial No. 29670

10	.18†	Embraer 190LR Purchase Agreement DCT-006/2003 dated as of May 2003 between Embraer—Empresa Brasileira de Aeronáutica S.A. and Regional Aircraft Holdings Ltd.

10	.19†	Letter Agreement DCT-007/2003 between Embraer—Empresa Brasileira de Aeronáutica S.A. and Regional Aircraft Holdings Ltd., relating to Purchase Agreement DCT- 006/2003

10	.20†	Letter Agreement DCT-008/2003 between Embraer—Empresa Brasileira de Aeronáutica S.A. and Regional Aircraft Holdings Ltd., relating to Purchase Agreement DCT- 006/2003

10	.21*	Aircraft General Terms Agreement, dated November 25, 1998, between The Boeing Company and Copa Holdings, S.A.

10	.22†	Purchase Agreement Number 2191, dated November 25, 1998, between The Boeing Company and Copa Holdings, S.A., Inc. relating to Boeing Model 737-7V3 & 737-8V3 Aircraft

10	.23†	Supplemental Agreement No. 1 dated as of June 29, 2001 to Purchase Agreement Number 2191 between The Boeing Company and Copa Holdings, S.A.

10	.24†	Supplemental Agreement No. 2 dated as of December 21, 2001 to Purchase Agreement Number 2191 between The Boeing Company and Copa Holdings, S.A.

10	.25†	Supplemental Agreement No. 3 dated as of June 14, 2002 to Purchase Agreement Number 2191 between The Boeing Company and Copa Holdings, S.A.

10	.26†	Supplemental Agreement No. 4 dated as of December 20, 2002 to Purchase Agreement Number 2191 between The Boeing Company and Copa Holdings, S.A.

10	.27†	Supplemental Agreement No. 5 dated as of October 31, 2003 to Purchase Agreement Number 2191 between The Boeing Company and Copa Holdings, S.A.

10	.28†	Supplemental Agreement No. 6 dated as of September 9, 2004 to Purchase Agreement Number 2191 between The Boeing Company and Copa Holdings, S.A.

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10	.29†	Supplemental Agreement No. 7 dated as of December 9, 2004 to Purchase Agreement Number 2191 between The Boeing Company and Copa Holdings, S.A.

10	.30†	Supplemental Agreement No. 8 dated as of April 15, 2005 to Purchase Agreement Number 2191 between The Boeing Company and Copa Holdings, S.A.

10	.31†	Maintenance Cost per Hour Engine Service Agreement, dated March 5, 2003, between G.E. Engine Services, Inc. and Copa Holdings, S.A.

10	.32†	English translation of Aviation Fuel Supply Agreement, dated July 18, 2005, between Petróleos Delta, S.A. and Compañía Panameña de Aviación, S.A.

10	.33†	Form of Amended and Restated Alliance Agreement between Continental Airlines, Inc. and Compañía Panameña de Aviación, S.A.

10	.34*	Form of Amended and Restated Services Agreement between Continental Airlines, Inc. and Compañía Panameña de Aviación, S.A.

10	.35*	Amended and Restated Shareholders’ Agreement, dated as of November 23, 2005, among Copa Holdings, S.A., Corporación de Inversiones Aéreas, S.A. and Continental Airlines, Inc.

10	.36*	Form of Guaranteed Loan Agreement

10	.37*	Form of Registration Rights Agreement among Copa Holdings, S.A., Corporación de Inversiones Aéreas, S.A. and Continental Airlines, Inc.

10	.38*	Copa Holdings, S.A. 2005 Stock Incentive Plan

10	.39*	Form of Copa Holdings, S.A. Restricted Stock Award Agreement

10	.40**	Form of Indemnification Agreement with the Registrant’s directors

10	.41*	Form of Amended and Restated Trademark License Agreement between Continental Airlines, Inc. and Compañía Panameña de Aviación, S.A.

21	.1*	Subsidiaries of the Registrant

23	.1	Consent of Ernst & Young, Panama

23	.2*	Consent of Galindo, Arias & Lopez, Panamanian legal counsel of the Registrant (included in Exhibit 5.1)

23	.3*	Consent of Simpson Thacher & Bartlett LLP, United States legal counsel of the Registrant (included in Exhibit 8.2)

24	.1*	Powers of Attorney (included in the signature pages to this registration statement)


*	Previously filed



**	To be filed.


†	Portions of the exhibit will be omitted pursuant to a request for confidential treatment.

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(b) Financial Statement Schedules

Schedule II — Valuation and Qualifying Accounts


	Balance at		Additions		Deductions			Balance
	Beginning of		Charged to		from			at End
Description	Year		Expense		Reserves			of Year

	(in thousands)
2004
Allowance for Doubtful Accounts	$	3,046	$	1,026	$	(1,450	) ^(a)	$	2,622
Allowance for Obsolescence of Expendable Parts and Supplies		1,733		6		—			1,739
General Sales Agent Contract Termination Reserves		2,885		1,300		(2,885	)		1,300
2003
Allowance for Doubtful Accounts	$	2,936	$	2,154	$	(2,045	) ^(a)	$	3,046
Allowance for Obsolescence of Expendable Parts and Supplies		796		938		—			1,733
General Sales Agent Contract Termination Reserves		2,031		954		(100	)		2,885
2002
Allowance for Doubtful Accounts	$	6,037	$	1,928	$	(5,029	) ^(a)	$	2,936
Allowance for Obsolescence of Expendable Parts and Supplies		655		141		—			796
General Sales Agent Contract Termination Reserves		—		2,031		—			2,031


(a)	Doubtful accounts written off.

All other financial statement schedules are not required under the related instructions or are inapplicable and therefore have been omitted.

II-4

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Copa Holdings, S.A.

We have audited the consolidated financial statements of Copa Holdings, S.A. and subsidiaries (the “Company”) as of December 31, 2004 and 2003, and for each of the three years in the period ended December 31, 2004, and have issued our report thereon dated August 30, 2005, except for the effects of the reorganization discussed in Note 5 to the consolidated financial statements, as to which the date is November 25, 2005 (included elsewhere in this Registration Statement). Our audits also included the financial statement schedule listed in Item 8(b) of Form F-1 of this Registration Statement. This schedule is the responsibility of the Company’s management. Our responsibility is to express an opinion based on our audits.

In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.


	/s/ Ernst & Young

Panama City, Republic of Panama

August 30, 2005, except for the effects of the

reorganization discussed in Note 5 to the

consolidated financial statements, as to

which the date is November 25, 2005

II-5


Item 9	*Undertakings*

The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 6 of this Registration Statement, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted against the Registrant by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

The undersigned Registrant hereby also undertakes that:


	1. For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement at the time it was declared effective.

	2. For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of London, England, on December 1, 2005.


	COPA HOLDINGS, S.A.


	By:	*



	Name: Pedro Heilbron


	Title:	Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons on December 1, 2005 in the capacities indicated:


				Title
Name


* Pedro Heilbron				Director and Chief Executive Officer (Principal Executive Officer)

Victor Vial				Chief Financial Officer (Principal Financial Officer)

* Adrian Thiel				Director - Financial Reporting and Accounting (Principal Accounting Officer)

* Stanley Motta				Chairman and Director

* Osvaldo Heilbron				Director

* Jaime Arias				Director

* Ricardo Alberto Arias				Director

* Alberto C. Motta, Jr.				Director

* Mark Erwin				Director

* George Mason				Director

II-7


		Title
Name


Roberto Artavia		Director

José Castañeda		Director

Donald Puglisi		Authorized Representative in the United States

* By:	Victor Vial, as Attorney-in-Fact

II-8

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT Exhibit 10.1 AIRCRAFT LEASE AGREEMENT (MSN 29047) DATED AS OF OCTOBER 1, 1998 BETWEEN FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS LESSOR AND COMPANIA PANAMENA DE AVIACION, S.A. (COPA) AS LESSEE IN RESPECT OF ONE BOEING MODEL 737-71Q AIRCRAFT MANUFACTURER'S SERIAL NUMBER 29047

TABLE OF CONTENTS 1. INTERPRETATION 1.1 Definitions..................................................... 1 1.2 Construction.................................................... 17 2. REPRESENTATIONS AND WARRANTIES 2.1 Lessee's Representations and Warranties......................... 18 2.2 Repetition...................................................... 22 2.3 [Intentionally omitted.]........................................ 22 2.4 FSB's Representations and Warranties............................ 22 3. CONDITIONS PRECEDENT 3.1 Conditions Precedent to Lessor's Obligations.................... 23 3.2 Further Conditions Precedent to Lessor's Obligations............ 27 3.3 Conditions Precedent to Lessor's Obligation to Request Deregistration.................................................. 27 3.4 Waiver.......................................................... 28 3.5 Conditions Precedent to Lessee's Obligations.................... 28 4. DELIVERY 4.1 Scheduled Delivery Month and Scheduled Delivery Date............ 28 4.2 Commencement.................................................... 28 4.3 Delayed Delivery................................................ 29 4.4 Acceptance of Aircraft.......................................... 29 4.5 Delivery........................................................ 30 4.6 Post-Production Modification.................................... 30 4.7 Deregistration.................................................. 30 5. PAYMENTS 5.1 Cash Deposit, Deposit Letter of Credit and Supplemental Rent i

Letter of Credit................................................ 31 5.2 Rent............................................................ 32 5.3 Supplemental Rent............................................... 33 5.4 Payments........................................................ 34 5.5 Gross-up........................................................ 35 5.6 Taxes and Other Payments........................................ 35 5.7 Value Added Tax................................................. 35 5.8 Information..................................................... 36 5.9 Taxation of Indemnity Payments.................................. 36 5.10 Default Interest................................................ 37 5.11 Contest......................................................... 37 5.12 Computations.................................................... 38 5.13 Payments Absolute............................................... 39 6. MANUFACTURERS' WARRANTIES 6.1 Benefit of Warranties........................................... 39 6.2 Parts........................................................... 40 6.3 Reassignment.................................................... 40 7. LESSOR'S COVENANTS 7.1 Quiet Enjoyment................................................. 40 7.2 End Payment..................................................... 40 7.3 Manufacturer Credit and Product Support......................... 41 7.4 Airworthiness Directive Cost Sharing............................ 42 8. LESSEE'S COVENANTS 8.1 Duration........................................................ 42 8.2 Further Covenants............................................... 42 ii

9. INSURANCE 9.1 Insurances...................................................... 42 9.2 Requirements.................................................... 43 9.3 Change.......................................................... 43 9.4 Insurance Covenants............................................. 43 9.5 Failure to Insure............................................... 45 9.6 Continuing Indemnity............................................ 45 9.7 Application of Insurance Proceeds............................... 45 9.8 Insurance for Lessee's Own Accounts............................. 46 10. INDEMNITY 10.1 General......................................................... 46 10.2 Duration........................................................ 47 10.3 Exceptions...................................................... 47 11. EVENTS OF LOSS 11.1 Pre-delivery.................................................... 48 11.2 Post-delivery................................................... 48 11.3 Engines......................................................... 49 11.4 Requisition..................................................... 49 12. REDELIVERY OF AIRCRAFT 12.1 Notification.................................................... 50 12.2 Redelivery...................................................... 50 12.3 Redelivery Acknowledgment....................................... 50 12.4 Short Term Storage.............................................. 50 12.5 Expenses........................................................ 50 12.6 Warranty Transfer............................................... 51 iii

12.7 Non-Compliance.................................................. 51 12.8 Export.......................................................... 51 12.9 Late Redelivery................................................. 51 13. DEFAULT 13.1 Events.......................................................... 52 13.2 Rights.......................................................... 56 13.3 Export.......................................................... 57 13.4 Default Payments................................................ 57 13.5 Survival........................................................ 58 14. ASSIGNMENT, NOVATION 14.1 Lien............................................................ 58 14.2 Lease Assignment/Novation....................................... 58 15. ILLEGALITY............................................................. 59 16. DISCLAIMERS AND WAIVERS 16.1 Exclusion and Waiver............................................ 59 16.2 Certificate of Acceptance....................................... 60 17. MISCELLANEOUS 17.1 Waivers, Remedies, Cumulative................................... 61 17.2 Delegation/Agency Agreement..................................... 61 17.3 Certificates.................................................... 61 17.4 Appropriation................................................... 62 17.5 Currency Indemnity.............................................. 62 17.6 Set-off......................................................... 62 17.7 Severability.................................................... 63 17.8 Remedy.......................................................... 63 iv

17.9 Expenses........................................................ 63 17.10 Time of Essence................................................. 64 17.11 Notices......................................................... 64 17.12 Law and Jurisdiction............................................ 65 17.13 Sole and Entire Agreement....................................... 66 17.14 Indemnities..................................................... 66 17.15 Counterparts.................................................... 66 17.16 Language........................................................ 66 17.17 Modification.................................................... 66 17.18 Owner Trustee................................................... 67 SCHEDULE 1 DESCRIPTION OF AIRCRAFT Part 1 Description of Aircraft Part 2 General Features Part 3 Lessee's Options Part 4 Lessee's Post Production Modification Part 5 Documents Part 6 Records SCHEDULE 2 CERTIFICATE OF ACCEPTANCE Part 1 Certificate of Acceptance Part 2 Aircraft Delivery Conditions SCHEDULE 3 LESSEE'S COVENANTS Part 1 Information 1. General Information 2. Technical Information 3. Financial Information Part 2 Lessee General Covenants 4. General 5. Third Party v

6. (Intentionally Left Blank) Part 3 Operation and Inspection 7. Lawful and Safe Operation 8. Protection 9. Sub-Leasing 10. Inspection Part 4 Title, Pooling 11. Title 12. Title on Equipment Changes 13. Pooling of Engines and Parts Part 5 Technical Covenants 14. Maintenance and Repair 15. Removal of Engines and Parts 16. Installation of Engines, Landing Gear and Parts 17. Non-Installed Engines, Landing Gear and Parts 18. Equipment Changes 19. Documents and Records SCHEDULE 4 AIRCRAFT REDELIVERY SCHEDULE 5 INSURANCE REQUIREMENTS SCHEDULE 6 FORM OF LEGAL OPINION SCHEDULE 7 FORM OF REPORT - AIRFRAME AND ENGINE STATUS REPORT vi

AIRCRAFT LEASE AGREEMENT (MSN 29047) This Aircraft Lease Agreement (MSN 29047) is made as of the 1st day of October, 1998 between: (1) FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity, except as otherwise expressly provided herein, but solely as Owner Trustee, a national banking association whose principal place of business is 79 South Main Street, Salt Lake City, Utah 84111 ("Lessor"); and (2) COMPANIA PANAMENA DE AVIACION, S.A. (COPA), a company incorporated under the laws of Panama whose registered office is at Avenida Justo Arosemena y Calle 39, Panama 1, Republic of Panama ("Lessee"); WHEREAS, Lessor wishes to lease to Lessee and Lessee is willing to lease from Lessor the Aircraft subject to the terms and conditions of this Agreement upon completion of the manufacture of the Aircraft by The Boeing Company; IT IS AGREED as follows: 1. INTERPRETATION 1.1 DEFINITIONS In this Agreement the following expressions have the following meanings: AFFILIATE With respect to a specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such person. For the purposes of this definition, "control," "controlling" and "controlled" when used with respect to any specified person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of securities having ordinary voting power for the election of directors, by contract or otherwise. AGREED MAINTENANCE PERFORMER Lessee, Continental Airlines, Inc., a maintenance performer approved from time to time by Continental Airlines, Inc. for its own aircraft, or any other person agreed to from time to time in writing by Lessor, such agreement not to be unreasonably withheld. AGREED MAINTENANCE PROGRAM The continuous airworthiness Boeing Model 737-700 maintenance program, which shall be PAGE 1

substantially the same as that used by Continental Airlines, Inc. for its own Boeing Model 737-700 aircraft and which shall be approved by the FAA and the Air Authority for use by Lessee, encompassing scheduled maintenance, condition monitored maintenance, and/or on-condition maintenance of Airframe, Engines and Parts, including but not limited to servicing, testing, preventative maintenance, repairs, structural inspections, system checks, overhauls, corrosion control, inspections and treatments. AGREED VALUE As defined in Annex A. AGREEMENT This Aircraft Lease Agreement (MSN 29047), including all annexes, schedules and exhibits hereto, as modified, supplemented and amended from time to time. AIR AUTHORITY During that portion of the Term extending from the Delivery Date to the Deregistration Date, the FAA or any successor thereof, and during that portion of the Term extending from the Deregistration Date to the Redelivery Date, the Directorate of Civil Aeronautics of the Republic of Panama or any successor thereof. AIRCRAFT The aircraft described in Part 1 of Schedule 1, which includes the Airframe, the Engines, and (unless the context does not permit) the Documents and Records, as it may be modified pursuant to the terms of Clause 4.6. AIRFRAME The Aircraft including Parts, modules, APU, appliances, components, equipment and furnishings, but excluding the Engines and Documents and Records. APU The auxiliary power unit installed on the Aircraft on the Delivery Date and any replacement auxiliary power unit installed in accordance with this Agreement. BASELINE SPECIFICATION The Baseline Specification referred to in Part 1 of Schedule 1. BENEFICIARY Tombo Aviation Inc., a Delaware corporation. PAGE 2

BUSINESS DAY A day (other than a Saturday or Sunday) on which banks are open for business in New York, New York, and, in respect of payments to be made by Lessee hereunder, Panama. CASH DEPOSIT As defined in Annex A. C-CHECK Scheduled Airframe systems and structural checks described as a "C" Check in the Agreed Maintenance Program. COPA HOLDINGS COPA Holdings S.A. CYCLE (i) In relation to the Airframe, one take-off and landing of the Aircraft, and (ii) in relation to each Engine, the APU and the Landing Gear, one take-off and landing of the airframe (including the Airframe) on which such Engine, APU or Landing Gear, as the case may be, is from time to time installed. DAMAGE NOTIFICATION THRESHOLD As defined in Annex A. D-CHECK Those items of maintenance characterized by the Agreed Maintenance Program as a D-Check. DEFAULT Any Event of Default and any event which with the giving of notice, lapse of time, or fulfillment of any other applicable condition or any combination of the foregoing would constitute an Event of Default. DELIVERY DATE The date on which the Aircraft is tendered for delivery by Lessor to Lessee in accordance with this Agreement. DELIVERY LOCATION Manufacturer's facility in Seattle, Washington, USA or such other airport or location as agreed upon by Lessor and Lessee. DEPOSIT LETTER OF CREDIT The letter of credit in respect of the deposit referred to in Clause 5.1 and issued pursuant to Clause 5.1, and any replacement or renewal of such letter of credit issued in accordance with the terms of this Agreement. DEPOSIT LETTER OF CREDIT As defined in Annex A. DELIVERY AMOUNT PAGE 3

DEPOSIT LETTER OF CREDIT As defined in Annex A. EXECUTION AMOUNT DEREGISTRATION DATE The date the FAA deregisters the Aircraft upon the request of Lessor following satisfaction of the conditions precedent set forth in Clause 3.3. DEREGISTRATION POWER OF The deregistration power of attorney given by ATTORNEY Lessee to Lessor in form and substance reasonably satisfactory to Lessor. DOCUMENTS (i) The Aircraft, Engine, and Part manuals, certificates, and other documentation listed in Part 5 of Schedule 1 to this Agreement; (ii) other manuals (including without limitation, operations, maintenance, repair, overhaul or parts manuals), data, drawings or other documents that are required to be maintained during the Term under the terms of this Agreement or by the Air Authority, and those that are provided to Lessee with respect to the Aircraft, and (iii) any revisions, additions, renewals, or replacements from time to time made by Manufacturer and/or Lessee in accordance with this Agreement and to comply with applicable laws and documentary requirements of the FAA under FAR Part 129 or FAR Part 145, as the case may be. DOLLARS AND $ The lawful currency of the USA. ENGINE Whether or not installed on the Aircraft, (1) each engine of the manufacture and model specified in Part 1 of Schedule 1 installed on the Aircraft on the Delivery Date, such engines being described as to serial numbers on the certificate of acceptance to be executed by Lessee upon delivery of the Aircraft; or (2) any engine which has replaced such Engine, having clear and unencumbered title which has, or should have, passed to Lessor in accordance with this Agreement; PAGE 4

and in each case including all modules and Parts from time to time belonging to or installed in an Engine, but excluding any properly replaced engine, title to which has, or should have, passed from Lessor pursuant to this Agreement. ENGINE MANUFACTURER CFM International, Inc. EQUIPMENT CHANGE Any modification or addition to the Aircraft, excluding structural changes. EVENT OF DEFAULT An event specified in Clause 13.1. EVENT OF LOSS With respect to the Aircraft, the Airframe or any Engine: (1) the actual or constructive total loss of the Aircraft, the Airframe or Engine (including any damage to the Aircraft, the Airframe or Engine which results in an insurance settlement on the basis of a total loss, or requisition for use or hire which results in an insurance settlement on the basis of a total loss); or (2) it being destroyed, damaged beyond economic repair or permanently rendered unfit for normal use for any reason whatsoever; or (3) the requisition of title, or other compulsory acquisition, capture, seizure, deprivation, confiscation or detention for any reason of the Aircraft, the Airframe or Engine by any Government Entity (whether de jure or de facto), but excluding the events described in clause (4) below; or (4) the hi-jacking, theft, condemnation, confiscation, seizure or requisition for use or hire of the Aircraft, the Airframe or Engine which deprives any person permitted by this Agreement to have possession and/or use of the Aircraft, the Airframe or Engine of its possession and/or use for more than 120 days or PAGE 5

such shorter period within which insurers consider an event of loss has taken place as a result of those events. EXCUSABLE DELAY With respect to the delivery of the Aircraft from Lessor to Lessee, delay or non-performance due to or arising out of any delay or failure in delivery of the Aircraft by the Manufacturer for any reason whatsoever (other than as a result of any act or omission of Lessor or any Person claiming by, through or under Lessor that is not permitted or otherwise anticipated by the terms of this Agreement); or any natural disaster, civil war, insurrection or riot, fire, flood, explosion, earthquake, accident, epidemic, quarantine restriction, nuclear or radioactive contamination, any act of government, governmental priority, allocation, regulation or order affecting directly or indirectly, the Aircraft, any manufacturer, any maintenance performer or Lessor or any materials or facilities, strike or labor dispute causing cessation, slowdown or interruption of work; inability to procure equipment, data or materials from manufacturers or suppliers in a timely manner; damage, destruction, loss or the necessity for service or repair; or any other cause to the extent that such cause is beyond the reasonable control of Lessor whether above mentioned or not and whether or not similar to the foregoing. EXPIRY DATE Subject to Clause 4.6, the day falling sixty (60) months plus fourteen (14) days after the Delivery Date or such earlier date on which: (1) the Aircraft has been redelivered in accordance with this Agreement; (2) this Agreement has been terminated in accordance with its terms; or (3) Lessor receives the Agreed Value following an Event of Loss. FAA The Federal Aviation Administration of the USA and any successor thereof. PAGE 6

FAR The USA Federal Aviation Regulations. FINAL INSPECTION The series of inspections to be conducted by Lessor or Lessor's representative during the course of the Redelivery Check and up to Redelivery of the Aircraft. FINANCIAL INDEBTEDNESS As defined in Annex A. FLIGHT HOUR (i) In relation to the Airframe, each hour or part thereof (rounded to two decimal places) elapsing from the moment the wheels of the Aircraft leave the ground on take off until the wheels of the Aircraft next touch the ground, and (ii) in relation to each Engine, the APU and the Landing Gear, each hour or part thereof (rounded to two decimal places) elapsing from the moment the wheels of the airframe (including the Airframe) on which such Engine, APU or Landing Gear, as the case may be, is from time to time installed leave the ground on take off until the wheels of such airframe next touch the ground. FSB First Security Bank, National Association, not in its capacity as Owner Trustee, but in its individual capacity. GOVERNING LAW The laws of the State of New York, USA. GOVERNMENT ENTITY (1) any national government, political subdivision thereof, or local jurisdiction therein; (2) any instrumentality, board, commission, court, or agency of any thereof, however constituted; and (3) any association, organization, or institution of which any of the above is a member or to whose jurisdiction any thereof is subject to or in whose activities any of the above is a participant. HABITUAL BASE Panama City, Republic of Panama. PAGE 7

INDEMNITEES Lessor and Beneficiary, including any of their respective successors and assigns, and any shareholders, Affiliates, directors, officers, servants, agents, representatives and employees thereof, and the Manufacturer. INSURANCE DEDUCTIBLE AMOUNT As defined in Annex A. INSURANCES The insurances in respect of the Aircraft as further described in Clause 9.1. JURISDICTION OF INCORPORATION Republic of Panama. JURISDICTION OF REGISTRATION During that portion of the Term extending from the Delivery Date to the Deregistration Date, the USA, and during that portion of the Term extending from the Deregistration Date to the Redelivery Date, the Republic of Panama. LANDING GEAR The nose and main landing gear assemblies of the Aircraft, excluding any rotable components such as wheels, tires and brakes, and consumable items. LESSEE DOCUMENTS This Agreement, the Lessee Assignment, any other agreement or document signed by Lessee, relating to this Agreement and delivered on the Delivery Date, and any other agreement or document which Lessor and Lessee agree in writing to be a Lessee Document. LESSOR LIEN (1) Any Lien whatsoever from time to time existing created by Lessor, Beneficiary or any Person claiming by, through or under Lessor or Beneficiary in connection with the financing or refinancing of the Aircraft; (2) Any Lien which results from the acts of, omissions of or claims against Lessor, Beneficiary, or any Person claiming by, through or under Lessor or Beneficiary not related to the transactions contemplated by or permitted under this Agreement, including, without limitation, post-delivery modifications performed on the Aircraft; PAGE 8

(3) Any Lien for or in respect of Lessor Taxes; or (4) Any Lien arising as a result of or in connection with any voluntary or involuntary sale, assignment, transfer, conveyance or other disposition (collectively, a "Transfer") by the Lessor, the Beneficiary, any transferee of the Lessor or the Beneficiary or any successor or assign of the Lessor or Beneficiary of the Aircraft, this Agreement or any part of their respective right, title and interest in or to the Aircraft or this Agreement. LESSOR TAXES (1) Taxes imposed by any federal, state, local Government Entity, any subdivision or department thereof or therein or any international or other taxing authority whether of the United States or any other country or political subdivision thereof (each a "Taxing Authority") against Lessor or Beneficiary or any Person lawfully claiming by, through or under Lessor or Beneficiary or all or any part of the Aircraft unrelated to (A) the licensing, location, installation, acceptance, delivery, registration, recordation of title, possession, repossession, control, operation, use, maintenance, repair, replacement, return, abandonment, storage, redelivery, leasing, subleasing, modification, importing or exporting of the Aircraft or any part thereof, (B) the rentals, receipts or earnings from any transactions contemplated by this Agreement, or (C) any other amount paid or payable pursuant to this Agreement or any document related thereto; (2) Taxes (i) that are based upon, measured by or with respect to the gross or net income, capital, gains, profits, net worth, franchise or conduct of business PAGE 9

of Lessor or Beneficiary or any Person lawfully claiming by, through or under Lessor or Beneficiary (including, without limitation, minimum taxes or alternative minimum taxes), other than Taxes in the nature of sales, use, rental, license, VAT, ad valorem or property Taxes, ("Income Taxes") and (ii) that are imposed on Lessor, Beneficiary or any Person lawfully claiming by, through or under Lessor or Beneficiary by (A) the United States federal government, (B) in the case of Lessor or any Person lawfully claiming by, through or under Lessor, the state and local taxing jurisdictions and authorities in the United States in which the Lessor maintains its principal office or principal place of business, (C) in the case of Beneficiary or any Person lawfully claiming by, through or under Beneficiary, the state and local taxing jurisdictions and authorities in the United States in which Beneficiary maintains its principal office or principal place of business, (D) any other state or local taxing jurisdiction or authority in the United States in which Lessor or Beneficiary or any Person lawfully claiming by, through or under Lessor or Beneficiary, as the case may be, would be subject to Income Tax without regard to the transactions contemplated by this Agreement, and (E) any foreign government or any political subdivision or taxing authority thereof, any territory or possession of the United States, or any international authority in which Lessor or Beneficiary or any Person lawfully claiming by, through or under Lessor or Beneficiary, as the case may be, would be subject to Income Tax without regard to the transactions contemplated by this Agreement; PAGE 10

(3) Taxes imposed on Lessor or Beneficiary or any Person lawfully claiming by, through or under Lessor or Beneficiary to the extent imposed as a result of (i) the willful misconduct or gross negligence of Lessor or Beneficiary or any Person lawfully claiming by, through or under Lessor or Beneficiary, (ii) any breach by Lessor, Beneficiary or any person claiming by or through Lessor or Beneficiary of any representations, warranties, covenants or obligations contained in this Agreement or any other document or instrument delivered under or in connection with this Agreement or the transactions contemplated herein, (including, without limitation, any breach by Lessor, Beneficiary or other person claiming by or through Lessor or Beneficiary of any covenant of quiet enjoyment set forth herein or in any document or instrument delivered pursuant to or in connection with this Agreement); (4) Taxes imposed on Lessor or Beneficiary or any Person lawfully claiming by, through or under Lessor or Beneficiary as a result of a sale, assignment, transfer or other disposition, whether voluntary or involuntary, (each a "Transfer"), by Lessor or Beneficiary or any other Person other than Lessee, of the Aircraft or any legal or beneficial interest in the Aircraft, this Agreement or any portion hereof or thereof; provided however, that such Transfer does not result from the exercise of any remedy provided for in this Agreement or at law during the continuance of an Event of Default, in connection with the termination of this Agreement or otherwise in connection with this Agreement; and (5) Taxes imposed on Lessor or Beneficiary or any Person lawfully claiming by, PAGE 11

through or under Lessor or Beneficiary with respect to any period commencing or event occurring (i) prior to the Delivery of the Aircraft, (ii) after the Redelivery of the Aircraft in conformity with the applicable provisions of this Agreement and (iii) at any time during which Lessee shall have been deprived of the use or possession of the Aircraft as a result of a breach by Lessor or any Person claiming by, through or under Lessor of Lessee's rights of quiet and peaceful use and possession of the Aircraft as set forth in Clause 7.1 hereof or in any other instrument or document delivered in connection with this Agreement or the transactions contemplated herein. LETTER(S) OF CREDIT The Deposit Letter of Credit, the Supplemental Rent Letter of Credit, or both, as the case may be. LIBOR The offered rate appearing on page 3750 of the Telerate screen (or any replacement page) which displays the British Bankers Association Interest Settlement Rates for deposits in Dollars at or about 11:00 a.m. (London time) for the required period for value on the due date, or the preceding Business Day if such due date is not a Business Day. LIEN Any mortgage, pledge, lien, charge, claim, encumbrance, hypothecation, assignment, right of set-off, agreement, arrangement, lease or security interest affecting the title to or any interest in property. LIFE LIMITED PART A part or component on the Aircraft having a life limit identified in either the Aircraft's FAA Type Certificate, applicable manufacturers' documents and manuals, or by Airworthiness Directive, alternatively referred to as "LLP." MAJOR CHECKS Any C-Check, multiple C-Check or D-check or equivalent heavy maintenance visit or segment PAGE 12

thereof as set out in the Agreed Maintenance Program. MANUFACTURER The Boeing Company. MINIMUM LIABILITY COVERAGE As defined in Annex A. MODIFICATION LIMIT As defined in Annex A. NEW OPERATOR CREDIT As defined in Annex A. OWNER TRUSTEE First Security Bank, National Association, not in its individual capacity, except as expressly provided herein, but solely as owner trustee under the Trust Agreement. OWNER TRUSTEE DOCUMENTS This Agreement, the Trust Agreement and the Purchase Agreement Assignment. PART Whether or not installed on the Aircraft: (1) any appliance, component, furnishing or equipment (other than a complete Engine) furnished with the Aircraft on the Delivery Date; and (2) any other appliance, component, furnishing or equipment (other than a complete Engine) title to which has, or should have, passed to Lessor pursuant to this Agreement; but excluding any such items title to which has, or should have, passed from Lessor pursuant to this Agreement. PAYMENT ACCOUNT As defined in Annex A. PERMITTED LIEN (1) The rights of Lessor and Lessee provided in this Agreement; (2) any Lessor Lien; (3) any lien for Taxes of Lessee not yet assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings and not material in the aggregate; and PAGE 13

(4) any lien of a repairer, mechanic, carrier, hangar keeper, airport, air navigation authority or other similar lien arising in the ordinary course of business or by operation of law in respect of obligations of Lessee or any permitted sublessee which are not overdue or are being contested in good faith by appropriate proceedings; but only if, in the case of both (3) and (4), (a) adequate reserves have been provided by Lessee for the payment of such Taxes or obligations; and (b) such proceedings, or the continued existence of the lien, do not give rise to any material risk of the sale, forfeiture or other loss of the Aircraft or any interest therein or of criminal liability on the part of Lessor. PERSON OR PERSON Any individual, firm, partnership, joint venture, trust, trustee, Government Entity, organization, association, corporation, government agencies, committees, departments, authorities and other bodies, corporate or incorporate, whether having distinct legal status or not, or any number of any of the foregoing. PURCHASE AGREEMENT Purchase Agreement No. 1906, dated May 2, 1996, between Manufacturer and Beneficiary, pursuant to which Manufacturer has agreed to sell and Beneficiary has agreed to purchase the Aircraft. PURCHASE AGREEMENT ASSIGNMENT That certain Purchase Agreement Assignment (MSN 29047), dated as of October 1, 1998, between Beneficiary and Lessor. RECORDS (1) the Aircraft, Engine, APU, Landing Gear and Part records, reports, and other documentation listed in Part 6 of Schedule 1 to this Agreement; (2) records relating to the service, inspection, maintenance, modification, testing, overhaul and repair of the Aircraft and all Parts installed therein or thereon that are required to be PAGE 14

maintained during the Term under the terms of this Agreement, by the Air Authority, by the Agreed Maintenance Program, or those that are provided to Lessee or otherwise maintained during the Term with respect to the Aircraft (including, without limitation, the Airframe, any Engine, the APU and Parts), other than replaced or superseded records that are permitted to be disposed of by the FAA; and (3) daily or periodic updates, as the case may be, to comply with applicable law and with record keeping requirements of the FAA for FAR Part 129 operation or FAR Part 145 operation, as the case may be. REDELIVERY The return of the Aircraft with all associated Documents and Records from Lessee to Lessor at the Redelivery Location, in the condition and manner required by Clause 12 and the other provisions of this Agreement. REDELIVERY CHECK The final exit full block "C" check, as defined in Appendix J of Manufacturer's Maintenance Planning Document, performed on the Aircraft prior to Redelivery in accordance with Clause 2.1 of Schedule 4. REDELIVERY DATE The date on which Lessor has accepted Redelivery of the Aircraft evidenced by executing an acknowledgment of Redelivery in accordance with Clause 12.3. REDELIVERY LOCATION An airport in the continental USA identified by Lessor or other location mutually agreed between Lessor and Lessee. RENT As defined in Annex A. RENTAL PERIOD Each period ascertained in accordance with Clause 5.2.2. RENT DATE The first day of each Rental Period, except in the case of the first Rental Period, the fifteenth (15th) day of such Rental Period. PAGE 15

SCHEDULED DELIVERY DATE The date within the Scheduled Delivery Month as advised by Lessor from time to time in accordance with Clause 4. SCHEDULED DELIVERY MONTH March, 1999. SHOP VISIT In relation to Engines and APU, an engine or APU removal where engine maintenance entails separation of mating engine case flanges and/or the removal of engine modules, requiring internal repairs or the replacements of a disk, hub or spool. SISTER LEASE Any aircraft lease agreement between (i) Lessor, Beneficiary, any Affiliate of Beneficiary, or any trust in which Beneficiary or any Affiliate of Beneficiary is the beneficiary under such trust, and (ii) Lessee for an aircraft, including the Aircraft Lease Agreement (MSN 29048) between Lessor and Lessee dated as of the date hereof in respect of a Boeing Model 737-71Q aircraft bearing Manufacturer's serial number 29048. SUBSIDIARY (1) In relation to any reference to accounts, any company whose accounts are consolidated with the accounts of Lessee in accordance with Panamanian generally accepted accounting principles; and (2) for any other purpose an entity from time to time: (a) of which another has direct or indirect control or owns directly or indirectly more than fifty per cent (50%) of the voting share capital; or (b) which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation. SUPPLEMENTAL RENT All amounts payable under Clause 5.3. PAGE 16

SUPPLEMENTAL RENT LETTER OF The letter of credit in respect of Supplemental CREDIT Rent issued pursuant to Clause 5.1, and any replacement or renewal of such letter of credit issued in accordance with the terms of this Agreement. SUPPLEMENTAL RENT LETTER OF As defined in Annex A. CREDIT AMOUNTS TAX OR TAXES All taxes, fees, duties, governmental charges and assessments, of any nature whatsoever, including interest, fines additions to tax, and penalties thereon, imposed by any taxing authority with respect to the Aircraft, on its ownership, delivery, possession, transportation, operation, rental, return to Lessor, transfer of title, registration, or otherwise with respect to or in connection with the transactions contemplated by this Agreement, including, but not limited to, any value-added taxes, sales and use taxes, property taxes and all license and registration fees; provided, however, that "Taxes" shall not include Lessor Taxes. TERM The period commencing on the Delivery Date and ending on the Expiry Date unless otherwise hereinafter provided. TRUST AGREEMENT That certain Trust Agreement (MSN 29047) dated as of October 1, 1998, between First Security Bank, National Association, and Beneficiary. USA United States of America. 1.2 CONSTRUCTION 1.2.1 In this Agreement, unless the contrary intention is stated, a reference to: (1) each of "Lessor" or "Lessee" or any other person includes, without prejudice to the provisions of this Agreement, any successor in title to it or, as the case may be, them and any permitted assignee or transferee; (2) a "person" includes, without limitation, any individual, corporation, company limited liability company, judicial entity, statutory body, partnership, joint venture, trust, estate, unincorporated association, PAGE 17

group or organization or any political sub-division, court, regulatory body, authority, ministry, bureau, legislative body, department or agency therein or thereof (including, without limitation, the central bank or any taxing or fiscal or other monetary authority or ministry thereof or therein); (3) words importing the plural shall include the singular and vice versa; (4) any document shall include that document as amended, novated or supplemented; (5) a law (a) includes any statute, decree, constitution, regulation, order, judgment or directive of any Government Entity; (b) includes any treaty, pact, compact or other agreement to which any Government Entity is a signatory or party; (c) includes any judicial or administrative interpretation or application thereof; and (d) is a reference to that provision as amended, substituted or re-enacted; and (6) a Clause or a Schedule is a reference to a clause of or a schedule to this Agreement. 1.2.2 The headings in this Agreement are to be ignored in construing this Agreement. 1.2.3 In this Agreement references to the "winding up", "dissolution", "examination" or "court protection" of a company or corporation, or the appointment of a "liquidator", "receiver", "examiner" or "administrator" shall be construed so as to include any equivalent or analogous proceedings or officer under the law of the jurisdiction in which such company or corporation is incorporated or established or any jurisdiction in which such company or corporation carries on business, including the seeking of liquidation, winding-up, reorganization, dissolution, administration, examination, arrangement, adjustment, protection or relief of debtors. 1.2.4 Reference to this Agreement includes reference to the Schedules. 2. REPRESENTATIONS AND WARRANTIES 2.1 LESSEE'S REPRESENTATIONS AND WARRANTIES Lessee represents and warrants to Lessor that: (1) STATUS: Lessee is a company duly incorporated and validly existing under the laws of Panama and has the corporate power to own its assets and carry on its business as it is being conducted and to perform its obligations under this Agreement and each other Lessee Document, and Lessee is the holder of all necessary air transportation licenses required in connection therewith and PAGE 18

with the use and operation of the Aircraft, and Lessee is duly qualified to transact intrastate business and is a foreign corporation in good standing in each jurisdiction in which failure to be so qualified would have a material adverse effect on Lessee's ability to perform its obligations hereunder; (2) POWER AND AUTHORITY: Lessee has the power to enter into and perform, and has taken all necessary action to authorize the entry into, performance and delivery of, this Agreement and each other Lessee Document and the transactions contemplated by this Agreement and each other Lessee Document; (3) LEGAL VALIDITY: Assuming the due authorization, execution and delivery by all of the other parties thereto, each of this Agreement and each other Lessee Document constitutes Lessee's legal, valid and binding obligation, enforceable against Lessee in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or other similar laws affecting the rights of creditors generally and general principles of equity, whether considered at a proceeding at law or in equity; (4) NON-CONFLICT: The entry into and performance by Lessee of, and the transactions contemplated by, this Agreement and the other Lessee Documents do not and will not: (a) conflict with any laws binding on Lessee; or (b) conflict with the organizational or constitutional documents of Lessee; or (c) conflict with or result in default under any document which is binding upon Lessee or any of its assets nor result in the creation of any Lien over any of its assets other than as otherwise expressly provided herein; (5) AUTHORIZATION: Subject to Clause 2.4(5), all authorizations, consents, registrations and notifications (including with respect to any Government Entity) required in connection with the entry into, performance, validity and enforceability of this Agreement and the other Lessee Documents and the transactions contemplated by this Agreement and the other Lessee Documents, have been (or will have been on or before the Delivery Date) obtained or effected and are (or will be upon being obtained or effected) in full force and effect and no exchange control or central bank authorizations will be required; PAGE 19

(6) NO IMMUNITY: (a) Lessee is subject to civil commercial law with respect to its obligations under this Agreement and the other Lessee Documents, including without limitation the civil commercial law of Panama; (b) neither Lessee nor any of its assets is entitled to any right of immunity and the entry into and performance of this Agreement, and the other Lessee Documents by Lessee constitute private and commercial acts; and (c) to the extent that Lessee or any of its assets becomes entitled at any time to any immunity, based on sovereignty or otherwise, from any legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any competent court, from service of process, from attachment in aid of execution, or from execution prior to judgment, or other legal process in any jurisdiction, Lessee for itself and its assets does hereby irrevocably and unconditionally waive, and agrees not to plead or claim, any such immunity with respect to its obligations, liabilities, or any other matter under or arising out of or in connection with this Agreement and the other Lessee Documents or the subject matter hereof; such agreement shall be irrevocable and not subject to withdrawal in any and all jurisdictions; (7) ACCOUNTS: The audited accounts (or, for any period Lessee's accounts are not audited, Lessee's unaudited accounts used by Lessee's management) of Lessee and its Subsidiaries most recently delivered to Lessor: (a) have been prepared in accordance with Panamanian generally accepted accounting principles and practices consistently applied; and (b) fairly represent the financial condition of Lessee and its Subsidiaries as at the date to which they were drawn up; (8) ALLOWANCES: Lessee has not claimed and will not claim any capital or depreciation deductions or allowances in respect of the Aircraft for any purpose (including for tax purposes); (9) NO DEFAULT: (a) no Default has occurred and is continuing or might result from the entry into or performance of this Agreement and the other Lessee Documents; and (b) no other event has occurred and is continuing which constitutes (or with the giving of notice, lapse of time, or the fulfillment of any other applicable condition or any combination of the foregoing, might PAGE 20

constitute) a material default under any document which is binding on Lessee or any assets of Lessee, including a Sister Lease; (10) REGISTRATION: (a) other than registering the Aircraft, filing this Agreement for recordation with the FAA, and filing UCC-1 financing statements in the state of Florida and the District of Columbia for the period from the Delivery Date through the Deregistration Date, and other than registering the Aircraft and filing this Agreement with the Panamanian Directorate of Civil Aeronautics, and recording this Agreement and the bill of sale evidencing Lessor's title to the Aircraft with the Office of the Public Registry of Panama for the period from the Deregistration Date through the end of the Term and Redelivery, it is not necessary or advisable under the laws of the Jurisdiction of Incorporation, the Jurisdiction of Registration or the Habitual Base in order to ensure the validity, effectiveness and enforceability of this Agreement and the other Lessee Documents, or to establish, perfect or protect the property rights of Lessor in the Aircraft or any Engine or Part that this Agreement or any other instrument relating thereto be filed, registered or recorded or that any other action be taken or if any such filings, registrations, recordings or other actions are necessary or advisable, the same have been effected or will have been effected or all steps that can at such time reasonably have been taken to effect same will have been taken on or before the Delivery Date or Deregistration Date, as the case may be; and (b) under the laws of the Jurisdiction of Incorporation, the Jurisdiction of Registration and the Habitual Base, the property rights of Lessor in the Aircraft have been, or on or before the Delivery Date or the Deregistration Date, as the case may be, shall be fully established, perfected and protected, and this Agreement and the other Lessee Documents, other than as provided with respect to Lessee's obligations thereunder in 2.1(12), will have priority in all respects over the claims of all creditors of Lessee; (11) LITIGATION: No litigation, arbitration or administrative proceedings are pending or to its knowledge threatened against Lessee before any court, administrative agency or arbitral tribunal which, if adversely determined, would have a material adverse effect upon its financial condition or business or its ability to perform its obligations under this Agreement; (12) PARI PASSU: The obligations of Lessee under this Agreement and the other Lessee Documents rank at least pari passu with all other present and future unsecured and unsubordinated obligations (including contingent obligations) of Lessee, with the exception of such obligations as are mandatorily preferred by law, including, without limitation, the Governing Law, and not by virtue PAGE 21

of any contract, which obligations have been disclosed to and itemized for Lessor; (13) MATERIAL ADVERSE CHANGE: There has been no material adverse change in the financial condition or prospects of Lessee and its Subsidiaries since the date to which the accounts most recently provided to Lessor on or prior to the date of the execution of this Agreement were drawn up; (14) TAXES AND OTHER PAYMENTS: Lessee has delivered all necessary returns and made all payments, other than Taxes of Lessee not yet assessed or, if assessed, not yet due and payable, or being contested in good faith by appropriate proceedings and not material in the aggregate, due to (i) the tax authorities in the Jurisdiction of Incorporation, the Jurisdiction of Registration and all applicable states, provinces and municipalities thereof, (ii) the Habitual Base and all applicable subdivisions thereof and (iii) airport and other aviation authorities, and Lessee is not required by law to deduct or withhold any Taxes from any payments under this Agreement and the other Lessee Documents; (15) INFORMATION: The financial and other information furnished by Lessee in connection with this Agreement and the other Lessee Documents does not contain any untrue statement or omit to state any facts, the omission of which makes the statements therein, in the light of the circumstances under which they were made, misleading, nor omits to disclose any material matter to Lessor and all forecasts and opinions contained therein were made in good faith on reasonable grounds by Lessee; and (16) CURRENT MAINTENANCE PROGRAM: As of the Delivery Date, the Agreed Maintenance Program is approved by the Air Authority. 2.2 REPETITION The representations and warranties in Clause 2.1 will survive the execution of this Agreement and the other Lessee Documents. The representations and warranties contained in Clause 2.1 will be deemed to be repeated by Lessee on the Delivery Date and on each Rent Date as if made with reference to the facts and circumstances then existing. The representation and warranty in Clause 2.1(13) shall be deemed to be given or repeated on each Rent Date with respect to the audited financial statements of Lessee last furnished pursuant to Schedule 3. 2.3 [Intentionally omitted.] 2.4 FSB'S REPRESENTATIONS AND WARRANTIES FSB represents and warrants to Lessee that: (1) STATUS: FSB is a national banking association duly organized, validly existing and in good standing under the laws of the USA, is duly authorized PAGE 22

to do business as a national banking association with banking authority to execute and deliver, and to perform its obligations under, the Owner Trustee Documents; (2) POWER AND AUTHORITY: FSB has taken, or has caused to be taken, all necessary action to authorize the execution and filing by FSB in its individual capacity and as Owner Trustee, of each of the Owner Trustee Documents, and its performance of its obligations thereunder, and Owner Trustee holds such title to the Aircraft as was conveyed to it by Manufacturer; (3) LEGAL VALIDITY: The Owner Trustee Documents constitute the legal, valid and binding obligation of FSB, in its individual capacity and as Owner Trustee, and, assuming the due authorization, execution and filing thereof by the other party or parties thereto, are enforceable against FSB, in its individual capacity and as Owner Trustee, in accordance with the respective terms thereof, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium and other similar laws affecting the rights of creditors generally and general principles of equity, whether considered in a proceeding at law or in equity; (4) NON-CONFLICT: The entry into and performance by FSB, in its individual capacity and as Owner Trustee, of, and the transactions contemplated by, this Agreement and the other Owner Trustee Documents do not and will not: (a) conflict with any federal USA banking or Utah state laws binding on FSB, in its individual capacity or as Owner Trustee; or (b) conflict with the organizational or constitutional documents of FSB; or (c) conflict with any document which is binding upon FSB, or any of its assets; and (5) AUTHORIZATION: Subject to Clause 2.1(5) so far as concerns the obligations of Lessor, all authorizations, consents, registrations and notifications required in connection with the entry into, performance, validity and enforceability of, and the transactions contemplated by, this Agreement by Lessor have been (or will have been on or before the Delivery Date) obtained or effected (as appropriate) and are (or will be upon being obtained or effected) in full force and effect. 3. CONDITIONS PRECEDENT 3.1 CONDITIONS PRECEDENT TO LESSOR'S OBLIGATIONS Lessor's obligation to deliver and lease the Aircraft under this Agreement is subject to satisfaction of each of the following conditions. PAGE 23

3.1.1 CASH DEPOSIT/DEPOSIT LETTER OF CREDIT: The delivery by Lessee to Lessor of the Cash Deposit and the Deposit Letter of Credit pursuant to Clause 5.1. 3.1.2 CERTAIN RECEIPTS AT EXECUTION OF AGREEMENT: Receipt by Lessor from Lessee upon execution of this Agreement of the following in form and substance (including but not limited to execution, notarization and translation where appropriate) satisfactory to Lessor: (1) CONSTITUTIONAL DOCUMENTS: A copy of the organizational and constitutional documents of Lessee; (2) RESOLUTIONS, AUTHORITY: A copy of a resolution of the board of directors of Lessee approving the terms of and the transactions contemplated by this Agreement and the other Lessee Documents, resolving that it enter into this Agreement and the other Lessee Documents and related agreements, including without limitation any amendments hereto, and authorizing a specified person or persons to execute this Agreement and the other Lessee Documents on its behalf, together with such other evidence of the authority of such person or persons to execute this Agreement and the other Lessee Documents as Lessor may reasonably request, including but not limited to extracts or certificates from Government Entities or commercial registries; (3) PROCESS AGENT: A letter from the process agent appointed by Lessee in this Agreement accepting that appointment in a form acceptable to Lessor; (4) CERTIFICATE: A certificate of a duly authorized officer of Lessee: (a) setting out a specimen of each signature referred to in Clause 3.1.2(2); and (b) certifying that each copy of a document specified in this Clause is correct, complete and in full force and effect; (5) ACCOUNTS: The latest available accounts of Lessee as described in Schedule 3, Part 1, Section 3; (6) OPINIONS: A signed original of the opinion substantially in the form of Schedule 6, or otherwise acceptable to Lessor, and from independent legal counsel acceptable to Lessor in the Jurisdiction of Registration, the Habitual Base and the Jurisdiction of Incorporation and as to matters applicable with respect to, among other things, Lessee's execution and delivery of this Agreement and the other Lessee Documents and the performance by Lessee of its obligations as contemplated hereunder and thereunder; and PAGE 24

(7) PAYMENTS: The Cash Deposit and the Deposit Letter of Credit, in the required amounts, due upon execution of this Agreement as more fully described in Clause 5.1. 3.1.3 CERTAIN RECEIPTS AT DELIVERY DATE: Unless otherwise delivered at execution of this Agreement, receipt by Lessor from Lessee not later than the Delivery Date of the following in form and substance (including but not limited to execution, notarization and translation where appropriate) satisfactory to Lessor: (1) CONSTITUTIONAL DOCUMENTS: Confirmation that the copy of the organizational and constitutional documents of Lessee already provided by Lessee have not changed, and if so a copy of any changes; (2) RESOLUTIONS, AUTHORITY: A copy of resolutions of the board of directors of Lessee authorizing a specified person or persons to execute any other documentation relating to delivery of the Aircraft to Lessee and the transaction contemplated hereby, together with such other evidence of the authority of such person or persons to execute the same as Lessor may reasonably request, including but not limited to extracts or certificates from Government Entities or commercial registries; (3) [Intentionally omitted.] (4) CERTIFICATE: A certificate of a duly authorized officer of Lessee: (a) setting out a specimen of each signature referred to in Clause 3.1.3(2); and (b) certifying that each copy of a document specified in this Clause is correct, complete and in full force and effect; (5) OPINIONS: A signed original of the opinion substantially in the form of Schedule 6, or otherwise acceptable to Lessor, and from independent legal counsel acceptable to Lessor in the Jurisdiction of Registration, the Habitual Base and the Jurisdiction of Incorporation and as to matters applicable to the performance by Lessee of its obligations as contemplated hereunder; (6) APPROVALS: Evidence of the issuance of each approval, license and consent which may be required in relation to, or in connection with, the remittance to Lessor in Dollars of all amounts payable under this Agreement and the other Lessee Documents or the performance by Lessee of any of its obligations hereunder or thereunder (including, without limitation, obtaining from all applicable Panamanian PAGE 25

aviation and other authorities including the FAA all applicable approvals, licenses, consents and authorizations); (7) EXPORT: Any required consent from the applicable Panamanian aviation and other authorities to the export of the Aircraft from the Habitual Base upon the termination of the leasing of the Aircraft under this Agreement; (8) IMPORT: Evidence that any required import license, and any customs formalities, relating to the import of the Aircraft into the Habitual Base have been obtained or complied with, and that the import of the Aircraft into the Habitual Base is exempt from Taxes; (9) LICENSES: Copies of Lessee's air transport license, air operator's certificates and all other licenses, certificates and permits required by Lessee in relation to, or in connection with, the operation of the Aircraft; (10) [Intentionally omitted.] (11) PAYMENTS: All sums due to Lessor under this Agreement on or before the Delivery Date including, without limitation, the first payment of Rent and the Cash Deposit; (12) LETTERS OF CREDIT: The Deposit Letter of Credit and the Supplemental Rent Letter of Credit, in the required amounts, due upon delivery of the Aircraft as more fully described in Clause 5.1; (13) INSURANCES: Certificates of insurance (and reinsurance as applicable), an undertaking from Lessee's insurance broker (and from reinsurers as applicable) and other evidence reasonably satisfactory to Lessor that Lessee has taken the required steps to ensure due compliance with the provisions of this Agreement as to Insurances with effect on and after the Delivery Date, in each case in form and substance complying with the requirements of Clause 9 and Schedule 5 hereto; (14) REGISTRATION AND FILINGS: Evidence that on the Delivery Date the Aircraft has been validly registered under the laws of the Jurisdiction of Registration and that all filings, registrations, recordings and other actions have been taken which are necessary or advisable to ensure the validity, effectiveness and enforceability of this Agreement and the other Lessee Documents and to protect the property rights of Lessor in the Aircraft, including, but not limited to, filing UCC financing statements executed by Lessee in the state of Florida and the District of Columbia; PAGE 26

(15) MAINTENANCE PROGRAM: Evidence that Lessee's current maintenance program for maintenance of the Aircraft has been approved by the FAA for use by Lessee; and (16) GENERAL: Such other documents and information as Lessor may reasonably request. 3.2 FURTHER CONDITIONS PRECEDENT TO LESSOR'S OBLIGATIONS The obligations of Lessor to deliver and lease the Aircraft under this Agreement are subject to the further conditions precedent that: (1) the representations and warranties of Lessee under Clauses 2.1 and 2.2 are correct and would be correct if repeated on delivery of the Aircraft under this Agreement; and (2) no Default has occurred and is continuing or would result from the leasing of the Aircraft to Lessee under this Agreement. 3.3 CONDITIONS PRECEDENT TO LESSOR'S OBLIGATION TO REQUEST DEREGISTRATION The obligation of Lessor to request the FAA to deregister the Aircraft is subject to satisfaction of each of the following conditions precedent: 3.3.1 POST-PRODUCTION MODIFICATION: Receipt by Lessor of evidence satisfactory to Lessor that the post-production modifications described in Part 4 of Schedule 1 have been (a) completed, (b) paid for, to the extent invoices in respect thereof are then due and payable, as provided in Clause 4.6, and (c) approved by the FAA; 3.3.2 REGISTRATION AND RECORDING IN PANAMA: Receipt by Lessor of evidence satisfactory to Lessor that as of the Deregistration Date the Aircraft has been, or is concurrently being, validly registered with the Air Authority and under the laws of the Jurisdiction of Registration and that all filings, registrations, recordings and other actions have been taken, in Panama and any other jurisdiction which are necessary or advisable to ensure the validity, effectiveness and enforceability of this Agreement and the other lessee Documents and to protect the property rights of Lessor in the Aircraft, including, but not limited to, recording this Agreement and the bill of sale evidencing Lessor's title to the Aircraft with the Office of the Public Registry of Panama; and 3.3.3 DEREGISTRATION POWER OF ATTORNEY: Receipt by Lessor of the Deregistration Power of Attorney. PAGE 27

3.4 WAIVER The conditions specified in Clauses 3.1 and 3.2 are for the sole benefit of Lessor and may be waived or deferred in whole or in part and with or without conditions by Lessor in its sole discretion. If any of those conditions are not satisfied on the Delivery Date and Lessor nonetheless agrees to deliver the Aircraft to Lessee, Lessee will ensure that those conditions are fulfilled within 15 days after the Delivery Date and Lessor may treat as an Event of Default the failure of Lessee to do so. 3.5 CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS The obligations of Lessee to lease the Aircraft on the Delivery Date are subject to satisfaction of each of the following conditions precedent: 3.5.1 BENEFICIARY QUIET ENJOYMENT LETTER: The delivery by Beneficiary to Lessee of a letter from Beneficiary agreeing to Lessee's right to quiet enjoyment of the Aircraft in substantially the same manner as in Clause 7.1; and 3.5.2 WARRANTY ASSIGNMENTS: Assignments by Lessor to Lessee of warranties with respect to the Aircraft and the Engines made by the Manufacturer and the Engine Manufacturer, respectively, duly acknowledged by the Manufacturer and the Engine Manufacturer. 4. DELIVERY 4.1 SCHEDULED DELIVERY MONTH AND SCHEDULED DELIVERY DATE Lessor has advised Lessee that, as of the date of this Agreement, the anticipated month of delivery of the Aircraft to Lessor, either directly or indirectly, from Manufacturer (or a Manufacturer group company) is the Scheduled Delivery Month. Lessor will notify Lessee promptly after Lessor has received notice from Manufacturer of a more specific Scheduled Delivery Date (approximately 30 days prior to the Scheduled Delivery Month and approximately 7 days prior to the actual date of delivery of the Aircraft under the Purchase Agreement), and from time to time of any significant anticipated and actual delays in delivery as advised by Manufacturer. 4.2 COMMENCEMENT Subject to the terms and conditions of this Agreement, Lessor will offer the Aircraft for delivery and Lessee will accept delivery of the Aircraft on or about the Scheduled Delivery Date in accordance with Schedule 2 of this Agreement at the Delivery Location. Lessor will lease the Aircraft to Lessee and Lessee will take the Aircraft on lease in accordance with this Agreement for the duration of the Term. PAGE 28

4.3 DELAYED DELIVERY If Lessor delays delivery or fails to deliver the Aircraft under this Agreement as a result of: (1) any Excusable Delay; (2) notification of any defect or non-conformity pursuant to Clause 3.5 of Schedule 2, Part 2; (3) any delay associated with Lessor not being able to receive all the approvals, consents and acceptances which are necessary for Lessor to deliver the Aircraft including those described in Clause 3.1.3(13) and making an acceptance flight under Clause 3.3 of Part 2 of Schedule 2, despite Lessor's reasonable and continuous efforts; or (4) any delay caused by any modification required on the Aircraft or agreed to in writing by Lessor and Lessee, which results in the Lessor not being able to receive all regulatory approvals, consents and acceptances which are necessary for Lessor to deliver the Aircraft; then: (a) Lessor will not be responsible for any losses, including loss of use, damages (including consequential or incidental damages) costs or expenses suffered or incurred by Lessee arising from or in connection with such delay or failure; and (b) Lessee will not be entitled to terminate this Agreement or to reject the Aircraft when tendered for delivery by Lessor on the grounds of any such delay unless the Aircraft is not tendered for delivery within 12 months beyond the Scheduled Delivery Month, as such date may be further extended by mutual agreement of the parties, and upon any such termination neither Lessor nor Lessee will have any further obligation to the other under this Agreement other than as expressly set out in this Agreement, except that Lessor will return any Cash Deposit, Deposit Letter of Credit and any other amounts theretofore received by Lessor from Lessee hereunder. 4.4 ACCEPTANCE OF AIRCRAFT If Lessee fails to accept delivery of the Aircraft when tendered for delivery by Lessor in accordance with this Agreement, Lessee will indemnify Lessor for all actual costs and expenses incurred by Lessor as a result of such failure by Lessee, and will also be liable to make payment to Lessor of Rent commencing on the date and otherwise as provided in Clause 5.2. PAGE 29

4.5 DELIVERY Lessor and Lessee expressly acknowledge that delivery of the Aircraft to Lessee is subject to and conditioned upon (1) delivery of the Aircraft to Lessor, either directly or indirectly, from Manufacturer and (2) Lessee having fulfilled all of the conditions precedent to delivery set out in Clause 3. Lessee will effect acceptance of the Aircraft by execution and delivery to Lessor of the duly completed and executed Certificate of Acceptance substantially in the form of Part 1 of Schedule 2. After delivery of the Aircraft to Lessee, Lessee will bear all risk of loss, theft, damage or destruction to the Aircraft from any causes whatsoever until the Aircraft is redelivered to Lessor (including, for the avoidance of doubt, during the installation or completion of any "Post-Production Modifications" listed in Part 4 of Schedule 1 after such delivery). 4.6 POST-PRODUCTION MODIFICATION Promptly following delivery of the Aircraft to Lessee hereunder, Lessee shall cause to be accomplished the post-production modifications described in Part 4 of Schedule 1. Such post-production modifications shall be made pursuant to a written agreement and by an entity that are reasonably satisfactory to Lessor. The cost of such post-production modifications for which Lessor shall be responsible shall be a fixed amount set forth in the written agreement which amount shall be subject to the Modification Limit. While such post-production modifications are being made, all of the terms of this Agreement, including Lessee's obligation to pay Rent, shall be and remain in full force and effect. Upon completion of such post-production modifications and submission of related invoices and other documentation reasonably requested by Lessor, Lessor shall either pay such invoices directly or, if already paid by Lessee, reimburse Lessee for the cost thereof, in either case up to the Modification Limit less the net costs of the modifications described in Part 3 of Schedule 1. 4.7 DEREGISTRATION Upon satisfaction of all the conditions precedent set forth in Clause 3.3, Lessor shall request the FAA to deregister the Aircraft. Lessee shall be responsible for the prompt payment of all Taxes, fees, costs and expenses, including Lessor's reasonable legal fees, relating to all actions taken in connection with the deregistration of the Aircraft with the FAA and with the registration of the Aircraft with the Directorate of Civil Aeronautics of Panama, and the recordation of this Agreement and of Lessor's title to the Aircraft with the Office of the Public Registry of Panama, up to a maximum amount of $50,000. PAGE 30

5. PAYMENTS 5.1 CASH DEPOSIT, DEPOSIT LETTER OF CREDIT AND SUPPLEMENTAL RENT LETTER OF CREDIT 5.1.1 Lessee shall deliver to Lessor the Cash Deposit. This Agreement shall be cross-collateralized with any Sister Lease, with respect to the Cash Deposit and with respect to any such collateral under any such Sister Lease. 5.1.2 Upon execution of this Agreement, Lessee shall provide Lessor with the Deposit Letter of Credit in the amount of the Deposit Letter of Credit Execution Amount, payable in favor of Lessor, issued or confirmed by a first class American or European bank reasonably acceptable to Lessor, and drawable in the USA. At any time after the Deregistration Date, at Lessee's option, the amount of the Deposit Letter of Credit may be increased by the amount of the Cash Deposit; the Cash Deposit shall be returned to Lessee promptly after any such increase in the amount of the Deposit Letter of Credit becomes effective. The Deposit Letter of Credit shall be further increased on or prior to the Delivery Date by an amount equal to the Deposit Letter of Credit Delivery Amount. The Deposit Letter of Credit shall be irrevocable, and shall be in form and substance reasonably acceptable to Lessor. 5.1.3 Lessor may upon the occurrence of an Event of Default which is continuing apply all or any portion of the Cash Deposit and/or draw down the Deposit Letter of Credit in accordance with its terms in whole or in part at any time or times until the later of 10 Business Days after Redelivery and until all of Lessee's obligations under this Agreement have been fulfilled to satisfy any liabilities of Lessee to Lessor under this Agreement and under any Sister Lease. 5.1.4 Prior to delivery of the Aircraft hereunder, Lessee shall provide Lessor with the Supplemental Rent Letter of Credit in the initial amount specified in the definition of Supplemental Rent Letter of Credit Amount, payable in favor of Lessor, issued or confirmed by a first class American or European bank reasonably acceptable to Lessor, and drawable in the USA. The Supplemental Rent Letter of Credit shall be increased on the dates and in the amounts specified in the definition of Supplemental Rent Letter of Credit Amount. The Supplemental Rent Letter of Credit shall be irrevocable, and shall be in form and substance reasonably acceptable to Lessor. 5.1.5 If Lessee shall fail to pay Supplemental Rent due and owing hereunder on the Expiry Date, or if Lessee shall fail to comply with the requirements of Clause 12 and Schedule 4 upon the expiration or the earlier termination of the Term as provided hereunder, Lessee may draw down the Supplemental Rent Letter of Credit in whole or in part to satisfy such obligations of PAGE 31

Lessee hereunder. The Supplemental Rent Letter of Credit may be drawn solely for the purposes set forth in this Clause 5.1.5. 5.1.6 In the event that any amount of the Cash Deposit is applied or the Deposit Letter of Credit is drawn down by Lessor, Lessee shall within 10 Business Days of receipt of notice of any such application of the Cash Deposit or draw down provide for the delivery of additional amounts of Cash Deposit and/or an additional letter of credit or an amendment to the Deposit Letter of Credit complying with the above requirements so as to restore the amounts of the Cash Deposit and/or the amount undrawn under the Deposit Letter of Credit to the original amount. 5.1.7 Clauses 4.3(4)(b), 5.1.2, 7.3 and 11.1 set forth the separate obligations of Lessor to return to Lessee the Letters of Credit and to refund to Lessee amounts in respect of the Cash Deposit in certain circumstances. 5.1.8 Lessee agrees that subject to Clauses 4.3(4)(b), 5.1.2, 7.2 and 11.1 and to Lessee's rights at law and in equity, all right, title and interest in any Cash Deposit paid by Lessee to Lessor pursuant to this Clause 5 shall vest in the recipient absolutely, irrevocably and unconditionally free and clear of any liens, claims, charges or encumbrances or any other interest of Lessee or of any third person. 5.1.9 Any interest earned with respect to the Cash Deposit or any draw down of a Letter of Credit shall be for Lessor's account, free and clear of any claims, charges or any interest of Lessee. 5.1.10 Lessee shall cause the Letters of Credit, in the respective amounts then required to be maintained by the terms of this Agreement, to be replaced or renewed from time to time in order that they remain in full force and effect through the date fifteen (15) days after the Expiry Date as required hereunder, and shall deliver to Lessor a replacement or renewal letter of credit at least 10 days prior to the date on which a Letter of Credit is to expire. If Lessee shall fail to deliver to Lessor a replacement or renewal letter of credit at least 10 days prior to the date on which the applicable Letter of Credit is to expire, Lessor may drawdown the full amount of such Letter of Credit and hold it for application in the same manner as in the case of the Cash Deposit. In any such case, if Lessee delivers a replacement letter of credit satisfying the requirements of this Agreement, Lessor shall return to Lessee the principal amount of such drawdown, so long as no Default or Event of Default has occurred and is continuing. 5.2 RENT 5.2.1 TIME OF PAYMENT: Lessee will pay to Lessor or its order Rent on the first Rent Date and in advance on each subsequent Rent Date. Payment must be initiated adequately in advance of each Rent Date to ensure that Lessor PAGE 32

receives credit for the payment of Rent payable on such Rent Date, or on the immediately preceding Business Day if such Rent Date is not a Business Day. 5.2.2 RENTAL PERIODS: The first Rental Period will commence on the Delivery Date and end on the fourteenth (14th) day of the second month following the Delivery Date. The second Rental Period will commence on the fifteenth (15th) day of the second month following the Delivery Date, with each subsequent Rental Period commencing on the fifteenth (15th) day of each subsequent month for the duration of the Term. The last Rental Period shall end on the Expiry Date. 5.3 SUPPLEMENTAL RENT 5.3.1 PAYMENT: Upon Redelivery of the Aircraft to Lessor at the time and in the manner provided hereunder, Lessee shall make a single payment to Lessor of Supplemental Rent in respect of Aircraft usage during the Term. 5.3.2 CALCULATION: (1) Not less than six (6) months prior to the scheduled Expiry Date, Lessee shall provide to Lessor sufficient industry estimates, reasonably satisfactory to Lessor, to enable Lessor and Lessee to calculate the estimated amount of Supplemental Rent payable by Lessee on Redelivery, such estimates to be based on Lessee's actual utilization of the Aircraft during the first 54 months of the Term. Such data shall include bona fide, arm's length market estimates from not fewer than three (3) mutually acceptable, internationally recognized aircraft maintenance providers of the cost of providing to Lessor or to another third party, other than Lessee or Continental Airlines, Inc., (i) a block D-Check, including a lower level check on the Airframe, (ii) a full restoration shop visit of each Engine, and (iii) a complete overhaul of the APU and the Landing Gear, including in each case all routine and non-routine work, material, labor and reasonable handling charges prevailing at the time, but excluding the cost of any replacement of Life Limited Parts (each of the Airframe, each Engine, the APU and the Landing Gear referred to as a "Component," and each of the respective costs described in subclauses (i) through (iii) referred to as a "Check/Overhaul Cost," for purposes of this Clause 5.3.2). Prior to the Expiry Date, Lessor and Lessee shall discuss in good faith, and agree on, the applicable Check/Overhaul Cost for each Component. (2) On the Expiry Date, Lessee shall pay to Lessor Supplemental Rent in respect of each Component in an amount equal to the product of (i) the Check/Overhaul Cost, times (ii) the result of (A) the time since such Component was new or since such Component had a full PAGE 33

restoration shop visit or complete overhaul, divided by (B) the mean time between overhaul ("Interval") for such Component as defined or estimated by the manufacturer of such Component, adjusted for the actual utilization of such Component by Lessee during the last six (6) months of the Term and as provided in clause (3) below. (3) The amount of Supplemental Rent calculated in accordance with clause (2) above shall be adjusted by deducting from the aggregate amount so calculated an amount equal to the sum of the Check/Overhaul Cost allocable to the first 20% of the Interval for each Component, provided that any such aggregate adjustment shall not result in a negative number and in no event shall Lessor be obligated to make any payment to Lessee under this Clause 5.3.2. (4) On the Expiry Date, if the time remaining on the life of any Life Limited Part is less than 80%, Lessee shall pay to Lessor an amount equal to the product of (i) the actual cost to replace such Life Limited Part, times (ii) the difference, expressed as a percentage of the life of such Life Limited Part, between (A) 80% and (B) the time remaining on the life of such Life Limited Part expressed as a percentage. If the time remaining on the life of any Life Limited Part is more than 80%, Lessee shall receive a credit against any amounts then owing by it under clauses (2) and (3) above in an amount equal to the product of (i) the cost to replace such life Limited Part as determined above, times (ii) the difference, expressed as a percentage of the life of such Life Limited Part, between (A) 20% and (B) the time used on such Life Limited Part since new, expressed as a percentage. 5.4 PAYMENTS 5.4.1 All payments by Lessee to Lessor under this Agreement will be made for value on the due date in Dollars, and if in relation to amounts incurred by Lessor other than in Dollars, in the Dollar equivalent advised by Lessor's bankers, and in same day funds settled through the New York Clearing House System or such other funds as may for the time being be customary for the settlement in New York City of international payments in Dollars by telegraphic transfer to the Payment Account. Lessee shall make all arrangements in advance to ensure that payment is received as above by Lessor on the due date. 5.4.2 All payments by Lessor to Lessee under this Agreement will be made by telegraphic transfer to the Payment Account in Dollars, and if in relation to amounts incurred by Lessee other than in Dollars, in the Dollar equivalent advised by Lessor's bankers. PAGE 34

5.5 GROSS-UP 5.5.1 All payments by Lessee under or in connection with this Agreement will be made without set-off or counterclaim, free and clear of and without deduction for or on account of any or all Taxes. 5.5.2 All Taxes in respect of payments under this Agreement shall be for the account of and will be paid by Lessee prior to the date on which penalties apply, except to the extent that such payment is being contested in good faith by appropriate proceedings, in respect of which adequate reserves have been provided by Lessee and non-payment of which does not give rise to any material likelihood of the Aircraft or any interest therein being sold, forfeited or otherwise lost or of criminal liability on the part of Lessor. 5.5.3 If Lessee is compelled by law to make payment subject to any Tax and Lessor or Beneficiary does not actually receive for its own benefit on the due date a net amount equal to the full amount provided for under this Agreement, Lessee will pay all necessary additional amounts to ensure receipt by Lessor of the full amount so provided for. 5.6 TAXES AND OTHER PAYMENTS Except as may be otherwise expressly provided herein, Lessee will promptly pay, or promptly after demand indemnify Lessor and Beneficiary against: (1) all Taxes and other fees or charges of any nature imposed by any Government Entity or other person including any airport or provider of service with respect to this Agreement, including without limitation the delivery, leasing, possession, use, operation, maintenance, storage, return or replacement of any Engine or Part or any other disposition or dealing by Lessee with or relating to the Aircraft during the Term; and (2) all rent, fees, charges, Taxes and other amounts in respect of any premises where the Aircraft or any Part thereof is located from time to time; except to the extent that such payment is being contested in good faith by appropriate proceedings, in respect of which adequate reserves have been provided by Lessee and non-payment of which does not give rise to any material likelihood of the Aircraft or any interest therein being sold, forfeited or otherwise lost or of criminal liability on the part of Lessor. 5.7 VALUE ADDED TAX 5.7.1 For the purposes of this sub-clause: (1) "VAT" means value added tax and any sales or turnover tax, imposition or levy of a like nature (other than Lessor Taxes); and PAGE 35

(2) "supply" includes anything on which VAT is chargeable. 5.7.2 Lessee will pay to Lessor or the relevant taxing authority, as the case may be, the amount of any VAT chargeable in respect of any supply for VAT purposes under this Agreement. 5.7.3 Each amount stated as payable by Lessee under this Agreement is exclusive of VAT (if any) and is accordingly to be construed as a reference to that amount plus any VAT in respect of it. 5.8 INFORMATION If Lessee is required by any applicable law, or by any third party, to deliver any report or return in connection with any Taxes, Lessee will, to the extent the same shall be pertinent, state therein that Lessee is exclusively responsible for the use and operation of the Aircraft and for any Taxes arising therefrom and Lessee will on request supply a copy of the report or return to Lessor. Lessor shall provide Lessee with such information in the possession of Lessor or otherwise reasonably available to it as Lessee may reasonably request to fulfill its tax filing requirements under this Clause 5.8 and any audit information request arising in connection with the Taxes subject to this Clause 5. If any report or return is required to be made with respect to any obligations of Lessee under this Clause 5, Lessee will make such report or return, provided that Lessee shall have no obligation to file any such return or report if (A) Lessor, after Lessee's written request therefor, shall have failed to furnish Lessee with such information as is peculiarly within the control of, or reasonably available to Lessor and is necessary for the filing of such report or return, or (B) such return or report would or should have been filed by Lessor even if it had not entered into this Agreement. 5.9 TAXATION OF INDEMNITY PAYMENTS 5.9.1 If and to the extent that any sums payable to an Indemnitee by Lessee under this Agreement by way of indemnity are insufficient, by reason of any Taxes payable in respect of those sums, for such Indemnitee to discharge the corresponding liability to the relevant third party (including any taxation authority), or to reimburse such Indemnitee for the cost incurred by it to a third party (including any taxation authority), Lessee will pay to such Indemnitee such sum as will after the Tax liability has been fully satisfied leave such Indemnitee with the same amount as it would have been entitled to receive in the absence of that liability, together with interest on the amount of the deficit at the rate of interest stated in Clause 5.10 (both before and after judgment) in respect of the period commencing on the date on which the payment of the Tax is finally due until payment by Lessee. 5.9.2 If and to the extent that any sums constituting (directly or indirectly) an indemnity to an Indemnitee but paid by Lessee to any person other than PAGE 36

such Indemnitee are treated as taxable in the hands of such Indemnitee, Lessee will pay to such Indemnitee, within 5 Business Days of a written demand accompanied by reasonable evidence of liability, such sum as will after the tax liability has been fully satisfied indemnify such Indemnitee to the same extent as it would have been indemnified in the absence of such liability. 5.10 DEFAULT INTEREST If Lessee fails to pay any amount payable under this Agreement or another Lessee Document on the due date, Lessee will pay on demand from time to time to Lessor or such other party as shall have a right thereto interest (both before and after judgment) on that amount, from the due date to the date of payment in full by Lessee to Lessor or such other party, at the rate calculated by Lessor to be 3% per cent per annum plus LIBOR at the rate quoted for the period closest to the length of time from such due date to such payment date. All such interest will be compounded monthly and calculated on the basis of the actual number of days elapsed and a 360 day year. 5.11 CONTEST If a claim is made in writing against any Lessor (whether on audit or otherwise) or if Lessee disputes the amount of any Tax payable by Lessor for which Lessee is required to reimburse or indemnify hereunder for any Taxes that Lessee is required to pay or indemnify against pursuant to Clause 5.6, Lessor shall notify Lessee in writing within 10 Business Days of the receipt of such claim, provided that a failure to so notify will not diminish or relieve Lessee of any obligations under Clause 5.6, except to the extent Lessee is entitled to contest or to cause Lessor to contest such Taxes and Lessee's or Lessor's successful defense of such claim is materially prejudiced or precluded thereby. If the amount of the claim exceeds $25,000 and if requested by Lessee in accordance with this Clause 5.11 and in writing within 30 Business Days after receipt by Lessee of the notice described in the preceding sentence, Lessor shall in good faith and with due diligence contest (including pursuing administrative and judicial appeals) in the name of Lessor or, if permitted by law and requested by Lessee in the name of Lessee, the validity, applicability or amount of such Taxes in appropriate administrative or judicial proceedings to be determined by Lessor, provided that (1) prior to taking such action, Lessee shall have agreed to pay Lessor all out-of-pocket costs and expenses that Lessor may incur in connection with contesting such claim, including, without limitation, all reasonable legal and accountant's fees and disbursements and costs of administrative and judicial proceedings, and the amount of any interest or penalties that may be attributable to and payable as a result of contesting such claim (or, at Lessor's request, Lessee shall advance to Lessor funds with which to pay the foregoing amounts, and Lessor's obligation to contest any Tax shall be suspended during any period Lessee does not advance sufficient funds to pay such amounts as they accrue or become payable), (2) if such contest is to be initiated by the payment of, and the claiming of a refund for such Taxes (and any interest and penalties that also must be paid), Lessee shall have advanced Lessor sufficient funds (on an interest-free basis) PAGE 37

to make such payment, (3) no Event of Default has occurred and is continuing, (4) the action to be taken will not result in a material risk of sale, forfeiture or loss of Lessor's title to the Aircraft (unless Lessee provides a bond or other security satisfactory to Lessor), (5) at Lessor's request, Lessee shall provide to Lessor a written opinion in form and substance reasonably satisfactory to Lessor of independent legal counsel reasonably satisfactory to Lessor that there is a reasonable basis for such contest and (6) Lessee acknowledges and agrees, in writing, that in the event such contest is unsuccessful Lessee shall fully indemnify Lessor against such Taxes (and any related interest and penalties). Notwithstanding that the conditions set forth in clauses (1), (2), (3), (4), (5) and (6) above may have been satisfied, Lessor, after consulting in good faith with Lessee, may elect not to pursue any contest or proceeding pursuant to the preceding sentence or elect to discontinue (by settlement or otherwise) any such contest or proceeding commenced pursuant to the preceding sentence, but such election shall constitute a waiver by Lessor of any right to payment or indemnification pursuant to Clause 5.6 with respect to the adjustment that was the subject of such proposed contest or proceeding (and any other adjustment the contest of which is precluded by such failure to contest) and, if Lessee has theretofore paid or provided Lessor with funds to pay any amount with respect to such adjustment, Lessor shall promptly repay such amount to Lessee. If Lessor shall obtain a refund in whatever form of all or any part of any Taxes that Lessee shall have paid or reimbursed to Lessor hereunder, Lessor shall, provided that no Event of Default shall have occurred and be continuing, pay to Lessee an amount that is equal to the sum of the amount of such refund or credit, plus any interest received on such refund fairly attributable to any Taxes paid by or with funds provided by Lessee prior to receipt of such refund, reduced by any Taxes incurred by Lessor by reason of the receipt or accrual of such refund and interest and net of any expenses described above that have not been previously reimbursed, and increased by any Tax benefit realized by Lessor as a result of any payment by Lessor made pursuant to this sentence, provided further that, if, at the time of such payment an Event of Default shall have occurred and be continuing, Lessor shall hold the amount of such payment as security for the obligations of Lessee to Lessor under the Lease, and at such time as there shall not be continuing any such Event of Default, shall pay such amount to the Lessee. Lessor hereby agrees that it will inform Lessee of the time and place of, and Lessor will not object to Lessee's presence at, any proceeding conducted pursuant to this clause 5.11, provided that Lessor shall be entitled to conduct any proceedings in respect of taxes for which Lessee is not obligated to indemnify Lessor outside the presence of Lessee and Lessee's presence also must be allowed by applicable law and provided further that the conditions set forth in clauses (1), (2), (3), (4), (5) and (6) above shall have been, and shall continue to be, satisfied. 5.12 COMPUTATIONS At Lessee's request, the computation by Lessor of any amount payable by Lessee pursuant to this Clause 5 shall be verified by an independent accounting firm of national reputation selected by Lessor. The fees of such accountants shall be paid by Lessee unless such accountants determine that the amount payable to Lessee is at PAGE 38

least 25% more, or the amount payable by Lessee is at least 25% less, than the amount computed by Lessor, in which case such fees shall be payable by Lessor. 5.13 PAYMENTS ABSOLUTE Lessee's obligations under this Agreement as to payment are absolute and unconditional irrespective of any contingency whatsoever including (but not limited to): (1) any right of set-off, counterclaim, recoupment, defense or other right which either party to this Agreement may have against the other; (2) any unavailability of the Aircraft for any reason, including, but not limited to, a requisition of the Aircraft or any prohibition or interruption of or interference with or other restriction against Lessee's use, operation or possession of the Aircraft; (3) any defect in airworthiness, merchantability, fitness for any purpose, condition, design, or operation of any kind or nature of the Aircraft for any particular use or trade, or for registration or documentation under the laws of any relevant jurisdiction, or any Event of Loss in respect of, or any damage to, the Aircraft; (4) any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation, examination or similar proceedings by or against Lessee; (5) any invalidity or unenforceability or lack of due authorization of, or other defect in, this Agreement; and (6) any other cause which but for this provision would or might otherwise have the effect of terminating or in any way affecting any obligation of Lessee under this Agreement. Nothing in this Clause 5.13 shall be construed to prohibit Lessee from separately pursuing any claim that it may have from time to time against Lessor or any other Person with respect to any matter, provided that any such claim shall not contest the applicability or enforceability of the foregoing provisions of this Clause 5.13. 6. MANUFACTURERS' WARRANTIES 6.1 BENEFIT OF WARRANTIES Unless an Event of Default shall have occurred and be continuing, Lessor agrees to make available to Lessee such rights as Lessor may have under any warranty with respect to the Aircraft of any Engine made by the Manufacturer or the Engine Manufacturer, respectively, pursuant to their respective standard assignment forms. To the extent that any warranties and/or rights (if any), express or implied, with PAGE 39

respect to or otherwise related to the Aircraft, any Engine or any Part from the Manufacturer, the Engine Manufacturer or any other manufacturer, vendor, subcontractor or supplier to Lessor, are not directly assignable by Lessor to Lessee, Lessor agrees to extend to Lessee, at Lessee's cost, the benefit of each such warranty and right to the extent possible. 6.2 PARTS Except to the extent Lessor otherwise agrees in a particular case, Lessee will procure that all engines, components, furnishings or equipment provided by the manufacturer, vendor, subcontractor or supplier in replacement of a defective Engine or Part pursuant to the terms of any warranty will be installed promptly by Lessee and that title thereto vests in Lessor free of Liens. On installation those items will be deemed to be an Engine or Part, as applicable. 6.3 REASSIGNMENT At the expiration or earlier termination of the Term as provided herein, Lessee shall reassign to Lessor, or its designee, without recourse or warranty, the benefit of any subsisting warranty and right assigned by Lessor to Lessee pursuant to this Agreement or otherwise. Lessee at its own cost and expense will do all such things and execute such documents as may reasonably be required for this purpose. 7. LESSOR'S COVENANTS 7.1 QUIET ENJOYMENT Lessor covenants that so long as an Event of Default shall not have occurred and be continuing, (i) Lessee shall quietly enjoy, in accordance with the terms hereof, the Aircraft and all rents, revenues, profits and income thereof, without interference from Lessor, or from any Person lawfully claiming by or through Lessor (including, without limitation, any Person providing financing or refinancing for the Aircraft), and (ii) neither Lessor nor any Person lawfully claiming by or through Lessor shall take or cause to be taken any action contrary to such right of quiet enjoyment. Lessor shall cause any Person providing financing or refinancing for the Aircraft to provide to Lessee a comparable covenant of quiet enjoyment. 7.2 END PAYMENT 7.2.1 Promptly following: (1) Redelivery of the Aircraft to Lessor in accordance with and in the condition required by this Agreement; or (2) payment to Lessor of the Agreed Value following an Event of Loss after the delivery Date; PAGE 40

or, in each case, such later time as Lessor is satisfied Lessee has paid to Lessor all amounts which may then be due and payable under this Agreement, Lessor will: (a) pay to Lessee the amount of any Rent received in respect of any period falling after the Redelivery Date or payment of the Agreed Value, as the case may be; (b) return to Lessee any remaining Cash Deposit, subject to any application and reduction by Lessor pursuant to Clause 5.1; and (c) return the Letters of Credit to Lessee, subject to any drawings pursuant to Clause 5.1. 7.2.2 If, at the end of the Term, an Event of Default has occurred and is continuing, the rebate and payments and return of the Letters of Credit, contemplated above will only be made following (1) any cure by Lessee to Lessor's reasonable satisfaction of such Event of Default, and (2) any set-off by Lessor hereunder, but any such rebate and return of the Letters of Credit or payment shall only be to the extent of the applicable balance remaining following such set-off. 7.3 MANUFACTURER CREDIT AND PRODUCT SUPPORT 7.3.1 Lessor shall, on or prior to delivery of the Aircraft hereunder, assign or shall cause to be assigned or otherwise provided to Lessee a new operator credit memorandum in the amount of the New Operator Credit to be issued by Manufacturer under the Purchase Agreement at the time of delivery of the Aircraft under the Purchase Agreement, such credit memorandum to be used in accordance with the terms thereof for the purchase of spare parts or training from Manufacturer or for the cost of certification to comply with applicable requirements of the Panamanian aviation authorities. 7.3.2 Lessor shall, on or prior to delivery of the Aircraft hereunder, assign or cause to be assigned to Lessee training, product support and onsite technical assistance applicable to the Aircraft and to the Engines to be furnished by Manufacturer pursuant to the Purchase Agreement and by the Engine manufacturer pursuant to its agreements with Lessor or Beneficiary, as the case may be, respectively. 7.3.3 Lessee shall provide directly to Manufacturer or to Lessor, as the case may be, all indemnities and insurance coverage, and perform all related obligations, required by Manufacturer or the Engine manufacturer in connection with such training, product support and onsite technical assistance, and shall otherwise indemnify and hold harmless Lessor from and against all claims and liabilities of any kind related thereto. PAGE 41

7.4 AIRWORTHINESS DIRECTIVE COST SHARING Where the cost of any single non-repetitive airworthiness directive to be accomplished pursuant to Clause 14.8 of Schedule 3 or which Lessee is otherwise required by the terms of this Agreement to accomplish exceeds US**Material Redacted**, Lessor shall pay to Lessee, as long as no Default has occurred and is continuing, an amount calculated in accordance with the following formula: C x (N - R) / N Where N = **Material Redacted** R = the number of complete months remaining in the Term after completion of the modification C = the cost of the modification in excess of US**Material Redacted**. 8. LESSEE'S COVENANTS 8.1 DURATION Subject to Clause 10.2, the undertakings of Lessee under this Agreement will: (1) except as otherwise stated, be performed at the expense of Lessee; and (2) remain in force until the earlier to occur of (a) Redelivery of the Aircraft to Lessor in accordance with this Agreement either at the end of the Term, or earlier as provided herein, and payment of all obligations of Lessee hereunder or (b) receipt by Lessor of the Agreed Value pursuant to an Event of Loss. 8.2 FURTHER COVENANTS Lessee also covenants to Lessor to perform the covenants set out in Schedule 3. 9. INSURANCE 9.1 INSURANCES Lessee will maintain in full force during the Term insurances in respect of the Aircraft in form and substance reasonably satisfactory to Lessor and in conformity with and covering such risks as are set forth in Schedule 5 hereof (the "Insurances," which expression includes, where the context so admits, any relevant re-insurance(s)) through such brokers, with such lead underwriters being subject to such exclusions as may be approved by Lessor, such approval not to be unreasonably withheld, and in such amounts and having such deductibles as are set forth in Schedule 5 hereof. The Insurances will be effected either: PAGE 42

(1) on a direct basis with insurers of recognized standing who normally participate in aviation insurances in the leading international insurance markets and led by reputable underwriter(s) approved by Lessor (such approval not to be unreasonably withheld or delayed); or (2) with a single insurer or group of insurers approved by Lessor who does not retain the risk but effects substantial reinsurance with reinsurers in the leading international insurance markets and through brokers each of recognized standing and acceptable to Lessor for a percentage acceptable to Lessor of all risks insured (such acceptance not to be unreasonably withheld or delayed). 9.2 REQUIREMENTS Lessor's current requirements as to required Insurances are as specified in this Clause 9 and in Schedule 5. Also, Lessor may request the addition of additional insureds, as appropriate. 9.3 CHANGE Lessor shall be entitled to revoke its approval of Lessee's broker or lead underwriter(s) provided that: (i) there shall have occurred after the date hereof, any event or series of events which in Lessor's reasonable opinion, after consultation with Lessee and such broker or underwriter(s), has adversely affected such broker's or underwriter's ability to perform its obligations with respect to the Insurances required to be maintained hereunder; (ii) a majority of Lessee's other lessors of aircraft consent to the resulting change in broker or lead underwriter(s); and (iii) similar insurance is then generally available through other brokers and underwriters in the major international insurance markets upon terms substantially similar to the then current policy or policies. 9.4 INSURANCE COVENANTS Lessee will: (1) ensure that all legal requirements as to insurance of the Aircraft, any Engine or any Part which may from time to time be imposed by the laws of the Jurisdiction of Registration, the Jurisdiction of Incorporation, or any state to, from, or over which the Aircraft may be flown, insofar as they affect or concern the operation of the Aircraft, are complied with and in particular those requirements, compliance with which is necessary to ensure that: (a) the Aircraft is not in material risk of detention or forfeiture; (b) the Insurances remain valid and in full force and effect; and (c) the interests of the Indemnitees in the Insurances and the Aircraft, any Engine or any Part are not thereby prejudiced; PAGE 43

(2) not use, cause or permit the Aircraft, any Engine or any Part to be used for any purpose or in any manner not covered by the Insurances or outside any geographical limit imposed by the Insurances; (3) comply with the terms and conditions of each policy of the Insurances and not do, consent or agree to any act or omission which: (a) invalidates or may reasonably be expected to invalidate the Insurances; or (b) renders, or may reasonably be expected to render, void or voidable the whole or any part of any of the Insurances; or (c) brings any particular liability within the scope of an exclusion or exception to the Insurances; (4) [Intentionally omitted.] (5) commence renewal procedures in due time prior to expiry of any of the Insurances and provide to Lessor: (a) if requested by Lessor, a written status report of renewal negotiations 10 days prior to each expiry date; (b) facsimile or telexed confirmation of completion of renewal together with summary of conditions prior to each expiry date; and (c) certificates of insurance (and where appropriate certificates of reinsurance) and broker's (and any reinsurance brokers') letter of undertaking in a form reasonably acceptable to Lessor in accordance with the provisions of this Clause 9, in English, detailing the coverage and confirming the insurers' (and any reinsurers') agreement to the specified insurance requirements of this Agreement within 7 days of renewal; (6) [Intentionally omitted.] (7) [Intentionally omitted.] (8) not make any modification or alteration to the Insurances material and adverse to the interests of any of the Indemnitees; (9) be responsible for any deductible under the Insurances; and (10) provide any other insurance and reinsurance related information in respect of the Insurances as Lessor may reasonably require. PAGE 44

9.5 FAILURE TO INSURE If Lessee fails to maintain the Insurances in compliance with this Agreement, each of the Indemnitees will be entitled but not bound (without prejudice to any other rights of Lessor under this Agreement): (1) to pay the premiums due or to effect and maintain insurances satisfactory to it or otherwise remedy Lessee's failure in such manner (including, without limitation to effect and maintain an "owner's interest" policy) as it considers appropriate. Any sums so expended by it will become immediately due and payable by Lessee to Lessor (or an Indemnitee) together with interest thereon at the rate specified in Clause 5.10, from the date of expenditure by it up to the date of reimbursement by Lessee; or (2) at any time while such failure is continuing, to require the Aircraft to remain at any airport or to proceed to and remain at any airport designated by it until the failure is remedied to its satisfaction. 9.6 CONTINUING INDEMNITY Lessor may require Lessee to effect and to maintain insurance after the Expiry Date with respect to its liability under the indemnities in Clause 10 for such period as Lessor may reasonably require (but in no event for a period longer than the earlier to occur of two years following the Expiry Date or the next D-check, or equivalent) and which provides for each Indemnitee to be named as additional insured. Lessee's obligation in this clause shall not be affected by Lessee's ceasing to be Lessee of the Aircraft and/or any of the Indemnitees ceasing to have any interest in respect of the Aircraft. 9.7 APPLICATION OF INSURANCE PROCEEDS As between Lessor and Lessee: (1) all insurance proceeds, other than proceeds of insurance described in Clause 9.8, received as the result of an Event of Loss occurring during the Term will be paid to Lessor; (2) all insurance proceeds of any property, damage or loss to the Aircraft, any Engine or any Part occurring during the Term not constituting an Event of Loss and in excess of the Damage Notification Threshold shall be paid to Lessor and applied in payment (or to reimburse Lessee) for repairs or replacement property upon Lessor's being satisfied that the repairs or replacement have been effected in accordance with this Agreement. Insurance proceeds in amounts below the Damage Notification Threshold may be paid by the insurer directly to Lessee or repairers in respect of repairs or replacements only; PAGE 45

(3) all insurance proceeds in respect of third party liability will be paid by the insurers to the relevant third party in satisfaction of the relevant liability or to Lessor or Lessee in reimbursement of any payment so made by them with the agreement of the insurers; and (4) notwithstanding Clauses 9.7(1), (2) or (3), if at the time of the payment of any such insurance proceeds a Default has occurred and is continuing, all such proceeds will be paid to or retained by Lessor as security for the performance of Lessee's obligations hereunder and may be applied toward payment of any amounts which may then be payable by Lessee under this Agreement or any Sister Lease in such order as Lessor reasonably sees fit. The amount so retained or the balance thereof after application of any portion thereof as provided in this Clause 9.7(4) shall be paid to Lessee at such time as such Default shall have ceased to exist. 9.8 INSURANCE FOR LESSEE'S OWN ACCOUNTS Nothing herein shall be deemed to prevent Lessee, at its sole expense, from carrying insurance covering the Aircraft, the Airframe, the Engines or any engine or engines from time to time installed on the Airframe or any Part in addition to the Insurances required under this Clause 9, or in amounts greater than those required under this Clause 9 (any such insurance "Additional Insurance"), provided that such Additional Insurance does not adversely affect the rights of Lessor, Beneficiary or any other Additional Insured to make any claim or obtain recovery or coverage in full under any of the Insurances required to be maintained pursuant to this Clause 9. The proceeds of any such Additional Insurance shall be paid directly to and shall be deemed the sole property of Lessee. 10. INDEMNITY 10.1 GENERAL Except as set forth in Clause 10.3, Lessee agrees to defend, indemnify and hold harmless the Indemnitees from and against any and all claims, proceedings, losses, liabilities, suits, judgment, costs (including attorneys' fees and related costs), expenses, penalties or fines (each a "Claim") (where any such Claim relates to an occurrence suffered, incurred, or arising out of an event the happening of which was during the Term or prior to redelivery of the Aircraft, but not before the Term) regardless of when the Claim is made whether or not it arises out of or is attributable to any act or omission, negligent or otherwise, of any Indemnitee: (1) which may at any time be suffered or incurred directly or indirectly as a result of or connected with the possession, delivery, performance, management, registration, control, maintenance, condition, service, repair, overhaul, leasing, use, operation or return of the Aircraft, any Engine or Part (either in the air or on the ground) whether or not the Claim may be PAGE 46

attributable to any defect in the Aircraft, any Engine or any Part or to its design, testing or use or otherwise; (2) which arises otherwise from or in connection with the leasing of the Aircraft to Lessee under this Agreement and any act or omission of Lessee; (3) which arises out of any act or omission which invalidates or which renders voidable any of the Insurances; or (4) which, except as to the Manufacturer, may at any time be suffered or incurred as a consequence of any design, production, article or material in the Aircraft, any Engine or any part or its operation or use constituting an infringement of patent, copyright, trademark, design or other proprietary right or a breach of any obligation of confidentiality owed to any person; but excluding any Claim to the extent that the Claim is covered pursuant to another indemnity provision of this Agreement or to the extent it arises solely as a result of Lessor Taxes or a Lessor Lien. 10.2 DURATION The indemnities contained in this Agreement will continue in full force after the Expiry Date. 10.3 EXCEPTIONS Notwithstanding anything to the contrary herein, Lessee shall not be required to indemnify any Indemnitee in respect of any Claim arising from or otherwise attributable to: (1) acts or events which occur prior to execution of this Agreement or after Redelivery of the Aircraft to the Lessor in the manner and in the condition required hereunder, provided that nothing herein shall be deemed to release Lessee from any of its obligations hereunder that provide for performance after termination of the Term; (2) the gross negligence or willful misconduct of such Indemnitee; (3) Lessor Taxes; (4) Lessor Liens; (5) ordinary and usual operating or overhead expenses of such Indemnitee other than arising in connection with a Default or an Event of Default hereunder; (6) the financing of the Aircraft or any voluntary or involuntary assignment, transfer, conveyance or other disposition (collectively a "Transfer") of all or any interest of such Indemnitee in or to the Aircraft, any Engine or Part or PAGE 47

this Lease by any Person other than the Lessee unless such Transfer arises in connection with the exercise by Lessor of any available remedies during the existence of an Event of Default); and (7) as to the Manufacturer, any breach by Manufacturer or Engine Manufacturer of any of their respective warranties as set forth in the Purchase Agreement or any other agreement or instrument between Manufacturer, Engine Manufacturer or any vendor, supplier or subcontractor of Manufacturer or Engine Manufacturer, or as a consequence of any design or production defect. Lessee shall be subrogated to the rights and remedies which any Indemnitee may have against the Manufacturer, the Engine Manufacturer or any supplier, vendor, subcontractor or other manufacturer of any Part or any other Person claiming against such Indemnitee, provided Lessee shall have satisfied its indemnification obligations hereunder. If any Indemnitee obtains a recovery of all or any portion of any indemnity amount which Lessee has paid in full to such Indemnitee, provided that at such time as no Default has occurred and is then continuing, such Indemnitee shall pay to Lessee the net amount recovered by such Indemnitee within ten Business Days after receipt thereof. 11. EVENTS OF LOSS 11.1 PRE-DELIVERY If an Event of Loss occurs prior to delivery of the Aircraft to Lessee, this Agreement will immediately terminate and except as expressly stated in this Agreement neither party will have any further obligation or liability under this Agreement other than pursuant to Clause 17.9, except that Lessor will return to Lessee the Cash Deposit and the Deposit Letter of Credit. 11.2 POST-DELIVERY If an Event of Loss occurs in respect of the Aircraft after delivery of the Aircraft to Lessee, Lessee will pay the Agreed Value to Lessor on or prior to the earlier of (1) 90 days after the Event of Loss and (2) the date of receipt of insurance proceeds in respect of that Event of Loss. Subject to the rights of any insurers and reinsurers or other third party, upon irrevocable payment in full to Lessor of that amount and all other amounts which may then be payable to Lessor under this Agreement, Lessor will without recourse or warranty (except as to Lessor's Liens) and without further act, be deemed to have transferred to Lessee all of Lessor's rights to any Engines and Parts not installed when the Event of Loss occurred, all on an as-is, where-is basis, and will at Lessee's reasonable expense (including Taxes, if any), execute and deliver such bills of sale and other documents and instruments as Lessee may reasonably request to evidence (on the public record or otherwise) the transfer and the vesting of PAGE 48

Lessor's rights in such Engines and Parts in Lessee, free and clear of all of Lessor Liens. 11.3 ENGINES If an Event of Loss occurs with respect to any Engine not then installed on the Aircraft, or upon any Event of Loss with respect to an Engine installed on the Aircraft not involving an Event of Loss of the Aircraft occurring after delivery of the Aircraft to Lessee, Lessee shall give Lessor prompt written notice thereof and Lessee shall replace such Engine as soon as reasonably possible by duly conveying to Lessor title to another engine owned or to be acquired by Lessee, which engine shall be free and clear of all Liens other than Permitted Liens, and shall be of the same make or model or an improved or advanced version, in such operating condition and of such value and utility as the Engine which sustained the Event of Loss was (or would have been if it had been maintained in accordance with the terms hereof). Such replacement engine shall be deemed an "Engine" as defined herein. Lessee agrees to take such action as Lessor may reasonably request in order that any such replacement Engine shall be duly and properly titled in Lessor and leased hereunder to the same extent as the Engine replaced thereby. Lessee's obligation to pay the Rent hereunder shall continue in full force and effect, but Lessee shall be entitled to be reimbursed by Lessor the amount of insurance or condemnation proceeds, if any, received by Lessor with respect to such replaced Engine, subject to insurers' rights. 11.4 REQUISITION During any requisition for use or hire of the Aircraft, any Engine or Part which does not constitute or has not matured into an Event of Loss and provided always that it does not arise out of any act or omission of Lessor, Beneficiary or any Person claiming by or through Lessor or Beneficiary: (1) the Rent and other charges payable under this Agreement will not be suspended or abated either in whole or in part, and Lessee will not be released from any of its other obligations under the Agreement (other than operational obligations with which Lessee is unable to comply solely by virtue of the requisition); and (2) so long as no Default has occurred and is continuing, Lessee will be entitled to any hire paid by the requisitioning authority in respect of the Term, but if a Default has occurred and is continuing, Lessor will be entitled to such hire to be held as security for Lessee's obligations hereunder and paid over to Lessee at such time as such Default shall not be continuing, if not applied in full or partial satisfaction of such obligations. Lessee will, as soon as practicable after the end of any such requisition, cause the Aircraft to be put into the condition required by this Agreement. Lessor will be entitled to all compensation payable by the requisitioning authority in respect of any change in the structure, state or condition of the Aircraft arising during the period of requisition, and Lessor will apply such compensation in PAGE 49

reimbursing Lessee for the cost of complying with its obligations under this Agreement in respect of any such change, but so that, if any Default has occurred and is continuing, Lessor may apply the compensation or hire in or towards settlement of any amounts owing by Lessee under this Agreement. 12. REDELIVERY OF AIRCRAFT 12.1 NOTIFICATION Lessee will notify and provide Lessor with a schedule for the Redelivery of the Aircraft not later than 30 days prior to the commencement of the Redelivery Check, and Schedule 4 shall apply in relation to the Redelivery Check. 12.2 REDELIVERY On the Expiry Date or termination of the leasing of the Aircraft under this Agreement, unless an Event of Loss has occurred, Lessee will, at its expense, redeliver the Aircraft including all Documents and Records to Lessor at the Redelivery Location in a condition complying with this Agreement and in particular Schedule 4, free and clear of all Liens and Permitted Liens (other than Lessor Liens). 12.3 REDELIVERY ACKNOWLEDGMENT Provided Lessee has complied with its obligations under this Agreement, upon redelivery of the Aircraft by Lessee to Lessor at the Redelivery Location, Lessor will deliver to Lessee an acknowledgment confirming that Lessee has redelivered the Aircraft to Lessor in accordance with this Agreement. 12.4 SHORT TERM STORAGE At the election of Lessor, the Lessee shall store the Aircraft either at Lessee's facility or, at Lessee's option, at another facility that is satisfactory to Lessor for a period of up to 30 days following Redelivery of the Aircraft by Lessee to Lessor, so long as Lessor has given Lessee 30 days' written notice of such storage intent prior to the Redelivery Date. If Lessor gives Lessee written notice of its intent to store the Aircraft less than 30 days prior to the Redelivery Date, Lessee shall only be obligated to provide such storage if space is available in the Lessee's storage facilities. Lessee will maintain the Aircraft per the Manufacturer's recommended storage program, and Lessor shall pay all actual and reasonable expenses of such storage and maintenance. 12.5 EXPENSES All expenses associated with the Redelivery Check, in accordance with this Clause 12 and Schedule 4, and any other Redelivery requirement, will be at the expense of the Lessee, unless specifically noted in this Agreement, or otherwise mutually agreed in writing. PAGE 50

12.6 WARRANTY TRANSFER Any warranties remaining from work accomplished by outside vendors or Parts installed on the Aircraft will be transferred to Lessor. For any component repair or overhaul performed by Lessee's internal shops, warranties will be transferred to Lessor on the understanding that Lessee's warranty is substantially the same as the industry standard of that component. 12.7 NON-COMPLIANCE To the extent that at the time of Final Inspection and demonstration flight, the Aircraft does not comply with the Redelivery condition of this Agreement, Lessee will at Lessor's option: (1) immediately rectify the non-compliance at Lessee's expense and to the extent the non-compliance extends beyond the Expiry Date, the Term will automatically be extended and this Agreement will remain in force until the non-compliance has been rectified to the mutual satisfaction of both parties, or (2) redeliver the Aircraft to Lessor and indemnify Lessor, and provide to Lessor's satisfaction security for such indemnity, against the cost of putting the Aircraft into the condition required by this Agreement, and pay to Lessor such actual and reasonable costs to troubleshoot and repair the non-compliant item as incurred by Lessor within 5 business days after the receipt of Lessor's invoice therefor, provided that all such repairs shall be completed within 90 days of Redelivery. 12.8 EXPORT At Redelivery, Lessee will provide to Lessor all documents necessary to export (if applicable) the Aircraft from the Redelivery Location if outside the USA (including without limitation, a valid and subsisting export license for the Aircraft). Lessee will also provide to Lessor all necessary assistance to enable the Lessor to obtain customs clearance and any other permissions and documentation relevant to exportation from the Redelivery Location if outside the USA and pay any Taxes incurred in respect of the exportation of the Aircraft from the Habitual Base. 12.9 LATE REDELIVERY If the Aircraft is not duly redelivered on the Expiry Date due to delays not caused by Lessor and unforeseen or foreseen in meeting return conditions, Lessee will be liable to Lessor (1) during the one month period following the Expiry Date, for Rent on the basis of the applicable Rent in the preceding Rental Period, and (2) thereafter for 150% such Rent. If in the reasonable judgment of Lessor the delay could have been avoided by the prudent planning of Lessee, Lessee will be liable to Lessor for Rent in the amount of 150% of the otherwise applicable Rent commencing on the fifteenth (15th) day following the scheduled Expiry Date. In each case, Rent will be prorated PAGE 51

on a daily basis in an amount equal to 1/30th of the monthly Rent and payable on a weekly basis, in advance, for each day following the Expiry Date, until the Aircraft is duly redelivered. Following redelivery of the Aircraft, Rent will be adjusted for the actual number of days between the Expiry Date and the actual Redelivery Date. Any excess amounts paid will be returned to Lessee upon satisfaction of all open items associated with the Redelivery. During this extended period, all of the Lessee's other responsibilities and obligations will remain in full force and effect and Lessee will use its best commercially reasonable efforts to redeliver the Aircraft as soon as possible. 13. DEFAULT 13.1 EVENTS Each of the following events will constitute an Event of Default and a repudiation of this Agreement by Lessee: (1) NON-PAYMENT: Lessee fails to make any payment under this Agreement or another Lessee Document on the due date and such failure shall continue for a period of 5 Business Days; or (2) INSURANCE: Lessee fails to comply with any provision of Clause 9 or Schedule 5 or any insurance required to be maintained under this Agreement is canceled or terminated or otherwise fails to remain in full force and effect; or (3) BREACH: Lessee fails to comply with any other provision of this Agreement or another Lessee Document and, if such failure is in the reasonable opinion of Lessor capable of remedy, the failure continues for 30 days after notice from Lessor to Lessee; or (4) REPRESENTATION: Any representation or warranty made (or deemed to be repeated) by Lessee in or pursuant to this Agreement or another Lessee Document, or in any document, certificate or statement, is, or proves to have been, incorrect in any material respect when made or deemed to be repeated and, to the extent that the same are capable of remedy the circumstances giving rise to such representation or warranty being incorrect are not remedied within 30 days after notice from Lessor to Lessee; or (5) CROSS DEFAULT: (a) any Financial Indebtedness of Lessee or COPA Holdings is not paid when due, after giving effect to any applicable grace period; or (b) any such Financial Indebtedness becomes due or capable of being declared due prior to the date when it would otherwise have become due; or PAGE 52

(c) the security for any such Financial Indebtedness becomes enforceable; or (d) under any Sister Lease, any "Event of Default" as therein defined occurs; or (6) APPROVALS: Any consent, authorization, license, certificate or approval of or registration with or declaration to any Government Entity in connection with this Agreement and the other Lessee Documents, including, without limitation: (a) any authorization required by Lessee to obtain and transfer freely Dollars (or any other relevant currency) out of any relevant country; or (b) any authorization required by Lessee to authorize, or which may be related to, the execution, delivery, validity, enforceability or admissibility in evidence of this Agreement or the performance by Lessee of its obligations under this Agreement; or (c) the registration of the Aircraft; or (d) any airline license or air transport license; is materially and adversely modified or is withheld, or is revoked, suspended, canceled, withdrawn, terminated or not renewed, or otherwise ceases to be in full force and Lessor reasonably determines, which determination shall be conclusive, that there is a material risk that such withholding, revocation, suspension, cancellation, withdrawal, termination or non-renewal or cessation will materially and adversely prejudice its rights under or in connection with this Agreement and the other Lessee Documents, have a material adverse effect on Lessee's ability to perform its obligations hereunder, jeopardize the interests of Lessor in the Aircraft, or give rise to any criminal liability on Lessor; or (7) INSOLVENCY: (a) Lessee or COPA Holdings is, or is deemed for the purposes of any relevant law to be, unable to pay its debts as they fall due or to be insolvent, or admits in writing inability to pay its debts as they fall due; or (b) Lessee or COPA Holdings suspends making payments on all or any class of its debts or announces an intention to do so, or a moratorium is declared in respect of any of its indebtedness; or PAGE 53

(c) a creditor applies for the suspension of payments of Lessee or COPA Holdings, and such application is not dismissed within sixty (60) days after the filing thereof; or (8) LIQUIDATION, BANKRUPTCY OR SIMILAR PROCEEDINGS: (a) a meeting of the shareholders or directors of Lessee or COPA Holdings is convened to consider a resolution to present an application for a moratorium, administration order, or any such resolution is passed; or (b) any step (including petition proposal or convening a meeting) is taken with a view to composition, assignment or arrangement with any of its creditors of, or the rehabilitation, administration, custodianship, liquidation, or dissolution of Lessee or COPA Holdings; or any other involuntary insolvency proceedings involving Lessee or COPA Holdings are commenced and remain undismissed for a period of sixty (60) days; or (c) any order is made or resolution passed for any such composition, assignment, arrangement, rehabilitation, administration, custodianship, liquidation, dissolution or insolvency proceedings, of Lessee or COPA Holdings becomes subject to or enters into any of the foregoing; or (d) any order, judgment or decree is entered by any court of competent jurisdiction finding Lessee or COPA Holdings to be a bankrupt or authorizing the liquidation, reorganization, bankruptcy, composition or readjustment of debts of Lessee or COPA Holdings; or (9) RECEIVER: (a) an administrative or other receiver or manager is appointed in respect of Lessee or COPA Holdings or any part of its assets; or (b) Lessee or COPA Holdings requests any person to appoint such a receiver or manager; or (c) any sequestration of any substantial part of the assets of Lessee or COPA Holdings that remains in force undismissed, unstayed and unvacated for a period of 60 days; or (10) FINAL ADVERSE JUDGMENT: A final judgment for the payment of money in excess of $3,000,000 that is not covered by insurance shall be rendered against Lessee and the same shall remain unpaid, unstayed or undischarged for a period of 60 days; or PAGE 54

(11) OTHER JURISDICTION: There occurs in relation to Lessee or COPA Holdings any event anywhere which, in the reasonable opinion of Lessor, corresponds with any of those mentioned in Clauses 13.1(8) or (9); or (12) UNLAWFUL: It becomes unlawful for Lessee to perform any of its obligations under this Agreement or this Agreement becomes wholly or partly invalid or unenforceable, subject to the provision in Clause 15.1; or (13) SUSPENSION OF BUSINESS: Lessee or COPA Holdings suspends or ceases or threatens to suspend or cease to carry on all or a substantial part of its business or that of any of its material subsidiaries as currently conducted and any such partial suspension or cessation would materially adversely affect Lessee's ability to perform its obligations under this Agreement; or (14) DISPOSAL: Lessee or COPA Holdings disposes or threatens to dispose of all or a material part of its operating fixed assets (including, but not limited to, aircraft and spares), whether by one or a series of transactions, related or not, other than for the purpose of a reconstruction or amalgamation, the terms of which have received the previous consent in writing of Lessor, which consent will not be unreasonably withheld, and any such disposition would materially adversely affect Lessee's ability to perform its obligations under this Agreement; or (15) RIGHTS: The existence, validity, enforceability or priority of the rights of Lessor as Lessor in respect of the Aircraft are challenged by Lessee or any other person claiming by or through Lessee; or (16) CHANGE OF OWNERSHIP: Any person or group of persons, excluding the shareholders of Lessee or COPA Holdings and any Affiliate or Subsidiary thereof, acquires, after the date hereof, more than 50% of the equity share capital of Lessee, or control of Lessee, without the consent of Lessor, which consent shall not be unreasonably withheld, and such acquisition of equity or control shall have a material adverse affect on Lessee's ability to perform its obligations hereunder. For the purposes of this Clause 13.1(16), "control" means the power to direct the management and policy of Lessee whether by control of the composition of the board of directors (or similar governing body) of Lessee, or by contract or otherwise; or (17) DELIVERY: Lessee fails to accept delivery of the Aircraft when validly tendered by Lessor pursuant to this Agreement; or (18) ADVERSE CHANGE: Any event or series of events occurs (exclusive of events affecting the airline industry generally) which, in the reasonable opinion of Lessor, shall have had a material adverse effect on Lessee's ability to perform its obligations hereunder and such event (or series of events) shall continue unremedied for a period in excess of 60 days. PAGE 55

(19) LETTERS OF CREDIT: (a) the issuer of either Letter of Credit fails to make any payment under any Letter of Credit when due and Lessee fails to procure the making of such payments within 3 Business Days after notice from Lessor to Lessee; or (b) either Letter of Credit is not in full force or, for any reason ceases to constitute the legal, valid and binding obligation of the issuer; or (c) Lessee fails to provide and deliver replacement, renewal or further Letters of Credit pursuant to Clause 5.1; or (d) any of the events listed in sub-clauses 13.1(7), (8) or (9) apply to that issuer (references in those sub-clauses to Lessee being deemed to be to the issuer) and Lessee has not provided to Lessor other letters of credit in the principal amount and in substantially the same form of the Letters of Credit issued or confirmed by a bank reasonably satisfactory to Lessor in Lessor's sole discretion, within 10 days of the occurrence of that event. 13.2 RIGHTS If an Event of Default occurs and is continuing, Lessor may at its option (and without limitation or prejudice to any other rights and remedies that may be available to Lessor under this Agreement or at law or equity), at any time thereafter: (1) by notice to Lessee and with immediate effect unilaterally and as a matter of law terminate the lease of the Aircraft hereunder (but without prejudice to the continuing obligations of Lessee under this Agreement), whereupon all rights of Lessee under this Agreement shall cease without any further action or judicial order; and/or (2) proceed by appropriate court action or actions to enforce performance of this Agreement and/or to recover damages for the breach of this Agreement; and/or (3) terminate the lease of the Aircraft hereunder as a matter of law and without further action or judicial order by either: (a) taking possession of the Aircraft, for which purpose Lessor may enter any premises belonging to or in the occupation of or under the control of Lessee where the Aircraft may be located, or cause the Aircraft to be redelivered to Lessor at an airport designated by the Lessor (or such other location as Lessor may require), and Lessor is hereby irrevocably by way of security for Lessee's obligations under this Agreement appointed attorney for Lessee in causing the redelivery or in directing the pilots of Lessee or other pilots to fly the Aircraft to PAGE 56

that airport and will have all the powers and authorizations necessary for taking that action; or (b) serving notice requiring Lessee to redeliver the Aircraft to Lessor at an airport designated by the Lessor in the USA. 13.3 EXPORT If an Event of Default occurs and is continuing and Lessor terminates this Agreement pursuant to Clause 13.2, Lessor may sell or otherwise deal with the Aircraft as if this Agreement had never been made and Lessee will at the request of Lessor take all steps necessary to effect (if applicable) export of the Aircraft from the country where the Aircraft is then situated and any other steps necessary to enable the Aircraft to be immediately redelivered to Lessor in accordance with this Agreement. Lessee hereby irrevocably and by way of security for its obligations under this Agreement appoints Lessor as its attorney to execute and deliver any documentation and to do any act or thing required in connection with the foregoing, including, but not limited to, filing any documents and taking any actions necessary for the purpose of requesting cancellation of the registration of the Aircraft with the Air Authority. 13.4 DEFAULT PAYMENTS If: (1) Default occurs and is continuing; or (2) the Aircraft is not delivered on the proposed Delivery Date by reason of failure of Lessee to satisfy any conditions to that delivery except in the event of an Excusable Delay; Lessee will indemnify Lessor on demand against any loss (including loss of profit), damage, expense, cost or inability which Lessor may sustain or incur directly or indirectly as a result thereof including but not limited to: (a) any loss of profit suffered by Lessor because of Lessor's inability to place the Aircraft on lease with another lessee on terms as favorable to Lessor as this Agreement or because the following are not as profitable to Lessor as such lease would have been but for such Default or non-delivery referred to in (1) and (2) above, namely (i) whatever use if any to which Lessor is able to put the Aircraft as an alternative to the Lease under this Agreement or (ii) any consequent sale or disposal by Lessor of the Aircraft and the funds arising upon such sale or disposal; and (b) any loss, cost, expense, or liability sustained or incurred by Lessor owing to Lessee's failure to redeliver the Aircraft on the date, at the place and in the condition required by this Agreement. PAGE 57

13.5 SURVIVAL All the representations, warranties, indemnities and unperformed covenants and Lessor's rights contained in this Agreement shall survive and continue in full force after the Expiry Date, notwithstanding the termination of this Agreement or the lease of the Aircraft for any reason whatsoever. 14. ASSIGNMENT, NOVATION 14.1 LIEN Lessee will not assign, or create or permit to exist any Lien, other than Permitted Liens, over, any of its rights under this Agreement, the other Lessee Documents or the Insurances. 14.2 LEASE ASSIGNMENT/NOVATION Subject at all times and in all cases to Lessee's rights under this Agreement and such other restrictions as are set forth herein, Lessor, at its sole cost and expense, may sell, assign, pledge, transfer or convey (in each case a "Transfer") to any Person (each a "Transferee"), any or all of Lessor's rights, title and interest in, to and under this Agreement and in respect of the Aircraft; provided however, that no such Transfer shall, directly or indirectly, (i) materially increase Lessee's obligations, duties or liabilities under this Agreement or in respect of the Aircraft in any manner whatsoever, (ii) diminish or adversely affect Lessee's rights under this Agreement or in respect of the Aircraft; (iii) be made to any airline, or (iv) otherwise cause Lessee to incur any obligations, cost or expense in excess of those for which it would have been responsible in the absence of such Transfer; provided further however, that (a) any Transferee, whether of all or any part of Lessor's interest in and to this Agreement or the Aircraft, shall have executed and delivered to Lessee written confirmation in form reasonably satisfactory to Lessee that such Transferee agrees to be bound by all of the terms and conditions of this Agreement and (b) any Transferee, whether of all or any part of Lessor's interest in and to this Agreement or the Aircraft, shall have executed and delivered to Lessee, a letter of quiet enjoyment, in form and substance substantially equivalent to Clause 7.1 hereof. Notwithstanding the foregoing, in the case of any Transfer of this Agreement or the Aircraft as security for any obligations of Lessor (whether in respect of any financing arrangements made by Lessor in respect of the Aircraft or otherwise), Lessor shall remain fully liable to Lessee for the prompt and due payment and performance of all of its duties, liabilities and obligations under this Agreement to the full extent as if no such Transfer had been made. Lessee acknowledges and agrees that should Lessor sell, assign transfer or convey to a Transferee, other than by way of security, all of Lessor's interest under this Agreement and in the Aircraft, Lessor shall thereupon be relieved of all of its obligations hereunder and Lessor's Transferee shall succeed to all of Lessor's rights, interests and obligations under this Agreement, subject however to Lessor's compliance with the terms and provisions of this Clause. PAGE 58

Subject to compliance by Lessor with this Clause 14.2, lessee shall execute and deliver, at Lessor's sole cost and expense, any and all instruments or documents reasonably requested by Lessor and shall otherwise reasonably cooperate with Lessor in connection with and to effectuate any such Transfer. 15. ILLEGALITY If, notwithstanding the provisions of Clause 17.7, it becomes unlawful in any jurisdiction for Lessor or Lessee to give effect to their respective obligations as contemplated by this Agreement, the affected party shall notify the other in writing. Lessor and Lessee will consult in good faith as to any steps which may be taken to restructure the transaction to avoid that unlawfulness but neither party will be under no obligation to take any such steps. Notwithstanding the foregoing, as Lessor in its discretion considers appropriate or advisable while any such illegality exists and prior to any such cure thereof, Lessor may by notice in writing to Lessee terminate the leasing of the Aircraft under this Agreement. Upon any such termination, Lessee will immediately redeliver the Aircraft to Lessor as follows: (i) if the illegality causing such termination relates to the rights or powers of Lessee and is attributable to the laws or regulations of the Republic of Panama or any other jurisdiction with jurisdiction over the rights or powers of Lessee, Lessee shall redeliver the Aircraft to Lessor in accordance with the requirements of Clause 12 and Schedule 4; (ii) if the illegality causing such termination relates to the rights or powers of Lessor or Beneficiary and is attributable to the laws of the USA or any other jurisdiction with jurisdiction over the rights or powers of Lessor or Beneficiary, Lessee shall return the Aircraft to Lessor in accordance with the requirements of Clauses 12.2, 12.4 12.5 12.6 and 12.8 of this Agreement, together with Clauses 1.0, 2.4, 2.8, 2.14, 2.15, 3.1, 4.1, 4.3 and 5.1 through 5.5 of Schedule 4. 16. DISCLAIMERS AND WAIVERS 16.1 EXCLUSION AND WAIVER AS BETWEEN LESSOR AND LESSEE, THE AIRCRAFT IS BEING DELIVERED AND LEASED TO LESSEE UNDER THIS AGREEMENT "AS IS, WHERE IS" AND, EXCEPT FOR LESSOR'S REPRESENTATIONS AND WARRANTIES SET FORTH IN CLAUSE 2.4 OF THIS AGREEMENT, NEITHER LESSOR NOR ANY OTHER INDEMNITEE (OTHER THAN MANUFACTURER) MAKES ANY WARRANTIES OR REPRESENTATIONS WHATSOEVER. LESSOR'S REPRESENTATIONS AND WARRANTIES SET FORTH IN CLAUSE 2.4 ARE EXCLUSIVE AND IN SUBSTITUTION FOR, AND LESSEE, FOR THE BENEFIT OF LESSOR AND ANY OTHER INDEMNITEE (OTHER THAN MANUFACTURER), HEREBY WAIVES, RELEASES AND RENOUNCES ALL OTHER WARRANTIES, PATENT AND OTHER INDEMNITIES, OBLIGATIONS AND LIABILITIES OF LESSOR AND ANY OTHER INDEMNITEE (OTHER THAN MANUFACTURER), AND ANY AND ALL RIGHTS, CLAIMS AND REMEDIES OF LESSEE, ITS SUCCESSORS OR PERMITTED ASSIGNS, EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, WITH RESPECT TO ANY NONCONFORMANCE OR DEFECT IN THE AIRCRAFT, ANY PART THEREOF OR ANY OTHER THING PAGE 59

DELIVERED, LEASED, CHARTERED, SOLD OR TRANSFERRED UNDER THIS LEASE, INCLUDING, BUT NOT LIMITED TO: (1) ANY WARRANTY AS TO THE DESCRIPTION, CONFORMITY TO THE PROVISIONS OF THE PURCHASE AGREEMENT, AIRWORTHINESS, VALUE, CONDITION, DESIGN, OPERATION OF, OR QUALITY OF THE MATERIAL OR WORKMANSHIP IN, OR ANY DEFECT IN, THE AIRCRAFT, THE AIRFRAME, ANY ENGINE, ANY PART, ANY DOCUMENTS, ANY RECORDS, ANY DATA OR ANY OTHER THING DELIVERED, SOLD OR TRANSFERRED HEREUNDER; (2) ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE OR FOR A PARTICULAR PURPOSE; (3) ANY EXPRESS OR IMPLIED WARRANTY AS TO TITLE; (4) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE; (5) ANY OBLIGATION OR LIABILITY WITH RESPECT TO ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY; (6) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY IN TORT, WHETHER OR NOT IN STRICT OR ABSOLUTE LIABILITY OR ARISING FROM THE NEGLIGENCE OF LESSOR OR ANY OTHER INDEMNITEE, WHETHER ACTUAL OR IMPUTED, ACTIVE OR PASSIVE; (7) THE ABSENCE OF LATENT OR OTHER DEFECT OR NONCONFORMANCE IN THE AIRFRAME, ANY ENGINE, ANY PART, ANY DOCUMENTS, ANY RECORDS, ANY DATA OR ANY OTHER THING DELIVERED, SOLD OR TRANSFERRED HEREUNDER, WHETHER OR NOT DISCOVERABLE; AND (8) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OR DAMAGE TO THE AIRCRAFT, THE AIRFRAME, ANY ENGINE, ANY PART, ANY DOCUMENT, ANY RECORD, ANY DATA OR ANY OTHER THING DELIVERED, LEASED OR TRANSFERRED HEREUNDER, FOR ANY LIABILITY OF LESSEE TO ANY THIRD PARTY OR FOR ANY LOSS OF USE, REVENUE OR PROFIT OR FOR ANY OTHER DIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES. 16.2 CERTIFICATE OF ACCEPTANCE DELIVERY BY LESSEE TO LESSOR OF THE CERTIFICATE OF ACCEPTANCE WILL BE CONCLUSIVE PROOF AS BETWEEN LESSOR AND PAGE 60

LESSEE THAT LESSEE HAS EXAMINED AND INVESTIGATED THE AIRCRAFT, THAT THE AIRCRAFT AND THE DOCUMENTS AND RECORDS ARE SATISFACTORY TO LESSEE AND THAT LESSEE HAS IRREVOCABLY AND UNCONDITIONALLY ACCEPTED THE AIRCRAFT FOR LEASE HEREUNDER WITHOUT ANY RESERVATIONS WHATSOEVER EXCEPT AS MAY BE STATED THEREIN. 17. MISCELLANEOUS 17.1 WAIVERS, REMEDIES, CUMULATIVE The rights of Lessor under this Agreement: (1) may be exercised as often as necessary; (2) are cumulative and not exclusive of its rights under any law; and (3) may be waived only in writing and specifically. Delay in the exercise or non-exercise of any such right will not constitute a waiver of that right. 17.2 DELEGATION/AGENCY AGREEMENT Lessor may delegate to any person or persons all or any of the trusts, powers or discretions vested in it under this Agreement and any such delegation may be made upon such terms and conditions and subject to such regulations (including power to sub-delegate) as Lessor determines in its absolute discretion, provided that Lessor shall remain responsible for the performance of any such trusts, powers and discretions so delegated. Pursuant to the Purchase Agreement, certain obligations remain to be performed by Lessor in connection with the manufacture, fabrication and completion of the Aircraft by Manufacturer, which obligations, including the furnishing of certain equipment for the Aircraft, will be performed by Lessee. Lessee will act as Lessor's agent with respect to such matters as set forth in, and pursuant to, the terms of an agency agreement to be entered into by Lessor and Lessee in form and substance reasonably satisfactory to Lessor and Lessee. Lessee will perform its obligations as set forth in such agency agreement and provide the Aircraft equipment which must be provided by Lessee within the time periods required by Manufacturer, save for excusable delay. 17.3 CERTIFICATES Except as expressly provided in this Agreement, any certificate or determination by Lessor as to any rate of interest or as to any other amount payable under this Agreement will, in the absence of manifest error, be conclusive and binding on Lessee provided that the same shall be accompanied by a written explanation, or PAGE 61

reasonable detail, as to the calculation or determination of any amount stated to be payable therein. 17.4 APPROPRIATION If any sum paid or recovered in respect of the liabilities of Lessee under this Agreement is less than the amount then due, Lessor may apply that sum to amounts due under this Agreement in such proportions and order and generally in such manner as Lessor may reasonably determine. 17.5 CURRENCY INDEMNITY 17.5.1 If Lessor receives an amount in respect of Lessee's liability under this Agreement or if such liability is converted into a claim, proof, judgment or order in a currency other than the currency in which the amount is expressed to be payable under this Agreement (the "contractual currency"), then: (1) Lessee will indemnify Lessor as an independent obligation against any loss arising out of or as a result of such conversion; (2) If the amount received by Lessor, when converted into the contractual currency (at the market rate at which Lessor is able on the relevant date to purchase the contractual currency with such other currency) is less than the amount owed in the contractual currency, Lessee will, immediately on demand, pay to Lessor an amount in the contractual currency equal to the deficit; and (3) Lessee will pay to Lessor on demand any exchange costs and Taxes payable in connection with the conversion. 17.5.2 Lessee waives any right it may have in any jurisdiction to pay any amount under this Agreement in a currency other than the contractual currency. 17.6 SET-OFF Lessor may set off any matured obligation owed by Lessee under this Agreement, any Sister Lease or any other agreement between Lessor (or any affiliate or subsidiary of Lessor) and Lessee (each an "Other Agreement") in respect of which an Event of Default (or similar event) has occurred and is continuing (to the extent beneficially owned by Lessor) against any obligation (whether or not matured) owed by Lessor to Lessee, regardless of the place of payment or currency. If the obligations are in different currencies, Lessor may convert either obligation at the market rate of exchange available for the purpose of the set-off. If an obligation is unascertained or unliquidated, Lessor may in good faith estimate that obligation and set off in respect of the estimate, subject to the relevant party accounting to the other when the obligation is ascertained or liquidated. Lessor will not be obliged to pay amounts to Lessee under this Agreement or any Other Agreements in respect of PAGE 62

which an Event of Default has occurred and is continuing so long as any sums which are then due to Lessor by Lessee under this Agreement remain unpaid and any such amounts which would otherwise be due will fall due only if and when Lessee has paid all such sums except to the extent Lessor otherwise agrees or sets off such amounts against such payment pursuant to the foregoing. 17.7 SEVERABILITY If any provision hereof shall be held invalid, illegal or unenforceable in any respect in any jurisdiction, then to the extent permitted by law, (a) all other provisions hereof shall remain in full force and effect in such jurisdiction and (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction. If, however, any law pursuant to which such provisions are held invalid, illegal or unenforceable may be waived, such law is hereby waived by the parties hereto to the full extent permitted, to the end that this Agreement shall be deemed to be a valid and binding agreement in all respects, enforceable in accordance with its terms. 17.8 REMEDY If Lessee fails to comply with any provision of this Agreement, Lessor may, without being in any way obliged to do so or responsible for so doing and without prejudice to the ability of Lessor to treat the non-compliance as a Default or an Event of Default, effect compliance on behalf of Lessee, whereupon Lessee shall become liable to pay immediately any sums expended by Lessor, together with all costs and expenses (including legal costs) in connection therewith. 17.9 EXPENSES 17.9.1 Whether or not the Aircraft is delivered to Lessee pursuant to this Agreement unless any failure to effect delivery results from an act or omission to act by Lessor or Beneficiary not anticipated or otherwise permitted under this Agreement, Lessee will pay to Lessor on demand all reasonable expenses (including investigation and appraisal expenses, attorneys' fees and other costs) payable or incurred by Lessor in connection with the enforcement of or preservation of any of Lessor's rights under this Agreement or any related agreement, or in respect of the repossession of the Aircraft pursuant to Clause 13.2. 17.9.2 Each party shall bear all other expenses (including legal, professional, and out-of-pocket expenses) incurred or payable by such party in connection with the negotiation, preparation, and execution of this Agreement and/or the other documents contemplated hereby. 17.9.3 All expenses payable pursuant to Clause 17.9.1 will be paid in the currency in which they are incurred by Lessor. PAGE 63

17.10 TIME OF ESSENCE The time stipulated in this Agreement for all payments payable by Lessee to Lessor and for the performance of Lessee's other obligations under this Agreement will be of the essence. 17.11 NOTICES All notices under, or in connection with, this Agreement will, unless otherwise stated, be given in writing by letter delivered by courier or by facsimile. Any such notice is deemed to be given as follows: (1) if by letter, when delivered; and (2) if by fax, when transmitted and full transmission has been separately notified by telephone by the transmitting party. The address, telephone numbers and facsimile numbers of Lessee and Lessor and Beneficiary are as follows (or such other address, telephone number or facsimile number notified by the relevant party): Lessee: Address: Avenida Justo Arosemena y Calle 39 Panama 1, Republic of Panama Attention: Executive President Facsimile: 507-227-1952 Telephone: 507-227-4551 Lessor: Address: 79 South Main Street Salt Lake City, Utah 84111 USA Attention: Corporate Trust Department Facsimile: 802-246-5053 Telephone: 802-246-5630 with a copy to: Beneficiary: Address: 3780 Kilroy Airport Way, Suite 700 Long Beach, California 90806 USA Attention; Contracts Director Facsimile: 562-988-2694 Telephone: 562-988-2688 PAGE 64

17.12 LAW AND JURISDICTION 17.12.1 This Agreement shall in all respects be governed by, and construed in accordance with, the internal laws of the State of New York, inclusive of all matters of construction, validity and performance. 17.12.2 Lessee and Lessor hereby irrevocably submit to the jurisdiction of any New York state or federal court sitting in New York City in any action or proceeding arising out of or relating to this Lease, and hereby irrevocably agree that all claims in respect of such action or proceeding may be heard and determined in such New York state court or, to the extent permitted by law, in such federal court. Lessee and Lessor hereby irrevocably waive, to the fullest extent they may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding. Lessor hereby irrevocably appoints CT Corporation System, with an office on the date hereof at 1633 Broadway, New York, New York 10019, and Lessee hereby irrevocably appoints Greenberg, Traurig, Hoffman, Lipoff, Rosen & Quentel, 200 Park Avenue, New York, New York 10019 (the "Process Agents"), as their respective Process Agents to receive on their behalf proper service of copies of the summons and complaint and any other process that may be served in any such action or proceeding. Such service may be made by mailing or delivering a copy of such process to Lessee or Lessor, as the case may be, in care of their respective Process Agents at such Process Agent's above address, and Lessee and Lessor hereby irrevocably authorize and direct their respective Process Agents to accept such service on their behalf. Lessee and Lessor agree that a final non-appealable judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Clause 17.12.2 shall affect the right of any Person to serve legal process in any other manner permitted by law or affect the right of any other party to bring any action or proceeding against Lessee or Lessor, or their respective properties in the courts of other jurisdictions. LESSEE AND LESSOR HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING TO WHICH THEY ARE PARTIES INVOLVING, DIRECTLY OR INDIRECTY, ANY MATTER ARISING OUT OF OR RELATING TO THIS LEASE. 17.12.3 Lessee agrees that any final non-appealable judgment or order of a Federal or State court located in the State of New York in connection with this Agreement and the other Lessee Documents is conclusive and binding on it and may be enforced against it in the courts of any other jurisdiction. 17.12.4 Lessee irrevocably and unconditionally: (1) agrees that if Lessor brings legal proceedings against it or its assets in relation to this Agreement and the other Lessee Documents, no immunity from such legal proceedings (which will be deemed to PAGE 65

include without limitation, suit, attachment prior to judgment, other attachment, the obtaining of judgment, execution or other enforcement) will be claimed by or on behalf of itself or with respect to its assets; (2) waives any such right of immunity which it or its assets now has or may in the future acquire; and (3) consents generally in respect of any such proceeding to the giving of any relief or the issue of any process in connection with such proceedings including without limitation, the making, enforcement or execution against any property whatsoever (irrespective of its use or intended use) of any order or judgment which may be made or given in such proceedings. 17.13 SOLE AND ENTIRE AGREEMENT This Agreement (including all Schedules hereto) is the sole and entire agreement between Lessor and Lessee in relation to the leasing of the Aircraft, and supersedes all previous agreements in relation to that leasing. 17.14 INDEMNITIES All rights expressed to be granted to each Indemnitee under this Agreement (other than Lessor) are given to Lessor on behalf of that Indemnitee. 17.15 COUNTERPARTS This Agreement may be executed in counterparts each of which will constitute one and the same document. 17.16 LANGUAGE All notices to be given under this Agreement will be in English. All documents delivered to Lessor pursuant to this Agreement will be in English, or will be accompanied by a certified English translation. If there is any inconsistency between the English version of this Agreement and any version in any other language, the English version will prevail. 17.17 MODIFICATION No modification, change, waiver or amendment to this Agreement or any related letter agreements shall be deemed to be made unless in writing signed by the party to be charged. PAGE 66

17.18 OWNER TRUSTEE (1) Except as expressly provided in this Agreement, Lessee acknowledges (i) that this Agreement is executed by First Security Bank, National Association, not in its individual capacity, but solely as owner trustee, except as otherwise expressly provided herein, under the Trust Agreement with Beneficiary as grantor, in the exercise of the power and authority conferred and vested in it as such owner trustee, (ii) this Agreement is intended to bind only the Trust Estate (as defined in the Trust Agreement) except to the extent of the representations and warranties made herein by First Security Bank, National Association in its individual capacity, and (iii) that nothing herein contained shall be construed as creating any liability on First Security Bank, National Association, individually or personally, to perform any agreement herein, all such liability, if any, being expressly waived by Lessee and by each and every person now or hereafter claiming by, through or under Lessee, except with respect to the negligence or willful misconduct of First Security Bank, National Association. (2) If First Security Bank, National Association shall cease to be a "citizen of the United States" within the meaning of 49 U.S.C. Section 40102 and the rules and regulations of the FAA thereunder, First Security Bank, National Association, in its individual capacity, agrees to give Lessee and Beneficiary prompt notice thereof, upon an officer of First Security Bank, National Association becoming aware thereof, and agrees to cooperate with the efforts of Beneficiary promptly to replace it as owner trustee of the trust owning the Aircraft and as Lessor hereunder with a person who is such a "citizen of the United States." [This space intentionally left blank.] PAGE 67

ANNEX A **Material Redacted** **3 pages** PAGE 1

ANNEX A CERTAIN TERMS Defined Term Definition [Intentionally omitted from the version of this document filed with the FAA and the Directorate of Civil Aeronautics and recorded with the Office of the Public Registry as containing confidential financial information.] PAGE 2

SCHEDULES Page 1

SCHEDULE 1 PART 1 DESCRIPTION OF AIRCRAFT AIRCRAFT MANUFACTURER: The Boeing Company MODEL: 737-71Q SERIAL NUMBER: 29047 GENERAL FEATURES (subject to change and offer ability by Boeing): As set out in Part 2 of Schedule 1 AIRCRAFT SPECIFICATION The Aircraft specification is as per Boeing Detail Specification Documents (D6-38808-27) ("Tombo Baseline Specification") (including such production improvements as may be incorporated into the Aircraft), as further modified to incorporate any change orders accepted by Manufacturer in respect of the Aircraft, and any further changes as agreed from time to time, together with Documents and Records. ENGINES ENGINE TYPE AND NO: Two (2) CFM56-7B24 engines rated at 24,000 lbs of thrust. EACH OF THE ENGINES IS 750 OR MORE RATED TAKE-OFF HORSEPOWER OR ITS EQUIVALENT. MANUFACTURER: CFM International, Inc. SERIAL NOS: As set out in the Certificate of Acceptance Page 1

SCHEDULE 1 PART 2 GENERAL FEATURES The following are to be incorporated on delivery in each case subject to confirmation by Boeing after signature of this Agreement that Boeing will incorporate them in the Aircraft on delivery, which Lessor shall request after signature. 0310MP3528 MTW/MTOW 153,500/153,000 LBS 7200CG3255 24,000 LBS THRUST DUAL MMR -ILS/GPS ENHANCED GPWS 3446 MK 3244 PREDICTIVE WINDSHEAR/WX RADAR Page 2

SCHEDULE 1 PART 3 LESSEE'S OPTIONS This listing represents changes assumed to accommodate the desired Lessee configuration and is subject to confirmation on availability and agreed effect on lease pricing and delivery schedule. I. 2210CG3197 G/S CAP INHIBIT BEFORE LOC (ADD) 2210CG3198 DFCS - CWS WARN (DELETE) 2210CG3232 DFCS - ALT ALERT 200/900 FT (DELETE) 2210CG3235 DFCS - ALT ALERT 300/900 (ADD) 2350CG3147 CW INTERPHONE SW - SPRING LOAD TO OFF W/LOCK (DELETE) 2350CG3158 CW INTERPHONE SW - SPRING LOAD TO OFF (ADD) 2350CG3153 FLT COMP AUDIO MUTE REVISION - ONE SIDE MUTING (ADD) 2350CG3163 DIG. AUDIO REMOTE ELECT. UNIT - DEL HEADSET AURAL (ADD) 3162CG3018 ENHANCED MACH / A/S DISPLAY (DELETE) 3162CG3019 R/A DISPLAY - ROUND DIAL (ADD) 3162CG3020 R/A ABOVE ADI (DELETE) 3162CG3021 R/A BELOW ADI (ADD) 3162CG3025 R/A ALERT 2,500 FT (DELETE) 3162CG3026 ALT. COMPARATOR - STEADY (ADD) 3162CG3027 ALT. COMPARATOR - FLASHING (DELETE) 3162CG3036 AUTOTUNED NAVIDS - DISPLAYED (ADD) 3162CG3037 AUTOTUNED NAAIDS - SUPPRESSED (DELETE) 3162CG3104 ENG INSTR DISPLAY - SIDE BY SIDE (ADD) 3162CG3105 ENG INSTR DISPLAY - OVER & UNDER (DELETE) 3162CH3135 ADDED T/O BUG - NOT DISPLAYED (ADD) 3162MP3186 WX RDR RANGE IND - RANGE MARKS IN LIEU ARCS (ADD) 3446CG3120 GPWS ACT OF DESCENT BELOW MIN (MODE 6) (DELETE) 3446CG3127 GPWS R/A CALLOUTS (100, 50, 30, 20, 10) (ADD) 3446MP3172 GPWS VOICE "HALF VOL" IN LIEU "FULL VOL" (ADD) 3461CG3432 THRUST REDUCTION ALT - T/O PROFILE (ADD) 3461CG3498 FMC ACTIVATION - 1 MEG DATA BASE (ADD) $77,300 3461CH3562 FMC ACTIVATION - RETENTION OF WAYPOINT AFTER DIRECT TO $9.900 Page 3

II. P/N SWAP CONTINENTAL TOMBO -------- ----------- ----- 1 SSCVR LORAL/FAIRCHILD 2100-1010-00 ALLIED SIG 2370MP3215 2370CH3199 2 FLASHLIGHT DME P2-07-0001-215 P2-07-0001-214 2564MP3127 3 DFDAU 223300-83 TELEDYNE DFDMU 3131MP3883, 3131MP3999 3131CH3935 RR97155-26,-29 4 SSDFDR LOCKHEED 3131MP3847 ? 5 NOSE & MLG WHLS/BRAKES BF GOODRICH ALLIED SIGNAL 3240CG3235 3240CG3226 6 MLG TIRES H44.5 X 16.5 X 21 / 28 PLY 26 PLY 3245CG3031 3245CG3030 7 WX RDR W/PWS COLLINS 622-5132-631 ALLIED SIGNAL 3443MP3264 3443CG3184 8 WX RDR SPLIT FUNC C/P COLLINS 622-5129-205 3443MP3259 ? 9 TCAS II 622-8971-500 COLLINS ALLIED SIG 3445MP3289 3445CG3169 10 ATC/TCAS CONT. PNL GABLES G6992-40 ? 3445MP3332 11 FMC CDU (MULTI-PURPOSE) FMC/ACARS/FDAU FMC CDU ONLY 3461CG3465 3461CG3464 12 CREW O2 BOTTLE 114 CU FT 76 CU FT 3510CE3098 3510CG3097 13 POT H20 VOL. 60 GAL 40 GAL 3810CG3V31 COLLECTOR 14 RADOME REV. M&N AEROSPACE BAC STD 5352MP3015 15 EVM ENDEVCO W/TRIM BAL VIBROMETER 7731CG3038 7731MP3045 16 COOL WHITE LIGHT 3320MP3039 STD 17 PERMANENT NO SMOKE LITE 3324MP3018 Page 4

III. BOEING ADD & DEL 1124CG3V02 EXIT TACTILE LOCATOR (ADD) 3450MP3006 REMOVAL ADF DELETE 144 ALL COACH SEATS INSTALL CONTINENTAL G1/G4B GALLEYS DELETE DRAPE MAT INSTALL CONTINENTAL CARPET AND FLOORING DELETE G2 GALLEY INSTALL CO EMERGENCY EQUIPMENT LOCATION INSTALL CO F/C CLOSET IV. BOEING PAPER CHANGES 2528CG3V10 MAGAZINE SORAGE RACK 2528CG3V20 O/H BIN WITH BULL NOSE FOR B737-700 0220MP3368 HI ALT AIRPORT 0225CH3026 ETOPS V. MISC. 0160MS3209 A/C I.D.#'S FDRS/MODES/REGISTRY 1110MP3354 COURTAULD H.S. PAINT (COPA) 9/25/98 DEADLINE Page 5

SCHEDULE 1 PART 4 LESSEE'S POST-PRODUCTION MODIFICATIONS: PDM 1 DUAL H.F. (COLLINS) Z311MP3553 2 THIRD VHF COMM (COLLINS) Z312MP3529 3 PA HANDSET INSTL IN FLT DECK AISLESTAND 2331CH3179 4 PAVES VIDEO SYSTEM (INSTL HARDWARE ONLY) 2332MP3742 5 AUDIO SELECT PNL MOVE O/B 2350CH3206 6 INTERPHONE BFE MIC/HANDSETS/HEADPHONES 2350CH3207 7 30 MIN STBY PWR WITH ADDED LOAD 2433CH3150 8 12/112 INTERIOR CONFIG (KOITO SEATS) 2520CH3816, 3818, 2523CG3V16 9 INSTL SELL G1, G2, G4B GALLEYS & INSERTS 3450CG3V09, 3450CG3V14, 3V28, 2528CG3V20, 2530CH3635, 2530CH3636, 5620CG3V02 10 ADD CLASS DIVIDER 2524CG3V16 11 ADD F/C CLOSET 2524MP3605 12 CONNECT SEAT MOUNT AISLE LITE 3351MP3049, 3351CH3030 13 INSTL FLOORING (CARPETS/LONCOIN) 2527MP3134 14 INTL DRAPES 2524CG3V20 15 BILINGUAL PLACARDS & SIGNS 2523MP3176, 2523CG3V05, 2523CG3V10 16 DELETE 2ND OBSERVER'S SEAT 17 G2 HARD POINTS RELOCATION 18 LIQUID SOAP DISP 2541CH3043 19 EMERG EQUIP P/N & RELOCATION 2502CG3V09, 3V10, 3V12, 2564CG3V03, 2564MP3136 20 ADD PAX LIFE VESTS 2562CG3V11 21 ADD LIFE RAFT 46 MAN X 3 EA 2562MP3225 22 RETRACTABLE EMERG EQ PNL 2564CH3095 23 PARK BRAKE WARNING LITE 24 STERILE C/P LITE 3310CH3020 25 PERMANENT NO SMOKE SIGNS 3324MP3018 26 EXTERNAL POS LIGHT SW INSTL 3343MP3044 27 GPWS FLAP WARNING INHIBIT ONLY 3446CH3128 28 BFE NAV DATA BASE 3461CG3403 29 2ND FMC 3461CG3496 30 JET 254 2900MP3035 31 TOTAL MISC PARTS 32 LIFELINE INSTL @ OVERWING EXIT 2560CG3V08 33 APU FIRE FIRE BOTTLE 224 IN3 RR97155-21 34 P.A. COLLINS P/N ARINC 700 RR97155-22 35 SELCAL GABLES P/N 6959-06 RR97155-24 Page 6

SCHEDULE 1 PART 5 DOCUMENTS The Documents listed below, include, but are not limited to, the following: AIRCRAFT CURRENT OPERATING AND STATUS RECORDS. 1. Certified Interior Drawing (LOPA) with STC (FAA approved). 2. Certified Emergency Equipment Drawing certified by FAA. 3. List of Oil and Fluids. 4. Cockpit Installation Drawings. 5. Avionics Equipment List. 6. Copy of exemptions/deviations granted by the NTSB/FAA. 7. Airframe and Engine Ownership Placards. 8. Airplane Flight Manual (FAA Approved). 9. Flight Crew Operating Manual. 10. Minimum Equipment List, with Procedures (MEL). 11. Configuration Deviations List Manual (CDL). 12. All required Cockpit Manuals, Documents, and Checklists. 13. Weight and Balance Manual, with last Weighing Report. 14. Loading and Control Manual. 15. Fuel Measuring Document Manual. 16. Boeing Detailed Specification (D6-38808-27). 17. Boeing Aircraft Readiness Log. 18. Boeing Significant Rework Log (SRL). 19. Boeing Miscellaneous Brochure. 20. Boeing PRR Listing. 21. Boeing Life Limited Landing Gear Parts Report. 22. Boeing FAA Airworthiness Directive Compliance Record Status Report. 23. Boeing Service Bulletin Compliance Record Status Report. 24. Boeing Rigging Brochure. 25. Boeing Delivery Exceptions, Equipment, Shortages and Aircraft Condition Items Letter. 26. Aircraft Logbooks and certification (Manufacturer Documents). 27. Operator Maintenance Program and Requirements. 28. Aircraft Maintenance Manual. 29. Aircraft Illustrated Parts Catalogue. 30. Wiring Diagram Manual, Including Equipment List, Termination and Hook-Up Charts. 31. Structural Repair Manual (SRM). 32. Fault Reporting Manual. 33. Interior Furnishings Manual, including Galley, Seat, and IFE Manuals. 34. Engine Data Submittal Sheets and Manufacture Documentation (CFMI). Page 7

CERTIFIED LETTERS AND CERTIFICATES 1. Redelivery Letter certifying status, time and cycles of the Airframe, Engine and APU, time to next check or inspections, and time to next inspection/removal of engines and components. 2. Quality Assurance Statements. (a) Status and History of Major Repairs and Alterations. (b) Computerized Record System. (c) Accident, Incident, and Damages. (d) Assistance in acquiring outstanding records with contractual release assigned to Lessors. (e) Deferred Item Status. (f) Installation of Non-Lessor or Lessee equipment on Aircraft. 3. Upon request of Lessor, identification of signatures, stamps, initials utilized in the verification and authentication of Records. 4. Copy of FAA Approval of Maintenance and Inspection Program (FAA Form 1014 or equivalent). 5. Inventory List of Documents and Records transferred with the Aircraft. 6. Original Export Certificate of Airworthiness. 7. Current, or last, Certificate of Airworthiness. 8. Current, or last, Registration. 9. Current, or last, Radio License. 10. Current Export Certificate of Airworthiness, if available. 11. Supplement Type Certificates. 12. Galley Certificate of Sanitary Construction. Page 8

SCHEDULE 1 PART 6 RECORDS The Records listed below, include, but are not limited to, the following: AIRCRAFT MAINTENANCE RECORDS 1. Aircraft Logbooks: Flight, Maintenance, and Cabin, as applicable to the Operator. 2. Aircraft Maintenance and Flight Log Sheets for prior 12 months in service (minimum). 3. Complete cycle of all "Letter" Checks. 4. All Time Controlled Inspection/Task (out of phase) Maintenance Records. 5. Component Airworthiness Approval Tags (FAA 8130-3 Form or JAA-1 Form or equivalent) with indication of work performed at shop. 6. Time Controlled Component (hard time) records back to last overhaul, including all intermediary Repair Records. 7. Life Limited Part (LLP) Records providing status and traceability to origin and manufacturer, including installation records of each component. 8. Airworthiness Directive Records and Compliance Documentation (Airframe and Appliances) including Alternate Means of Compliance Approval. 9. Service Bulletin Status and Method of Compliance records. 10. [Intentionally omitted.] 11. Listing of all FAR revision compliance, including date of accomplishment and record of proof of compliance. 12. Accident and Incident Report Records. 13. Major Structural Damage Reports and Repair Records with necessary approvals. 14. Major Repair/Alteration Compliance Records with FAA 337 Form (or its equivalent). 15. Major and Minor Repair Records. 16. Records of current Engine, Landing Gear, and APU Installation. 17. Modification Records, copies of all engineering orders and related engineering drawings and STCs which have been accomplished on the Aircraft, components, Engines, and APU, including documentation for work accomplished by the previous owner(s) and operator(s). AIRCRAFT CURRENT OPERATING AND STATUS RECORDS 1. Provide the following Status and Summary Report (or Reports) that furnish the following types of data and information regarding the Certified Status of the Aircraft and Engines. (a) Aircraft Time & Cycle Report, including daily utilization recordings. (b) Aircraft Description & Status Summary. (c) Aircraft Maintenance Inspection & Status Report, including total time, interval, time-to-go, and last compliance times for all items of the Agreed Maintenance Program. (d) Component Status and Listing Report (H/T, O/C, C/M, and LLP). (e) Airworthiness Directive Status and Summary Report (airframe, engines, and appliances). Page 9

(f) Service Bulletin Status and Compliance Report. (g) Listing of all Major Repairs/Alterations and STCs. (h) Aircraft Life Limited Component Status Report. (i) Deferred Item (non-MEL, long term) and Engineering Deviations Listings. 2. Current Weighing Report, including current Operational Weights and Weight & Balance changes since last actual weight (delta weight change). 3. Accident, Incident and Damage Report. 4. Sampling Programs, history and status. 5. Record of Last Compass Swing. 6. Record of Last Altimeter and Transponder Certification. 7. Record of Last Flight Recorder Certification. 8. Flight Control Balance Records. ENGINE AND APU RECORDS (FOR EACH ENGINE) 1. Overhaul and Repair Records, at a minimum, back to the last overhaul of each Module (or New Manufacture). In the case of the APU back to last overhaul and HSI (minimum). 2. Component Status Report and Records, with Airworthiness Tags and Work Orders. 3. Time Controlled Component Records back to last overhaul, including all intermediary Repair Records. 4. Time Controlled Inspection Records. 5. Borescope and Isotope Inspection Records (including NDT Records & Videos). 6. Airworthiness Directive Records and Compliance Documentation. 7. Life Limited Part Status and traceability to origin and manufacture, with installation records. 8. Service Bulletin Status and Method of Compliance Instructions. 9. Current (Last) Test Cell Report. 10. Engine Condition Monitoring Reports. 11. Engine Logbooks and Manufacture Delivery Records. 12. Current Installation Records. 13. All Records, Technical Orders, STC, Major Repairs, alterations and other relevant events. NOTES: All records will be delivered as original hard copy, "dirty finger print" records. Computerized records will be supported with original hard copy records. Any records not identified within this Schedule 1, Part 6 "Records" that become required due to regulatory change, FAA requirement, or export requirements shall be provided as part of the return. All computerized reports and summaries will be certified and signed by the Director of Quality Assurance (or Authorized Official of the airline). In the case of computerized reports and summaries issued on behalf of Lessee by Lessee's third party approved maintenance provider, the Lessee will make a certified statement in writing that identifies the authenticity of such reports made on behalf of the Lessee. Page 10

SCHEDULE 2 PART 1 CERTIFICATE OF ACCEPTANCE This Certificate of Acceptance is delivered, on the date set out below, by Compania Panamena de Aviacion, S.A. (COPA) ("Lessee"), to First Security Bank, National Association, not in its individual capacity but solely as Owner Trustee ("Lessor"), pursuant to the Aircraft Lease Agreement (MSN 29047) dated as of October 1, 1998 between Lessor and Lessee (the "Agreement"). The capitalized terms used in this Certificate shall have the meaning given to such terms in the Agreement. 1. DETAILS OF ACCEPTANCE Lessee hereby confirms to Lessor that Lessee has at ________ o'clock on this day of _______________, ____________, at _____________________, accepted the following, in accordance with the provisions of the Agreement: (1) AIRCRAFT: Airframe Manufacturer's Serial No.: TSN ________________________ CSN ________________________ (2) ENGINES: Engine Number Manufacturer's Serial No.: 1 __________ TSN __________ CSN __________ 2 __________ TSN __________ CSN __________ (3) LANDING GEAR: NOSE MAIN LEFT MAIN RIGHT TSN: CSN: Page 1

(4) APU: MSN: TSN: CSN: (5) FUEL STATUS: ______________ Pounds (6) LOOSE EQUIPMENT CHECK LIST: as per list signed by Lessor and Lessee and attached hereto. (7) DOCUMENTS AND RECORDS: as per list signed by Lessee and attached hereto. (8) DAMAGE CHART: as per the diagram signed by Lessor and Lessee and attached hereto. 2. CONFIRMATION Lessee confirms to Lessor that as of the time indicated above, being the Delivery Date: (1) the representations and warranties contained in Clause 2 of the Agreement are hereby repeated; (2) the Aircraft is insured as required by the Agreement; (3) Lessee confirms that there have been affixed to the Aircraft and the Engines the fireproof notices of the type and in the locations required by the Agreement; (4) Lessee's authorized technical experts have inspected the Aircraft to ensure the Aircraft conforms to Lessee's requirements. The Aircraft is in accordance with the specifications of the Agreement and satisfactory in all respects. IN WITNESS WHEREOF, Lessee has, by its duly authorized representative, executed this Certificate on the date in paragraph 1 above. COMPANIA PANAMENA DE AVIACION, S.A. (COPA) By: ------------------------------------ Title: --------------------------------- Page 2

ATTACHMENTS "Loose Equipment Checklist": Documents and Records: Damage Chart: etc. Signed by Lessee and Lessor Page 3

SCHEDULE 2 PART 2 AIRCRAFT DELIVERY CONDITIONS 1.0 AIRCRAFT SPECIFICATION AT DELIVERY 1.1 The Aircraft shall be a Boeing Model 737-700 airplane with two CFM56-7B24 engines rated at 24,000 lbs of thrust. The Aircraft and attached Engines shall be delivered new from the Manufacturer. 1.2 The physical specification of the Aircraft is as defined in Parts 1, 2 and 3 of Schedule 1. 1.3 The Documents and Records that comprise part of the Aircraft and are delivered with the Aircraft at delivery are defined in Parts 5 and 6 of Schedule 1. 2.0 CONDITION OF AIRCRAFT 2.1 Except as otherwise specified in this Agreement, as between Lessor and Lessee the Aircraft will be delivered "as is, where is". 2.2 The Aircraft will have a Standard FAA Certificate of Airworthiness or FAA Export Certificate of Airworthiness as the case may be. The Aircraft will be suitable for immediate operation in commercial service except for specific items which the Air Authority may require of Lessee for registration, certification and operation in the Jurisdiction of Registration (this may include but is not limited to language placards and operational requirements). 2.3 The Aircraft will be delivered in Lessee's external livery provided that Lessee shall provide sufficient information, such as paint specification and paint drawing, to and when required by Manufacturer. 3.0 INSPECTIONS AND CORRECTIONS 3.1 During the course of final assembly of the Aircraft, Lessee or Lessee's representative will be provided reasonable access for inspection of the Aircraft, subject to conditions as may be set forth by the Manufacturer, to ensure conformity with this Agreement, including being provided with the Tombo Baseline Specification, a copy of which will be made available to Lessee. 3.2 Prior to Aircraft delivery, Lessee or Lessee's representative will be provided an opportunity to perform a walk around inspection and system checks. 3.3 Lessor will provide Lessee or Lessee's representative (up to 2 persons including any personnel from the Air Authority) the opportunity to participate as observers in an acceptance demonstration flight as made available to Lessor pursuant to the Purchase Agreement. Page 4

3.4 Lessee will notify Lessor promptly and prior to the Delivery Date of any defect or non-conformity with Manufacturer's specifications, noted during the above inspections or demonstration flight. Lessor will correct or procure the correction of the defect or non-conformity as promptly as practicable subject to provisions available to Lessor in the Purchase Agreement. 3.5 In the event that remedy to the noted defect or non-conformity will delay delivery of the Aircraft, subject to Clause 4.3 of the Agreement, (i) Lessor may postpone the delivery to the date which Lessor notifies Lessee that the defect or non-conformity has been rectified or (ii) provided that the Aircraft is airworthy, Lessor may elect to deliver the Aircraft but will be responsible to rectify, or cause Manufacturer to rectify, the defect or non-conformity promptly after the Delivery Date at the earliest practicable date in cooperation with the Lessee. In the case of (ii) in the preceding sentence, when such defect or non-conformity has been (a) rectified to the reasonable satisfaction of the Lessee, or (b) in the event there is no reasonable remedy available for such defect or non-conformity and to the extent that it has no material adverse effect on the use, operation and maintenance of the Aircraft, such defect or non-conformity issue will be deemed closed and Lessor will have no further responsibility to rectify such defect or non-conformity. 4.0 ACCEPTANCE AND DELIVERY 4.1 As between Lessor and Lessee, Lessee acknowledges that in accepting the Aircraft, Lessee is relying on its own inspection and knowledge of the Aircraft in determining whether it meets the requirements of this Agreement. 4.2 The on-board fuel provided to the Lessee at delivery will be that amount as provided by the Manufacturer in accordance with the Manufacturer's standard allowance at delivery. 4.3 Lessee will at its expense obtain all licenses, permits, and approvals which may be necessary to export and/or ferry the Aircraft from the Delivery Location. Lessor will furnish to Lessee any data and information available to Lessor and provide assistance to Lessee as may be reasonably required by Lessee to obtain such licenses, permits or approvals. Page 5

SCHEDULE 3 LESSEE'S COVENANTS Sub-Index PART 1 INFORMATION 1. General Information 2. Technical Information 3. Financial Information PART 2 LESSEE GENERAL COVENANTS 4. General 5. Third Party 6. [Intentionally omitted.] PART 3 OPERATION AND INSPECTION 7. Lawful and Safe Operation 8. Protection 9. Sub-Leasing 10. Inspection PART 4 TITLE, POOLING 11. Title 12. Title on Equipment Changes 13. Pooling of Engines and Parts PART 5 TECHNICAL COVENANTS 14. Maintenance and Repair 15. Removal of Engines and Parts 16. Installation of Engines, Landing Gear and Parts 17. Non-Installed Engines, Landing Gear and Parts 18. Equipment Changes 19. Documents and Records Page 1

PART 1 INFORMATION 1. GENERAL INFORMATION Lessee will: (1) notify Lessor promptly of the occurrence of any Default or any other event which would reasonably be expected to have a material adverse affect on Lessee's ability to perform any of its obligations under this Agreement; and (2) furnish any information or other documents to be provided to Lessor under this Agreement in English. 2. TECHNICAL INFORMATION Lessee will: (1) provide Lessor with reports in English not later than the 10th day of the end of each six-month period of the Term in the form containing the information set out in Schedule 7 in relation to the matters reportable in each reporting period; (2) promptly notify Lessor of: (a) any loss, theft, damage or destruction to the Aircraft, Engines, APU or any Part or any repair or modification to the Aircraft if the potential cost may exceed the Damage Notification Threshold; (b) any claim or other occurrence likely to give rise to a claim under the Insurances (but in the case of hull claims only in excess of the Damage Notification Threshold) and reasonable details of any material negotiations with the insurance brokers over any such claim; (c) any extended periods (exceeding 7 days) of the Aircraft being out of service for any cause other than scheduled maintenance; (d) any change in any engine installed on the Aircraft; (3) use reasonable efforts to give Lessor not less than 30 days prior written notice as to the time and location of all Major Checks; and (4) promptly furnish to Lessor all information Lessor from time to time reasonably requests regarding the Aircraft, any Engine or any Part, its use, location and condition including, without limitation, the hours available on the Aircraft and any Engine until the next scheduled check, inspection, overhaul or Shop Visit, as the case may be. Page 2

3. FINANCIAL INFORMATION 3.1 Lessee will provide to Lessor: (1) within sixty (60) days after the end of the relevant quarter, the unaudited, management prepared accounts of Lessee and COPA Holding, in each case comprising balance sheet and profit and loss statements and cash flow statement and in the original language and in English prepared for each quarter of their respective financial years prepared in accordance with Panamanian generally accepted accounting principles applicable to Lessee and to COPA Holding and consistently applied; (2) as soon as available and not more than 120 days after the last day of each financial year starting with 1998 of Lessee and COPA Holding in each case in English, their audited balance sheets and the audited consolidated balance sheet as of such day and their audited profit and loss statements and the audited consolidated profit and loss statement for the year ending on such day; (3) at the same time as it is issued to the creditors of Lessee, a copy of each notice or circular issued to Lessee's creditors generally; (4) on request from time to time, such other information regarding Lessee and COPA Holding and their respective business as if not proprietary and as Lessor may reasonably request; (5) on request, not more frequently than annually unless a Default is continuing, evidence reasonably satisfactory to Lessor that all Taxes incurred by Lessee with respect to the Aircraft have been paid and discharged in full, except to the extent that such payment is being contested in good faith by appropriate proceedings, in respect of which adequate reserves have been provided by Lessee and non-payment of which does not give rise to any material likelihood of the Aircraft or any interest therein being sold, forfeited or otherwise lost or of criminal liability on the part of Lessor; and (6) on request during any continuing Default, evidence satisfactory to Lessor that all charges incurred by Lessee affecting the Aircraft, including without limitation all payments due to any air traffic control authorities, airports, fuel suppliers, maintenance and repair shops and other suppliers of services have been paid and discharged in full or are being contested in good faith by appropriate proceedings and are not material in the aggregate. 3.2 Lessee shall meet with Lessor at Lessor's request no more frequently than every six months in order for Lessee to explain its financial and business position and general planning overview, and at such meeting Lessee shall discuss with Lessor Lessee's operational statistics, RPMs, ASMs, CASMs, load factors and yields; Lessor shall treat all such information as confidential. Page 3

PART 2 LESSEE GENERAL COVENANTS 4. GENERAL: Lessee will not make any substantial change in the nature of the business in which it is engaged and will preserve its corporate existence (other than in connection with a solvent reconstruction, the terms of which have been approved by Lessor, such approval not to be unreasonably withheld); and 5. THIRD PARTY: Lessee will procure that no person acting on behalf of Lessee (other than Lessor) will act in any manner inconsistent with its obligations under this Agreement and that all such persons will comply with those obligations as if references to "Lessee" included a separate reference to those persons. 6. [INTENTIONALLY OMITTED] PART 3 OPERATION AND INSPECTION 7. LAWFUL AND SAFE OPERATION: Lessee will ensure that: (1) the law in effect in any country or jurisdiction which may be applicable to the Aircraft, its maintenance and condition or, relating to the use and operation of the Aircraft is complied with, any required modification or alteration to the Aircraft, any Engine or Part will be made and all reasonable steps will be taken to ensure that the Aircraft is not used for any illegal purpose; (2) the Aircraft is not used in any manner contrary to any recommendation of the relevant manufacturer of the Aircraft, any Engine or any Part or any recommendation or regulation of the Air Authority or for any purpose for which the Aircraft is not designed or reasonably suitable; (3) the crew and engineers employed in connection with the operation and maintenance of the Aircraft have the qualifications and hold the licenses required by the Air Authority and applicable law; (4) the Aircraft is used solely in commercial or other operations duly authorized by the Air Authority and applicable law; (5) the Aircraft is not used for the carriage of: (a) whole animals, living or dead, except in the cargo compartments according to I.A.T.A. regulations, and except domestic pet animals carried in a suitable container to prevent the escape of any liquid and to ensure the welfare of the animal; Page 4

(b) acids, toxic chemicals, other corrosive materials, explosives, nuclear fuels, nuclear wastes, or any nuclear assemblies or components, except as permitted for passenger aircraft under the "Restriction of Goods" schedule issued by I.A.T.A., from time to time, and provided that all the requirements for packaging, or otherwise contained therein, are fulfilled; (c) any other goods, materials or items of cargo which would reasonably be expected to cause damage to the Aircraft and which would not be adequately covered by the Insurances; or (d) any illegal item or substance; (6) the Aircraft is not utilized for purposes of training, qualifying or re-confirming the status of cockpit personnel except for the benefit of Lessee's cockpit personnel, and then only if the use of the Aircraft for such purpose is not disproportionate to the use for such purpose of other aircraft of the same type operated by Lessee; (7) the Aircraft is not caused or permitted to proceed to, or remain at, any location which would for the time being violate any law, order or regulation of: (a) any Government Entity of the State of Registration or the Habitual Base; or (b) any Government Entity of the country in which such location is situated; or (c) any Government Entity having jurisdiction over Lessor or the Aircraft, and Lessor will notify Lessee as soon as reasonably practicable after Lessor becomes aware of any such prohibition order (or any similar order or directive) of the application of same; (8) there are obtained and maintained in full force all certificates, licenses, permits and authorizations required for the use and operation of the Aircraft for the time being, and for the making of payments required by, and the compliance by Lessee with its other obligations under, this Agreement; (9) a current certificate of airworthiness (in the appropriate category for the nature of the operations of the Aircraft) is maintained in good standing for the Aircraft issued by the Air Authority, except where the Aircraft is undergoing maintenance, modification or repair required or permitted by this Agreement, and Lessee will from time to time provide to Lessor a copy on request; Page 5

(10) the Aircraft is operated and maintained in accordance with the Documents and the Records, including for the redelivery of the Aircraft hereunder, to specified contractual standards, Manufacturer's specifications and type design, and any other rules and regulations as may be applicable to ensure that the Air Authority transport category certificate of airworthiness and aircraft registration shall remain legal and valid throughout the Term, permitting commercial passenger and cargo revenue service in accordance with the rules and regulations of the Air Authority and, in addition, to a standard equivalent to that required for a USA operator to comply with all rules, regulations, and restrictions issued by the FAA for operation in accordance with FAR (including, but not limited to, Part 121 and any other rules and regulations of the FAA as may be applicable to passenger category aircraft of the same manufacture and model); (11) any Part installed on the Aircraft complies with FAA fire resistance regulations and U.S. TSO requirement, as applicable; and (12) no change occurs in the Habitual Base of the Aircraft without the prior written consent of Lessor, and Lessee shall pay to Lessor on demand any reasonable legal or other costs of Lessor relating to the consideration of such change whether or not Lessor consents thereto. Any consent of Lessor may be subject to such conditions as Lessor may require to protect its rights and interests in the Aircraft. 8. PROTECTION: Lessee will ensure that: (1) the registration of the Aircraft is maintained with the Air Authority reflecting (so far as permitted by applicable law) the interests of Lessor and the Lessee shall not do or allow anything to be done which might adversely affect that registration; and (2) subject to Clause 14 of the Agreement and, in respect of Clause (a) below, at Lessor's sole cost and expense, and otherwise at Lessee's sole cost and expense, all acts and things are done (including, without limitation, making any filing or registration with the Air Authority or any other Government Entity) and executing and delivering all documents (including, without limitation, any amendment of this Agreement) as may reasonably be required by Lessor: (a) following any change or proposed change in the ownership or financing of the Aircraft; or (b) following any modification of the Aircraft, any Engine or any Part or the permanent replacement of any Engine or Part in accordance with this Agreement, so as to ensure that the rights of Lessor under this Agreement and the other Lessee Documents in respect thereof, apply with the same effect as before; or (c) to establish, maintain, preserve, perfect and protect the rights of Lessor under this Agreement, in the Aircraft and the other Lessee Documents; and Page 6

(3) Lessee obtains all documents, data, and records relating to maintenance, inspection or repair performed by Lessee's contractors employed for such purpose. 9. SUB-LEASING: 9.1 Lessee will not without the prior written consent of Lessor, which consent will not be unreasonably withheld, sub-lease, sub-charter or otherwise part with possession of the Aircraft, the Engines or any Part, except that: (1) Lessee may part with possession with respect to the Aircraft, the Engines or any Part to the relevant manufacturer for testing or similar purposes or to the Agreed Maintenance Performer for service, repair, maintenance or overhaul work, or alterations, modifications or additions to the extent required or permitted by this Agreement; (2) wet leasing and chartering, being cases where Lessee retains full operational control and its own aircrew, are permitted; and (3) Lessee may sublease the Aircraft for a period not to extend beyond the end of the Term to Continental Airlines, Inc. pursuant to a sublease agreement reasonably satisfactory in form and substance to Lessor. 9.2 Where Lessee wishes to dry sub-lease the Aircraft, which shall be subject to the consent of the Lessor in its absolute discretion, Lessee shall give notice to Lessor of its request and pay to Lessor a fee of $10,000 for Lessor to assess the proposed arrangements, such notice only to be effective upon confirmation by Lessor of its receipt of that fee, and in any event Lessee shall pay on demand any reasonable legal or other costs of Lessor relating to the evaluation of any wet-lease, dry sub-lease or charter whether or not Lessor consents thereto. Any consent of Lessor may be subject to such conditions as Lessor may require to protect its rights and interests in the Aircraft. 10. INSPECTION: 10.1 Lessor and any person designated by Lessor may, upon reasonable notice and at reasonable times that do not unreasonably interfere with Lessee's normal business and maintenance operations, inspect and survey the Aircraft, any Engine, the APU, any Part or the Documents and Records and for such purpose may, subject to any applicable Air Authority regulation, travel on the flight deck as an observer on any non-revenue test flights as allowed by the applicable air authority, and Lessee shall ensure that all reasonable arrangements are made for Lessor and any designated person. Lessor reserves the right to perform an inspection at least once each year and preferably during the accomplishment of a C-Check, such inspection shall be a ground inspection and shall not require the opening of any panels additional to those already opened in the course of any ongoing maintenance. 10.2 In the case of inspection of Documents and Records, Lessee shall use commercially reasonable efforts to prepare them for inspection by Lessor within 2 weeks after notice from Lessor. Page 7

10.3 Lessor will: (1) have no duty to make, or liability arising from any such visit, inspection or survey; and (2) for so long as a Default has not occurred and is continuing, not exercise such right other than on reasonable notice so as not to disrupt unreasonably the commercial operations of Lessee. PART 4 TITLE, POOLING 11. TITLE: Lessee will ensure that: (1) it shall not do or permit to be done, or omit to be done or permit to be omitted to be done, any act or thing which might reasonably be expected to jeopardize the rights of Lessor as owner of the Aircraft; (2) on all occasions when the ownership of the Aircraft, any Engine or any Part is relevant, it is made clear to third parties that title is held by Lessor; (3) at any time (a) Lessor is not represented or held out as carrying goods or passengers on the Aircraft or as being in any way connected or associated with any operation or carriage (whether for hire or reward or gratuitously) which may be undertaken by Lessee or (b) it shall not pledge, or allow to be pledged, Lessor's credit; (4) there is always affixed, and not removed or in any way obscured, a fireproof plate (having dimensions of not less than 10 cm x 7 cm) in a reasonably prominent position on the Aircraft and on each Engine stating: "This Aircraft/Engine which is owned by First Security Bank, National Association, not in its individual capacity but solely as Owner Trustee (Lessor), is leased to Compania Panamena de Aviacion, S.A. (COPA) and may not be operated by any other person without the prior written consent of Lessor"; (5) there is not created or permitted to exist any Lien upon the Aircraft, any Engine or any Part other than Permitted Liens; (6) it shall not do or permit to be done anything which may reasonably be expected to expose the Aircraft, any Engine or any Part to penalty, forfeiture, impounding, detention, appropriation, damage or destruction and without prejudice to the foregoing, if any such penalty, forfeiture, impounding, detention or appropriation, damage or destruction occurs, give Lessor notice and use commercially reasonable efforts to procure the immediate release of the Aircraft, any Engine or the Part, as the case may be; (7) the Aircraft, the Engine or any Part is not abandoned; Page 8

(8) there is paid and discharged when due and payable, or adequate provision is made by way of security, or otherwise, for all debts, damages, claims and liabilities which have given or might give rise to a Lien (other than Permitted Liens) over or affecting the Aircraft, any Engine or any Part; (9) it shall not attempt, or hold itself out or permit any other Person to hold itself out as having any power, to sell, lease or otherwise dispose of the Aircraft, any Engine or any Part; and (10) all charges relating to navigation and charges of airports, fuel suppliers, maintenance and repair shops and other suppliers of services are paid when due. 12. TITLE ON EQUIPMENT CHANGES: 12.1 Title to all Landing Gear, APU and Parts installed on the Aircraft, excluding engines whether by way of replacement, as the result of an Equipment Change, or otherwise (except those installed pursuant to Clause 16(1)(b) of this Schedule 3), will on installation, without further act, vest in Lessor subject to this Agreement free and clear of all Liens other than Permitted Liens. Lessee will at its own expense take all such steps and execute, and procure the execution of, all such instruments as Lessor may require and which are necessary to ensure that title so passes to Lessor according to all applicable laws. At any time when requested by Lessor, Lessee will provide evidence to Lessor's satisfaction (including the provision, if required, to Lessor of one or more legal opinions) that title has so passed to Lessor. 12.2 Any Landing Gear, APU or Part at any time removed from the Aircraft will remain the property of Lessor until a replacement has been made in accordance with this Agreement and until title in that replacement has passed, according to applicable laws, to Lessor subject to this Agreement free of all Liens, whereupon title to the Landing Gear, APU or Part will, provided no Default has occurred and is continuing, pass to Lessee. 12.3 Engines shall remain the property of Lessor even after any removal from the Airframe unless the Engine or Engines are: (1) deemed to be the subject of an Event of Loss and title to a replacement Engine passes to the Lessor pursuant to Clause 11.3; or (2) removed from the Aircraft in accordance with Clause 15 of this Schedule 3 and it is impractical to reinstate them, and Lessee installs a substitute engine or engines in accordance with Clause 16 of this Schedule 3, title to which was transferred to Lessor in accordance with Clause 16, provided that the obligations under Clause 16(1)(a) shall apply absolutely and not subject to Lessee's using its reasonable efforts to ensure their application, and that title shall be transferred to Lessor in accordance with the terms of Clause 16. Page 9

13. POOLING OF ENGINES AND PARTS: 13.1 Lessee shall not enter into any pooling agreement or make any pooling arrangement in respect of Engines without the prior written consent of the Lessor, it being understood that (i) as of the date hereof, Lessee and Continental Airlines, Inc. are contemplating an engine pooling or sharing agreement that Lessor agrees to duly consider, and (ii) Lessee shall not enter into the foregoing engine pooling or sharing agreement in respect of the Engines without the prior written consent of Lessor, which consent shall not be unreasonably withheld. 13.2 Lessee may make pooling arrangements in respect of Parts pursuant to a pooling agreement with the Agreed Maintenance Performer which may be inspected by Lessor on request, provided that the obligations under Clause 16.1 of this Schedule 3 shall be absolute and not subject to Lessee using its reasonable efforts to ensure their application. PART 5 TECHNICAL COVENANTS 14. MAINTENANCE AND REPAIR 14.1 Lessee will insure compliance with this Part 5 subject to the requirements of the Air Authority and standards equivalent to that of a United States operator in compliance with FAA requirements under FAR 121 and otherwise in compliance with this Schedule 3. 14.2 The Aircraft shall be kept airworthy in all respects and in good repair and condition, ordinary wear and tear excepted. 14.3 MAINTENANCE PROGRAM 14.3.1 The Aircraft shall be maintained through an Agreed Maintenance Performer in accordance with applicable rules and regulations of the FAA and the Air Authority, and in compliance with the Agreed Maintenance Program and the Agreement. 14.3.2 [Intentionally omitted.] 14.3.3 The Agreed Maintenance Program shall include an anti-fungus/biological growth and contamination prevention, control and treatment program of all fuel tanks if required by Manufacturer documents in accordance with the Manufacturer's approved procedures and specifications. 14.3.4 Lessee shall provide Lessor with reasonable access to the Agreed Maintenance Program throughout the Term. Page 10

14.4 MAINTENANCE STANDARDS 14.4.1 Lessee shall at a minimum ensure that the Aircraft shall at all times be treated and receive the same level of attention, maintenance and improvements as Lessee affords the balance of its fleet, including but not limited, to Service Bulletin incorporation, improvements, repairs, cleanliness and correction of items of a cosmetic nature, such as, but not limited to, hail damage, except where the terms of this Agreement dictate higher standards. 14.4.2 Lessee shall, if required by the Air Authority, maintain a current certificate as to maintenance, issued by or on behalf of the Air Authority to Lessee or the Agreed Maintenance Performer in respect of the Aircraft and will from time to time provide to Lessor a copy on request. 14.4.3 In the event the Aircraft is out of service for any period exceeding 2 weeks, other than for scheduled maintenance in accordance with the Agreed Maintenance Program, Lessee shall maintain the Aircraft in accordance with Lessee's or Manufacturer's storage maintenance program. 14.5 REPAIRS Lessee shall act as follows in respect of repairs to the Aircraft or any part thereof: 14.5.1 In the event the Aircraft requires repair, all repairs will be classified as "Major" or "Minor", in accordance with FAA regulations or its equivalent. 14.5.2 All Major repairs shall be accomplished in accordance with Manufacturer approved data as specified in Manufacturer's Structural Repair Manuals and other Manufacturer's applicable FAA approved manuals or if not contained in such manuals, provided with FAA Designated Engineering Representative approval. 14.5.3 In the event Major repair instructions are not listed in FAA approved Manufacturer Repair Manuals and other Manufacturer's applicable FAA approved manuals, Manufacturer approval and appropriate substantiating documents, including all drawings, calculations, materials list, and any other pertinent data, as available, will be provided. 14.6 [Intentionally omitted.] 14.7 SERVICE BULLETINS: Lessee shall procure all applicable service bulletin kits which are offered "No charge" by or claimable under warranty from the Manufacturer, prior to the expiration of the "No charge" warranty period. Page 11

14.8 AIRWORTHINESS DIRECTIVES 14.8.1 Lessee shall accomplish all airworthiness directives issued by the FAA and all rules and regulations and directives of the Air Authority in accordance with specific instructions issued by the Air Authority at any time during the Term, including all routine and non-routine requirements as applicable to the Aircraft, Engines, including all Parts and the APU. 14.8.2 All documentation necessary to establish the source data, method of compliance, verification of accomplishment, Quality Assurance approval and all schedules for recurring action, including Air Authority approved data used to substantiate compliance with Air Authority airworthiness directives, rules and regulations and all mandatory inspection and modification requirements shall form a permanent part of the Documents and Records. 15. REMOVAL OF ENGINES, LANDING GEAR, APU AND PARTS 15.1 Lessee will ensure that no Engine, Landing, Gear, APU or Part installed on the Aircraft is at any time removed from the Aircraft other than (1) if replaced as expressly permitted by this Agreement; or (2) if the removal is of an obsolete item and is in accordance with the Agreed Maintenance Program; or (3) (a) during the course of maintaining, servicing, repairing, overhauling or testing that Engine, Landing Gear, APU, Part or the Aircraft, as the case may be; or (b) as part of a normal rotation program; or (c) for the purpose of making such modifications to the Engine, Landing Gear, APU, Part or the Aircraft, as the case may be, as are permitted under this Agreement; and then in each case only if it is reinstalled or replaced by an engine or part complying with Clause 16(1) of this Schedule 3 as soon as practicable and in any event by the earlier of within 30 days after completion of any off-Aircraft maintenance or by the Expiry Date. 15.2 Subject to Clause 11.3 of the Agreement, Lessee shall procure promptly the replacement of any Engine, Landing Gear, APU or Part which has become time, cycle or calendar expired, lost, stolen, seized, confiscated, destroyed, damaged beyond repair, unserviceable or permanently rendered unfit for use or whose removal is required under the Agreed Maintenance Program, with an engine or part complying with the conditions set out in Clause 16.1 of this Schedule 3. Page 12

16. INSTALLATION OF ENGINES, LANDING GEAR, APU AND PARTS Lessee will: (1) subject to Clause 16(2) of this Schedule 3, ensure that, except as permitted by this Agreement, no engine or part is installed on the Aircraft unless: (a) ENGINES, LANDING GEAR AND APU: it is in airworthy condition, is the same model, thrust rating, modification status, service bulletin and airworthiness directive compliance and incorporation status, or an improved or advanced version of the Engine (including all modules), Landing Gear or APU it replaces. The replacement engine, including all modules, Landing Gear or APU, shall be in airworthy condition, certified serviceable, in the same or better operating condition than the installed part prior to its failure or removal, including all manufacturer's performance parameters. (b) PARTS: it is in airworthy condition, is the same model, modification, status, service bulletin and airworthiness directive interchangeability status, or an improved or advanced version of the item it replaces and meets all FAA TSO requirements. The replacement item shall be in airworthy condition, certified serviceable, in the same or better operating condition than the installed part prior to its failure or removal. The replacement item shall have substantially equivalent value, utility and airworthiness as the replaced Part. (c) Subject to (2) below, in each case, it has become and remains the property of Lessor free from Liens other than Permitted Liens and on installation on the Aircraft will without further act be subject to this Agreement; and (2) if no Default has occurred which is continuing, be entitled to install any engine or part on the Aircraft by way of replacement, notwithstanding (1) above, if: (a) there is not available to Lessee at the time and in the place that engine or part is required to be installed on the Aircraft, a replacement engine complying with the requirements of (1) above; (b) it would result in an unreasonable disruption of the operation of the Aircraft and/or the business of Lessee to ground the Aircraft until an engine or part, as the case may be, complying with (1) above becomes available for installation on the Aircraft; (c) such engine or part is of the same model, is in airworthy condition and is serviceable; and Page 13

(d) as soon as the Engine becomes available to be reinstalled on the Aircraft but in any event by the earlier of (i) the next scheduled D-Check, (ii) 45 days after completion of any off-aircraft maintenance of the Engine or (iii) the Expiry Date, Lessee removes any such engine or part and replaces it with the Engine or Part replaced by it or by an engine or part, as the case may be, complying with (1) above. 17. NON-INSTALLED ENGINES, LANDING GEAR, APU AND PARTS Lessee will: (1) ensure that any Engine, Landing Gear, APU or Part which is not installed on the Aircraft (or any other aircraft as permitted by this Agreement) is, except as expressly permitted by this Agreement, properly and safely stored, and kept free from Liens other than Permitted Liens; (2) not be permitted to install any Engine (except as permitted in clause (3) below or elsewhere in the Agreement), Landing Gear, APU or Part on another aircraft, or in the case of a Part, another engine; (3) notwithstanding the foregoing provisions of this Clause 17, be permitted if no Default has occurred and is continuing, to install any Engine on an aircraft operated by Lessee; and (4) on Lessor's request procure that any person to whom possession of an Engine, APU or Landing Gear is given, acknowledges in writing to Lessor, in form and substance satisfactory to Lessor, that it will respect the interests of Lessor in the Engine, APU or Landing Gear and will not seek to exercise any rights whatsoever in relation thereto; provided that: (a) upon Lessor's request, Lessee shall notify Lessor from time to time of the details of that aircraft or engine and of the lessor under such lease, the seller under such conditional sale agreement, the owner of such aircraft or engine or the holder of such Lien as the case may (in this Clause 17 being "interested parties"); and (b) the terms of any such lease, conditional sale agreement or a Lien will not have the effect of prejudicing the interests of Lessor in that Engine, Landing Gear, APU or Part. Page 14

18. EQUIPMENT CHANGES 18.1 Lessee will not make any modification or addition to the Aircraft, except for an Equipment Change which is permitted by this Agreement, has the prior written approval of Lessor and which does not materially diminish the value, utility, condition, or airworthiness of the Aircraft, or is required by the Air Authority, Manufacturer or Engine manufacturer. 18.2 So long as a Default has not occurred and is continuing, Lessee may remove any Equipment Change if it can be removed from the Aircraft without materially diminishing or impairing the value, utility, condition or airworthiness of the Aircraft. 18.3 At Redelivery, Lessee may elect to remove any Equipment Change and restore the Aircraft to its condition prior to that Equipment Change. 18.4 In the event the Aircraft requires modification or alteration, all modifications and alterations will be classified as "Major" or "Minor" in accordance with FAA regulations. 18.5 No modification or alteration costing more than $100,000 shall be accomplished without the Lessor's prior consent. 18.6 All Major modifications and Major alterations incorporated throughout the Term which deviate from the Aircraft certified specifications, type design, or configuration shall be accomplished in accordance with Manufacturer's recommendations and instructions, as approved in any event by the Air Authority, and where they deviate from the certified configuration of the Aircraft, shall be covered by a FAA Supplemental Type Certificate ("STC") as well as by approval from the Air Authority; if an STC is not obtained, Lessee shall provide all and complete data which Lessor deems necessary to obtain an STC and such approval. 18.7 Any Part or equipment removed from the Aircraft pursuant to the terms hereof may be shipped by Lessee to Lessor for proper storage by Lessor. Upon Redelivery, if Lessor shall elect to have such Part or equipment reinstalled on the Aircraft, :Lessor shall ship such Part or equipment to Lessee for reinstallation on the Aircraft. If Lessor does not so elect, at Lessee's written request and at Lessee's reasonable expense, Lessor shall ship such Part or equipment to Lessee and, without further action, such Part or equipment shall become Lessee's property. 19. DOCUMENTS AND RECORDS 19.1 Documents and Records shall at a minimum meet all Air Authority requirements and shall be prepared and maintained in accordance with FAR 121 and 145 and any other FAR applicable from time to time. Page 15

19.2 All documents and data as required by the FAR (including technical and engineering data, calculations and drawings) evidencing compliance with any of the requirements or procedures set out in Clause 14 above shall form a permanent part of the Documents and Records. All manufacturer and vendor manuals and documents which are affected by a Major repair, compliance with a Service Bulletin, modification or alteration, including the Manufacturer's Weight & Balance manual, shall be revised to reflect the current specification and configuration of the Aircraft. 19.3 The Documents and Records shall be maintained in the English language or accompanied by a certified translation thereof. All Documents and Records shall be in plain language and all coded forms must have cross references, including but not limited to parts numbers, engineering order numbers and Service Bulletin numbers. 19.4 All records included in the Documents and Records shall be original hard copy "dirty fingerprint" records. Documents and Records produced by Electronic Data Processing (EDP) or other computers are not acceptable, except as summary documents, without accompanying substantiating records and documents reasonably approved by Lessor, providing the means of verification of accomplishment. In addition, these summary documents shall include instructions for interpretation of the information provided. 19.5 All Computerized Reports and Summaries will be certified and signed by the Director of Quality Control or an authorized official of the Lessee. 19.6 Documents and Records and in particular serialized shop record including all airworthiness approval tags (JAA-1 Form or FAA 8130 Form) and serviceable ("yellow") tags shall form a permanent part of the Documents and Records. 19.7 Life Limited Parts as specified by the Aircraft and Engines types certificates shall be provided with appropriate documents and records that identify current status, life history (removal and installation), total time in service, authenticity and origin back to manufacturer. 19.8 Time controlled Parts as identified by the Agreed Maintenance Program, shall be provided with all records necessary to establish documentation, expressed in Flight Hours, Cycles, or calendar time, back to overhaul (including all interim repair records since overhaul). 19.9 Lessee shall be responsible for maintaining a revision service for all manufacturers and operators manuals, reports and documents which shall at all times contain the latest issued revisions, and reflect the current specification, configuration and status of the Aircraft and Engines, which includes APU, systems, assemblies and components. Lessee will have all modifications, wiring changes, and engineering orders (or equivalent) incorporated into the relevant manuals. Page 16

SCHEDULE 4 AIRCRAFT REDELIVERY 1.0 GENERAL CONDITION 1.1 The Aircraft will be in the same configuration (except as per Clause 1.5 of this Schedule 4) and operating condition as at delivery to Lessee, including post-delivery modifications as defined in Schedule 1, Parts 1 through 4, ordinary wear and tear excepted and be clean by international commercial airline standards for an aircraft exiting a C-Check (or as the case may be D-Check) and ready for flight with all of the equipment, components and systems fully functional and operating within limits and/or guidelines established by the relevant manufacturers and the FAA.. 1.2 The Aircraft will have installed the full complement of Engines, APU, equipment, components, furnishings and loose equipment as when originally delivered to Lessee and shall not have installed thereon any engines, APU, components, parts, equipment and furnishings which are owned by any person other than the Lessor or the Lessee. 1.3 The Aircraft will have a current legal and valid transport category certificate of airworthiness issued by the Air Authority, or if required by Lessor, an export certificate of airworthiness, if available, for export to the USA. In such case, the Aircraft will be deregistered from the country registered at Lessee's cost upon the Redelivery. 1.4 Subject to Lessee's consent, Lessor may elect to retain certain Equipment Changes incorporated on the Aircraft by Lessee during the Term of this Agreement, excluding leased equipment. In this event any equipment or components that were removed from the Aircraft, not substituted by way of such Equipment Change, and not shipped to Lessee for storage, will be returned in a serviceable and airworthy condition to Lessor with the Aircraft. 1.5 The Aircraft will be in a condition as to immediately be eligible to receive a USA certificate of airworthiness issued by FAA in accordance with FAR part 21, and to be placed on the operating certificate of a USA airline in accordance with FAR 121. 1.6 The Aircraft will be free of Liens other than Lessor Liens. 2.0 AIRCRAFT CONDITION 2.1 The Aircraft will be fresh out of the next scheduled full and complete zonal, systems and structural C-Check (including all segments if segmented) or equivalent type maintenance check, in accordance with Appendix J of the then latest Boeing Maintenance Planning Document ("MPD"). This check will clear all lower level checks including "A", "B" and service checks. Should Lessee be required to perform any tasks in respect of the Agreed Maintenance Program in addition to the tasks required to be performed pursuant to the block C-Check in accordance with Appendix J of the MPD, such tasks shall be performed by Lessee and the reasonable costs and expenses incurred by Lessee in connection therewith shall be promptly paid for by Lessor. Page 1

2.2 The Aircraft will be weighed prior to Redelivery and have a current weight and balance report in form acceptable to the FAA. 2.3 The Aircraft will be in compliance with all Airworthiness Directives, FAR revisions and other mandatory orders issued by the FAA requiring compliance during or within 90 days or 750 Flight Hours or 500 Cycles (whichever is most limiting) after Redelivery of the Aircraft. If any waivers, extensions or other special dispensations were granted by the Air Authority (except for such waivers, extensions or dispensations granted to the industry as a whole) with respect to any Airworthiness Directive, FAR revision or other mandatory order, Lessee shall incorporate the required Airworthiness Directives, FARs or other mandatory order as if such waiver, extension or dispensation had not been granted. 2.4 All "No Charge" service bulletin kits procured by Lessee but not installed on the Aircraft will be returned to Lessor with the Aircraft. 2.5 The Aircraft will have all open and deferred items, including maintenance and temporary repair items (except those deferred to the next D-Check, in which case financial adjustments shall be negotiated at that time, but in no case shall Lessee have any repair or financial obligations for items deferred beyond the next D-Check), MEL/CDL items, and pilot/cabin/engine logbook items, rectified on a terminating action basis. Any waivers, extensions or dispensations granted to this Aircraft by the manufacturers, the FAA, or the Air Authority (except for such waivers, extensions or dispensations granted to the industry as a whole) which require incorporation of special operations, inspections or maintenance tasks to this Aircraft will be treated as if such waivers, extensions or dispensations had not been granted. 2.6 The Aircraft (excluding Engines) will have any and all maintenance items, including inspections and replacements of life limited/time controlled parts, required by the Agreed Maintenance Program and the MPD cleared for 3,000 Flight Hours or 2,000 Cycles, whichever is more limiting, and 12 months beyond the Redelivery Check. In the event that an item is due more often than the periods noted above, that item will be cleared for its maximum interval. 2.7 All tires and brakes will have at least 50% of full service life remaining. 2.8 All repairs made to the Aircraft will be in accordance with the Manufacturer's FAA Structural Repair Manual (SRM) or otherwise traceable to FAA or FAA DER approval. Page 2

2.9 The Aircraft will be properly stripped, corrosion protected and painted per Manufacturer's specifications in such external livery as advised by Lessor. This shall include corrosion protection and painting of fuselage, empennage, wings, vertical/horizontal stabilizer, flight control surfaces, engine cowling/nacelle and wheel wells. Control surfaces will be rebalanced as required. Prior to painting the Aircraft, all previous exterior markings, logos, or other distinctive insignia will be removed in accordance with Manufacturer's instructions and recommendations. All fairings and skin laps seams will be properly refinished and resealed. The repaint of the Aircraft will be of high quality; free from flaking, overspray, peeling, drips or other cosmetically unacceptable items and Lessor shall be responsible for the actual costs of repainting the Aircraft, provided that Lessee shall use its reasonable efforts to ensure that the costs are not in excess of industry practice. 2.10 The Aircraft, both interior and exterior, will have no evidence of untreated or uncorrected corrosion or delamination. 2.11 The Landing Gear assemblies or the Aircraft will have a minimum of 12 months remaining to its next expected overhaul. 2.12 No Engine, Landing Gear or APU will have more than 130% of the total Flight Hours or Cycles on the Aircraft. 2.13 No Aircraft LLP (see Clause 3.2 for Engine LLPs) will have less than 3,000 Flight Hours, 2,000 cycles or 12 months remaining to useful life replacement. 2.14 All fuel tanks will be at least as full as at delivery of Aircraft. All oil and fluid tanks will be full. 2.15 All "loose equipment", galley inserts, cargo containers will be returned with the Aircraft in good and serviceable condition, ordinary wear and tear excepted.. 3.0 ENGINES AND APU CONDITION 3.1 Each Engine will be installed on the Aircraft and will be the Engine originally installed at delivery, unless such Engine was the subject of an Event of Loss and has been replaced in accordance with Clause 11.3, or unless such Engine has otherwise been replaced with a suitable replacement Engine in accordance with Clause 16 of Schedule 3. 3.2 The Engines will have no less than 3,000 Flight Hours and 2,000 Cycles remaining on the "mean time between unscheduled removals" as determined by the applicable manufacturer ("MTBUR"). There will be no LLP replacement scheduled within 2,000 Cycles of life remaining. 3.3 The Engines will not be "on-watch", nor have records or Engine Monitoring Program trend data that based on the Engine manufacturer's experience would require Engine removal or maintenance for any cause within 3,000 Flight Hours or 2,000 Cycles of operation. Page 3

3.4 Immediately prior to Redelivery of the Aircraft, each Engine will have a full hot and cold section video borescope and a maximum power assurance (MPA) run in accordance with the Manufacturer's procedures. 3.5 The APU will be in serviceable condition, fresh from a hot section inspection or borescope, and with a full APU performance run per manufacturer's procedures. The APU will not have less than 3,000 Flight Hours remaining on the MTBUR. 4.0 REDELIVERY INSPECTION AND DEMONSTRATION FLIGHT 4.1 During the Redelivery Check and at Redelivery, Lessor or its representatives will have an opportunity to inspect the Aircraft and Documents and Records and participate in and review all aspects of the Redelivery Check to ensure to Lessor's satisfaction that Redelivery conditions are met. 4.2 During the course of the Redelivery Check and Final Inspection, if corrosion or other problems are detected, Lessee will open adjacent areas as required to ensure that the detected problem is rectified in accordance with Manufacturer's specifications. 4.3 Prior to the Redelivery of the Aircraft, Lessee will perform a demonstration flight of not less than two hours of the Aircraft in accordance with the Lessee's post-C-Check Flight Functional Acceptance Procedures. The demonstration flight will show that the Aircraft, its Engines, and its various components and systems are fully operational and capable of full rated performance throughout the operational envelope of the Aircraft. Lessor's representative(s) will be allowed on the flight to monitor compliance. The demonstration flight will be at Lessee's expense. Any squawks found in the flight will be corrected at Lessee's cost and expense. Lessee and Lessor will reasonably cooperate to combine this demonstration flight with the flight to the Redelivery Location. 5.0 DOCUMENTS AND RECORDS 5.1 The Documents and Records will be made available to Lessor or Lessor's representative not less than 10 Business Days prior to scheduled Redelivery Date. Lessor or Lessor's representative will review and inventory to determine that the Documents and Records are in compliance with the requirements specified in this Agreement. 5.2 Upon request of Lessor, Lessee will provide a current and complete copy of the Agreed Maintenance Program. Lessor shall use and retain the copy of the Agreed Maintenance Program on a strictly confidential basis, and shall return said Document to Lessee after integrating the Aircraft into the next operator's maintenance program. 5.3 Lessee shall return all Documents and Records delivered to Lessee at delivery (as specified in Parts 5 and 6 of Schedule 1). All Documents and Records shall reflect the Redelivery condition and current status of the Aircraft at time of Redelivery, including all modifications and maintenance activity performed on the Redelivery Check. Page 4

5.4 In the event of missing, incomplete, or otherwise unacceptable Documents or Records, Lessee will take all necessary steps to replace such Documents or Records (whether by reaccomplishing tasks, recreating documents, reverifying, or otherwise). 5.5 Lessee will provide assistance as reasonably required by Lessor or Lessor's representative to locate and inventory the Documents and Records and to ensure their accuracy and completeness. 5.6 Lessee will provide a work scope detailing all scheduled maintenance and other activities (including any alterations, modifications, Airworthiness Directives, component changes, service bulletin and engineering order incorporation) to be accomplished during the Redelivery Check. 5.7 Lessee will provide Lessor with a final audited copy of all work accomplished during the Redelivery Check at Redelivery. Page 5

SCHEDULE 5 INSURANCE REQUIREMENTS The Insurances required to be maintained are on the basis of AVN 67B and as follows: 1. HULL ALL RISKS of Loss or Damage whilst flying and on the ground with respect to the Aircraft on an "agreed value basis" for the Agreed Value and with a deductible not exceeding the Insurance Deductible Amount, or such other amount agreed by Lessor from time to time, and to include deductible insurances, if necessary, to achieve that limit. 2. WAR AND ALLIED PERILS, being such risks excluded from the Hull All Risks Policy to the fullest extent available from the leading international insurance markets including confiscation and requisition by the Jurisdiction of Incorporation for the Agreed Value. 3. ALL RISKS (INCLUDING WAR AND ALLIED RISK except when on the ground or in transit other than by air) property insurance on all Engines and Parts when not installed on the Aircraft or an "agreed value" basis for their full replacement value and including engine test and running risks. 4. AIRCRAFT THIRD PARTY, PROPERTY DAMAGE, PASSENGER, BAGGAGE, CARGO AND MAIL AND AIRLINE GENERAL THIRD PARTY (INCLUDING PRODUCTS) LEGAL LIABILITY for a Combined Single Limit (Bodily Injury/Property Damage) of an amount not less than the Minimum Liability Coverage for the time being any one occurrence (but in respect of products and personal injury liability this limit may be an aggregate limit for any and all losses occurring during the currency of the policy). War and Allied Risks are also to be covered under the Policy to the fullest extent available from the leading international insurance markets. 5. All required hull and spares insurance (as specified above), so far as it relates to the Aircraft will: (1) name Lessor as sole loss payee up to the Agreed Value; (2) provide that any loss will be payable in Dollars, and: (a) in respect of any claim that becomes payable on the basis of an Event of Loss, settlement shall be made to or to the order of Lessor up to the Agreed Value; (b) in respect of any other claim, settlement (net of any policy deductible) shall be made with such party(ies) as may be necessary to repair the Aircraft unless otherwise agreed after consultation between the insurers, Lessee and, where the loss exceeds the Damage Notification Threshold, Lessor; and Page 1

(c) if separate Hull "all risk" and "war risks" insurances are arranged, include a 50/50 provision in accordance with market practice (AVS. 103 is the current market language). 6. All required liability insurances (specified above) will: (1) include Lessor, and its successors and assigns and their respective shareholders, subsidiaries, directors, officers, agents, employees and Indemnitees as additional insureds for their respective rights and interests, warranted, each as to itself only, no operational interest; (2) operate in all respects as if a separate policy had been issued covering each party insured, but shall not include any claim under hull and spares insurances (as specified above); notwithstanding the foregoing, the total liability of insurers shall not exceed the limits of liability stated in the policy; and (3) contain a provision confirming that the policy is primary without right of contribution and the liability of the insurers will not be affected by any other insurance of which Lessor or Lessee have the benefit so as to reduce the amount payable to the additional insureds under such policies. 7. All Insurances will: (1) be in accordance with normal industry practice of persons operating similar aircraft in similar circumstances; (2) provide cover denominated in Dollars and any other currencies which Lessor may reasonably require in relation to liability insurance; (3) operate on a world-wide basis subject to such limitations and exclusions as Lessor may reasonably agree; (4) provide that, in relation to the interests of each of the additional assureds the Insurances will not be invalidated by any act or omission (including misrepresentation and non-disclosure) of any other person or party which results in a breach of any term, condition or warranty of the policy, provided that the additional insured party so protected has not caused, contributed to or knowingly condoned the said act or omission; (5) provide that upon payment of any loss or claim to or on behalf of any additional assureds, insurers shall to the extent and in respect of such payment be thereupon subrogated to all legal and equitable rights of that additional assured indemnified hereby (but not against any additional assureds). Insurers shall not exercise such rights without the consent of those indemnified, such consent not to be unreasonably withheld. At the expense of insurers such additional assureds shall do all things reasonably necessary to assist the insurers to exercise said rights; Page 2

(6) provide that the additional assureds will have no obligation or responsibility for the payment of any premiums due and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional assureds other than outstanding premiums relating to the Aircraft, any Engine or Part which is the subject of the relevant claim; (7) provide that, except in respect of any provision for cancellation or automatic termination specified in the Policy or any endorsement thereof, cover provided by the Insurances may only be cancelled or materially altered in a manner adverse to the additional assureds by the giving of not less than 30 days (7 days or such less period as may be customarily available in respect of war risks and allied perils) notice in writing to the appointed broker, who shall undertake to notify Lessor promptly. Notice shall be deemed to commence from the date such notice is given by the insurers. Such notice will not, however, be given the normal expiry date of the Policy or any endorsement; and (8) reinsurance will (a) be on the same terms as the original insurances and will include the provisions of this Schedule, (b) provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers' liability will be to make such payments as would have fallen due under the relevant policy of reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original insurance policies in respect of which the then relevant policy of reinsurance has been effected; and (c) contain a "cut-through" clause in the following form (or otherwise, satisfactory to Lessor): "The Reinsurers and the Reinsured hereby mutually agree that in the event of any claim arising under the reinsurances in respect of a total loss or other claim where as provided by the Aircraft Lease Agreement (MSN 29047) dated as of October 1, 1998 and made between Lessor and Lessee such claim is to be paid to the person named as sole loss payee under the primary insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the person named as sole loss payee under the primary insurances effected by the Reinsured, that portion of any loss due for which the Reinsurers would otherwise be liable to pay the original Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith" subject to such provisions not contravening any law of the Jurisdiction of Incorporation. Page 3

SCHEDULE 6 FORM OF LEGAL OPINION To: First Security Bank, National Association Tombo Aviation, Inc. Date: ______________ Dear Sirs, 1. You have asked us to render an opinion in connection with the transaction governed, inter alia, by the under mentioned documents. Words and expressions used herein will bear the same meanings as defined in an Aircraft Lease Agreement (MSN 29047) (the "Lease") dated as of October 1, 1998 between First Security Bank, National Association, not in its individual capacity, except as otherwise expressly provided herein, but solely as Owner Trustee, and Compania Panamena de Aviacion, S.A.: (1) the Lease; (2) the constitutional documents comprising [_________________] of Lessee; and (3) all other documents, approvals and consents of whatever nature and wherever kept which it was, in our judgment and to our knowledge, necessary or appropriate to examine to enable us to give the opinion expressed below. 2. Having considered the documents listed in paragraph 1 above, and having regard to the relevant laws of Panama, we are pleased to advise that in our opinion: (1) Lessee was duly constituted in accordance with the laws of Panama on [________________] as [________________] and is a validly existing separate legal entity, is subject to suit in its own name, and, to the best of our knowledge, no steps have been, or are being, taken to appoint a receiver or liquidator over, or to dissolve, Lessee; (2) Lessee has the corporate power to enter into and perform, and has taken all necessary corporate action to authorize the entry into, performance and delivery of, the Lease and the transactions contemplated by the Lease; (3) the entry into and performance by Lessee of, and the transactions contemplated by, the Lease do not and will not: (a) conflict with any laws binding on Lessee; (b) conflict with the constitutional documents of Lessee; or Page 1

(c) conflict with or result in default under any document which is binding upon Lessee or any of its assets nor result in the creation of any Lien over any of its assets. (4) no authorizations, consents, licenses, approvals and registrations (other than those which have been obtained and of which copies are attached hereto) are necessary or desirable to be obtained from any governmental or other regulatory authorities in the Jurisdiction of Incorporation to enable Lessee: (a) to enter into and perform the transactions contemplated by the Lease; (b) to import the Aircraft into Panama for the duration of the Term; (c) to operate the Aircraft for the transport of fare-paying passengers; or (d) to make the payments provided for in the Lease in the currency, in the accounts and otherwise in accordance with the terms and conditions provided in the Lease; (5) other than(i) registering the Aircraft and filing this Agreement with the Panamanian Directorate of Civil Aeronautics, and (ii) recording this Agreement and the bill of sale evidencing Lessor's title to the Aircraft with the Office of the Public Registry of Panama, it is not necessary or desirable, to ensure the priority, validity and enforceability of all the obligations of Lessee under the Lease that the Lease be filed, registered, recorded or notarized in any public office or elsewhere or that any other instrument relating thereto be signed, delivered, filed, registered or recorded, that any tax or duty be paid or that any other action whatsoever be taken under the laws of Panama; accordingly, upon completion of the registration and recording set forth above, pursuant to the Lease, Lessor will be deemed to be the full legal and beneficial owner of the Aircraft and all rights and interests with respect thereto, Lessee shall not be deemed to have acquired any interest in the Aircraft other than the leasehold interest contemplated by the Lease, and such leasehold interest of Lessee at all times shall be subject to the terms and conditions provided in the Lease; (6) no other steps beyond (i) registering the Aircraft and filing this Agreement with the Panamanian Directorate of Civil Aeronautics, and (ii) recording this Agreement and the bill of sale evidencing Lessor's title to the Aircraft with the Office of the Public Registry of Panama are necessary or desirable to record or perfect Lessor's interest in the Aircraft in Panama; (7) on termination of the Lease (whether on expiry or otherwise) as contemplated in the Lease, Lessor would be entitled: (a) to repossess the Aircraft; and (b) to export the Aircraft from Panama; Page 2

without requiring any further consents, approvals or licenses from any governmental or regulatory authority in Panama; (8) the Lease has been properly signed and delivered on behalf of Lessee and the obligations on the part of Lessee contained therein, assuming them to be valid and binding according to the Governing Law, are valid and legally binding on and enforceable against Lessee respectively under the laws of Panama; (9) the events described in Clause 13.1(7), (8) and (9) of the Lease comprise an accurate and complete statement of all events and situations provided for by the laws Panama which may lead to the cessation of activities, winding up or dissolution of Lessee, and upon the occurrence of any such described events, and the Lessor's exercise of its rights to affect a termination of the Lease based on such Events of Default: the Lease shall terminate; Lessee shall have no further interest in the Aircraft; the Aircraft shall be excluded from any reorganization or other legal proceedings with respect to the Lessee; no receiver, trustee, liquidator, administrator, judicial official or other Person shall have any interest in or rights under or with respect to the Lessee or the Aircraft; and Lessor shall be entitled to immediate return and unrestricted possession and control of the Aircraft free and clear of any liens, claims or other encumbrances and without any liability to Lessee or any other Person; (10) Upon Lessor's giving the type of notice to Lessee set forth in Clause 13.2(1) following an Event of Default of the type set forth in Clause 13.1(8)(d), the Lease shall terminate (but without prejudice to the continuing obligations of Lessee under the Lease) without the need of any further action or judicial order; Lessee shall have no further interest in the Aircraft; the Aircraft shall be excluded from any liquidation or other legal proceedings with respect to the Lessee; no receiver, trustee, liquidator, administrator, judicial official or other Person shall have any interest in or rights under or with respect to the Lessor or the Aircraft; and Lessor shall be entitled to immediate return and unrestricted possession and control of the Aircraft free and clear of any liens, claims or other encumbrances and without any liability to Lessee or any other Person; (11) the obligations of Lessee under the Lease rank at least pari passu with all other present and future unsecured and unsubordinated (including contingent) obligations of the Lessee upon an Event of Default or other breach by Lessee of the Lease, Lessor at all times shall be entitled without restriction to set off any damage suffered or amounts owing by Lessee against any obligation of Lessor to return any deposits or other funds or otherwise make any payments or performance to Lessee or any Person claiming by, through or on behalf of Lessee; (12) there is no withholding tax or other Tax to be deducted from any payment whatsoever or which may be made by Lessee pursuant to the Lease; with respect to any withholdings, the provisions of Clauses 5.5, 5.6 and 5.9 of the Lease are fully effective; and the arrangements contemplated by the Lease do not give rise to any charge whatsoever to Taxes in Panama; Page 3

(13) there is no applicable usury or interest limitation law in Panama which may restrict the recovery of payments in accordance with the Lease; (14) there are no registration, stamp or other taxes or duties of any kind payable in Panama in connection with the signature, performance or enforcement by legal proceedings of the Lease; (15) Lessor will not violate any law or regulation in Panama nor become liable to tax by reason of entering into the Lease with Lessee, or performing its obligations thereunder; (16) it is not necessary to establish a place of business in Panama in order to enforce any provisions of the Lease; (17) the choice of the Governing Law to govern the Lease will be upheld as a valid choice of law in any action in the Courts of Panama; (18) the consent to jurisdiction by Lessee contained in the Lease is valid and binding on Lessee and not subject to revocation; (19) any judgment for a definite sum given by an arbitration proceeding or court as provided in the Lease against Lessee would be recognized and accepted by the Courts of Panama without re-trial or examination of the merits of the case; (20) Lessee is subject to civil commercial law with respect to its obligations under the Lease, and neither Lessee nor any of its assets is entitled to any right of immunity, and the entry into and performance of the Lease by Lessee constitute private and commercial acts; (21) there are no circumstances under the law of Panama whereby Lessee may be deprived of the Aircraft by any Government Entity or any other person; and (22) The Republic of Panama has ratified the Geneva Convention without any reservations or limitations thereto, and all requirements set forth in Article XXI of the Geneva Convention for Panama to become incorporated as a member of the Geneva Convention have been completed. 3. We do not purport to be experts on, and do not purport to be generally familiar with or qualified to express legal opinions based on, any law other than the laws of Panama and accordingly express no legal opinion herein based upon any law other than the laws of Panama. Yours faithfully, Page 4

Paragraph 2 (1) of Schedule 3 SCHEDULE 7 FORM OF REPORT AIRFRAME AND ENGINE STATUS REPORT FOR EACH SIX-MONTH PERIOD ("PERIOD") Report for the Calendar Period Ended: _______________________ Aircraft Type: _______________________ Manufacturer Serial/Registration Number: _______________________ 1. AIRCRAFT UTILIZATION Aircraft Total Hours: ____________________ Aircraft Total Cycles: ____________________ Flight Hours for Period: ____________________ Cycles for Period: ____________________ 2. DELIVERED ENGINE STATUS ENGINES POS. 1 POS. 2 - ------- ------- ------- Serial No. of Present Engine: _______ _______ Serial No. of Delivered Engine: _______ _______ Current Location of Delivered Engine: _______ _______ Flight Hours Since New : _______ _______ Cycles Since New: _______ _______ Flight Hours for Period: _______ _______ Cycles for Period: _______ _______ Page 1

The following sections need be reported only if one of the following events has taken place during the foregoing Period: (A) D-Check or equivalent - Complete Section 3 (B) C-Check or equivalent - Complete Section 3 (C) Engine Change or Shop Visit - Complete Section 4 3. MAJOR CHECK REPORT Date of Check: ______________ Total Hours: ______________ Total Cycles: ________ Location: _________________ Agent: __________________ Downtime: ___________ Days Type of Check: _________________________________________________ MODS / ADs / SBs Accomplished During Check: ____________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ Next Check Due In: _______________________________ Hours / Months / Years Estimated Date: _________________ 4. ENGINE REMOVAL AND SHOP VISIT REPORT For Removed Engine: _____________________________________ ______________________ Serial Number: ____________________ Date of Removal: ___________________________ Position: _________________________ Airframe Total Hours at Removal: ___________ Engine Total Hours: _______________ Airframe Total Cycles at Removal: __________ Engine Total Cycles:_______________ Reason for Removal: ____________________________________________________________ Repair Agent: __________________________ Location: _____________________________ Intended Workscope: ____________________________________________________________ MODS / ADs / SBs to be Accomplished: ___________________________________________ Or Installed Engine: __________________________________________________________ Serial Number: ____________________ Time Since Last Shop Visit: ________________ Position: _________________________ Last Shop Visit Description: _______________ Engine Total Hours: _______________ Next Limiter: ______________________________ Engine Total Cycles: ______________ Time to Next Limiter: ______________________ Page 2

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT Exhibit 10.2 FIRST SECURITY BANK, NATIONAL ASSOCIATION 79 SOUTH MAIN STREET SALT LAKE CITY, UTAH 84111 As of November 6, 1998 Compania Panamena de Aviacion, S.A. (COPA) Avenida Justo Arosemena y Calle 39 Panama 1, Republic of Panama Re: Letter Agreement Amending Lease (MSN 29047) Ladies and Gentlemen: Reference is hereby made to (i) that certain Aircraft Lease Agreement (MSN 29047) ("Lease"), dated as of October 1, 1998 between Compania Panamena de Aviacion, S.A. (COPA), as Lessee (this and all other capitalized terms used but not defined herein shall have the respective meanings set forth in the Lease), and First Security Bank, National Association, not in its individual capacity, but solely as Owner Trustee, as Lessor, and (ii) that certain Side Letter Agreement Involving Aircraft Modification (MSN 29047), dated October 10, 1998 between Beneficiary and Lessee ("Side Letter"). Pursuant to the terms of the Lease and the commitments set forth in the Side Letter, the parties hereto hereby acknowledge and agree to the following terms regarding modifications to the Aircraft: 1. Part 4 of Schedule 1 of the Lease is hereby amended by adding the following three post-production modifications: a. Category IIIa Certification (Boeing Paper) b. Optical QAR c. ACARS with Printer. 2. The costs of the modifications to the Aircraft described in Parts 3 and 4 of Schedule 1 of the Lease (as amended above) in excess of the Modification Limit shall be allocated between the Lessor and Lessee as follows: a. Lessor shall pay for the first $**Material Redacted** of such excess costs; b. At the election of Lessee, which election must be made prior to the Delivery Date, the next $**Material Redacted** of such excess costs shall

be paid either by Lessor or by Lessee, provided that (i) if Lessor pays for such costs, the Rent for each Rental Period shall be increased by one percent (1%) of the aggregate amount of such costs paid by Lessor, (ii) if Lessee pays for such costs, Lessee must make such payment prior to Delivery, and (iii) if any of such costs paid for by the Lessee arise from the purchase of any of the following five items of Equipment, Lessee may remove and retain such Equipment upon Redelivery in the manner provided for in the Lease, provided that Lessee must select such Equipment in the following order of priority: (1) Optical QAR (2) ACARS with Printer (3) 2nd FMC (4) Dual H.F. (Collins) (5) 3rd VHF Comm (Collins); and c. Lessor and Beneficiary shall not be liable for paying any modification costs in excess of the amounts described in clauses "a" and "b" above. This letter agreement (i) shall constitute an amendment to the Lease, (ii) shall be binding upon, inure to the benefit of and be enforceable by the respective successors and permitted assigns of the parties hereto, (iii) constitutes the entire agreement between the parties concerning the subject matter hereof, and supersedes all previous proposals, agreements, understandings, negotiations and other written and oral communications in relation thereto, including, but not limited to, the Side Letter, and (iv) may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute but one and the same letter agreement. Very truly yours, FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee PAGE 2

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT Exhibit 10.3 AIRCRAFT LEASE AMENDMENT AGREEMENT (MSN 29047) DATED AS OF MAY 21, 2003 BETWEEN WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS LESSOR AND COMPANIA PANAMENA DE AVIACION, S.A. (COPA) AS LESSEE IN RESPECT OF ONE BOEING MODEL 737-71Q AIRCRAFT MANUFACTURER'S SERIAL NUMBER 29047 AIRCRAFT LEASE AMENDMENT AGREEMENT (MSN 29047)

This Aircraft Lease Amendment Agreement (MSN 29047) is made as of the 21 day of May, 2003 between: (1) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (formerly known as First Security Bank, National Association) a national banking association whose principal place of business is 299 South Main Street, Salt Lake City, Utah 84111, not in its individual capacity, except as otherwise expressly provided herein, but solely as Owner Trustee ("Lessor"); and (2) COMPANIA PANAMENA DE AVIACION, S.A. (COPA), a company incorporated under the laws of the Republic of Panama whose registered office is at Avenida Justo Arosemena y Calle 39, Panama 1, Republic of Panama ("Lessee"); WHEREAS, Lessor wishes to amend the terms of the Aircraft Lease Agreement dated as of 1 October 1998 (as amended, the "LEASE") in respect of one Boeing model B737-71Q aircraft msn 29047 and Panamanian Registration HP-1369 CMP (the "AIRCRAFT") as set out herein IT IS AGREED as follows: 1. INTERPRETATION 1.1 Section 1.1 of the Lease is amended by adding the following definition thereto: "Amendment Agreement that certain Aircraft Lease Amendment Agreement dated as of May __,2003 by and between Lessor and Lessee. From and after the date hereof, the term "Lease" shall be deemed to mean the Lease as amended by the Amendment Agreement." 1.2 Capitalised terms used herein shall, unless otherwise indicated, bear the same meanings ascribed thereto pursuant to the Lease. The provisions of Clause 1.2 of the Lease apply as if set out herein, mutatis mutandis. 2. REPRESENTATIONS AND WARRANTIES The Lessee hereby repeats the representations and warranties contained in Clause 2.1 of the Lease as if made with reference to facts and circumstances existing as of the date of this Amendment Agreement. For avoidance of doubt, the reference to Lessee's "Accounts" set forth in Clause 2.1(13) (Material Adverse Change) shall be deemed to

refer to the accounts most recently provided by Lessee to Lessor prior to the date of this Amendment Agreement. 3. AMENDMENTS TO LEASE 3.1. TERM: Clause 4.2 of the Lease is hereby amended by adding the words "and Term" to the word "Commencement" in the heading; and by adding a new paragraph to the end thereof as follows: "Provided that the Aircraft has not been earlier redelivered in accordance with this Agreement, this Agreement has not earlier been terminated in accordance with its terms, or Lessor has not earlier received the Agreed Value following an Event of Loss, the Term shall, unless the parties otherwise agree, be automatically extended for successive periods of one year (each an "Extension Term") up to a maximum term ending April 21, 2009 (but subject to an additional extension of one year, at Lessee's choice, commencing April 22, 2009 and ending April 21, 2010, provided that no Event of Default shall have occurred and be continuing at the time of such election and as of April 21, 2009 and that Lessee shall have given Lessor written notice (which, once given, shall be irrevocable) of its election to so extend the Term not less than 12 months prior to April 21, 2009) and the definition of "Expiry Date" set forth in Section 1.1 of the Lease shall be construed accordingly". 3.2 RENT: With effect from May 1, 2003, the definition of "Rent" set forth in Annex A to the Lease is amended by deleting paragraphs (1) and (2) thereof in their entirety and substituting the following: "(1) For the period commencing on May 1, 2003 and throughout each yearly Extension Term up to and until April 21, 2009, $**Material Redacted** per Rental Period; (2) Should Lessee elect to extend the Lease from April 22, 2009 until April 21, 2010 as set forth in Clause 4.2 of the Lease (as amended by Clause 3.1 of the Aircraft Amendment Agreement), each installment of Rent in respect of each Rental Period shall be calculated on the basis of an assumed rent of $**Material Redacted** per month (the "Assumed Rent"). The Assumed Rent is calculated on the assumption that the "Applicable LIBOR" (being 12-month The Bank of Tokyo-Mitsubishi, Ltd. LIBOR as quoted to Lessor two banking days prior to April 22, 2009) is **Material Redacted**% per annum. To the extent that the Applicable LIBOR is higher or lower than **Material Redacted**% per annum, the

Assumed Rent shall be increased (in the case where the Applicable LIBOR is higher than **Material Redacted**% per annum) or reduced (in the case where the Applicable LIBOR is lower than **Material Redacted**% per annum) by $**Material Redacted** for each **Material Redacted**% difference between Applicable LIBOR and **Material Redacted**% per annum (and pro rata for fractions of a per cent) to determine the Rent payable by the Lessee on the Rent Dates for each Rental Period occurring on or after April 22, 2009." 3.3. BLENDED WINGLETS: Schedule 4 to the Lease is hereby amended by adding the following as paragraph 1.7 thereof: "Lessor and Lessee agree to the installation of the blended winglets on the Aircraft during any period where it can be reasonably scheduled prior to Redelivery without affecting the commercial program of the Aircraft. Lessor and Lessee shall compare the cost of material and installation available to each of Lessor and Lessee under their respective agreements (collectively, the "APB ARRANGEMENTS") with Aviation Partners Boeing ("APB") and the procurement and installation of the winglets shall be made under and pursuant to the less expensive of the two APB arrangements. Lessor shall either pay to APB the full cost of labor and equipment or reimburse Lessee for same upon presentation to Lessor of the actual invoice. The blended winglets shall remain on the Aircraft at Redelivery." 3.4. ENGINE DERATE: Notwithstanding any other provision of the Lease, Lessor consents to Lessee's decreasing the Engine take-off thrust rating from 24,000lbs. to 22,000lbs. after installation of the blended winglets subject to receipt by Lessor of prior written confirmation (in form and substance satisfactory to Lessor acting reasonably) from the Engine Manufacturer that returning the Engine take-off thrust rating to 24,000lbs. will not result in any cost and, further, the parties agree that Schedule 4 to the Lease is hereby amended by adding the following as paragraph 3.6 thereof: "The take-off thrust rating of the Engines shall be not less than 24,000lbs at Redelivery". 3.5. LETTERS OF CREDIT: Clause 5.1.10 of the Lease is hereby amended by deleting both references therein to "10 days" and by substituting therefor references to "thirty (30) days." Lessor and Lessee agree to attempt in good faith to consolidate the Deposit Letter of Credit and the Supplemental Letter of Credit on terms acceptable to both parties

3.6. MAINTENANCE PAYMENT: Clause 5.3.2(1) of the Lease is hereby amended by deleting the words "during the first 54 months of the Term" and substituting therefor the words "during the 24 month period immediately preceding the date falling six months prior to expiry of the Term". 3.7 AGREED VALUE: Annex A to the Lease is hereby amended by deleting the reference in the definition of "Agreed Value" to "$**Material Redacted**" and substituting therefor: "$**Material Redacted** to be decreased by $**Material Redacted** upon each annual renewal of Lessee's fleet policies during the remainder of the Term". 4. OTHER AGREEMENT 4.1. AIRCRAFT SYSTEM MODIFICATIONS: Lessor and Lessee will separately negotiate in good faith to agree to incorporate (such incorporation to be completed on or before April 1, 2004) certain system upgrades (based on a mutually agreed upon listing of "approved system upgrades") on the Aircraft, and Lessor shall pay up to an aggregate cap of US $**Material Redacted** for such upgrades. Lessor and Lessee agree to amend the Lease being at that time to reflect any such agreement as to incorporation of system upgrades and to reflect a corresponding increased adjustment to the Rent with effect from completion of such incorporation by **Material Redacted**% per month times the total modification costs for such incorporation. For the avoidance of doubt, nothing in this Clause 4.1 shall constitute an amendment to the Lease. For the avoidance of doubt, the cap referenced above and the rent adjustment factor detailed above do not pertain to cost of installation of the blended winglets referenced in Clause 3.3 above. 4.2. ENGINE MAINTENANCE: Lessee will discuss with a qualified engine maintenance services provider acceptable to Lessor acting reasonably for such provider to cover the maintenance of the Engines of the Aircraft ("ENGINES") pursuant to an agreement between such provider and Lessee which shall be in form and substance satisfactory to Lessor (in the reasonable opinion of Lessor). Lessor and Lessee agree to amend the Lease, as may be required to reflect any agreement between them in respect of maintenance of the Engines, which may deviate from the provisions concerning maintenance of the Engines currently set forth in the Lease. For the avoidance of doubt, nothing in this Clause 4.2 shall constitute an amendment to the Lease.

5. MISCELLANEOUS 5.1. GOVERNING LAW: This Agreement shall in all respects be governed by, and construed in accordance with, the internal laws of the State of New York, inclusive of all matters of construction, validity and performance. 5.2 REGISTRATION: Lessee at its expense shall cause this Agreement to be duly filed with the Civil Aeronautics Authority and to be recorded at the Office of the Public Registry of Panama. This Agreement has been negotiated, executed and delivered in English. In case of any conflict or discrepancy between the executed English version of this Agreement and any Spanish translation thereof or any extract thereof recorded at the Public Registry of Panama or any other governmental office, the English version of this Agreement shall prevail. 5.3 OTHER: The provisions of Clauses 17.12.2, 17.12.3, 17.12.4, 17.15. 17.16, 17.17 and 17.18 of the Lease shall apply to this Amendment Agreement as if set out herein and as if references therein to "this Agreement" were to this Amendment Agreement. Save as amended hereby, the provisions of the Lease remain in full force and effect without modification. All references in the Lease to "this Agreement" shall be construed as including reference to this Amendment Agreement.

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT Exhibit 10.4 AIRCRAFT LEASE AGREEMENT (MSN 29048) DATED AS OF OCTOBER 1, 1998 BETWEEN FIRST SECURITY BANK, NATIONAL ASSOCIATION, AS LESSOR AND COMPANIA PANAMENA DE AVIACION, S.A. (COPA) AS LESSEE IN RESPECT OF ONE BOEING MODEL 737-71Q AIRCRAFT MANUFACTURER'S SERIAL NUMBER 29048

TABLE OF CONTENTS 1. INTERPRETATION 1.1 Definitions............................................................. 1 1.2 Construction............................................................ 17 2. REPRESENTATIONS AND WARRANTIES 2.1 Lessee's Representations and Warranties................................. 18 2.2 Repetition.............................................................. 22 2.3 [Intentionally omitted.]................................................ 22 2.4 FSB's Representations and Warranties.................................... 22 3. CONDITIONS PRECEDENT 3.1 Conditions Precedent to Lessor's Obligations............................ 23 3.2 Further Conditions Precedent to Lessor's Obligations.................... 27 3.3 Conditions Precedent to Lessor's Obligation to Request Deregistration... 27 3.4 Waiver.................................................................. 28 3.5 Conditions Precedent to Lessee's Obligations............................ 28 4. DELIVERY 4.1 Scheduled Delivery Month and Scheduled Delivery Date.................... 28 4.2 Commencement............................................................ 28 4.3 Delayed Delivery........................................................ 29 4.4 Acceptance of Aircraft.................................................. 29 4.5 Delivery................................................................ 30 4.6 Post-Production Modification............................................ 30 4.7 Deregistration.......................................................... 30 5. PAYMENTS 5.1 Cash Deposit, Deposit Letter of Credit and Supplemental Rent i

Letter of Credit........................................................ 31 5.2 Rent.................................................................... 32 5.3 Supplemental Rent....................................................... 33 5.4 Payments................................................................ 34 5.5 Gross-up................................................................ 35 5.6 Taxes and Other Payments................................................ 35 5.7 Value Added Tax......................................................... 35 5.8 Information............................................................. 36 5.9 Taxation of Indemnity Payments.......................................... 36 5.10 Default Interest........................................................ 37 5.11 Contest................................................................. 37 5.12 Computations............................................................ 38 5.13 Payments Absolute....................................................... 39 6. MANUFACTURERS' WARRANTIES 6.1 Benefit of Warranties................................................... 39 6.2 Parts................................................................... 40 6.3 Reassignment............................................................ 40 7. LESSOR'S COVENANTS 7.1 Quiet Enjoyment......................................................... 40 7.2 End Payment............................................................. 40 7.3 Manufacturer Credit and Product Support................................. 41 7.4 Airworthiness Directive Cost Sharing.................................... 42 8. LESSEE'S COVENANTS 8.1 Duration................................................................ 42 8.2 Further Covenants....................................................... 42 ii

9. INSURANCE 9.1 Insurances.............................................................. 42 9.2 Requirements............................................................ 43 9.3 Change.................................................................. 43 9.4 Insurance Covenants..................................................... 43 9.5 Failure to Insure....................................................... 45 9.6 Continuing Indemnity.................................................... 45 9.7 Application of Insurance Proceeds....................................... 45 9.8 Insurance for Lessee's Own Accounts..................................... 46 10. INDEMNITY 10.1 General................................................................. 46 10.2 Duration................................................................ 47 10.3 Exceptions.............................................................. 47 11. EVENTS OF LOSS 11.1 Pre-delivery............................................................ 48 11.2 Post-delivery........................................................... 48 11.3 Engines................................................................. 49 11.4 Requisition............................................................. 49 12. REDELIVERY OF AIRCRAFT 12.1 Notification............................................................ 50 12.2 Redelivery.............................................................. 50 12.3 Redelivery Acknowledgment............................................... 50 12.4 Short Term Storage...................................................... 50 12.5 Expenses................................................................ 50 12.6 Warranty Transfer....................................................... 51 iii

12.7 Non-Compliance.......................................................... 51 12.8 Export.................................................................. 51 12.9 Late Redelivery......................................................... 51 13. DEFAULT 13.1 Events.................................................................. 52 13.2 Rights.................................................................. 56 13.3 Export.................................................................. 57 13.4 Default Payments........................................................ 57 13.5 Survival................................................................ 58 14. ASSIGNMENT, NOVATION 14.1 Lien.................................................................... 58 14.2 Lease Assignment/Novation............................................... 58 15. ILLEGALITY...................................................................... 59 16. DISCLAIMERS AND WAIVERS 16.1 Exclusion and Waiver.................................................... 59 16.2 Certificate of Acceptance............................................... 60 17. MISCELLANEOUS 17.1 Waivers, Remedies, Cumulative........................................... 61 17.2 Delegation/Agency Agreement............................................. 61 17.3 Certificates............................................................ 61 17.4 Appropriation........................................................... 62 17.5 Currency Indemnity...................................................... 62 17.6 Set-off................................................................. 62 17.7 Severability............................................................ 63 17.8 Remedy.................................................................. 63 iv

17.9 Expenses................................................................ 63 17.10 Time of Essence......................................................... 64 17.11 Notices................................................................. 64 17.12 Law and Jurisdiction.................................................... 65 17.13 Sole and Entire Agreement............................................... 66 17.14 Indemnities............................................................. 66 17.15 Counterparts............................................................ 66 17.16 Language................................................................ 66 17.17 Modification............................................................ 66 17.18 Owner Trustee........................................................... 67 SCHEDULE 1 DESCRIPTION OF AIRCRAFT Part 1 Description of Aircraft Part 2 General Features Part 3 Lessee's Options Part 4 Lessee's Post Production Modification Part 5 Documents Part 6 Records SCHEDULE 2 CERTIFICATE OF ACCEPTANCE Part 1 Certificate of Acceptance Part 2 Aircraft Delivery Conditions SCHEDULE 3 LESSEE'S COVENANTS Part 1 Information 1. General Information 2. Technical Information 3. Financial Information Part 2 Lessee General Covenants 4. General 5. Third Party v

AIRCRAFT LEASE AGREEMENT (MSN 29048) This Aircraft Lease Agreement (MSN 29048) is made as of the 1st day of October, 1998 between: (1) FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its individual capacity, except as otherwise expressly provided herein, but solely as Owner Trustee, a national banking association whose principal place of business is 79 South Main Street, Salt Lake City, Utah 84111 ("Lessor"); and (2) COMPANIA PANAMENA DE AVIACION, S.A. (COPA), a company incorporated under the laws of Panama whose registered office is at Avenida Justo Arosemena y Calle 39, Panama 1, Republic of Panama ("Lessee"); WHEREAS, Lessor wishes to lease to Lessee and Lessee is willing to lease from Lessor the Aircraft subject to the terms and conditions of this Agreement upon completion of the manufacture of the Aircraft by The Boeing Company; IT IS AGREED as follows: 1. INTERPRETATION 1.1 DEFINITIONS In this Agreement the following expressions have the following meanings: AFFILIATE With respect to a specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such person. For the purposes of this definition, "control," "controlling" and "controlled" when used with respect to any specified person means the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of securities having ordinary voting power for the election of directors, by contract or otherwise. AGREED MAINTENANCE PERFORMER Lessee, Continental Airlines, Inc., a maintenance performer approved from time to time by Continental Airlines, Inc. for its own aircraft, or any other person agreed to from time to time in writing by Lessor, such agreement not to be unreasonably withheld. AGREED MAINTENANCE PROGRAM The continuous airworthiness Boeing Model 737-700 maintenance program, which shall be PAGE 1

substantially the same as that used by Continental Airlines, Inc. for its own Boeing Model 737-700 aircraft and which shall be approved by the FAA and the Air Authority for use by Lessee, encompassing scheduled maintenance, condition monitored maintenance, and/or on-condition maintenance of Airframe, Engines and Parts, including but not limited to servicing, testing, preventative maintenance, repairs, structural inspections, system checks, overhauls, corrosion control, inspections and treatments. AGREED VALUE As defined in Annex A. AGREEMENT This Aircraft Lease Agreement (MSN 29048), including all annexes, schedules and exhibits hereto, as modified, supplemented and amended from time to time. AIR AUTHORITY During that portion of the Term extending from the Delivery Date to the Deregistration Date, the FAA or any successor thereof, and during that portion of the Term extending from the Deregistration Date to the Redelivery Date, the Directorate of Civil Aeronautics of the Republic of Panama or any successor thereof. AIRCRAFT The aircraft described in Part 1 of Schedule 1, which includes the Airframe, the Engines, and (unless the context does not permit) the Documents and Records, as it may be modified pursuant to the terms of Clause 4.6. AIRFRAME The Aircraft including Parts, modules, APU, appliances, components, equipment and furnishings, but excluding the Engines and Documents and Records. APU The auxiliary power unit installed on the Aircraft on the Delivery Date and any replacement auxiliary power unit installed in accordance with this Agreement. BASELINE SPECIFICATION The Baseline Specification referred to in Part 1 of Schedule 1. BENEFICIARY Tombo Aviation Inc., a Delaware corporation. PAGE 2

(4) any lien of a repairer, mechanic, carrier, hangar keeper, airport, air navigation authority or other similar lien arising in the ordinary course of business or by operation of law in respect of obligations of Lessee or any permitted sublessee which are not overdue or are being contested in good faith by appropriate proceedings; but only if, in the case of both (3) and (4), (a) adequate reserves have been provided by Lessee for the payment of such Taxes or obligations; and (b) such proceedings, or the continued existence of the lien, do not give rise to any material risk of the sale, forfeiture or other loss of the Aircraft or any interest therein or of criminal liability on the part of Lessor. PERSON OR PERSON Any individual, firm, partnership, joint venture, trust, trustee, Government Entity, organization, association, corporation, government agencies, committees, departments, authorities and other bodies, corporate or incorporate, whether having distinct legal status or not, or any number of any of the foregoing. PURCHASE AGREEMENT Purchase Agreement No. 1906, dated May 2, 1996, between Manufacturer and Beneficiary, pursuant to which Manufacturer has agreed to sell and Beneficiary has agreed to purchase the Aircraft. PURCHASE AGREEMENT ASSIGNMENT That certain Purchase Agreement Assignment (MSN 29048), dated as of October 1, 1998, between Beneficiary and Lessor. RECORDS (1) the Aircraft, Engine, APU, Landing Gear and Part records, reports, and other documentation listed in Part 6 of Schedule 1 to this Agreement; (2) records relating to the service, inspection, maintenance, modification, testing, overhaul and repair of the Aircraft and all Parts installed therein or thereon that are required to be PAGE 14

SCHEDULED DELIVERY DATE The date within the Scheduled Delivery Month as advised by Lessor from time to time in accordance with Clause 4. SCHEDULED DELIVERY MONTH March, 1999. SHOP VISIT In relation to Engines and APU, an engine or APU removal where engine maintenance entails separation of mating engine case flanges and/or the removal of engine modules, requiring internal repairs or the replacements of a disk, hub or spool. SISTER LEASE Any aircraft lease agreement between (i) Lessor, Beneficiary, any Affiliate of Beneficiary, or any trust in which Beneficiary or any Affiliate of Beneficiary is the beneficiary under such trust, and (ii) Lessee for an aircraft, including the Aircraft Lease Agreement (MSN 29047) between Lessor and Lessee dated as of the date hereof in respect of a Boeing Model 737-71Q aircraft bearing Manufacturer's serial number 29047. SUBSIDIARY (1) In relation to any reference to accounts, any company whose accounts are consolidated with the accounts of Lessee in accordance with Panamanian generally accepted accounting principles; and (2) for any other purpose an entity from time to time: (a) of which another has direct or indirect control or owns directly or indirectly more than fifty per cent (50%) of the voting share capital; or (b) which is a direct or indirect subsidiary of another under the laws of the jurisdiction of its incorporation. SUPPLEMENTAL RENT All amounts payable under Clause 5.3. PAGE 16

SUPPLEMENTAL RENT LETTER OF The letter of credit in respect of Supplemental CREDIT Rent issued pursuant to Clause 5.1, and any replacement or renewal of such letter of credit issued in accordance with the terms of this Agreement. SUPPLEMENTAL RENT LETTER OF As defined in Annex A. CREDIT AMOUNTS TAX OR TAXES All taxes, fees, duties, governmental charges and assessments, of any nature whatsoever, including interest, fines additions to tax, and penalties thereon, imposed by any taxing authority with respect to the Aircraft, on its ownership, delivery, possession, transportation, operation, rental, return to Lessor, transfer of title, registration, or otherwise with respect to or in connection with the transactions contemplated by this Agreement, including, but not limited to, any value-added taxes, sales and use taxes, property taxes and all license and registration fees; provided, however, that "Taxes" shall not include Lessor Taxes. TERM The period commencing on the Delivery Date and ending on the Expiry Date unless otherwise hereinafter provided. TRUST AGREEMENT That certain Trust Agreement (MSN 29048), dated as of October 1, 1998, between First Security Bank, National Association, and Beneficiary. USA United States of America. 1.2 CONSTRUCTION 1.2.1 In this Agreement, unless the contrary intention is stated, a reference to: (1) each of "Lessor" or "Lessee" or any other person includes, without prejudice to the provisions of this Agreement, any successor in title to it or, as the case may be, them and any permitted assignee or transferee; (2) a "person" includes, without limitation, any individual, corporation, company limited liability company, judicial entity, statutory body, partnership, joint venture, trust, estate, unincorporated association, PAGE 17

7.4 AIRWORTHINESS DIRECTIVE COST SHARING Where the cost of any single non-repetitive airworthiness directive to be accomplished pursuant to Clause 14.8 of Schedule 3 or which Lessee is otherwise required by the terms of this Agreement to accomplish exceeds US$**Material Redacted**, Lessor shall pay to Lessee, as long as no Default has occurred and is continuing, an amount calculated in accordance with the following formula: C x (N - R) / N Where N = **Material Redacted** R = the number of complete months remaining in the Term after completion of the modification C = the cost of the modification in excess of US$**Material Redacted**. 8. LESSEE'S COVENANTS 8.1 DURATION Subject to Clause 10.2, the undertakings of Lessee under this Agreement will: (1) except as otherwise stated, be performed at the expense of Lessee; and (2) remain in force until the earlier to occur of (a) Redelivery of the Aircraft to Lessor in accordance with this Agreement either at the end of the Term, or earlier as provided herein, and payment of all obligations of Lessee hereunder or (b) receipt by Lessor of the Agreed Value pursuant to an Event of Loss. 8.2 FURTHER COVENANTS Lessee also covenants to Lessor to perform the covenants set out in Schedule 3. 9. INSURANCE 9.1 INSURANCES Lessee will maintain in full force during the Term insurances in respect of the Aircraft in form and substance reasonably satisfactory to Lessor and in conformity with and covering such risks as are set forth in Schedule 5 hereof (the "Insurances," which expression includes, where the context so admits, any relevant re-insurance(s)) through such brokers, with such lead underwriters being subject to such exclusions as may be approved by Lessor, such approval not to be unreasonably withheld, and in such amounts and having such deductibles as are set forth in Schedule 5 hereof. The Insurances will be effected either: PAGE 42

ANNEX A **Material Redacted** **3 pages** PAGE 68

SCHEDULES Page 1

SCHEDULE 1 PART 1 DESCRIPTION OF AIRCRAFT AIRCRAFT MANUFACTURER: The Boeing Company MODEL: 737-71Q SERIAL NUMBER: 29048 GENERAL FEATURES (subject to change and offer ability by Boeing): As set out in Part 2 of Schedule 1 AIRCRAFT SPECIFICATION The Aircraft specification is as per Boeing Detail Specification Documents (D6-38808-27) ("Tombo Baseline Specification") (including such production improvements as may be incorporated into the Aircraft), as further modified to incorporate any change orders accepted by Manufacturer in respect of the Aircraft, and any further changes as agreed from time to time, together with Documents and Records. ENGINES ENGINE TYPE AND NO: Two (2) CFM56-7B24 engines rated at 24,000 lbs of thrust. EACH OF THE ENGINES IS 750 OR MORE RATED TAKE-OFF HORSEPOWER OR ITS EQUIVALENT. MANUFACTURER: CFM International, Inc. SERIAL NOS: As set out in the Certificate of Acceptance Page 1

SCHEDULE 1 PART 6 RECORDS The Records listed below, include, but are not limited to, the following: AIRCRAFT MAINTENANCE RECORDS 1. Aircraft Logbooks: Flight, Maintenance, and Cabin, as applicable to the Operator. 2. Aircraft Maintenance and Flight Log Sheets for prior 12 months in service (minimum). 3. Complete cycle of all "Letter" Checks. 4. All Time Controlled Inspection/Task (out of phase) Maintenance Records. 5. Component Airworthiness Approval Tags (FAA 8130-3 Form or JAA-1 Form or equivalent) with indication of work performed at shop. 6. Time Controlled Component (hard time) records back to last overhaul, including all intermediary Repair Records. 7. Life Limited Part (LLP) Records providing status and traceability to origin and manufacturer, including installation records of each component. 8. Airworthiness Directive Records and Compliance Documentation (Airframe and Appliances) including Alternate Means of Compliance Approval. 9. Service Bulletin Status and Method of Compliance records. 10. [Intentionally omitted.] 11. Listing of all FAR revision compliance, including date of accomplishment and record of proof of compliance. 12. Accident and Incident Report Records. 13. Major Structural Damage Reports and Repair Records with necessary approvals. 14. Major Repair/Alteration Compliance Records with FAA 337 Form (or its equivalent). 15 Major and Minor Repair Records. 16. Records of current Engine, Landing Gear, and APU Installation. 17. Modification Records, copies of all engineering orders and related engineering drawings and STCs which have been accomplished on the Aircraft, components, Engines, and APU, including documentation for work accomplished by the previous owner(s) and operator(s). AIRCRAFT CURRENT OPERATING AND STATUS RECORDS 1. Provide the following Status and Summary Report (or Reports) that furnish the following types of data and information regarding the Certified Status of the Aircraft and Engines. (a) Aircraft Time & Cycle Report, including daily utilization recordings. (b) Aircraft Description & Status Summary. (c) Aircraft Maintenance Inspection & Status Report, including total time, interval, time-to-go, and last compliance times for all items of the Agreed Maintenance Program. (d) Component Status and Listing Report (H/T, O/C, C/M, and LLP). (e) Airworthiness Directive Status and Summary Report (airframe, engines, and appliances). Page 9

SCHEDULE 2 PART 1 CERTIFICATE OF ACCEPTANCE This Certificate of Acceptance is delivered, on the date set out below, by Compania Panamena de Aviacion, S.A. (COPA) ("Lessee"), to First Security Bank, National Association, not in its individual capacity but solely as Owner Trustee ("Lessor"), pursuant to the Aircraft Lease Agreement (MSN 29048) dated as of October 1, 1998 between Lessor and Lessee (the "Agreement"). The capitalized terms used in this Certificate shall have the meaning given to such terms in the Agreement. 1. DETAILS OF ACCEPTANCE Lessee hereby confirms to Lessor that Lessee has at ________ o'clock on this day of _______________, ____________, at _____________________, accepted the following, in accordance with the provisions of the Agreement: (1) AIRCRAFT: Airframe Manufacturer's Serial No.: TSN ________________________ CSN ________________________ (2) ENGINES: Engine Number Manufacturer's Serial No.: 1 __________ TSN __________ CSN __________ 2 __________ TSN __________ CSN __________ (3) LANDING GEAR: NOSE MAIN LEFT MAIN RIGHT ---- --------- ---------- TSN: CSN: Page 1

ATTACHMENTS "Loose Equipment Checklist": Documents and Records: Damage Chart: etc. - ------------------------------------- Signed by Lessee and Lessor Page 3

(6) provide that the additional assureds will have no obligation or responsibility for the payment of any premiums due and that the insurers will not exercise any right of set-off or counter-claim in respect of any premium due against the respective interests of the additional assureds other than outstanding premiums relating to the Aircraft, any Engine or Part which is the subject of the relevant claim; (7) provide that, except in respect of any provision for cancellation or automatic termination specified in the Policy or any endorsement thereof, cover provided by the Insurances may only be cancelled or materially altered in a manner adverse to the additional assureds by the giving of not less than 30 days (7 days or such less period as may be customarily available in respect of war risks and allied perils) notice in writing to the appointed broker, who shall undertake to notify Lessor promptly. Notice shall be deemed to commence from the date such notice is given by the insurers. Such notice will not, however, be given the normal expiry date of the Policy or any endorsement; and (8) reinsurance will (a) be on the same terms as the original insurances and will include the provisions of this Schedule, (b) provide that notwithstanding any bankruptcy, insolvency, liquidation, dissolution or similar proceedings of or affecting the reinsured that the reinsurers' liability will be to make such payments as would have fallen due under the relevant policy of reinsurance if the reinsured had (immediately before such bankruptcy, insolvency, liquidation, dissolution or similar proceedings) discharged its obligations in full under the original insurance policies in respect of which the then relevant policy of reinsurance has been effected; and (c) contain a "cut-through" clause in the following form (or otherwise, satisfactory to Lessor): "The Reinsurers and the Reinsured hereby mutually agree that in the event of any claim arising under the reinsurances in respect of a total loss or other claim where as provided by the Aircraft Lease Agreement (MSN 29048) dated as of October 1, 1998 and made between Lessor and Lessee such claim is to be paid to the person named as sole loss payee under the primary insurances, the Reinsurers will in lieu of payment to the Reinsured, its successors in interest and assigns pay to the person named as sole loss payee under the primary insurances effected by the Reinsured, that portion of any loss due for which the Reinsurers would otherwise be liable to pay the original Reinsured (subject to proof of loss), it being understood and agreed that any such payment by the Reinsurers will (to the extent of such payment) fully discharge and release the Reinsurers from any and all further liability in connection therewith" subject to such provisions not contravening any law of the Jurisdiction of Incorporation. Page 3

SCHEDULE 6 FORM OF LEGAL OPINION To: First Security Bank, National Association Tombo Aviation, Inc. Date: _____________ Dear Sirs, 1. You have asked us to render an opinion in connection with the transaction governed, inter alia, by the under mentioned documents. Words and expressions used herein will bear the same meanings as defined in an Aircraft Lease Agreement (MSN 29048) (the "Lease") dated as of October 1, 1998 between First Security Bank, National Association, not in its individual capacity, except as otherwise expressly provided herein, but solely as Owner Trustee, and Compania Panamena de Aviacion, S.A.: (1) the Lease; (2) the constitutional documents comprising [______] of Lessee; and (3) all other documents, approvals and consents of whatever nature and wherever kept which it was, in our judgment and to our knowledge, necessary or appropriate to examine to enable us to give the opinion expressed below. 2. Having considered the documents listed in paragraph 1 above, and having regard to the relevant laws of Panama, we are pleased to advise that in our opinion: (1) Lessee was duly constituted in accordance with the laws of Panama on [______] as [__________] and is a validly existing separate legal entity, is subject to suit in its own name, and, to the best of our knowledge, no steps have been, or are being, taken to appoint a receiver or liquidator over, or to dissolve, Lessee; (2) Lessee has the corporate power to enter into and perform, and has taken all necessary corporate action to authorize the entry into, performance and delivery of, the Lease and the transactions contemplated by the Lease; (3) the entry into and performance by Lessee of, and the transactions contemplated by, the Lease do not and will not: (a) conflict with any laws binding on Lessee; (b) conflict with the constitutional documents of Lessee; or Page 1

The following sections need be reported only if one of the following events has taken place during the foregoing Period: (A) D-Check or equivalent - Complete Section 3 (B) C-Check or equivalent - Complete Section 3 (C) Engine Change or Shop Visit - Complete Section 4 3. MAJOR CHECK REPORT Date of Check: _____________ Total Hours: _____________ Total Cycles: __________ Location: ________________ Agent: _________________ Downtime: ___________Days Type of Check: _______________________________________________ MODS / ADs / SBs Accomplished During Check: ____________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ Next Check Due In: _______________________________ Hours / Months / Years Estimated Date: _________________ 4. ENGINE REMOVAL AND SHOP VISIT REPORT For Removed Engine: _____________________________________ ____________________ Serial Number: ___________________ Date of Removal: ___________________________ Position: ________________________ Airframe Total Hours at Removal: ___________ Engine Total Hours: ______________ Airframe Total Cycles at Removal: __________ Engine Total Cycles: ______________ Reason for Removal: ____________________________________________________________ Repair Agent: __________________________ Location: _____________________________ Intended Workscope: ____________________________________________________________ MODS / ADs / SBs to be Accomplished: ___________________________________________ Or Installed Engine: ___________________________________________________________ Serial Number: ________________ Time Since Last Shop Visit: ____________________ Position: _____________________ Last Shop Visit Description: ___________________ Engine Total Hours: _____________ Next Limiter: ________________________________ Engine Total Cycles: ____________ Time to Next Limiter: ________________________ Page 2

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT Exhibit 10.5 FIRST SECURITY BANK, NATIONAL ASSOCIATION 79 SOUTH MAIN STREET SALT LAKE CITY, UTAH 84111 As of November 6, 1998 Compania Panamena de Aviacion, S.A. (COPA) Avenida Justo Arosemena y Calle 39 Panama 1, Republic of Panama Re: Letter Agreement Amending Lease (MSN 29048) Ladies and Gentlemen: Reference is hereby made to (i) that certain Aircraft Lease Agreement (MSN 29048) ("Lease"), dated as of October 1, 1998 between Compania Panamena de Aviacion, S.A. (COPA), as Lessee (this and all other capitalized terms used but not defined herein shall have the respective meanings set forth in the Lease), and First Security Bank, National Association, not in its individual capacity, but solely as Owner Trustee, as Lessor, and (ii) that certain Side Letter Agreement Involving Aircraft Modification (MSN 29048), dated October 10, 1998 between Beneficiary and Lessee ("Side Letter"). Pursuant to the terms of the Lease and the commitments set forth in the Side Letter, the parties hereto hereby acknowledge and agree to the following terms regarding modifications to the Aircraft: 1. Part 4 of Schedule 1 of the Lease is hereby amended by adding the following three post-production modifications: a. Category IIIa Certification (Boeing Paper) b. Optical QAR c. ACARS with Printer. 2. The costs of the modifications to the Aircraft described in Parts 3 and 4 of Schedule 1 of the Lease (as amended above) in excess of the Modification Limit shall be allocated between the Lessor and Lessee as follows: a. Lessor shall pay for the first $**Material Redacted** of such excess costs; b. At the election of Lessee, which election must be made prior to the Delivery Date, the next $**Material Redacted** of such excess costs shall

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT Exhibit 10.6 AIRCRAFT LEASE AMENDMENT AGREEMENT (MSN 29048) DATED AS OF MAY 21, 2003 BETWEEN WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION, AS LESSOR AND COMPANIA PANAMENA DE AVIACION, S.A. (COPA) AS LESSEE IN RESPECT OF ONE BOEING MODEL 737-71Q AIRCRAFT MANUFACTURER'S SERIAL NUMBER 29048 AIRCRAFT LEASE AMENDMENT AGREEMENT (MSN 29048)

This Aircraft Lease Amendment Agreement (MSN 29048) is made as of the 21 day of May, 2003 between: (1) WELLS FARGO BANK NORTHWEST, NATIONAL ASSOCIATION (formerly known as First Security Bank, National Association) a national banking association whose principal place of business is 299 South Main Street, Salt Lake City, Utah 84111, not in its individual capacity, except as otherwise expressly provided herein, but solely as Owner Trustee ("Lessor"); and (2) COMPANIA PANAMENA DE AVIACION, S.A. (COPA), a company incorporated under the laws of the Republic of Panama whose registered office is at Avenida Justo Arosemena y Calle 39, Panama 1, Republic of Panama ("Lessee"); WHEREAS, Lessor wishes to amend the terms of the Aircraft Lease Agreement dated as of 1 October 1998 (as amended, the "LEASE") in respect of one Boeing model B737-71Q aircraft msn 29048 and Panamanian Registration HP-1370 CMP (the "AIRCRAFT") as set out herein IT IS AGREED as follows: 1. INTERPRETATION 1.1 Section 1.1 of the Lease is amended by adding the following definition thereto: "Amendment Agreement that certain Aircraft Lease Amendment Agreement dated as of May __,2003 by and between Lessor and Lessee. From and after the date hereof, the term "Lease" shall be deemed to mean the Lease as amended by the Amendment Agreement." 1.2 Capitalised terms used herein shall, unless otherwise indicated, bear the same meanings ascribed thereto pursuant to the Lease. The provisions of Clause 1.2 of the Lease apply as if set out herein, mutatis mutandis. 2. REPRESENTATIONS AND WARRANTIES The Lessee hereby repeats the representations and warranties contained in Clause 2.1 of the Lease as if made with reference to facts and circumstances existing as of the date of this Amendment Agreement. For avoidance of doubt, the reference to Lessee's "Accounts" set forth in Clause 2.1(13) (Material Adverse Change) shall be deemed to

refer to the accounts most recently provided by Lessee to Lessor prior to the date of this Amendment Agreement. 3. AMENDMENTS TO LEASE 3.1. TERM: Clause 4.2 of the Lease is hereby amended by adding the words "and Term" to the word "Commencement" in the heading; and by adding a new paragraph to the end thereof as follows: "Provided that the Aircraft has not been earlier redelivered in accordance with this Agreement, this Agreement has not earlier been terminated in accordance with its terms, or Lessor has not earlier received the Agreed Value following an Event of Loss, the Term shall, unless the parties otherwise agree, be automatically extended for successive periods of one year (each an "Extension Term") up to a maximum term ending June 21, 2009 (but subject to an additional extension of one year, at Lessee's choice, commencing June 22, 2009 and ending June 21, 2010, provided that no Event of Default shall have occurred and be continuing at the time of such election and as of June 21, 2009 and that Lessee shall have given Lessor written notice (which, once given, shall be irrevocable) of its election to so extend the Term not less than 12 months prior to June 21, 2009) and the definition of "Expiry Date" set forth in Section 1.1 of the Lease shall be construed accordingly". 3.2 RENT: With effect from May 1, 2003, the definition of "Rent" set forth in Annex A to the Lease is amended by deleting paragraphs (1) and (2) thereof in their entirety and substituting the following: "(1) For the period commencing on May 1, 2003 and throughout each yearly Extension Term up to and until June 21, 2009, $**Material Redacted** per Rental Period; (2) Should Lessee elect to extend the Lease from June 22, 2009 until June 21, 2010 as set forth in Clause 4.2 of the Lease (as amended by Clause 3.1 of the Aircraft Amendment Agreement), each installment of Rent in respect of each Rental Period shall be calculated on the basis of an assumed rent of $**Material Redacted** per month (the "Assumed Rent"). The Assumed Rent is calculated on the assumption that the "Applicable LIBOR" (being 12-month The Bank of Tokyo-Mitsubishi, Ltd. LIBOR as quoted to Lessor two banking days prior to June 22, 2009) is **Material Redacted**% per annum. To the extent that the Applicable LIBOR is higher or lower than **Material Redacted**% per annum, the

Assumed Rent shall be increased (in the case where the Applicable LIBOR is higher than **Material Redacted**% per annum) or reduced (in the case where the Applicable LIBOR is lower than **Material Redacted**% per annum) by $** Material Redacted** each **Material Redacted**% difference between Applicable LIBOR and **Material Redacted**% per annum (and pro rata for fractions of a per cent) to determine the Rent payable by the Lessee on the Rent Dates for each Rental Period occurring on or after June 22, 2009." 3.3. BLENDED WINGLETS: Schedule 4 to the Lease is hereby amended by adding the following as paragraph 1.7 thereof: "Lessor and Lessee agree to the installation of the blended winglets on the Aircraft during any period where it can be reasonably scheduled prior to Redelivery without affecting the commercial program of the Aircraft. Lessor and Lessee shall compare the cost of material and installation available to each of Lessor and Lessee under their respective agreements (collectively, the "APB ARRANGEMENTS") with Aviation Partners Boeing ("APB") and the procurement and installation of the winglets shall be made under and pursuant to the less expensive of the two APB arrangements. Lessor shall either pay to APB the full cost of labor and equipment or reimburse Lessee for same upon presentation to Lessor of the actual invoice. The blended winglets shall remain on the Aircraft at Redelivery." 3.4. ENGINE DERATE: Notwithstanding any other provision of the Lease, Lessor consents to Lessee's decreasing the Engine take-off thrust rating from 24,000lbs. to 22,000lbs. after installation of the blended winglets subject to receipt by Lessor of prior written confirmation (in form and substance satisfactory to Lessor acting reasonably) from the Engine Manufacturer that returning the Engine take-off thrust rating to 24,000lbs. will not result in any cost and, further, the parties agree that Schedule 4 to the Lease is hereby amended by adding the following as paragraph 3.6 thereof: "The take-off thrust rating of the Engines shall be not less than 24,000lbs at Redelivery". 3.5. LETTERS OF CREDIT: Clause 5.1.10 of the Lease is hereby amended by deleting both references therein to "10 days" and by substituting therefor references to "thirty (30) days." Lessor and Lessee agree to attempt in good faith to consolidate the Deposit Letter of Credit and the Supplemental Letter of Credit on terms acceptable to both parties

3.6. MAINTENANCE PAYMENT: Clause 5.3.2(1) of the Lease is hereby amended by deleting the words "during the first 54 months of the Term" and substituting therefor the words "during the 24 month period immediately preceding the date falling six months prior to expiry of the Term". 3.7 AGREED VALUE: Annex A to the Lease is hereby amended by deleting the reference in the definition of "Agreed Value" to "$**Material Redacted**" and substituting therefor: "$**Material Redacted** to be decreased by $**Material Redacted** upon each annual renewal of Lessee's fleet policies during the remainder of the Term". 4. OTHER AGREEMENT 4.1. AIRCRAFT SYSTEM MODIFICATIONS: Lessor and Lessee will separately negotiate in good faith to agree to incorporate (such incorporation to be completed on or before June 1, 2004) certain system upgrades (based on a mutually agreed upon listing of "approved system upgrades") on the Aircraft, and Lessor shall pay up to an aggregate cap of US $**Material Redacted** for such upgrades. Lessor and Lessee agree to amend the Lease being at that time to reflect any such agreement as to incorporation of system upgrades and to reflect a corresponding increased adjustment to the Rent with effect from completion of such incorporation by **Material Redacted**% per month times the total modification costs for such incorporation. For the avoidance of doubt, nothing in this Clause 4.1 shall constitute an amendment to the Lease. For the avoidance of doubt, the cap referenced above and the rent adjustment factor detailed above do not pertain to cost of installation of the blended winglets referenced in Clause 3.3 above. 4.2. ENGINE MAINTENANCE: Lessee will discuss with a qualified engine maintenance services provider acceptable to Lessor acting reasonably for such provider to cover the maintenance of the Engines of the Aircraft ("ENGINES") pursuant to an agreement between such provider and Lessee which shall be in form and substance satisfactory to Lessor (in the reasonable opinion of Lessor). Lessor and Lessee agree to amend the Lease, as may be required to reflect any agreement between them in respect of maintenance of the Engines, which may deviate from the provisions concerning maintenance of the Engines currently set forth in the Lease. For the avoidance of doubt, nothing in this Clause 4.2 shall constitute an amendment to the Lease.

CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT Exhibit 10.7 ================================================================================ AIRCRAFT LEASE AGREEMENT dated as of November 18, 1998 between AVIATION FINANCIAL SERVICES INC. Lessor and COMPANIA PANAMENA DE AVIACION, S.A., Lessee One New Boeing Model 737-700 Aircraft Manufacturer's Serial No. 28607 ================================================================================ EXECUTION COPY

TABLE OF CONTENTS Page ---- 1. Definitions........................................................ 1 2. Lease and Conditions............................................... 8 3. Delivery and Acceptance; Term...................................... 10 (a) Delivery..................................................... 10 (b) Place of Delivery and Acceptance............................. 10 (c) Casualty to the Aircraft, Excusable Delay Preceding Delivery or Damage to Aircraft........................................ 10 (d) Pre-Delivery Acceptance Flight............................... 11 (e) Acceptance of Aircraft....................................... 11 (f) Term of Lease................................................ 12 (g) Lease Term Renewal Options................................... 12 4. Rent............................................................... 12 (a) Rent......................................................... 12 (b) Place and Method of Payment.................................. 12 (c) Prohibition Against Setoff, Counterclaim, Etc................ 13 5. Representations and Warranties..................................... 14 (a) Warranties and Disclaimer of Warranties...................... 14 (b) Manufacturers' Warranties.................................... 15 (c) Lessee's Representations and Warranties...................... 16 6. Possession and Use................................................. 18 (a) Possession................................................... 18 (b) Reciprocal Recognition of Rights............................. 21 (c) Lawful Insured Operations.................................... 21 (d) Maintenance.................................................. 22 (e) Registration................................................. 23 (f) Insignia..................................................... 23 7. Information........................................................ 23 8. Covenants of Lessee................................................ 24 (a) Maintenance of Corporate Existence........................... 24 (b) Maintenance of Status........................................ 24 (c) Payment of Taxes............................................. 24 (d) Consolidation, Merger, Etc................................... 24 (e) Place of Business............................................ 24 (f) Notice of Default............................................ 24 (g) Governmental Consents........................................ 25 (h) Registration, Certification and Filing....................... 25 (i) Suspension, Cessation, Etc................................... 25 (j) No Operation until Registration and Certification............ 25 9. Replacement of Parts; Alterations; Modifications and Additions..... 26 (a) Replacement of Parts......................................... 26 (b) Alterations, Modifications and Additions..................... 26 10. Tax Indemnity...................................................... 28 (a) General Tax Indemnity........................................ 28 (b) Exclusions................................................... 28 (c) FSC Indemnity................................................ 30 i

(d) FSC Benefits................................................. 31 (e) After Tax Basis of Payments.................................. 32 (f) Payments..................................................... 32 (g) Contests..................................................... 33 (h) Reports...................................................... 34 (i) Value Added Taxes............................................ 35 (j) Affiliated Group............................................. 35 (k) Survival..................................................... 35 (l) Tax Treaty Elections......................................... 35 (m) Verification................................................. 35 11. Casualty Occurrences............................................... 36 (a) Casualty Occurrence with Respect to the Airframe............. 36 (b) Casualty Occurrence with Respect to an Engine................ 36 (c) Application of Proceeds and Payments......................... 37 (d) Requisition for Use by Government with Respect to the Aircraft..................................................... 37 (e) Other Dispositions........................................... 38 (f) Application in Default....................................... 38 (g) ICAO Rules and Procedures.................................... 38 12. Insurance.......................................................... 38 (a) Public Liability and Property Damage Insurance............... 38 (b) Insurance Against Loss or Damage............................. 38 (c) Required Policy Designations and Provisions.................. 39 (d) Application of Insurance Proceeds for a Casualty Occurrence.. 40 (e) Application of Insurance Proceeds for Other than a Casualty Occurrence................................................... 41 (f) Application in Default....................................... 41 (g) Certificates of Insurance.................................... 41 13. Indemnification.................................................... 42 14. Liens.............................................................. 44 15. Perfection of Title and Further Assurances......................... 44 16. Return of Aircraft and Records..................................... 45 (a) Return....................................................... 45 (b) Legal Status Upon Return..................................... 45 (c) Engines...................................................... 45 (d) Records...................................................... 45 (e) Service Bulletin and Modification Kits....................... 46 (f) Condition of Aircraft........................................ 46 (g) Final Inspection............................................. 46 (h) Aircraft Documentation....................................... 46 (i) Corrections and Subsequent Corrections....................... 47 (j) Additional Maintenance, Repair or Overhaul................... 47 (k) Functional Check Flight...................................... 47 (l) Technical Acceptance at Return............................... 47 (m) Maintenance Payments at Redelivery........................... 48 (l) Excusable Delay.............................................. 48 17. Events of Default.................................................. 48 18. Remedies........................................................... 50 19. Alienation......................................................... 53 20. Miscellaneous...................................................... 54 (a) Severability and Construction................................ 54 ii

(b) Governing Law; Jurisdiction.................................. 54 (c) Notices...................................................... 55 (d) Lessor's Right to Perform for Lessee......................... 55 (e) Counterparts................................................. 55 (f) Quiet Enjoyment.............................................. 55 (g) Brokers...................................................... 56 (h) Payments in U.S. Dollars..................................... 56 (i) Security Letter of Credit.................................... 56 (j) Security Deposit............................................. 57 (k) Transaction Costs............................................ 57 (l) Time is of the Essence....................................... 57 (m) Disclaimer of Consequential Damages.......................... 58 (n) Agent for Service of Process................................. 58 (o) Entire Agreement; Modification or Revision................... 58 iii

Exhibits Exhibit A - Schedule and Description of Aircraft Exhibit B - Aircraft Documents Exhibit C - Definitions, Values and other Matters Exhibit D - Lease Supplement Exhibit E - Return Condition Requirements Exhibit F-1 - Lessee's Counsel Opinion Exhibit F-2 - Lessee's Counsel Opinion Exhibit G - Letter of Credit Exhibit H - Technical Acceptance Receipt iv

AIRCRAFT LEASE AGREEMENT THIS AIRCRAFT LEASE AGREEMENT dated as of November 18, 1998 between AVIATION FINANCIAL SERVICES INC., a Delaware Corporation, with a principal place of business at 201 High Ridge Road, Stamford, Connecticut 06927 ("Lessor"), and COMPANIA PANAMENA DE AVIACION, S.A., a corporation organized under the laws of the Republic of Panama, with its principal place of business and registered office at Avenida Justo Arosema & Calle 39, Aptdo. 1572, Panama 1, Republic of Panama ("Lessee"). Lessee desires to lease from Lessor and Lessor is willing to lease to Lessee the Aircraft upon and subject to the terms and conditions of this Lease, as hereinafter set forth. In consideration of the mutual promises herein, Lessor and Lessee agree as follows: Section 1. Definitions The following terms shall have the following respective meanings for all purposes of this Lease Agreement: AD means an Airworthiness Directive promulgated by the FAA. Affiliate means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such persons including, without limitation, any limited partnership or grantor trust of which such person or any Affiliate of such person is the sole or co-general partner or managing agent and any trustee of a trust of which the beneficiary is such Person, any Affiliate of such Person, such a limited partnership, or such a grant or trust. Aircraft means the Airframe together with (a) the Engines, whether or not installed on the Aircraft, (b) all Parts or components thereof, (c) spare parts or ancillary equipment or devices furnished with the Aircraft under this Lease, and (d) all substitutions, replacements and renewals of any and all thereof. Aircraft Documents means the items identified on Exhibit B hereto, all of which shall be maintained in the English language, or accompanied by a certified English translation. Airframe means (a) the aircraft described on Exhibit A, but not including any engine installed thereon, and (b) any and all Parts so long as the same shall be incorporated or installed on or attached, to the Airframe, or so long as title thereto shall remain vested, in Owner in accordance with the terms of Section 9, after removal from the Airframe. Appraisal Procedure means the following procedure for determining the "fair market rental value" of the Aircraft. "Fair market rental value" shall mean the value determined by an appraisal completed on an "as is" and "where is" basis. Lessor shall elect an internationally recognized, independent aircraft appraiser certified by the International Society of Transport Aircraft Trading ("ISTAT") who shall make a determination of fair market rental value. The fees and expenses of the aircraft appraiser shall be paid by Lessee.

Approved Auditor means KPMG Peat Marwick or another auditing firm having an internationally recognized reputation and reasonably acceptable to the Lessor. Approved Insurance Broker means J. H. Marsh & McLennan, or any other reputable insurance broker, or reinsurance broker, of internationally recognized responsibility and standing in aircraft insurance. Approved Insurer means any insurer or reinsurer, or insurance broker, or reinsurance broker, of internationally recognized responsibility and standing in aircraft insurance in each case reasonably acceptable to the Lessor. Basic Rent means the amount specified therefor on Exhibit C and payable throughout the Term for the Aircraft pursuant to Section 4(a). Basic Rent Payment Date means each day for payment of Basic Rent determined in accordance with Exhibit C. It is further understood and agreed that if a Basic Rent Payment Date shall fall on a day which is not a Business Day, any payment due on such Basic Rent Payment Date shall be made on the next succeeding Business Day. Business Day means any day other than a Saturday, Sunday or other day on which banking institutions in New York, New York or, in respect of any payments to be made by Lessee hereunder, the Republic of Panama, are authorized or required by law to be closed. "C" Check means a "C" check in accordance with the Lessee's Maintenance Program in effect on the Delivery Date, as modified from time to time by the DAC. Casualty Occurrence means any of the following events with respect to the Aircraft, Airframe or any Engine: (a) loss of such property or its use due to theft or disappearance for a period in excess of sixty (60) consecutive days, or destruction, damage beyond economic repair or rendition of such property permanently unfit for normal use by Lessee for any reason whatsoever; (b) any damage to such property which results in an insurance settlement with respect to such property on the basis of a total loss or on the basis of a compromised or constructive total loss; or (c) the condemnation, confiscation, appropriation or seizure of, or requisition of title to such property, or the use of such property by or on the authority of any Governmental Entity or purported Governmental Entity (excluding therefrom any Governmental Entity, or purported Governmental Entity, of the United States of America), which in any such case shall have resulted in the loss of possession thereof by Lessee for a period in excess of ninety (90) consecutive days (or for such shorter period ending on the date which is seven (7) days from the date of receipt of an insurance settlement with respect to such property on the basis of a total loss). Casualty Value means the value as specified on Exhibit C hereto. Continental means Continental Airlines, Inc. or any of its subsidiaries or Affiliates. "D" Check means a "D" check in accordance with the Lessee's Maintenance Program as in effect on the Delivery Date, as modified from time to time by Lessee and approved by the DAC. 2

DAC means the Direccion General de Aeronautica Civil of the Country of Registration, or any successor Governmental Entity exercising authority with regard to aircraft registration and airworthiness in the Country of Registration comparable to the FAA (as defined below). Damage Notification Threshold means **Material Redacted**. Default means an Event of Default or event which would constitute an Event of Default but for the lapse of time or the giving of notice or both. Delivery Date means the date on which the Aircraft is delivered to Lessee for purposes of this Lease. Delivery Location means the location specified on Exhibit C hereto for the delivery of the Aircraft by Lessor to Lessee. Dollars or "$" means lawful currency of the United States of America. Engine means any engine installed on or furnished in connection with the Aircraft on the Delivery Date, such engines being identified as to manufacturer, type and manufacturer serial number on Exhibit A hereto, and any Replacement Engine which may from time to time be substituted therefor pursuant to Section 11; together in each case with any and all Parts incorporated or installed in or attached thereto or any and all Parts removed therefrom so long as title thereto remains vested in Owner in accordance with the terms of Section 9 after removal from such Engine. Except as otherwise set forth herein, at such time as a Replacement Engine shall be so substituted, such replaced Engine shall cease to be an Engine hereunder. The term "Engines" means, as of any date of determination, all Engines then leased hereunder. Engine Manufacturer means CFM International. Estimated Delivery Date means the date specified on Exhibit C hereto, which the parties anticipate to be the Delivery Date. Estimated Acceptance Date means the date specified on Exhibit C hereto, which the parties anticipate to be the date for Technical Acceptance of the Aircraft. Event of Default shall have the meaning specified in any one or more clauses in Section 17. Excusable Delay means any delay in delivery or redelivery of the Aircraft hereunder not occasioned by the fault or negligence of the party hereto seeking to excuse such delay and due to or arising from any cause beyond such party's reasonable control including, without limitation, (i) acts of the public enemy, civil war, war-like operations, insurrection or riots, or quarantine restrictions, strikes, lockouts, inability to obtain materials, accessories, equipments or parts, delays in transportation or labor stoppages and/or (ii) fire, floods, explosions, earthquakes or epidemics. Expiration Date means the date specified in the Lease Supplement for expiration of the Term. 3

FAA means the Federal Aviation Administration of the United States Department of Transportation or any successor. FAR means the Federal Aviation Regulations set forth in title 14 of the United States Code of Federal Regulations, as amended and modified from time to time. FSC Benefits has the meaning ascribed to it in Section 10(c). GECAS means either or both of GE Capital Aviation Services, Inc. and GE Capital Aviation Services Limited. Governmental Entity means and includes (a) the DAC; (b) any national government, or political subdivision thereof or local jurisdiction therein; (c) any board, commission, department, division, organ, instrumentality, court, or agency of any entity described in (b) above, however constituted; and (d) any association, organization, or institution of which any entity described in (b) or (c) above is a member or to whose jurisdiction any such entity is subject or in whose activities any such entity is a participant but only (except for purposes of defining Law below) to the extent that any of the preceding have jurisdiction over the Aircraft or its operations. Head Lease means that certain Aircraft Lease Agreement, of even date herewith, between Owner, as lessor, and Lessor, as lessee, with respect to the Aircraft. Indemnitee means Owner, Lessor, GECAS and their respective officers, directors, shareholders, subsidiaries, agents, employees and their respective successors and assigns. Interim Rent for the Aircraft means the rent determined as provided on Exhibit C and payable on the Final Acceptance Date. Law means and include (a) any statute, decree, constitution, regulation, order, judgment or other directive of any Governmental Entity; (b) any treaty, pact, compact or other agreement to which any Governmental Entity is a signatory or party; (c) any judicial or administrative interpretation or application of any Law described in (a) or (b) above; and (d) any amendment or revision of any Law described in (a), (b) or (c) above. Lease means this Lease, the Lease Supplement, Letter Agreement No. 1, and any and all amendments, revisions, supplements and modifications thereto. Lease Supplement means the Lease Supplement No. 1, substantially in the form of Exhibit D hereto, dated the Delivery Date and entered into between Lessor and Lessee. Lessee's Actual Cost means Lessee's cost incurred in performing an obligation under this Lease determined as follows: (i) if Lessee elects that such obligation be performed by a third party, then Lessee's Actual Cost shall be the actual charges of such third party paid by Lessee (without markups or overhead by Lessee); and (ii) if Lessee elects that such obligation be performed by Lessee or Continental, then Lessee's Actual Cost shall be Lessee's or Continental's direct cost for labor and materials, plus a percentage of such direct cost to cover overhead, which percentage shall be determined by mutual agreement of Lessor and Lessee, prior to commencing performance; 4

provided that if Lessor and Lessee do not reach such mutual agreement such obligation shall be performed by a third party. Lessor's Duty to Repair means the obligation of the Lessor, as expressly described in Section 3(d), to correct discrepancies agreed upon but not corrected due to the unavailability of any spare parts and shall not mean or include any other duty of the Lessor and shall not be interpreted to impose any other duty on the Lessor. Lessor's Liens means Liens arising as a result of (a) claims against Lessor or Owner not related to the transactions contemplated by this Lease; or (b) acts of Lessor or Owner, not contemplated and expressly permitted under this Lease; or (c) Taxes imposed against Lessor or Owner which are not required to be indemnified against by Lessee pursuant to Section 10; or (d) claims against Lessor or Owner arising out of the voluntary transfer by Lessor or Owner of all or any part of their respective interests in the Aircraft or this Lease, other than a transfer pursuant to Sections 11 or 18 hereof. In each case, references in this definition to "Lessor" and "Owner" shall include their respective successors and assigns. Letter Agreement No. 1 means that certain letter agreement dated the date of this Lease between Lessor and Lessee addressing certain related matters, which constitutes a part of this Lease and is expressly incorporated herein by reference. Letter of Credit means an irrevocable Letter of Credit ("LC") issued and drawn upon and payable by, or confirmed by, a commercial bank domiciled and licensed in the United States of America reasonably acceptable to Lessor and in form and substance similar to Exhibit G, as security for all payment obligations of Lessee to Lessor under this Agreement (including damages), which shall remain in full force and effect until the Required LC Expiry Date. The Letter of Credit may have a validity period or periods ending prior to the Required LC Expiry Date, provided that (i) the Letter of Credit shall, in each case, be renewed and delivered to Lessor not later than 15 days prior to its expiry; and (ii) a Letter of Credit shall remain in force at all times up to the Required LC Expiry Date. LIBOR means a rate per annum, equal to the rate at which United States dollar deposits on three month maturities are offered by prime banks in the London inter-bank market to Lessor or its nominee at or about 11 a.m. London time as of any date on which interest is to be calculated hereunder. Lien means any mortgage, pledge, lien, charge, encumbrance, hypothecation, lease, exercise of rights, security interest or claim or other type of preferential arrangement, including without limitation any equivalent arrangement created or arising under the Law of the Country of Registration. Maintenance Program means a DAC approved maintenance program as in effect from time to time for the Aircraft encompassing scheduled maintenance, condition monitored maintenance and on-condition maintenance of the Airframe, Engines and components of the Aircraft. Manufacturer means Boeing Company. 5

Mortgage Convention means the Convention for the International Recognition of Rights in Aircraft, signed (ad referendum) at Geneva, Switzerland, on June 19, 1948, and amended from time to time, but excluding the terms of any adhesion thereto or ratification thereof containing reservations to which the United States of America does not accede. Owner means Alcyone FSC Corporation, a company incorporated under the Laws of Barbados and having its principal place of business at c/o Corporate Services, Price Waterhouse Centre, St. Michael, Barbados. Part 36 means part 36 of title 14 of the United States Code of Federal Regulations, as amended or modified from time to time. Part 129 means part 129 of title 14 of the United States Code of Federal Regulations, as amended or modified from time to time. Parts means all appliances, components, parts, instruments, appurtenances, accessories, furnishings and other equipment of whatever nature (other than complete Engines or engines), which may now or from time to time be incorporated or installed in or attached to the Airframe or any Engine and that meet the requirements of the FAA regulations found at Part 129 and any other laws, rules or regulations relating to the Aircraft, as the same may be amended or modified from time to time, or that remain the property of the Owner pursuant to the terms of Section 9 despite removal therefrom. Except as otherwise set forth herein, at such time as a replacement part shall be substituted for a Part in accordance with Section 9 hereof, the Part so replaced shall cease to be a Part hereunder. Permitted Sublease means a sublease with Continental or a sublease with another Person which has the prior written consent of Lessor (which consent shall not be unreasonably withheld) and which complies with all of the provisions of Section 6(a)(iii) hereof. Person means and include any individual person, corporation, partnership, firm, joint stock company, joint venture, trust, estate, unincorporated organization, association or Governmental Entity. Purchase Agreement means the Purchase Agreement between the Manufacturer and Owner and the Aircraft Specification D6-38808-34, Revision A - July 16, 1998, except as amended by change orders initiated by Lessor under the terms thereof prior to the date of this Lease (which change orders have been delivered to Lessee prior to the date hereof), or change orders initiated by Lessor with the consent of Lessee under the terms thereof after the date of this Lease, which change orders shall have been delivered to Lessee prior to the Delivery Date. Related Leases means any and all leases of aircraft between Lessor or any Affiliate of Lessor, as lessor, and Lessee as lessee. Rent means Interim Rent, Basic Rent and Supplemental Rent, collectively. Replacement Engine means an engine of the same manufacturer and model, and having substantially equivalent value, utility, modification status, and the same certified thrust rating, as the 6

Engine it is intended to replace under Section 11(b) hereof, or, at Lessee's option, an engine of the same manufacturer as such Engine but of an improved model, and otherwise of an equivalent value and utility and suitable for installation and use on the Airframe without impairing the value or utility of the Airframe and compatible with the remaining installed Engine. Required LC Expiry Date means the date which occurs thirty days after the Expiration Date. Return Occasion means the event that occurs when possession of the Aircraft is returned from Lessee to Lessor at the end of the Term of this Lease or upon Lessor taking possession pursuant to Section 18 hereof. Security Deposit means the Security Deposit referred to in Section 20(j) hereof. Security Letter of Credit or the Letter of Credit means the Letter of Credit referred to in Section 20(i) hereof. Supplemental Rent means any and all amounts, liabilities and obligations (other than Interim Rent and Basic Rent) which Lessee assumes or agrees to pay hereunder, or under any document delivered pursuant hereto, to Lessor, including without limitation, (a) any payment of Casualty Value; (b) any payment of indemnity required by Sections 10 and 13 hereof; (c) any payment of deposits; (d) any payment in respect of Maintenance Costs required by Section 16(m); and (e) to the extent permitted by applicable Law, interest at the Interest Rate (all computations of interest under this Lease to be made on the basis of a 365-day year for the actual number of days elapsed) calculated: (i) on any part of any installment of Basic Rent not paid on the due date thereof for the period the same remains unpaid and (ii) on any Supplemental Rent not paid when due hereunder until the same is paid. Taxes means any and all Value Added Taxes, sales, use, business, gross income, personal property, transfer, fuel, leasing, occupational, excess profits, excise, gross receipts, franchise, stamp, income, levies, imposts, withholdings or other taxes or duties of any nature, or amounts in lieu thereof, together with any penalties, fines, charges or interest thereon. Technical Acceptance of the Aircraft means acceptance of the Aircraft as described in Section 3(d). Technical Acceptance Date of the Aircraft means the date on which Technical Acceptance of the Aircraft occurs. Technical Acceptance Receipt means a receipt executed substantially in the form of Exhibit H hereto. Term means the term of this Lease, specified in the Lease Supplement, as may be extended in accordance with the terms hereof. Value Added Taxes means any value added tax and any sales or turnover tax, imposition or levy of a like nature. 7

Wet Lease means any arrangement whereby Lessee agrees to furnish the Aircraft to a third party pursuant to which (i) Lessee's crew at all times shall maintain full operational control of the Aircraft, (ii) the Aircraft shall be operated solely by regular employees of Lessee possessing all current appropriate DAC certificates and licenses (it is understood that cabin attendants need not be regular employees of Lessee), (iii) the insurance required under Section 12 hereof shall remain in full force and effect and (iv) the Aircraft shall be maintained by Lessee in accordance with its normal maintenance practices. Year 2000 Compliance has the definition given to it in Section 5(a) hereof. The terms Country of Organization, Country of Registration, Engine Manufacturer, Final Acceptance Date, Interest Rate, Last Basic Rent Payment Date, Lease Identification, Lessee's Address, Lessor's Address, Manufacturer and Payment Location have the meanings set forth on Exhibit C hereto. Where words or phrases are set forth in all upper case letters, an underscored first letter indicates that the word or phrase is a defined term hereunder. Section 2. Lease and Conditions. (a) Lessor hereby agrees to lease the Aircraft to Lessee, and Lessee hereby agrees to lease the Aircraft from Lessor, on the terms of this Lease, as supplemented by the Lease Supplement and Letter Agreement No. 1. (b) Lessor's obligation to commence the leasing of the Aircraft hereunder to Lessee shall be conditioned upon the absence of any Default hereunder, the absence of any material adverse change in the financial condition, affairs or operations of Lessee, from that existing on September 30, 1998 as reflected in the financial statements of the Lessee delivered to the Lessor, and the receipt by Lessor of the following documents on or before the Delivery Date for the Aircraft (and Lessor agrees to use its reasonable efforts to co-operate in obtaining such documents), all of which shall be reasonably satisfactory in form and substance to Lessor: (i) a Lease Supplement in the form of Exhibit D completed, executed and delivered by Lessee, and effective as of the Delivery Date of the Aircraft; (ii) Letter Agreement No. 1, duly executed and delivered by Lessee, in the form attached hereto as Exhibit D (with appropriate insertions); (iii) evidence of the Security Letter of Credit having been delivered pursuant to Section 20(i) hereof or, in the alternative, evidence of the Security Deposit having been delivered pursuant to Section 20(j) hereof; (iv) a copy of the provisional certificate of registration for the Aircraft issued by the DAC, certified by a duly authorized officer of Lessee; (v) a copy of the Memorandum and Articles of Association of Lessee, certified by a duly authorized officer of Lessee; 8

(vi) copies of the resolutions of the Board of Directors of Lessee approving and authorizing the execution, delivery and performance of the Lease, the Lease Supplement, Letter Agreement No. 1 and any and all other documents required to be executed and delivered on its behalf, certified by a duly authorized officer of Lessee and naming a person or persons authorized and appointed to execute and deliver each such document on behalf of Lessee and give all notices and take all other action required of Lessee thereunder; (vii) a certificate of a duly authorized officer of Lessee setting forth the names and signatures of the persons authorized and appointed to execute and deliver on behalf of Lessee the documents referred to in (vi) above and to take any action contemplated therein; (viii) copies, certified by a duly authorized officer of Lessee of each consent, license, authorization or approval of, and exemption by, each Governmental Entity or other authority (if any) as may be necessary to authorize the execution, delivery and performance by Lessee of the Lease and any document delivered pursuant thereto and to consummate the transactions contemplated thereby and to permit the payment and remittance of all payments to be made to the Lessor in such currency or currencies, at such times, at such places and in such manner as provided for under the Lease and any document delivered pursuant thereto; (ix) evidence reasonably satisfactory to the Lessor of the due and binding acceptance by the Lessee's appointees of their appointments as agents for the service of process in any action or proceeding instituted in the courts of the United States of America in connection with or arising out of the Lease and any other documents executed in connection therewith; (x) a power of attorney in form and substance satisfactory to the Lessor, duly signed by Lessee and notarized and legalized so that the power of attorney will be valid and legally binding in accordance with the laws of the Country of Registration (with Lessee to pay all costs associated with such notarization and legalization), irrevocably empowering the Lessor or Owner or their respective assignee or designee, upon termination of the Lease, pursuant to the terms of the Lease, whether as a result of an Event of Default, upon expiration of the Term or otherwise, to execute in Lessee's name and on Lessee's behalf all documents deemed necessary or desirable by the Lessor to release, terminate and void Lessee's interest in the Aircraft leased hereunder, to deregister the Aircraft and the Lease and to export (if required) the Aircraft and to file such documents for registration or recordation with the DAC, and any other appropriate Governmental Entity, and otherwise to effect any of the rights and remedies contemplated by the Lease; (xi) a certificate of a duly authorized officer of Lessee confirming that each document (or a certified copy thereof) required to be filed by Lessee under applicable Law has been, or will after execution be, filed with the relevant Governmental Entities in the Country of Registration; (xii) a Technical Acceptance Receipt, in the form of Exhibit H, dated, executed and delivered by Lessee; (xiii) a certificate signed by the chief executive officer or the chief financial officer, or their equivalent, of Lessee, dated the Delivery Date, stating that: (A) the representations and warranties contained in Section 5(c) hereof are true and accurate on and as of such date as 9

though made on and as of such time; and (B) no event has occurred and is continuing, or would result from the lease of the Aircraft, which constitutes a Default or an Event of Default; (xiv) one or more certificates, dated as of the Delivery Date, each signed by an Approved Insurer or by an Approved Insurance Broker which together evidence that the insurance as required by Section 12 hereof is in full force and effect and a certificate from the reinsurance broker certifying that the reinsurance required to be maintained is in full force and effect; (xv) the legal opinions, in English, signed by Lessee's independent counsel, dated the Delivery Date, substanitally in the respective forms set forth in Exhibit F-1 and Exhibit F-2 hereto; provided, however, that the opinion set forth in Exhibit F-2 may be delivered as provided in Section 8(h) hereof; (xvi) if required, an export license with respect to the Aircraft, duly authorized and issued to Lessor by the Office of Export Licenses, United States Department of Commerce, which export licenses shall be obtained by Lessor at its sole expense; (xvii) if required, a true and complete copy of the import license with respect to the Aircraft, duly authorized and issued to Lessor or Lessee, as appropriate, by the appropriate Governmental Entity of the Government of Organization and the Government of Registration, which licenses shall be obtained by Lessee at its sole expense; and (xviii) such financial information concerning Lessee and such other documents and evidence (if any) with respect to Lessee's compliance with the conditions set forth in this Section 2 as the Lessor or its counsel may reasonably request. Section 3. Delivery and Acceptance; Term. (a) Delivery. It is anticipated that the Aircraft will become available (i) for Technical Acceptance on or about the Estimated Acceptance Date set forth on Exhibit C and (ii) for delivery on or about the Estimated Delivery Date set forth on Exhibit C. (b) Place of Delivery and Acceptance. Technical Acceptance and delivery of the Aircraft will occur at the Acceptance Location set forth on Exhibit C. (c) Casualty to the Aircraft, Excusable Delay Preceding Delivery or Damage to Aircraft. In the event of a Casualty Occurrence with respect to the Aircraft prior to its delivery, Lessor shall promptly notify Lessee in writing, and this Lease shall terminate upon receipt of such written notice. In the event of an Excusable Delay with respect to the Aircraft which delays the delivery of the Aircraft hereunder to a date which is more than six months beyond the Estimated Delivery Date, or such later date as may be mutually agreed to by Lessor and Lessee, Lessor shall promptly notify Lessee in writing thereof, and at the option of either Lessor or Lessee, this Lease shall terminate with respect to the Aircraft (provided that such Excusable Delay is beyond the control of and is not occasioned by the fault or negligence of the party so electing) upon receipt of written notice thereof by the other party. Upon such termination, Lessor shall return to Lessee any and all Rent or other amounts (including any Security Deposit), and any Letter of Credit, theretofor received by Lessor with respect to the Aircraft or this Lease. Neither Lessor nor Lessee shall be 10

responsible for the failure to deliver the Aircraft hereunder due to an Excusable Delay, provided that such Excusable Delay is beyond the control of and is not occasioned by the fault or negligence of such party. (d) Pre-Delivery Acceptance Flight. On or about the Estimated Acceptance Date, the Manufacturer shall perform (at no cost and expense to Lessee, except for the costs of Lessee's representatives or designees, which costs shall be borne by Lessee) an operational ground check and acceptance flight of the Aircraft in accordance with the Manufacturer's ground check and acceptance flight procedures in the vicinity of the Delivery Location in order to demonstrate that the Aircraft satisfies the delivery conditions set forth in Exhibit A hereto. The Manufacturer shall perform a power assurance check with respect to each Engine in accordance with the Manufacturer's standard procedures for new aircraft deliveries if such check is part of the Manufacturer's standard acceptance procedures for such aircraft. The Aircraft Documents for the Aircraft shall be made available to Lessee for inspection during such ground check and acceptance flight periods in accordance with the Manufacturer's standard procedures for new aircraft deliveries. To facilitate such inspection Lessor, or Manufacturer, shall provide reasonable office accommodation at or near the inspection site (equipped with a telephone and having access to photocopier and telecopier facilities). Upon completion of the pre-delivery inspection and acceptance flight, as provided in this Section 3(d) and provided the Aircraft is in the condition set forth in Exhibit A hereto, Lessee shall execute and deliver a Technical Acceptance Receipt, in the form annexed hereto as Exhibit H. Execution and delivery of the Technical Acceptance Receipt shall be deemed to constitute the Lessee's acknowledgment and acceptance that all conditions to delivery specified herein have been fully satisfied, subject to Lessor's Duty to Repair, if any. Lessee shall indemnify and hold harmless each Indemnitee from and against any and all actions, causes of action, claims, judgments, liabilities, damages, losses, costs and expenses: (i) for all injuries to or deaths of Lessee's representatives or designees during any ground check, acceptance flights, checks or inspections under this section, except to the extent that such injuries or deaths arise out of or are caused by the gross negligence or willful misconduct of such Indemnitee, or (ii) for loss of or damage to property of Lessee or its representatives or designees pursuant to this section, except to the extent that such loss or damage arises out of or is caused by the gross negligence or willful misconduct of such Indemnitee. In the event any claim is made or suit is brought against Lessor, Lessee, or their respective Affiliates or their respective directors, officers, employees, agents or servants for damages for deaths or injuries or property damage, the liability for which has been assumed by the other party pursuant to this section, the former shall promptly give notice to the other parties, and such parties shall have the right to assume and conduct the defense thereof, or to effect any settlement which it, in its opinion, deems proper. For the purpose of this section, any claim or suit against any of the directors, officers, employees, servants and agents of Lessor or Lessee or their respective Affiliates, as the case may be, shall be deemed to be a claim or suit against Lessor or Lessee, as the case may be. (e) Acceptance of Aircraft. The Aircraft to be leased hereunder shall be delivered to Lessee on the Delivery Date meeting the conditions specified in Exhibit A hereto and otherwise 11

"AS IS," "WHERE IS" and on and after the Delivery Date SUBJECT TO EACH AND EVERY DISCLAIMER OF WARRANTY AND REPRESENTATION AS SET FORTH IN SECTIONS 5(a) AND (b) HEREOF. Upon the satisfaction of such conditions, Lessee shall execute a Technical Acceptance Certificate and the leasing of the Aircraft hereunder shall commence. Following execution and delivery of the Technical Acceptance Receipt and upon tender of delivery hereunder by Lessor, Lessee shall accept delivery of the Aircraft. Lessee shall thereupon indicate and confirm its acceptance of delivery of the Aircraft by execution and delivery to Lessor of a Lease Supplement, dated the Delivery Date, in the form set forth as Exhibit D. (f) Term of Lease. The Term of this Lease shall commence on the Delivery Date and shall continue until the Expiration Date set forth in the Lease Supplement; provided that this Lease may be earlier terminated or extended pursuant to the provisions hereof. (g) Lease Term Renewal Options. Lessor hereby grants Lessee the right to renew the lease for up to three (3) additional, consecutive terms (each a "Renewal Term") (the option to renew for each Renewal Term being hereafter referred to as the "Renewal Option"). Each Renewal Term shall consist of twelve (12) months, and the first Renewal Term would commence the day following the Expiry Date of the initial Basic Term. Exercise of each Renewal Option shall be subject to (i) the delivery by Lessee of written notice to Lessor (a "Renewal Notice") as to such exercise at least nine (9) months prior to the then applicable Expiry Date, and (ii) no Event of Default shall have occurred and be continuing on or as of the date the Renewal Notice is received by Lessor or the first Rent Date of the applicable Renewal Term. The Basic Rent during any such Renewal Term shall be payable monthly in advance at the average monthly Basic Rent rate paid by Lessee over the initial sixty (60) months of the Basic Term. At the commencement of a Renewal Term the Basic Term shall be deemed extended to include such Renewal Term. Except for the Rent as specified above, the revised Expiry Dates and the exercised Renewal Option which shall be deemed extinguished with the related extension of the Basic Term, all terms and conditions of this Agreement as applicable during the initial Basic Term shall remain in full force and effect for any Renewal Term. Section 4. Rent (a) Rent. Lessee covenants and agrees to pay to Lessor, or its assigns, the following as Rent: (i) Interim Rent: The Interim Rent as determined pursuant to Exhibit C hereto in respect of the Aircraft on the Interim Rent Payment Date. (ii) Basic Rent: The Basic Rent as set forth on Exhibit C hereto throughout the Term hereof, payable in consecutive installments and due on each Basic Rent Payment Date. (iii) Supplemental Rent: Any and all Supplemental Rent as the same becomes due. (b) Place and Method of Payment. All Interim Rent, Basic Rent and Supplemental Rent and other amounts payable under this Lease shall be paid in immediately available funds in Dollars, at the Payment Location specified on Exhibit C hereto, or at such other location in the United States 12

as Lessor shall designate in writing. (c) Prohibition Against Setoff, Counterclaim, Etc.. This Lease is a net lease. Lessee's obligation to pay all Rent due hereunder (it being specifically acknowledged that upon performance in full of Lessee's obligations under Section 11(a) hereof Lessee would have no further obligation to pay Rent hereunder) shall be absolute and unconditional and shall not be affected or reduced by any circumstances, including, without limitation, (i) any setoff, counterclaim, recoupment, defense or other right which Lessee may have against Lessor, the Manufacturer, the Engine Manufacturer, any seller of or person providing services with respect to the Aircraft or any other Person, for any reason whatsoever; (ii) any defect in the title, airworthiness or eligibility for registration under applicable Law, or any condition, design, operation or fitness for use of, or any damage to or loss or destruction of, the Aircraft, or any interruption or cessation in the use or possession thereof by Lessee for any reason whatsoever, whether arising out of or related to an act or omission of Lessee, or any other Person; (iii) any Liens with respect to the Aircraft; (iv) the invalidity or unenforceability or lack of due authorization or other infirmity of this Lease or any absence of right, power or authority of Lessor or Lessee to enter into this Lease; (v) any insolvency, bankruptcy, reorganization or similar proceedings by or against Lessor or Lessee; (vi) any other circumstance or happening of any nature whatsoever, similar to any of the foregoing; or (vii) any Taxes; it being the express intention of Lessor and Lessee that all Rent payable hereunder shall be payable in all events, unless the obligation to pay the same shall be terminated pursuant to the express provisions of this Lease. Lessee hereby waives, to the extent permitted by applicable Law, any and all rights which it may now have or which at any time hereafter may be conferred upon it, by Law or otherwise, to terminate this Lease or any obligation imposed upon Lessee hereunder or in relation hereto. Nothing contained in this Lease shall be construed as a waiver of Lessee's right to seek, or its entitlement to, damages, specific performance, separate recovery of any payment of Rent made by Lessee which is not due and payable in accordance with the terms of this Lease or other remedies at law or equity and any combination thereof, as against Lessor, Owner or other Person having an interest herein through Lessor, Owner or any other Person as shall be liable therefor, on account of any failure of Lessor, Owner or any other such Person to perform its obligations under this Lease or on account of any act or omission of Lessor, Owner or any other such Person or to enforce any judgment therefor. Nothing contained in this Section shall be construed as a waiver of Lessee's right to seek a separate recovery of any payment of Rent which is not due and payable in accordance with the terms of this Lease. If for any reason whatsoever this Lease shall be terminated in whole or in part by operation of law, to the extent permitted by applicable Law, and provided Lessee has not been deprived of possession and use of the Aircraft under and in accordance with the provisions of this Lease as a consequence of such termination, Lessee nonetheless agrees to pay to Lessor amounts equal to the Rent payments hereunder at the time such payments would have become due and payable in accordance with the terms hereof had this Lease not been terminated, and so long as such payments are made and all other terms and conditions hereof are complied with by Lessor and Lessee, Lessor and Lessee will deem this Lease to remain in full force and effect; provided, however that if any 13

court validly exercising jurisdiction with respect to this Lease orders the return of the Aircraft and such order is final and non-appealable and binding upon the parties, and Lessee, in compliance with such court order, returns the Aircraft to the Lessor in accordance with the terms of this Lease (including Section 16) and such order, Lessee shall have no further obligation to pay Rent hereunder to the Lessor that otherwise would accrue from and after the date of such return. Section 5. Representations and Warranties. (a) Warranties and Disclaimer of Warranties. AS AMONG LESSOR, OWNER, GECAS AND LESSEE, THE AIRCRAFT IS TO BE LEASED HEREUNDER "AS IS" AND "WHERE IS" AND ON THE DELIVERY DATE MEETING THE DELIVERY CONDITIONS SET FORTH IN EXHIBIT A HERETO. NONE OF LESSOR, OWNER AND GECAS HAS AND OR SHALL BE DEEMED TO HAVE MADE (WHETHER BY VIRTUE OF HAVING ACQUIRED THE AIRCRAFT OR LEASED IT UNDER THIS LEASE, OR HAVING DONE OR FAILED TO DO ANY ACT, OR HAVING ACQUIRED OR FAILED TO ACQUIRE ANY STATUS UNDER OR IN RELATION TO THIS LEASE OR OTHERWISE), AND LESSOR, OWNER AND GECAS HEREBY SPECIFICALLY DISCLAIM, ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE TITLE (EXCEPT AS HEREIN BELOW PROVIDED), AIRWORTHINESS, VALUE, DURABILITY, COMPLIANCE WITH SPECIFICATIONS, CONDITION, DESIGN, OPERATION, MERCHANTABILITY, FREEDOM FROM CLAIMS OF INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS, OR FITNESS FOR USE FOR A PARTICULAR PURPOSE OF THE AIRCRAFT, OR AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP, THE ABSENCE THEREFROM OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, OR AS TO ANY OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED (INCLUDING ANY IMPLIED WARRANTY ARISING FROM A COURSE OF PERFORMANCE OR DEALING OR USAGE OF TRADE), WITH RESPECT TO THE AIRCRAFT; AND LESSEE HEREBY WAIVES, RELEASES, RENOUNCES AND DISCLAIMS EXPECTATION OF OR RELIANCE UPON ANY SUCH WARRANTY OR WARRANTIES. NONE OF LESSOR, OWNER AND GECAS SHALL HAVE ANY RESPONSIBILITY OR LIABILITY TO LESSEE OR ANY OTHER PERSON, WHETHER ARISING IN CONTRACT OR TORT OUT OF ANY NEGLIGENCE OR STRICT LIABILITY OF LESSOR, OWNER OR GECAS OR OTHERWISE, FOR (i) ANY LIABILITY, LOSS OR DAMAGE CAUSED OR ALLEGED TO BE CAUSED DIRECTLY OR INDIRECTLY BY THE AIRCRAFT OR ANY ENGINE OR BY ANY INADEQUACY THEREOF OR DEFICIENCY OR DEFECT THEREIN OR BY ANY OTHER CIRCUMSTANCE IN CONNECTION THEREWITH, (ii) THE USE, OPERATION OR PERFORMANCE OF THE AIRCRAFT OR ANY RISKS RELATING THERETO, (iii) ANY INTERRUPTION OF SERVICE, LOSS OF BUSINESS OR ANTICIPATED PROFITS OR CONSEQUENTIAL DAMAGES OR (iv) THE DELIVERY, OPERATION, SERVICING, MAINTENANCE, REPAIR, IMPROVEMENT OR REPLACEMENT OF THE AIRCRAFT. NONE OF LESSOR, OWNER AND GECAS WILL HAVE ANY LIABILITY OR OBLIGATION WHATSOEVER IN CONNECTION WITH, THE YEAR 2000 COMPLIANCE (AS HEREINAFTER DEFINED) OF THE AIRCRAFT OR ANY PART THEREOF. FOR PURPOSES OF THIS AGREEMENT, THE TERM "YEAR 2000 COMPLIANCE" SHALL MEAN AND INCLUDE THE ABILITY 14

OF THE AIRCRAFT AND EACH PART THEREOF TO ACCURATELY PROCESS, PROVIDE AND/OR RECEIVE DATE/TIME DATA (INCLUDING WITHOUT LIMITATION CALCULATING, COMPARING, OUTPUTTING AND SEQUENCING), WITHIN, FROM, INTO, AND BETWEEN THE TWENTIETH CENTURY AND THE TWENTY-FIRST CENTURY, INCLUDING LEAP YEAR CALCULATIONS SUCH THAT NEITHER THE AIRCRAFT NOR ANY PART THEREOF OR SERVICE RELATED THERETO WILL BE AFFECTED BY DATES/TIMES PRIOR TO, ON, AFTER OR SPANNING JANUARY 1, 2000. THE WARRANTIES AND REPRESENTATIONS SET FORTH IN THIS SECTION 5(a) ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, AND LESSOR SHALL NOT BE DEEMED TO HAVE MADE ANY OTHER WARRANTIES, EXCEPT THAT: (i) Lessor warrants that on the Delivery Date title to the Aircraft shall be vested in Owner and the Aircraft shall be free and clear of any and all Liens other than Lessor's Liens; (ii) Lessor further represents and warrants that Lessor is a corporation duly organized and validly existing and in good standing under the laws of Delaware, and has the corporate power and authority to carry on its business as presently conducted and to perform its obligations under this Lease; (iii) Lessor further represents and warrants that the Head Lease has been duly entered into by the parties thereto, remains in full force and effect as of the date hereof and no default or event of default (as defined therein) has occurred and is continuing thereunder; and the making and performance by Lessor of this Lease have been duly authorized by all necessary corporate action on the part of Lessor and will not violate any provision of law or its Articles of Incorporation; and (iv) Lessor further represents and warrants that this Lease (including Letter Agreement No. 1 and any other document to be executed by Lessor pursuant to the terms hereof) has been duly entered into and delivered by Lessor, and that this Lease does, and such other documents when executed and delivered hereunder will, constitute legal, valid and binding obligations of Lessor, enforceable in accordance with their respective terms except as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally, and, to the extent that certain remedies require or may require enforcement in equity, by such principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) as a court having jurisdiction may impose and by laws which may affect some of such remedies but which do not make available remedies inadequate for the substantial realization of the benefits provided herein. (b) Manufacturers' Warranties. So long as (i) no Event of Default has occurred and is continuing, (ii) the Lease has not terminated, or (iii) Lessor has not terminated this Lease following an Event of Default, Lessor agrees to authorize Lessee to exercise for the account of Lessor and Owner such rights as Lessor or Owner may have under any warranty, express or implied, with respect to the Aircraft made by the Manufacturer, the Engine Manufacturer, or the manufacturer of any Part, to the extent that the same may be assigned or otherwise made available to Lessee, and Lessee shall be entitled to reimbursement from any monetary settlement under any such warranty; provided, however, that upon an Event of Default and termination of this Lease all such rights shall 15

immediately revert to Lessor to the exclusion of Lessee including all claims thereunder whether or not perfected. Upon Lessee's request, Lessor shall execute and deliver (or cause Owner to execute and deliver) to Lessee such assignments or other instruments as shall be required by the Manufacturer, the Engine Manufacturer, or the manufacturer of any Part, to enable Lessee to obtain the benefit of any assignable warranties and indemnities given to Lessor or Owner by Manufacturer, the Engine manufacturer and other vendors with respect to the Aircraft. To the extent that any warranty or indemnity given to Lessor by Manufacturer and others with respect to the Aircraft cannot be assigned, Lessee will be entitled to take such action to enforce such warranty or indemnity in the name of Lessor against Manufacturer and such other parties as Lessee sees fit, but subject to Lessee indemnifying Lessor against all costs and expenses associated with such action. (c) Lessee's Representations and Warranties. Lessee hereby makes the following representations and warranties, which representations and warranties shall survive the execution and delivery of this Lease and the delivery of the Aircraft: (i) Lessee is a corporation duly organized, and existing in good standing under the Laws of the Country of Organization and has the corporate power and authority to carry on its business as presently conducted and to perform its obligations under this Lease; (ii) this Lease has been duly authorized by all necessary corporate action on the part of Lessee and does not require any approval of stockholders of Lessee (or if such approval is required, such approval has been obtained), and neither the execution and delivery hereof nor the consummation of the transactions contemplated hereby nor compliance by Lessee with any of the terms and provisions hereof will contravene any Law applicable to Lessee or result in any breach of, or constitute any default under, or result in the creation of any lien, charge or encumbrance upon any property of Lessee under, any credit agreement or instrument, corporate charter or by-law or other agreement or instrument to which Lessee is a party or by which Lessee or its properties or assets are bound or affected; (iii) Lessee has received every consent, approval or authorization of, and has given every notice to, each Governmental Entity having jurisdiction with respect to the execution, delivery or performance of this Lease (including all monetary and other obligations hereunder) that is required for Lessee to execute and deliver this Lease and each such consent, approval or authorization is valid and effective and has not been revoked, and on or before the Delivery Date Lessee will have received such consents, approvals or authorizations, or will have given such notices in order to perform the transactions contemplated hereby; (iv) this Lease (including Letter Agreement No. 1) has been duly executed and delivered by Lessee, and the Lease does, and the Lease Supplement when executed and delivered by Lessee will, constitute legal, valid and binding obligations of Lessee, enforceable in accordance with their respective terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally, and, to the extent that certain remedies require or may require enforcement by a court of equity, by such principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) as a court having jurisdiction may impose and by laws which may affect some of such remedies but which do not make the available remedies inadequate for the substantial realization of the benefits provided herein; 16

(v) there are no suits or proceedings pending or, to the knowledge of Lessee, threatened in any court or before any regulatory commission, board or other administrative Governmental Entity against or affecting Lessee which would reasonably be expected to materially and adversely affect Lessee's ability to perform its obligations hereunder; (vi) Lessee has filed or caused to be filed all tax returns which are required to be filed by it, and has paid or caused to be paid all Taxes shown to be due or payable on said returns or on any assessment received by Lessee, except to the extent the same are being contested by Lessee in good faith by appropriate proceedings; (vii) except for compliance with the rules and regulations of the DAC with respect to the filing for recordation of this Lease and the Lease Supplement, and the placing on the Aircraft and on each Engine of the plates containing the legends referred to in Section 6(f) hereof, no further filing or recording of this Lease or of any other document and no further action, are necessary under the Laws of any Governmental Entity (including without limitation any Governmental Entity of the Government of Organization or the Government of Registration) in order to (A) fully protect and establish Owner's title to the Aircraft, and Owner's and Lessor's interests in and property rights with respect to the Aircraft as against Lessee or any third party and to ensure that property rights of Owner and Lessor therein will have priority in all respects over the claims of all creditors of Lessee, or (B) ensure the validity, effectiveness and enforceability of this Lease; (viii) Lessee is not in default in the performance of any of its obligations (A) for the payment of indebtedness for borrowed money or of any interest or premium thereon or (B) for the payment of rent under any lease or agreement to lease real, personal or mixed property, in each case in respect of obligations in amounts in excess of **Material Redacted**; (ix) the Maintenance Program for the Aircraft complies with all DAC requirements; (x) there are no withholding or other Taxes of the Country of Registration to be deducted from any payment to be made by Lessee under this Lease; provided that Lessor is, and remains, an entity organized under the laws of a country which has in effect a tax reciprocity treaty or agreement with Panama which so provides; (xi) the choice of law to govern this Lease, as specified in Section 20(b) hereof, is a valid choice of law and such choice will be upheld in the courts of the Country of Organization and the Country of Registration; and (xii) Lessee is subject to private commercial law and suit under the Laws of the Country of Organization and the Country of Registration. Lessee is not entitled to sovereign immunity under the Laws of the Country of Organization, the Country of Registration or such other jurisdiction, and neither Lessee nor its properties or assets have the right of immunity from suit or execution on the grounds of sovereignty in the Country of Organization, the Country of Registration, the United States of America or any other jurisdiction. To the extent that Lessee, in any jurisdiction in which proceedings may at any time be taken for the determination of any 17

question arising under or for the enforcement of this Lease (including any interlocutory proceedings or the execution of any judgment or award arising therefrom), may be entitled to claim or otherwise be accorded for itself or its property, assets or revenues immunity from suit or attachment (whether in aid of execution, before judgment or otherwise) or other legal process, and to the extent that in any such jurisdiction, there may be attributed to Lessee, or its property, assets or revenues such immunity (whether or not claimed), Lessee hereby irrevocably agrees not to claim and waives such immunity to the fullest extent permitted by the law of such jurisdiction. Section 6. Possession and Use. (a) Possession (i) SUBLEASE, ASSIGNMENT AND TRANSFER. EXCEPT AS PROVIDED IN SECTION 14, LESSEE WILL NOT ASSIGN, PLEDGE OR OTHERWISE ENCUMBER THIS LEASE OR SUBLET OR TRANSFER POSSESSION OF THE AIRCRAFT, AIRFRAME OR ANY ENGINE OR INSTALL ANY ENGINE OR PERMIT ANY ENGINE TO BE INSTALLED ON ANY AIRFRAME OTHER THAN THE AIRFRAME, PROVIDED THAT SO LONG AS NO DEFAULT OR EVENT OF DEFAULT SHALL HAVE OCCURRED AND BE CONTINUING AND AS LONG AS THE ACTION TO BE TAKEN SHALL NOT AFFECT THE REGISTRATION OF THE AIRCRAFT AND SO LONG AS ALL NECESSARY APPROVALS OF EACH GOVERNMENTAL ENTITY HAVING JURISDICTION OVER THE AIRCRAFT HAVE BEEN OBTAINED, THEN LESSEE, WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, MAY: (A) SUBJECT ANY ENGINE OR PART TO NORMAL INTERCHANGE OR POOLING AGREEMENTS OR SIMILAR ARRANGEMENTS IN EACH CASE CUSTOMARY IN THE AIRLINE INDUSTRY AND ENTERED INTO IN THE ORDINARY COURSE OF ITS BUSINESS WITH AN AIR CARRIER HOLDING A PART 121 OR 129 CERTIFICATE OR AN ENGINE OR PART (AS APPROPRIATE) OVERHAUL AGENCY CERTIFICATED BY THE FAA OR THE DAC, PROVIDED THAT: (I) NO SUCH AGREEMENT OR ARRANGEMENT RESULTS IN OR REQUIRES THE TRANSFER OF TITLE TO SUCH ENGINE OR SUCH PART; OR (II) IF OWNER'S TITLE TO SUCH ENGINE SHALL BE DIVESTED UNDER ANY SUCH AGREEMENT OR ARRANGEMENT, SUCH DIVESTITURE SHALL BE DEEMED TO BE A CASUALTY OCCURRENCE WITH RESPECT TO SUCH ENGINE AND LESSEE SHALL COMPLY WITH SECTION 11(b) HEREOF IN RESPECT THEREOF; (B) DELIVER POSSESSION OF THE AIRCRAFT, THE AIRFRAME OR ANY ENGINE OR ANY PART THEREOF TO THE MANUFACTURER THEREOF FOR TESTING OR OTHER SIMILAR PURPOSES OR TO ANY ORGANIZATION FOR SERVICE, REPAIR, MAINTENANCE, TESTING OR OVERHAUL WORK ON THE AIRCRAFT, AIRFRAME OR ENGINE OR ANY PART THEREOF OR FOR ALTERATIONS OR MODIFICATIONS IN OR ADDITIONS TO THE AIRCRAFT, AIRFRAME OR ENGINE TO THE EXTENT REQUIRED OR PERMITTED BY THE TERMS OF SECTION 9 HEREOF; (C) INSTALL AN ENGINE ON AN AIRFRAME (OTHER THAN THE AIRFRAME) OWNED OR OPERATED BY LESSEE, PROVIDED SUCH AIRFRAME IS MAINTAINED IN ACCORDANCE WITH THE MAINTENANCE PROGRAM AND IS FREE 18

AND CLEAR OF ALL LIENS EXCEPT: (I) THOSE OF THE TYPE PERMITTED UNDER CLAUSE (D) OF SECTION 14 HEREOF AND THOSE WHICH APPLY ONLY TO ENGINES (OTHER THAN THE ENGINE), APPLIANCES, PARTS, INSTRUMENTS, APPURTENANCES, ACCESSORIES, FURNISHINGS AND OTHER EQUIPMENT (OTHER THAN PARTS) INSTALLED ON SUCH AIRFRAME; AND (II) THE RIGHTS OF THE PARTICIPANTS UNDER NORMAL INTERCHANGE AGREEMENTS WHICH ARE CUSTOMARY IN THE AIRLINE INDUSTRY AND DO NOT CONTEMPLATE, PERMIT, RESULT IN OR REQUIRE THE TRANSFER OF TITLE TO THE AIRFRAME, ENGINES OR PARTS INSTALLED THEREON; (D) INSTALL AN ENGINE ON AN AIRFRAME LEASED TO LESSEE OR OWNED BY LESSEE SUBJECT TO A CONDITIONAL SALE OR OTHER SECURITY AGREEMENT, PROVIDED, THAT: (i) SUCH AIRFRAME IS MAINTAINED IN ACCORDANCE WITH THE MAINTENANCE PROGRAM; (ii) SUCH AIRFRAME IS FREE AND CLEAR OF ALL LIENS EXCEPT THE RIGHTS OF THE PARTIES TO THE LEASE OR CONDITIONAL SALE OR OTHER SECURITY AGREEMENT COVERING SUCH AIRFRAME AND EXCEPT LIENS OF THE TYPE PERMITTED BY CLAUSES (I) AND (II) OF SECTION 6(a)(i)(C), AND THE LIEN OF ANY MORTGAGE OR OTHER SECURITY INTEREST WHICH EITHER BY ITS TERMS DOES NOT APPLY TO THE ENGINE OR WHICH EFFECTIVELY PROVIDES THAT AN ENGINE LEASED TO LESSEE HEREBY SHALL NOT BECOME SUBJECT TO THE LIEN THEREOF OR TO ANY RIGHTS OF ANY PARTY THEREUNDER OTHER THAN LESSEE (WITH RESPECT TO LESSEE'S RIGHTS EXPRESSLY GRANTED HEREUNDER), NOTWITHSTANDING THE INSTALLATION OF SUCH ENGINE ON ANY AIRFRAME SUBJECT TO THE LIEN OF SUCH MORTGAGE OR OTHER SECURITY INTEREST UNLESS AND UNTIL LESSEE SHALL BECOME THE OWNER OF SUCH ENGINE AND LESSOR AND OWNER SHALL HAVE NO FURTHER INTEREST THEREIN; (iii) THERE SHALL BE IN EFFECT A WRITTEN AGREEMENT OF THE LESSOR OR SECURED PARTY OF SUCH AIRFRAME (WHICH MAY BE THE LEASE OR CONDITIONAL SALE OR OTHER SECURITY AGREEMENT COVERING SUCH AIRFRAME) SUBSTANTIALLY SIMILAR IN EFFECT TO THE AGREEMENT OF LESSOR IN SECTION 6(b) BELOW WHEREBY SUCH LESSOR OR SECURED PARTY EFFECTIVELY AND EXPRESSLY AGREES THAT NEITHER IT NOR ITS SUCCESSORS OR ASSIGNS WILL ACQUIRE OR CLAIM ANY RIGHT, TITLE OR INTEREST IN ANY ENGINE BY REASON OF SUCH ENGINE BEING INSTALLED ON SUCH AIRFRAME, AND A COPY OF SUCH AGREEMENT SHALL BE PROVIDED TO LESSOR UPON WRITTEN REQUEST; AND (iv) UPON REQUEST OF THE LESSOR, THE LESSOR SHALL HAVE RECEIVED FROM COUNSEL FOR THE LESSEE AN OPINION, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE LESSOR, BASED ON APPLICABLE LAW, TO THE EFFECT THAT THE LESSOR OR SECURED PARTY OF SUCH AIRFRAME WILL NOT ACQUIRE ANY RIGHT, TITLE OR INTEREST IN SUCH ENGINE BY REASON OF SUCH ENGINE BEING INSTALLED ON SUCH AIRFRAME AT ANY TIME WHILE SUCH ENGINE IS SUBJECT TO THIS LEASE AND IS OWNED BY OWNER; (E) ENTER INTO ANY WET LEASE OF THE AIRCRAFT PROVIDED SUCH WET LEASE DOES NOT EXTEND BEYOND THE TERM HEREOF; AND 19

(F) SUBLEASE THE AIRCRAFT TO A PERMITTED SUBLESSEE, PURSUANT TO A PERMITTED SUBLEASE, PROVIDED THAT THE TERM OF SUCH SUBLEASE DOES NOT EXTEND BEYOND THE TERM HEREOF. (ii) CERTAIN LIMITATIONS ON TRANSFERS. WITH RESPECT TO ANY TRANSFER PURSUANT TO THIS SECTION 6(a): (A) THE RIGHTS OF ANY TRANSFEREE THAT RECEIVES POSSESSION BY REASON OF A TRANSFER PERMITTED BY THIS SECTION 6(a) SHALL BE SUBJECT AND SUBORDINATE TO ALL THE TERMS OF THIS LEASE; (B) LESSEE SHALL REMAIN PRIMARILY LIABLE HEREUNDER FOR THE PERFORMANCE OF ALL OF THE TERMS OF THIS LEASE TO THE SAME EXTENT AS IF SUCH TRANSFER HAD NOT OCCURRED; AND (C) NO INTERCHANGE AGREEMENT OR OTHER RELINQUISHMENT OF POSSESSION PURSUANT TO THE TERMS OF THIS SECTION 6(a) SHALL IN ANY WAY DISCHARGE OR DIMINISH ANY OF LESSEE'S OBLIGATIONS TO LESSOR HEREUNDER. (iii) CERTAIN LIMITATIONS ON SUBLEASE. With respect to any transfer pursuant to Section 6(a) which is a Permitted Sublease: (A) the term of such sublease (including, without limitation, any option of the sublessee to renew or extend the sublease), shall not extend beyond the end of the Term; (B) the rights of the sublessee shall be subject and subordinate to all the terms of this Lease, including without limitation the right of repossession pursuant to Section 18 and to avoid such sublessee's right to possession upon such repossession; (C) Lessee shall remain primarily liable hereunder for the performance of all the terms of this Lease to the same extent as if any such sublease had not occurred; (D) such sublease shall provide that (i) the Aircraft, Airframe or any Engine may not be operated or used other than as provided in Section 6 hereof, (ii) Lessor may avoid or terminate such sublease following an Event of Default hereunder and (iii) to the extent not accomplished by an assignment of sublease, upon the occurrence of an Event of Default, Lessee's rights under such sublease shall automatically be deemed assigned to Lessor until such time as the Event of Default has been cured; (E) no sublease of the Aircraft or any Engine shall in any way destroy or diminish any of Lessor's rights hereunder or Owner's rights under the Head Lease and such rights shall continue as if such sublease or transfer has not occurred; (F) Lessee shall provide a copy of such proposed sublease to Lessor for its review and approval (which approval shall not be unreasonably withheld) at least ten (10) Business Days prior to the proposed effective date of such sublease and Lessee shall reimburse Lessor within 20

ten (10) Business Days after demand for Lessor's actual out-of-pocket cost for such review whether or not Lessor gives approval. (G) such sublease shall expressly provide (x) that such sublessee will not transfer possession or control of the Aircraft, the Airframe or an Engine to anyone other than Lessee or Lessor (except as provided in Subsection (a)(i)(A)-(E) of this Section 6) and (y) that all rights of the sublessee are subject and subordinate to all the terms of this Lease including, without limitation, in each instance, Lessor's rights to repossession pursuant to Section 18 and Lessor's rights to avoid such sublessee's right to possession upon such repossession; (H) such sublease shall include appropriate provisions (whether by requiring such obligations to be performed by the sublessee, Lessee, or both) for the operation, maintenance and insurance of the Aircraft and the Engines subleased thereby which are comparable to, or more restrictive than, the provisions of this Lease; and (I) such sublease shall expressly prohibit any assignment or further sublease (other than as permitted by Subsection (a)(i) clauses (A)-(E) of this Section 6) of the Aircraft, the Airframe or any Engine and any of the rights under such sublease. (b) Reciprocal Recognition of Rights. In the event Lessee shall have received from the lessor or secured party of any airframe leased to Lessee or owned by Lessee subject to a conditional sale or other security agreement a written agreement complying with clause (II) of Section 6(a)(i)(D) hereof (which agreement may be contained in the lease, conditional sale agreement or security agreement relating to such airframe), and such lease or conditional sale or other security agreement covering such airframe also covers an engine or engines owned by the lessor under such lease or subject to a security interest in favor of the secured party under such conditional sale or other security agreement, Lessor hereby agrees for the benefit of such lessor or secured party that Lessor will not acquire or claim, as against such lessor or secured party, any right, title or interest in any such engine as the result of such engine being installed on the Airframe and any time while such engine is subject to such lease or conditional sale or other security agreement and owned by such lessor or subject to a security interest in favor of such secured party. Lessor also hereby agrees for the benefit of the mortgagee under any mortgage complying with clause (I) of Section 6(a)(i)(D) hereof, relating to installation of an Engine on an airframe leased to Lessee, that Lessor will not acquire or claim, as against such mortgagee, any right, title or interest in any engine subject to the lien of such mortgage as the result of such engine being installed on the Airframe at any time while such engine is subject to the lien of such mortgage. (c) Lawful Insured Operations. Lessee will not permit the Aircraft to be maintained, used or operated in violation of any Law of any Governmental Entity of the Country of Registration, the Country of Organization or any other jurisdiction in which Lessee operates the Aircraft, or in violation of any airworthiness certificate, or license or registration issued by any such authority, or contrary to the Manufacturer's or Engine Manufacturer's operating manuals or instructions for the Aircraft or the Engines. In the event that any such Law requires alteration of the Aircraft, Lessee shall comply therewith at its sole expense and shall maintain the same in proper condition for operation under such Laws. Lessee agrees not to operate the Aircraft, or permit the Aircraft to be operated during the Term, (i) unless the Aircraft is covered by insurance as required by the provisions hereof, or (ii) contrary to the terms of such insurance. Lessee also agrees not to operate 21

or locate the Aircraft or suffer or permit the Aircraft to be operated or located during the Term in (A) any area excluded from coverage by any insurance policy issued pursuant to the requirements of this Lease, (B) any location that is prohibited or not permitted under: (i) any Law or government regulation applicable to the Aircraft or to Lessee; or (ii) any requirement of a Government Entity of the Country of Registration; or (iii) any requirement of a Government entity of the country in which such location is situated. Lessee will not be deemed in non-compliance with the obligations set forth in the immediately preceding sentence to the extent such non-compliance occurs when Lessee has been deprived of possession of the Aircraft by a breach of the Covenant of Quiet Enjoyment under Section 20(f). Lessee shall comply with the Law for the time being in force in any country or jurisdiction to, from, in or over which the Aircraft is flown. Lessee shall use the Aircraft solely in commercial operations for which Lessee is duly authorized by applicable Law and shall not use or permit the Aircraft to be used for any purpose for which the Aircraft is not designed or reasonably suitable. Lessee shall not knowingly use the Aircraft for the carriage of: (A) whole animals living or dead except pets and food products unless all of the rules and regulations prescribed by the International Air Transport Association ("IATA") as in effect from time to time for such carriage, to the extent the same exist and are applicable to the particular form of carriage, are followed, (B) goods characterized as dangerous goods by the regulations of IATA unless all of the rules and regulations prescribed by IATA as in effect from time to time for such carriage, to the extent the same exist and are applicable to the particular form of carriage, are followed or (C) any other goods, materials or items of cargo which could reasonably be expected to cause damage to the Aircraft and which would not be adequately covered by the insurance required by or obtained pursuant to the terms of this Lease. Lessee shall not at any time during the Term do or permit to be done anything which may expose the Aircraft or any part thereof to penalty, forfeiture, seizure, arrest, impounding, detention, confiscation, taking in execution, attachment, appropriation or destruction nor abandon the Aircraft or any part thereof and, if any such penalty, forfeiture, seizure, arrest, impounding, detention, confiscation, taking in execution, attachment or appropriation shall occur, Lessee shall give Lessor notice thereof and shall endeavor to procure the immediate release therefrom of the Aircraft or the relevant part thereof as the case may be. (d) Maintenance. Lessee, at its own cost and expense, shall: (i) perform all mandatory service, inspections, repair, maintenance, overhaul and testing, (A) as may be required under DAC rules and regulations applicable to the Aircraft and in compliance with the Maintenance Program, (B) in the same manner and with the same care as shall be the case with similar aircraft and engines owned by or operated by Lessee without discrimination and (C) so as to keep the Aircraft in as good operating condition as when delivered to Lessee, ordinary wear and tear excepted; (ii) keep the Aircraft in such condition as is necessary to enable the airworthiness certification of the Aircraft to be maintained in good standing at all times under DAC regulations and any other applicable Law; (iii) maintain, as accurate, complete, current, and in the English language, all records, logs and other materials required by, and in a manner acceptable to, the DAC and any other Governmental Entity having jurisdiction over the Aircraft and (iv) permit Lessor or any authorized representative 22

of Lessor to examine such records at any reasonable time and upon prior written notice (as provided in Section 7). (e) Registration. During the Term Lessee shall at its expense keep the Aircraft at all times registered under the applicable Laws of the Country of Registration or such other country approved by Lessor in the name of Owner as owner and Lessor as lessor of the Aircraft or, using its best efforts, in the name of such Person as Lessor may reasonably designate, including, without limitation any successor lessor under this Lease. During such time as the Aircraft is registered in the Country of Registration, the certificate of registration shall register the Aircraft in the name of Owner and include such information concerning Owner and Lessor as permitted by applicable Law in the Country of Registration. (f) Insignia. Upon delivery of the Aircraft, Lessee agrees to place the Lease Identification as set forth in Exhibit C in the cockpit in a prominent location and to place the Lease Identification on each Engine. Lessee agrees to make such changes to the Lease Identification as Lessor may reasonably request from time to time. Section 7. Information. From and after the Delivery Date, Lessee agrees to furnish Lessor the following: (a) within sixty (60) days following the end of each quarter of Lessee's fiscal year, except the last such quarter of such year, an unaudited consolidated balance sheet of Lessee prepared as of the close of each quarterly period, together with the related unaudited profit and loss statement for such period, together with a certificate of the chief financial officer of Lessee stating that such reports fairly present the financial position of Lessee in accordance with Panamanian generally accepted accounting principles; (b) within one hundred twenty (120) days after the close of each fiscal year of Lessee, balance sheet, profit and loss statement, and statement of stockholders' equity of Lessee (prepared on a consolidated basis), as of the close of such fiscal year and audited by an Approved Auditor; (c) within one hundred twenty (120) days after the close of each fiscal year of Lessee, a certificate signed by a duly authorized officer of Lessee, stating (i) that such officer is familiar with the relevant terms of this Lease and has made a review of Lessee's compliance herewith during the preceding fiscal year, and (ii) that no event has occurred and is continuing which constitutes a Default, or, if such an event has occurred, the nature thereof and action Lessee has taken or is taking to cure the same; (d) within ten (10) days following each six (6) month anniversary of the Delivery Date, Lessee shall provide Lessor with a report with respect to the Aircraft specifying: (i) total hours and total cycles of the Airframe and the Engines; (ii) any scheduled maintenance above a "C" Check performed in the prior six (6) month period; (iii) any significant modifications performed to the Aircraft; (iv) any damage to or destruction of the Aircraft, an Engine or Part, the potential cost of which exceeds the Damage Notification Threshold; and (v) the status of the accomplishment of airworthiness directives and manufacturer's service bulletins, including method of compliance (e.g., terminating action or surveillance); 23

(e) notice in writing of (A) any proceeding by or against Lessee the adverse determination of which would materially adversely affect Lessee's ability to perform under this Lease and (B) any other matter which materially adversely affects the Lessee's ability to perform under this Lease; and (f) from time to time such other information as Lessor may reasonably request, including the location, condition, use and operation of the Aircraft. Lessee shall permit Lessor or its designee on three (3) days' prior written notice to visit and inspect the Aircraft, its condition, use and operation and the records maintained in connection therewith. In conducting any such visit or inspection as contemplated herein, Lessor shall not interfere with Lessee's operation or require Lessee to open panels of the Aircraft which are not open under an inspection then being conducted by Lessee. Lessor shall have no duty to make any such inspection and shall not incur any liability or obligation by reason of not making any such inspection. Lessor's failure to object to any condition or procedure observed or observable in the course of an inspection hereunder shall not be deemed to waive or modify any of the terms of this Lease with respect to such condition or procedure. Section 8. Covenants of Lessee. Lessee covenants and agrees that: (a) Maintenance of Corporate Existence. Except as provided in Section 8(d) below, until the Return Occasion, Lessee will preserve and maintain its corporate existence and such of its rights, privileges, licenses and franchises in any jurisdiction where failure to obtain such licensing or qualification would have a material adverse effect upon Lessee. (b) Maintenance of Status. Lessee is, and shall remain so long as it shall be Lessee under this Lease, duly qualified to operate the Aircraft under applicable Law. (c) Payment of Taxes. Lessee will pay or cause to be paid all Taxes and governmental charges or levies imposed upon it, or upon its income or profits, or upon any property belonging to it, prior to the date on which penalties attach thereto and prior to the date on which any lawful claim, if not paid, would become a Lien upon any of the material property of Lessee, except to the extent the same are being contested by Lessee in good faith by appropriate proceedings.. (d) Consolidation, Merger, Etc. Without the prior written consent of Lessor (which consent shall not be unreasonably withheld), Lessee shall not consolidate with or merge into any other corporation or convey, transfer or lease substantially all of its assets as an entirety to any other Person. (e) Place of Business. Without prior written notice to Lessor, Lessee shall not change its principal place of business. (f) Notice of Default. Within seven (7) Business Days after any responsible officer of Lessee obtains knowledge of a Default hereunder, Lessee shall notify Lessor in writing of such Default. 24

(g) Governmental Consents. Lessee undertakes to maintain in full force and effect all governmental consents, licenses, authorizations, approvals, declarations, filings and registrations obtained or effected in connection with this Lease and every document or instrument contemplated hereby (including without limitation foreign exchange and transfer permits regarding Dollar amounts due hereunder and thereunder) and to take all such additional action as may be proper or advisable in connection herewith or therewith. Lessee further undertakes to obtain or effect any new or additional governmental consents, licenses, authorizations, approvals, declarations, filings or registrations as may become necessary for the performance of any of the terms and conditions of this Lease or any other document or instrument contemplated hereby. (h) Registration, Certification and Filing. Lessee undertakes to register the Aircraft with the DAC, to secure a valid and effective provisional certificate of airworthiness for operation in the Country of Registration within seven (7) days of the Delivery Date and to provide to the Lessor a copy of the provisional certificate(s) of registration issued by the DAC relating to the Aircraft, reflecting the Owner as the owner and Lessor as lessor of the Aircraft to the extent permitted by applicable Law in the Country of Registration, and a copy of the certificate of airworthiness issued by the DAC relating to the Aircraft, each certified by a duly authorized officer of Lessee and in a form satisfactory to the Lessor so as to enable counsel to the Lessee to provide an opinion that (A) the Aircraft has been duly registered with the DAC and that the Head Lease, the Lease, the Lease Supplement, and any other documents evidencing title necessary or advisable to be filed have been duly filed for recordation with the relevant Governmental Entities, (B) or such other action with respect to, this Lease as may be required to make a public record of the respective interests of Lessor and Lessee in the Aircraft and (C) such other matters as Lessor may reasonably request and substantially in the form of Exhibit F-2 hereto. Lessee shall obtain the definitive certificate of airworthiness in replacement of the provisional certificate as soon as possible after the Delivery Date and shall promptly provide to Lessor a copy thereof, certified by a duly authorized officer of Lessee. Lessee shall timely renew the provisional certificate(s) of registration as required by the DAC during the Term hereof. (i) Suspension, Cessation, Etc. Lessee shall not at any time during the Term (i) voluntarily suspend its certificated operations; or (ii) voluntarily or involuntarily permit to be revoked, canceled or otherwise terminated all or substantially all of the franchises, concessions, permits, rights or privileges required for the conduct of business and operations of Lessee or the free and continued use and exercise thereof. (j) No Operation until Registration and Certification. Lessee shall not at any time operate the Aircraft until it has received a provisional certificate of registration for the Aircraft and a provisional certificate of airworthiness for the Aircraft and has provided certified copies of each thereof to the Lessor. 25

Section 9. Replacement of Parts; Alterations, Modifications and Additions. (a) Replacement of Parts Lessee, at its own cost and expense, shall promptly replace all Parts which, from time to time, may become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond repair or permanently rendered unfit for use for any reason whatsoever. In addition, in the ordinary course of maintenance, service, repair, overhaul or testing during the Term, Lessee may at its own cost and expense cause to be removed any Parts, whether or not worn out, destroyed, damaged beyond repair or permanently rendered unfit for use, provided that Lessee shall replace at its own cost and expense such Parts as promptly as practicable. All replacement Parts shall be free and clear of all Liens, other than Liens permitted by Section 14 hereof, shall be in at least the same modification status and service bulletin accomplishment status, shall be fully interchangeable as to form, fit and function, shall have been overhauled, repaired and inspected by an agency acceptable to the DAC and shall be in as good an operating condition as, and have a utility at least equal to and a value and remaining warranty reasonably approximating, the Parts replaced (assuming such replaced parts were in the condition and repair in which they were required to be maintained by the terms hereof). All historical records relating to such Parts shall be maintained by Lessee. Notwithstanding the foregoing provision, the right of Lessee to utilize an agency acceptable to the DAC shall not be construed as modifying Lessee's obligations under Section 16 and Exhibit E with respect to return of the Aircraft in accordance with the standards and requirements of the DAC as therein provided. All Parts owned by Owner or Lessor which are at any time removed from the Aircraft shall remain the property of Owner or Lessor, as the case may be, and subject to this Lease, no matter where located, until such time as such Parts shall be replaced by Parts which have been incorporated or installed in or attached to the Aircraft and which meet the requirements for replacement Parts specified above. Immediately upon any replacement Part becoming incorporated or installed in or attached to the Aircraft as above provided, (i) title to the removed part shall thereupon vest in Lessee, free and clear of all rights of Owner and Lessor and of Lessor's Liens, (ii) title to such replacement part shall thereupon vest solely in Owner and (iii) such replacement part shall become subject to this Lease and be deemed a Part for all purposes hereof to the same extent as the Part which it has replaced. (b) Alterations, Modifications and Additions. Lessee, at its own expense, shall make such alterations and modifications and additions to the Aircraft as may be required from time to time to meet the applicable standards of the DAC or to comply with any Law, rule, directive, mandatory bulletin, regulation or order of any Governmental Entity having jurisdiction over the Aircraft or of the manufacturer of the Aircraft, Engines or Parts. Lessee's records shall document the method and date of compliance with FAA requirements to the extent required for certification by the FAA under Part 129 (with no material variance, extension, carry-overs or deferrals). In addition, Lessee, at its own expense, may from time to time make alterations and modifications in and additions to the Aircraft, provided no such alteration, modification or addition materially diminishes the remaining warranty, value or utility, or impairs the condition or airworthiness, of the Aircraft. Title to all Parts (other than leased Parts) incorporated or installed in or attached or added to the Aircraft as the result of such alteration, modification or addition shall vest immediately in Lessor and become subject to this Lease, without the necessity for any further act of transfer, document or notice. In no event shall Lessor bear any liability or cost for any alteration, modification or addition to, or for any grounding or suspension of certification of, the 26

Aircraft, or for any loss of revenue arising therefrom. Notwithstanding the foregoing, so long as no Default or Event of Default shall be continuing, Lessee may remove any Part; provided that (i) such Part is in addition to, and not in replacement of or substitution for, any Part originally incorporated or installed in or attached to the Aircraft or any Engine at the time of delivery thereof hereunder or any Part in replacement of, or substitution for any such Part, (ii) such Part is not required to be incorporated or installed in or attached or added to the Aircraft or such Engine pursuant to the terms of this Lease, and (iii) such Part can be removed from the Aircraft or such Engine without impairing or materially diminishing the value, utility, condition or airworthiness required to be maintained by the terms of this Lease that the Aircraft or such Engine would have had at such time had such Parts not been installed and such removal not occurred. Upon the removal by Lessee of any Part as provided in the immediately preceding sentence, title thereto shall, without further act, vest in Lessee and such Part shall no longer be deemed part of the Aircraft or such Engine from which it was removed. Lessee shall make no material alterations, modifications or additions to the Aircraft (such as removal of galleys, lavatories, major avionics equipment or the like) that would adversely affect the marketability of the Aircraft without Lessor's prior written consent. If Lessor grants such consent, which shall not be unreasonably withheld, title to such removed Parts shall remain with Owner and Lessor may request Lessee to reinstall such Parts prior to termination of this Lease, provided Lessor shall be responsible for the reasonable costs to store such Parts pending such re-installation. If Lessor requests Lessee to reinstall such Parts, title to the Parts removed shall vest in Lessee. All costs associated with such removal and reinstallation shall be borne by Lessee. In addition to the foregoing, Lessee will not make any alterations, modifications or additions to the Aircraft or any Part that may adversely affect its ability to comply with Year 2000 Compliance (as defined in Section 5(a) hereof) in relation to the Aircraft or any Part. 27

Section 10. Tax Indemnity. (a) General Tax Indemnity Lessee agrees for the benefit of each Indemnitee that all payments by Lessee in connection with the transactions contemplated by this Lease shall be free of all withholdings or deductions of any nature whatsoever (including, without limitation, withholding taxes, monetary transfer fees, or similar taxes and charges), and in the event any withholding or deduction is required (other than a withholding or deduction in respect of Taxes for which Lessee is not responsible to indemnify any Indemnitee pursuant to Section 10(b) hereof), Lessee shall pay the same together with such additional amount as is required so that each such payment shall be, under any circumstances and in any event, after any such withholding or deduction, in the amount as set forth or referred to in this Lease. Lessee agrees for the benefit of each Indemnitee to pay and, on written demand, to indemnify and hold each Indemnitee (which term as used in this Section 10 shall include each Indemnitee, their respective affiliates, agents, employees, directors, successors and assigns, and any transferee of an Indemnitee with respect to any interest in the Aircraft) harmless from, all license and registration fees, duties, imposts, deductions, charges and, without limitation, all Taxes, howsoever levied or imposed, whether levied or imposed upon or asserted against any Indemnitee, Lessee, the Lease, the Aircraft, or any part thereof or interest therein, or otherwise by any Federal, state or local government, or instrumentality thereof, or other taxing authority in the United States of America ("U.S. Taxing Authority") or by any government other than that of the United States of America or any taxing authority or governmental subdivision or instrumentality of any other country or of a territory or possession of the United States of America or by any international taxing authority ("Foreign Taxing Authority"), upon or with respect to, based upon or measured by: (i) the Aircraft, or any part thereof, or interest therein, (ii) the exportation, importation, ownership, delivery, non-delivery, warehousing, removal, leasing, exchange, acceptance, assigning, possession, repossession, condition, recording, use, operation, settlement of any insurance claim, sale, subleasing, rental, retirement, imposition of any Lien, abandonment, registration, preparation, installation, modification, repair, maintenance, replacement, transportation, storage, transfer of title, return or other disposition of the Aircraft or any part thereof or interest therein, (iii) the rentals, receipts or earnings arising from any one or more of the items or acts described in clause (i) or (ii) above (including, without limitation, the Rent), (iv) upon or with respect to this Lease, or (v) otherwise with respect to or in connection with the transactions contemplated and permitted by the Lease; and any documented out-of-pocket costs and expenses fairly attributable to any of the foregoing incurred by any Indemnitee. (b) Exclusions. Except as provided in subsections (c), (d) and (e) below, there shall be excluded from the indemnity provided in Section 10(a) the following: (i) Taxes upon or with respect to the gross or net income, capital gains or 28

capital or net worth of any Indemnitee (including, without limitation, any such Taxes which are minimum or alternative minimum Taxes, Taxes on or measured by items of tax preference and franchise Taxes levied in lieu of income taxes, but excluding, without limitation, any Taxes in the nature of sales, rental, use, value-added, license, withholding or property taxes) ("Income Taxes") which are imposed by any U.S. Taxing Authority; (ii) Income Taxes imposed by any Foreign Taxing Authority, but excluding any such Income Taxes imposed by a Foreign Taxing Authority to the extent that such Income Taxes result from the location or use of the Aircraft or any part thereof in such taxing jurisdiction or other activities of Lessee or any Person that obtains from Lessee possession or control or the right to use the Aircraft or any part thereof (an "Aircraft User"); (iii) Taxes imposed as a result of any Lessor Lien or (A) a voluntary sale, transfer of title, mortgaging, pledging, financing, voluntary transfer or other voluntary disposition by an Indemnitee of the Aircraft or part thereof or interest therein, or any interest in the Rent or part thereof or any interest in this Lease or part thereof, unless such sale, transfer, mortgage, pledge or disposition occurs by reason of the exercise of an Indemnitee's remedies under this Lease upon an Event of Default, or (B) any involuntary transfer or disposition of any of the foregoing interests in connection with any bankruptcy, foreclosure or similar proceeding with respect to any Indemnitee unless such transfer or disposition occurs by reason of an Event of Default; (iv) Taxes for any taxable period or portion thereof, relating to events occurring prior to the Delivery Date or after the expiration of the Term of the Lease (and any renewal term) and the redelivery of the Aircraft in accordance with the Lease, except to the extent that any such Taxes are imposed in connection with remedies exercised by Lessor following an Event of Default; (v) Taxes imposed by any Governmental Entity or international taxing authority in any jurisdiction which would not have been imposed but for some connection of any Indemnitee with such jurisdiction other than a connection arising by reason of, relating to or attributable to Lessee, any Aircraft User, this Lease, any sublease, the operation by Lessee, any sublessee or any Aircraft User of the Aircraft, the location of the Aircraft or arising pursuant to the transactions contemplated hereby in such jurisdiction, except that the exclusion contained in this clause (vi) shall not apply to the extent that such Taxes are imposed in connection with Lessor's exercise of remedies following an Event of Default; (vi) Taxes imposed on or with respect to a successor or assignee of an Indemnitee to the extent such Taxes exceed the amount of Taxes that would have been imposed on or with respect to such Indemnitee had such succession or assignment not occurred, provided, however, that the exclusion contained in this clause (iv) shall not apply to any successor or assignee if such succession or assignment shall have occurred at any time in connection with Lessor's exercise of remedies after the occurrence of an Event of Default; (vii) Taxes and any fines, penalties, or additions thereto to the extent the same would not have been incurred but for the failure of Lessor, Owner, GECAS or any other Person other than Lessee to make any filing or election required by it to be made, provided that this exclusion shall not apply if the failure to file or make the election results from the failure of the Lessee to notify the Lessor, Owner, or GECAS of such requirement (unless the Lessor, Owner, or GECAS is otherwise aware of such requirement). 29

Notwithstanding the foregoing, Income Taxes resulting directly or indirectly (whether by inclusion of an item in gross income, disallowance of a deduction or credit, or otherwise) from any payment on or after the Delivery Date by any supplier in satisfaction of a claim against such supplier with respect to the Aircraft or any part thereof and inclusions in income in any taxable year of any amounts relating to improvements, alterations, modifications, or additions by or on behalf of Lessee of the Aircraft, any Engine or any part thereof (other than improvements, alterations, modifications or additions required by this Lease) or any substitution or replacement of any engine, or any part thereof, shall not be excluded from the indemnity provided in Section 10(a). (c) FSC Indemnity. Owner has assumed that United States income tax benefits, as provided in sections 921 et seq of the United States Internal Revenue Code of 1986, as amended (the "Code") (i.e. that United States income taxation of the net income or gain from the sale or lease of the Aircraft will be limited in each calendar year to taxation on only seventy per cent (70%) of such net income or gain (the "FSC Benefits")) will be available to Owner and the other Indemnitees. Accordingly, in order to support Owner entitlement to the FSC Benefits, Lessee covenants that: (i) in each calendar year during the Term, the Aircraft will be located outside the United States (used in this Section 10(c)to include the Commonwealth of Puerto Rico) more than fifty per cent (50%) of the time or more than fifty per cent (50%) of the miles traversed in the use of the Aircraft will be traversed outside the United States (regarding for this purpose any flight between two points in the United States without an intervening stop in a foreign jurisdiction of at least 12 hours as being entirely within the United States); (ii) except as required by applicable Law (including compliance with any AD) and except for the Modifications as defined in Letter Agreement No. 1 to which Lessor expressly consents, it will not (A) undertake any alterations, modifications or additions to the Aircraft or any Part without the prior written consent of Lessor (x) involving a modification, re-manufacturing or alteration of the Aircraft, which modification, re-manufacturing or alteration is of a permanent nature or (y) which could not be removed from the Aircraft without material damage to the Aircraft or (z) which together with prior related and future related expected alterations, modifications or additions would involve a cost (including labor, overhead, engineering, supplies, materials and third-party costs) in excess of **Material Redacted**, or (B) undertake any replacement of any Engine that involves Owner's relinquishment of title thereto and does not arise from a Casualty Occurrence; and (iii) after delivery of the Aircraft to Lessee pursuant to this Agreement, the first flight of the Aircraft shall occur as soon as practicable but in any event within 24 hours of the Delivery Date save for any reasonable delays beyond 24 hours due to (i) adverse weather conditions or (ii) Lessee crew staffing restrictions, or (iii) any other cause which is beyond the reasonable control of Lessee, provided in all cases that Lessee shall work diligently to promptly remedy any such delay to the first flight. The first flight shall be a non-revenue producing flight from the Delivery Location to a location outside the United States. After arrival at such location outside the United States, the Aircraft will not begin any return flight to the United States prior to the expiration of 12 hours after its arrival at such location outside the United States. In addition, between the time of delivery to Lessee and such first flight, Lessee shall make no use of the 30

Aircraft except for such fuelling, loading and provisioning required in connection with such first flight. Lessor acknowledges that the covenants contained in Section 10(c)(i), (ii) and (iii) are given by Lessee solely for the purpose of the indemnification requirements in Section 10 (d) and shall not prevent or restrict Lessee from taking any action otherwise permitted under this Agreement. Lessee will make available to Lessor any records relating to the use and location of the Aircraft that Lessor may reasonably request, in order to fulfill Lessor's or any Indemnitee's tax reporting, filing, audit or litigation requirements, and will otherwise reasonably cooperate with any reasonable requests of Lessor with respect to compliance with requirements for the FSC Benefits; provided, that any such cooperation shall not result in costs in excess of those which Lessee would have incurred in the absence of such cooperation nor result in any additional obligation of Lessee nor adversely affect Lessee's rights hereunder. Except as expressly set forth in Section 10(c) (i), (ii) and (iii), there are no other events intended to be covered by the indemnification set forth in Section 10 (d). (d) FSC Benefits (i) Lessor's remedy for the breach of any of the covenants contained in Section 10(c)(i), (ii) and (iii), if such breach shall directly result in a loss of FSC Benefits, shall be the right to receive the indemnity payments specified in this Section 10 (d) from Lessee. Any such indemnity payments will be due within 30 days after Lessee's receipt of a written request from Lessor certifying that there has been a loss of FSC Benefits describing in reasonable detail the circumstances of such loss and that such loss is a direct result of the breach by Lessee of a covenant contained in Section 10 (c) hereof. (ii) Owner, GECAS and Lessor acknowledge and agree that Lessee's indemnity obligation for an Indemnitee's entitlement to the FSC Benefits shall be limited in amount with respect to any calendar year, subject to Section 10(e), to the lesser of (x) the amount of FSC Benefits lost or disallowed for such calendar year which are a direct result of a breach of the covenants set forth in Section 10(c)(i), (ii) or (iii) and (y) the amount set forth as the FSC Indemnity Maximum Amounts in Exhibit C plus in either case the amount of any interest, penalties and additions to tax payable by Owner or the relevant Indemnitee as a result of the loss or disallowance of the FSC Benefits, but not including any interest, penalties or additions to tax resulting solely from acts or omissions of Lessor, Owner, GECAS, or any Person other than Lessee. For the avoidance of doubt, if the FSC Benefits are lost or disallowed for any calendar year, the maximum amount which Lessee shall pay to Lessor with respect to such calendar year, subject to Section 10(e), is the amount for such calendar year as set forth as the FSC Indemnity Maximum Amounts in Exhibit C plus the amount of any interest, penalties, and additions to tax payable by Owner or the relevant Indemnitee as a direct result of such loss or disallowance (but not as a result solely of acts or omissions of Lessor, Owner, GECAS, or any Person other than Lessee) and if such FSC Benefits are determined to be lost or disallowed with respect to a subsequent sale of the Aircraft after any termination of the Lease (irrespective of whether the Term of the Lease is extended pursuant to Section 3(g)) as a direct result of Lessee's breach of its covenants set forth in Section 10(c)(ii) or (iii), Lessee's indemnity payment shall be limited to the lesser of the actual amount of FSC Benefits lost or disallowed which arise directly as a result of any such breach and the amount set forth as the FSC Indemnity Maximum Amounts in Exhibit C 31

with respect to the Residual Period (as enumerated in Exhibit C), plus the amounts set forth as the FSC Indemnity Maximum Amounts in Exhibit C for any calendar years which have not elapsed at the time the Lease is terminated, plus any interest, penalties and additions to tax but not including any penalties or additions resulting principally from any act or omission of Lessor, Owner, GECAS or any other Person other than Lessee that is not in turn attributable to an act or omission of Lessee. For avoidance of doubt, the loss or disallowance of any FSC Benefits resulting solely from any act or omission of Lessor, Owner, GECAS, or any Person other an Lessee and not directly the result of a breach by Lessee of the covenants set forth in Sections 10(c)(i),(ii) or (iii) or arising for any reason other than a breach by Lessee of its covenants set forth in Section 10(c) shall not be deemed to be included in the indemnities provided in this Section 10. (iii) If the Aircraft is leased after any termination of this Agreement, Lessee's indemnity obligation, subject to Section 10(e), with respect to a loss or disallowance of FSC Benefits as a result of Lessee's breach of its covenants set forth in Section 10(c)(ii) or (iii) will be (in addition to any applicable interest, penalties or additions to tax) the actual amount of FSC Benefits lost or disallowed, as a direct result of such breach, for any calendar year during any subsequent lease of the Aircraft for such calendar year. (e) After Tax Basis of Payments. Notwithstanding anything in this Section 10 to the contrary (including, without limitation, subparagraphs (i) and (ii) of Section 10(b) above), Lessee further agrees that, with respect to any payment or indemnity under this Section 10, such payment or indemnity shall include any amount necessary to hold the recipient of the payment or indemnity harmless on an after-tax basis from all Taxes required to be paid by such recipient with respect to such payment or indemnity to any U.S. Taxing Authority or any Foreign Taxing Authority, taking into account any reductions in such recipient's taxes by reason of any deductions, credits, or other allowances in respect of the payment or accrual of the amount indemnified against. Any subsequent reduction in such recipient's deductions, credits, or other allowances in respect of the payment or accrual of the amount indemnified against shall be treated as a Tax that is indemnifiable under this Section without regard to the exclusions set forth in Section 10(b) above. (f) Payments. The Lessee shall pay all Taxes for which it assumes liability hereunder when such Taxes are due. If a claim is made against any Indemnitee for any such Taxes, such Indemnitee shall promptly notify Lessee provided, however, the failure to provide such notice shall not affect the Lessee's obligations hereunder to any Indemnitee unless Lessee's rights to contest such Taxes are materially prejudiced by such failure. Any amount payable as an indemnity to any Indemnitee or any amount payable to Lessee pursuant to this Section 10 is to be paid to such party directly, in immediately available funds, by bank wire transfer at such bank or to such account as specified by the payee in written directions to the payor, or, if such directions shall not have been given, by check of the payor payable to the order of the payee and mailed to the payee by certified mail, postage prepaid at its address as set forth in this Lease, within thirty (30) days after receipt of a written demand therefor from such Indemnitee or Lessee, as the case may be, but in no event more than ten (10) days prior to the due date thereof. In the event Lessee fails to make any such payment following a request by an Indemnitee and such Indemnitee makes a tax payment with respect to any such Taxes (other than with funds advanced to such Indemnitee on an interest-free basis by Lessee pursuant to this Section 10), Lessee shall pay to the Indemnitee interest on the amount of such payment at the Interest Rate set forth in Exhibit C from the date of such 32

Indemnitee's payment to the relevant taxing authority to the date of such payment by Lessee to the Indemnitee hereunder. In the event an amount is payable to Lessee under this Section 10, the Indemnitee owing such amount shall pay interest on such amount at the Interest Rate set forth in Exhibit C from the date of receipt by such Indemnitee of any amount giving rise to such obligation to pay Lessee until the date of payment to Lessee. (g) Contests. If requested by Lessee in writing within forty-five (45) days after its receipt of notice pursuant to this Section 10 of a claim against an Indemnitee, upon receipt of indemnity reasonably satisfactory to it and at the sole expense of Lessee (including, without limitation, all reasonable out-of-pocket costs and expenses, reasonable legal and accounting and investigatory fees and disbursements, additions to tax because of underpayments of estimated Taxes, losses, penalties, and interest) such Indemnitee shall in good faith contest or permit Lessee, if desired by Lessee, to contest in the name of Lessee and/or the Indemnitee the validity, applicability or amount of such Taxes by, in the reasonable discretion of such Indemnitee (or, where the Lessee is not permitted to conduct the contest in the name of the Indemnitee, in the sole discretion of such Indemnitee), (i) resisting payment thereof if practicable and legally permissible, (ii) not paying the same except under protest with funds advanced by Lessee on an interest-free basis, if protest is necessary and proper, and (iii) if payments are made, using reasonable efforts to obtain a refund thereof in appropriate administrative and judicial proceedings; provided, however, that Lessee shall not be permitted to contest in the name of such Indemnitee if such contest involves Income Taxes imposed by a U.S. Taxing Authority, Income Taxes imposed by a Foreign Taxing Authority, or any Taxes imposed against such Indemnitee that are unrelated to the transactions contemplated by the Lease, in which event such Indemnitee shall follow the direction of Lessee with respect to the method of pursuing that portion of any such contest that does not relate to Income Taxes unless with respect to issues that do not relate to the settlement of any portion of the contest involving Taxes for which indemnification is provided by this Section 10, such direction would, in the judgment of such Indemnitee, adversely affect in a material manner interests of such Indemnitee unrelated to the transactions hereby contemplated; provided further, however, that in no event shall an Indemnitee settle such portion of any claim for which Lessee has an indemnity obligation pursuant to this Section 10 without Lessee's written consent; provided further, however, that the Indemnitee shall not be required to undertake any contest or allow Lessee to contest in the name of such Indemnitee unless: (A) no Event of Default shall have occurred and be continuing, (B) prior to the commencement of any contest undertaken by the Lessee or any contest undertaken by such Indemnitee with respect to which such Indemnitee is required to follow the direction of the Lessee with respect to the method of pursuing that portion of the contest that relates to the transactions hereby contemplated, the Lessee shall have delivered to such Indemnitee a written acknowledgment of its obligation to indemnify fully such Indemnitee to the extent that the contest is not successful, (C) Lessee shall have provided such Indemnitee with an opinion of legal counsel reasonably acceptable to such Indemnitee to the effect that a reasonable basis exists to contest such claim and, prior to the commencement of any appeal of an adverse administrative or judicial decision, with an opinion of such tax counsel to the effect that a reasonable basis exists to appeal such adverse administrative or judicial decision (which opinions shall be obtained at Lessee's sole 33

cost and expense), (D) if such contest is to be initiated by the payment of, and the claiming of a refund for, such Taxes, Lessee shall have advanced to such Indemnitee sufficient funds (on an interest-free basis) to make such payments, provided, however, that the Lessee shall indemnify such Indemnitee for any adverse tax consequences resulting from such advance, (E) such proceedings do not involve any material risk or danger of the sale, forfeiture, or loss of the Aircraft or any part thereof or the creation of any Lien (other than a Lien for taxes not yet due or being contested in good faith by appropriate proceedings, and for the payment of which such reserves, if any, as are required to be provided under generally accepted accounting principles have been provided), and (F) in the event that the subject matter of the contest is of a continuing nature and has previously been resolved adversely pursuant to the contest provisions of this Section 10 and there has been a change in the law (including, without limitation, amendments to statutes or regulations, administrative rulings and court decisions) after such claim shall have been so previously resolved, such Indemnitee shall have received an opinion of independent tax counsel selected by such Indemnitee and reasonably acceptable to Lessee, which opinion shall be obtained at Lessee's sole expense, to the effect that, as a result of such change, it is as likely as not that the position which such Indemnitee or Lessee, as the case may be, had asserted in such previous contest would prevail. If any Indemnitee shall obtain a refund of all or any part of such Taxes (including interest, penalties, or additions thereto) paid by Lessee, such Indemnitee shall pay Lessee, the amount of such refund reduced by the amount of any Taxes payable by such Indemnitee in respect of the receipt of such refund and increased by the amount of any savings realized by such Indemnitee in respect to any such Taxes by reason of deductions, credits, allocations or allowances in respect of such payment to Lessee; provided that such amount shall not be payable (x) before such time as Lessee shall have made all payments or indemnities then due to or on behalf of all Indemnitees under this Lease, (y) while an Event of Default is outstanding and continues unremedied, or (z) to the extent it exceeds the amount of all payments made by Lessee with respect to such Taxes. If in addition to such refund any Indemnitee shall receive an amount representing interest on the amount of such refund, Lessee shall be paid that proportion of such interest which is fairly attributable to Taxes paid by Lessee prior to the receipt of such refund; provided, however, that no amount shall be payable under this or the preceding sentence during any period in which an Event of Default has occurred and is continuing unremedied unless the Lease has terminated and Lessee has paid all amounts due Lessor hereunder. If any such refund or tax savings taken into account under this paragraph in Taxes is subsequently disallowed or canceled, such disallowance or cancellation shall be treated as a Tax that is indemnifiable under this Section 10 without regard to the exclusions set forth in Section 10(b). (h) Reports. In case any report or return is required to be made with respect to any Taxes which are an obligation of Lessee under this Section 10, Lessee, if lawfully able to do so and appropriate and in receipt of notice from Lessor in circumstances where Lessor, but not Lessee, could reasonably be expected to have knowledge of such obligation, will either make such report or return in such manner as will show the ownership of the Aircraft and the Engines in Owner and 34

send a copy of such report or return to Lessor or will notify Lessor of such requirement and if lawfully able to do so, will make such report or return in such manner as shall be reasonably satisfactory to Lessor (and the Lessee shall hold each Indemnitee harmless from and against any liabilities, obligations, losses, damages, penalties, claims, actions, suits and reasonable costs arising out of any insufficiency or inaccuracy in any such return, statement, report or information). As soon as practicable after the beginning of each calendar year (but in no event later than February 28 of such year), Lessee shall provide Lessor with any information that Lessor shall reasonably request in writing (by January 31 of such year) and Lessee can reasonably compile to enable Lessor and Owner to allocate accurately for foreign, state and local tax purposes its rental income for the preceding calendar year. (i) Value Added Taxes. Each amount stated as payable by Lessee under this Lease is exclusive of Value Added Taxes (if any) and is accordingly to be construed as a reference to that amount plus any Value Added Taxes in respect of it. (j) Affiliated Group. In the event that the Indemnitee is a member of an Affiliated Group (within the meaning of Section 1504(a) of the U.S. Internal Revenue Code) which files a consolidated Federal income tax return, the term "Indemnitee" shall mean and include such Affiliated Group and all the members thereof. (k) Survival. All of the obligations of Lessee and each Indemnitee under this Section 10 with respect to the Aircraft and the Engines or any part thereof shall survive the assignment, expiration or other termination of this Lease. Such obligations are expressly undertaken by Lessee for the benefit of, and shall be enforceable by, Lessor and each other Indemnitee. Lessee's obligations under this Section 10 shall not be affected by any circumstances, including, without limitation, any setoff, counterclaim, recoupment, defense or other right which Lessee may have against Lessor or any other person for any reason whatsoever. Lessee will pay to an Indemnitee, on demand, and an Indemnitee will pay to Lessee, if applicable, to the extent permitted by applicable law, interest at the Interest Rate set forth in Exhibit C hereto on any amount not paid when due pursuant to this Section 10 until the same shall be paid. All indemnities, obligations, adjustments and payments provided for in this Section 10 shall survive, and remain in full force and effect, notwithstanding the expiration or other termination of this Lease. The obligations of Lessee in respect of all such indemnities, obligations, adjustments and payments are expressly made for the benefit of, and shall be enforceable by, an Indemnitee, without declaring this Lease to be in default or taking other action thereunder, and notwithstanding any provision to the contrary contained herein. (l) Tax Treaty Elections. Lessor agrees to make, at Lessee's request, any available election under an applicable tax treaty to the extent that making such election would serve to reduce or eliminate any indemnification obligation of the Lessee under this Section 10, but only to the extent that such election can be made on a transaction-by-transaction basis and such election has no adverse consequences to Lessor or any Indemnitee. (m) Verification. At Lessee's request, the computation by any Indemnitee of any amount of Taxes or other amounts paid or payable by or to Lessee under this Section 10 shall be verified by such Indemnitee's independent public accountants. In the event the amount of Taxes or other amounts computed by such independent public accountants differs from the amounts paid or 35

payable by or to Lessee, appropriate adjustments shall be made between Lessee and such Indemnitee. Section 11. Casualty Occurrences. (a) Casualty Occurrence with Respect to the Airframe. Within fifteen (15) days after a Casualty Occurrence during the Term with respect to the Airframe and any Engine then installed thereon, Lessee shall give Lessor written notice of such occurrence. On or before one hundred twenty (120) days after the date of the Casualty Occurrence, but in no event later than the date of receipt of insurance proceeds in respect of such Casualty Occurrence, Lessee shall pay to Lessor in immediately available funds an amount equal to the sum of (i) the Casualty Value of the Aircraft computed as of the date of payment less an amount equal to the daily equivalent of Basic Rent (computed on the basis of a 360-day year) for each day during the period commencing with the day after payment of such Casualty Value and extending to, but excluding, the Basic Rent Payment Date immediately following payment of such Casualty Value, and (ii) all Supplemental Rent accrued or due and unpaid (other than Maintenance Payments which would have been payable by Lessee pursuant to Section 16(m) and amounts paid pursuant to clause (i) above), computed as of the date of payment less any Security Deposit then held by Lessor. Upon such payment (A) the obligation of Lessee to make further payments of Basic Rent hereunder shall terminate, (B) this Lease shall terminate with respect to the Aircraft and (C) Lessor will cause Owner to transfer to Lessee or its insurers (as directed by Lessee), without recourse or warranty, all of Owner's right, title and interest, if any, in and to the Airframe and Engines (if any) suffering the Casualty Occurrence, as well as all of Owner's right, title and interest in and to any Engine constituting part of the Aircraft but not installed thereon at the time of the Casualty Occurrence in each case free of any Lessor's Liens. (b) Casualty Occurrence with Respect to an Engine. Upon a Casualty Occurrence with respect to an Engine only, Lessee shall give Lessor prompt written notice thereof and shall, within ninety (90) days after such occurrence, convey to Owner, as replacement for the Engine suffering a Casualty Occurrence, title to a Replacement Engine. Each Replacement Engine shall be free of all Liens (except those Liens which are permitted by Section 14 hereof) and shall be in as good an operating condition and shall have a value and utility at least equal to, and shall have a substantially equivalent number of cycles remaining on its life limited parts as the Engine being replaced, assuming the Engine being replaced was in the condition and repair required by the terms hereof immediately prior to the Casualty Occurrence and shall be compatible with the remaining installed Engine. Upon full compliance by Lessee with the terms of this paragraph, Lessor will cause the Owner to transfer to Lessee all of Owner's right, title and interest in and to the Engine which suffered the Casualty Occurrence free of any Lessor's Liens. Prior to or at the time of any such conveyance, Lessee, at its own expense, will promptly (i) furnish Lessor with a full warranty bill of sale conveying title free and clear of all Liens except Lessor Liens, in form and substance reasonably satisfactory to Lessor, with respect to such Replacement Engine; (ii) cause a supplement hereto, in form and substance reasonably satisfactory to Lessor, subjecting such Replacement Engine to this Lease, to be duly executed by Lessee, and recorded pursuant to applicable Law; (iii) furnish Lessor with such evidence of title to such Replacement Engine and of compliance with the insurance provisions of Section 12 hereof with respect to such Replacement Engine as Lessor may reasonably request; (iv) furnish Lessor with an opinion of Lessee's counsel (which counsel shall be 36

reasonably acceptable to Lessor) to the effect that title to such Replacement Engine has been duly conveyed to Owner as provided in clause (i) above, and that such Replacement Engine is duly leased hereunder; (v) furnish a certificate signed by a duly authorized financial officer or executive of Lessee certifying that, upon consummation of such replacement, no Default or Event of Default will exist hereunder; (vi) furnish Lessor with such documents as Lessor may reasonably request in connection with the consummation of the transactions contemplated by this Section 11(b), in each case in form and substance reasonably satisfactory to Lessor; and (vii) furnish such financing statement covering the Replacement Engine as may be reasonably requested by Lessor. Upon full compliance by Lessee with the terms of this Section 11(b), Lessor will cause Owner to transfer by bill of sale to Lessee "AS IS AND WHERE IS" and without recourse or warranty (except as to the absence of Lessor's Liens) all of the right, title and interest in the Engine which suffered the Casualty Occurrence and which was originally leased to Lessee. For all purposes hereof, each such Replacement Engine shall be deemed part of the property leased hereunder, shall be deemed an "Engine" as defined herein and shall be deemed part of the same Aircraft as was the Engine replaced thereof. No Casualty Occurrence covered by this Section 11(b) shall result in any reduction in Rent. (c) Application of Proceeds and Payments. Any payments received at any time by Lessor or by Lessee from any insurer under any policy of insurance (other than liability insurance) or any other person (other than an insurer under insurance maintained by Lessor) shall be applied in the manner specified in Sections 12(d), 12(e) or 12(f) hereof as applicable. Subject to Section 11(f) hereof, any payments received at any time by Lessor or Lessee from any Governmental Entity or other Person with respect to a Casualty Occurrence will be applied as follows: (i) unless clause (ii) below is applicable, so much of such payments as shall not exceed the sum of accrued, unpaid Rent plus the Casualty Value required to be paid by Lessee pursuant to Section 11(a) of this Lease shall be paid to Lessor in reduction of Lessee's obligation to pay such unpaid Rent and Casualty Value if not already paid by Lessee, or, if already paid by Lessee (unless a Default or an Event of Default shall have occurred and be continuing) shall be applied by Lessor to reimburse Lessee for its payment of such Casualty Value and the balance of such payment, if any, remaining thereafter (if such payment is received with respect to insurance other than liability insurance) (unless a Default or an Event of Default shall have occurred and be continuing) shall be paid over to, or retained by, Lessee; or (ii) if such payments are received as a result of a Casualty Occurrence with respect to an Engine which is being replaced pursuant to Section 11(b), unless a Default or Event of Default shall have occurred and be continuing, all such payments shall be paid over to, or retained by, Lessee if Lessee shall have fully performed or, concurrently therewith will fully perform, the terms of Section 11(b) and of Section 15 hereof with respect to the Casualty Occurrence for which such payments are made. (d) Requisition for Use by Government with Respect to the Aircraft.. In the event of the requisition for use by a Governmental Entity of the Airframe or any Engine (other than a requisition constituting a Casualty Occurrence), all Lessee's obligations under this Lease with respect to the Airframe or Engine shall continue to the same extent as if such requisition had not occurred, except to the extent such obligations cannot be performed by Lessee as a consequence of such requisition. All payments received by Lessor or Lessee from the Governmental Entity for the 37

use of the Airframe or Engine prior to the time (if at all) such requisition becomes a Casualty Occurrence shall be paid over to, or retained by, Lessee if no Default or Event of Default shall have occurred and be continuing; and all payments received by Lessor or Lessee from the Governmental Entity for the use of such item thereafter shall be paid over to, or retained by, Lessor. (e) Other Dispositions. Any amounts not payable to or retainable by Lessee pursuant to this Section 11 or Section 12 hereof because a Default or an Event of Default shall have occurred and be continuing shall be held by Lessor and shall be paid over to Lessee when such Default or Event of Default shall cease to be continuing, except that if Lessor shall have theretofore declared this Lease to be in default pursuant to Section 18 hereof, such amounts shall be retained by Lessor and disposed of in accordance with the provisions thereof. (f) Application in Default. Any amount referred to in clause (i) or (ii) of Section 11(c) which is otherwise payable to Lessee shall not be paid to Lessee, or, if it has been previously paid to Lessee, and not yet applied by Lessee as permitted or required hereunder, shall be delivered from Lessee to Lessor, if at the time of such payment a Default or an Event of Default shall have occurred and be continuing. In such case, all such amounts shall be paid to and held by Lessor as security for the obligations of Lessee, or, at the option of Lessor, applied by Lessor toward payment of any of Lessee's obligations at the time due hereunder, as Lessor may elect. At such time as there shall not be continuing any such Event of Default or Default, all such amounts at the time held by Lessor in excess of the amount, if any, which Lessor has elected for application as provided above, shall be paid to Lessee. (g) ICAO Rules and Procedures. It is agreed that any investigation of an accident involving the Aircraft or a Casualty Occurrence will be carried out with the participation of Lessor and Lessee in accordance with the Rules and Procedures of the International Civil Aviation Organization ("ICAO") from time to time in effect. All necessary information required by ICAO, to the extent reasonably available to the Lessor, shall be promptly furnished by the Lessor. Section 12. Insurance. (a) Public Liability and Property Damage Insurance. Lessee shall carry and maintain in full force and effect, at its own expense, with Approved Insurers, airline public liability insurance (including, to the extent generally available in the insurance markets but not limited to, contractual liability, third party legal liability, passenger, baggage, cargo, mail and airline general liability, including premises hangar keepers and products liability) and property damage insurance with respect to the Aircraft of the type usual and customary by commercial scheduled passenger airline carriers similarly situated to Lessee and operating similar aircraft. Such policy shall include war and allied risks in accordance with standard market practice (currently "The Extended Coverage Endorsement - AVN 52C"). Such insurance shall be in an amount not less than the amount under "Public Liability and Property Damage Insurance" as set forth on Exhibit C hereto. Lessee shall not discriminate against the Aircraft in providing such insurance. (b) Insurance Against Loss or Damage. Lessee, at its own expense, shall maintain in full force and effect throughout the Term with Approved Insurers during the Term "all-risk" ground and flight aircraft hull insurance (which shall include, but not be limited to, vandalism, war risk and allied perils, hijacking, disappearance clause and coverage against strikes, riots, commotions or 38

labor disturbances, malicious acts or acts of sabotage and unlawful seizure (including confiscation, confiscation by the Country of Registration, arrest, nationalization, seizure, restraint, detention, appropriation, requisition or destruction thereat, by or under authority of any Governmental Entity), or wrongful exercise of control of the Aircraft in flight by a person on board the Aircraft acting without the consent of Lessee) covering the Aircraft, and "all-risk" coverage insurance with respect to Engines and Parts while not installed on the Aircraft or an aircraft, which in each case is at least as broad as coverage maintained by commericial scheduled passenger airlines similarly situated to Lessee and operating similar aircraft and engines as Lessee's fleet. Such insurance shall be for an amount not less than the Casualty Value for the Aircraft and shall incorporate a 50/50 clause with respect to "all-risk" hull and war risk coverage and shall be as further specified in Exhibit C. Such insurance may include provisions for deductibles in an amount usual and customary for commercial scheduled airline carriers similarly situated and operating similar aircraft provided that (i) the amount of such deductibles must be no greater than the lowest deductible amount applying to any similar aircraft in Lessor's fleet, and (ii) in no event shall the amount of such deductibles exceed the amount under "Deductible Amount" set forth on Exhibit C hereto. (c) Required Policy Designations and Provisions. Each and any policy of insurance obtained and maintained pursuant to this Section, and each and any policy obtained in substitution or replacement for any such policies, shall: (i) designate Owner as owner and Lessor as lessor of the aircraft covered thereby and designate Owner the sole loss payee in respect of the insurance covering the Aircraft required to be maintained by Lessee pursuant to Section 12(b), and shall designate Lessor, GECAS, and Owner and their respective named successors and assigns (and in respect of coverage specified in Section 12(a) hereof, their respective directors, officers, agents, shareholders, subsidiaries and employees), as additional named insureds (the "Additional Insureds") (and the policy shall be promptly amended upon the request of Lessor to add any additional named successors or assigns of Lessor, GECAS, or Owner) as their interests may appear (but without imposing upon the Additional Insureds, any obligation imposed upon the insured, including, without limitation, the liability to pay any premiums for, any such policies); (ii) expressly provide that, in respect of the interests of the Additional Insureds, in such policies, the insurance shall not be invalidated by any action or inaction of Lessee, and shall insure the Additional Insureds, regardless of any breach or violation of any warranty, declaration or condition contained in such policies by Lessee or any other party other, and provided the Person so protected has not caused, contributed to or knowingly condoned such action or inaction, other than with respect to an Additional Insured in connection with a breach or violation by such Additional Insured; (iii) provide that if there is a cancellation or material adverse alteration of the insurance, such cancellation or alteration shall not be effective as to the Additional Insureds for thirty (30) days (seven (7) days or such lesser period as from time to time may be applicable in the case of any war risks for allied perils coverage) after issuance to Lessor of written notice by telecopy or overnight courier, by such insurer or insurers of such prospective cancellation or change; (iv) include coverage for the territorial limits of any country (including its airspace) in which the Aircraft operates on a worldwide basis subject to such limitations and exclusions as Lessor may reasonably agree; (v) provide that, as against the Additional Insureds, the insurer waives any rights of set-off, counterclaim or any other deduction (except to the extent set forth in an insurance certificate which shall have been approved by Lessor), whether by attachment or otherwise, and agrees to waive rights of subrogation against the Additional Insureds, provided, however, that such waiver of subrogation need not extend to claims against third parties; (vi) provide that no amount due from the Lessee or any other Person to any insurer or broker shall be deducted from any amount payable to a third party under such insurance 39

policy; (vii) provide that in the event of any damage or loss, whether or not a Casualty Occurrence hereunder, and which results in a payment, such payment shall be payable directly to Lessor or its assignee as loss payees, for the account of all interests; provided, however, that so long as no Default or Event of Default shall have occurred and be continuing, payments with respect to property damage loss to the Airframe or Engine not constituting a Casualty Occurrence, or any Part, in any amount not to exceed **Material Redacted** may be paid to Lessee to be applied for the repair or replacement necessitated by such property damage and Lessee shall notify Lessor in writing of any such payments in excess of the Damage Notification Threshold and the nature of the property damage giving rise to such payments; (viii) provide that none of the Additional Insureds shall be liable for any insurance premium; (ix) expressly exclude any fleet aggregate, ground aggregate or any other type of sublimit, limiting coverage to the Aircraft unless (A) Lessee, all other loss payees and all other insureds, other than Lessor, execute and deliver a subordination agreement, in form reasonably acceptable to Lessor, whereby such parties agree to subordinate their rights to the rights of Lessor or (B) Lessee obtains an excess policy of insurance which provides insurance coverage in an amount not less than the Casualty Value of the Aircraft for the express and exclusive benefit of Lessor or (C) any such aggregate or sublimit is set forth in an insurance certificate which shall have been approved by Lessor; and (x) be reinsured outside the Country of Registration with an Approved Insurer in the international reinsurance markets for an amount not less than 97.5% of the insured risk for each type of coverage required to be maintained hereunder and, to the extent of any reinsurance, include a cut-through provision permitting the Additional Insureds to file claims and to obtain payment directly from the reinsurers under the reinsurance policies. Each such policy shall be primary without right of contribution (except to the extent set forth in an insurance certificate which shall have been approved by Lessor), from any other insurance which may be carried by any of the Additional Insureds, and, with respect to liability coverage, shall expressly provide that all of the provisions thereof shall operate in the same manner as if there were a separate policy covering each insured, provided that such policies shall not operate to increase the insurer's limit of liability and shall not operate to permit claims recoverable under the hull policy to be recoverable as liability claims. Lessee shall have the right to carry insurance in excess of the amounts required hereunder and the proceeds of such excess insurance shall be payable to Lessee; provided, however that no such excess insurance shall prejudice any insurance coverages required to be maintained by Lessee hereunder. Similarly, Lessor shall have the right to carry additional and separate insurance for its own benefit at its own expense, without, however, thereby limiting Lessee's obligations under this Section 12, provided that no such insurance maintained by Lessor shall prejudice any insurance coverage required to be maintained by Lessee hereunder or the recovery by Lessee thereunder. (d) Application of Insurance Proceeds for a Casualty Occurrence. It is agreed that insurance payments which arise from any policy of insurance carried by Lessee and received as the result of the occurrence of a Casualty Occurrence shall be applied as follows: (i) if such payments are received with respect to a Casualty Occurrence relating to the Airframe and Engines or engines installed on the Airframe, so much of such payments as shall not exceed the amounts due under Section 11(a) hereof shall be paid to Owner, and the balance to Lessee; and (ii) if such payments are received with respect to a Casualty Occurrence relating 40

to an Engine under circumstances contemplated by Section 11(b) hereof, such payment shall be adjusted with Lessee (provided that Lessee has not breached any warranty, declaration or condition contained in the applicable insurance policy) and paid over to Lessee, provided that Lessee shall have fully performed or, concurrently therewith, will fully perform the terms of Section 11(b) hereof. (e) Application of Insurance Proceeds for Other than a Casualty Occurrence. Subject to the proviso in Section 12(c)(vi) above, the insurance payments for any property damage loss to the Airframe or any Engine not constituting a Casualty Occurrence, or to any Part, will be applied in payment (or to reimburse Lessor/Lessee) for repairs or replacement property upon Lessor's receipt of evidence reasonably satisfactory to it that repairs or replacement have been effected in accordance with this Agreement. (f) Application in Default. Any amount referred to in Section 12(d)(i) or (ii) of Section 12(e) which is otherwise payable to Lessee shall not be paid to Lessee, or, if it has been previously paid to Lessee, and not yet applied by Lessee as permitted or required hereunder, shall be delivered by Lessee to Lessor, if at the time of such payment, a Default or an Event of Default shall have occurred and be continuing. In either case, all such amounts shall be held by Lessor as security for the obligations of Lessee, or, at the option of Lessor, applied by Lessor toward payment of any of Lessee's obligations at the time due hereunder. At such time as there shall not be continuing any such Default or Event of Default, all such amounts at the time held by Lessor in excess of the amount, if any, which Lessor has elected for application as provided above, shall be paid to Lessee. (g) Certificates of Insurance. On or before the Delivery Date, and thereafter on each renewal by Lessee of the insurance required hereby, but not less often than annually, Lessee will furnish to Lessor one or more certificates (substantially in the form of Exhibits G and H hereto or such other form to which Lessor shall have agreed) each executed and delivered by an Approved Insurance Broker who is authorized by one or more Approved Insurers, appointed by Lessee, which together shall describe in reasonable detail insurance carried on the Aircraft and confirming the Approved Insurers' agreement to the specified insurance requirements of this Lease. Lessee will cause each such Approved Insurance Broker who is authorized by an Approved Insurer to agree to advise Lessor in writing at least thirty (30) days (seven (7) days or such lesser period as may from time to time be applicable in the case of any war risk and allied perils coverage) prior to the non-renewal, termination or cancellation by the underwriters for any reason (including, without limitation, failure to pay the premium therefor) of any such insurance or as soon as possible in respect of "non-renewal" or automatic termination for war risk. 41

Section 13. Indemnification. Lessee agrees to indemnify, reimburse and hold harmless each Indemnitee from and against any and all claims, damages, losses, liabilities, demands, suits, judgments, causes of action, legal proceedings, whether civil or criminal, penalties, fines and other sanctions, and any attorneys' fees and other reasonable costs and expenses in connection herewith or therewith, including any of the foregoing arising or imposed with or without Lessor's fault or negligence (whether passive or active) or under the doctrine of strict liability (any and all of which are hereafter referred to as "Claims") which in any way may result from, pertain to or arise in any manner out of, or are in any manner related to (a) the Aircraft or this Lease, or the breach of any representation, warranty or covenant made by Lessee hereunder, or (b) the condition, ownership, manufacture, purchase, delivery, non-delivery, lease, acceptance, rejection, possession, return, disposition or use, or operation of the Aircraft either in the air or on the ground, or (c) any defect in the Aircraft (whether or not discovered or discoverable by Lessee or Lessor) arising from the material or any articles used therein or from the design, testing, or use thereof or from any maintenance, service, repair, overhaul, or testing of the Aircraft, whether or not the Aircraft is in the possession of Lessee, and regardless of where the Aircraft may then be located, or (d) any transaction, approval, or document contemplated by this Lease or given or entered into in connection herewith; provided, however, that Lessee shall be subrogated to all rights and remedies which any Indemnitee may have against the Manufacturer of the Aircraft and its subcontractors as to any such Claims, but only to the extent that Lessee satisfies its indemnification obligation to such Indemnitee hereunder with respect to such Claims. In the event Lessee is required to indemnify any Indemnitee hereunder, Lessee shall pay to such Indemnitee an amount which, after deduction of all Taxes and like charges required to be paid by such Indemnitee in respect of such payment, is equal to the amount of the indemnification required. Lessee shall not be required to indemnify any Indemnitee for any attorneys' fees and expenses incurred by such Indemnitee in seeking indemnification from Lessee and relating to an alleged breach of any representation, warranty or covenant made by Lessee hereunder unless such Indemnitee prevails in the action seeking such indemnification. Lessee hereby waives, and releases each Indemnitee from, any Claims (whether existing now or hereafter arising) for or on account of or arising or in any way connected with injury to or death of personnel of Lessee or loss or damage to property of Lessee or the loss of use of any property which may result from or arise in any manner out of or in relation to the ownership, leasing, condition, use or operation of the Aircraft, either in the air or on the ground, of which may be caused by any defect in the Aircraft from the material or any article used therein or from the design or testing thereof, or use thereof, or from any maintenance, service, repair, overhaul or testing of the Aircraft regardless of when such defect may be discovered, whether or not the Aircraft is at the time in the possession of Lessee, and regardless of the location of the Aircraft at any such time excluding Claims resulting from the gross negligence or willful misconduct of an Indemnitee. The indemnities contained in this Section 13 shall continue in full force and effect notwithstanding the expiration or other termination of this Lease and are expressly made for the benefit of and shall be enforceable by each Indemnitee. 42

Notwithstanding the foregoing provisions of this Section 13: Lessee shall not be obligated to make any payment by way of indemnity in respect of any Claims against an Indemnitee: (i) which result from or arise out of the gross negligence or willful misconduct of such Indemnitee or its Affiliates or out of a breach of such Indemnitee's or its Affiliate's representations, warranties or covenants hereunder or under any documents, agreement or instrument delivered in connection herewith; or (ii) in respect to the Aircraft to extent that the same are attributable to acts or events which occur after the Aircraft has been redelivered to Lessor in accordance with Section 16 hereof and is no longer subject to this Lease unless any such act or event shall itself directly result from an act or omission of Lessee which occurred during the Term (provided, however, that to the extent an Indemnitee is indemnified by Lessee for Claims arising from acts or events which occur prior to the Delivery Date, such Indemnitee shall assign to Lessee any rights it may have against other Persons to recover for such Claims); or (iii) which represent Taxes which are excluded under Section 10(b); (iv) arising from the financing of the Aircraft or the voluntary or involuntary sale, transfer or other disposition (other than in connection with the exercise of an Indemnitee's remedies following an Event of Default or Casualty Occurrence) of the Aircraft or this Lease or any part thereof or interest therein, or the Rent or any interest therein, by any Person other than Lessee; (v) which would not have occurred but for the existence of a Lien (other than this Lease or a Lien arising by or through Lessee) which Lessee is not responsible for discharging under this Lease; and (vi) which constitute ordinary and usual operating or overhead expenses other than any such expense arising in connection with Lessor's exercise of remedies hereunder following an Event of Default. 43

Section 14. Liens. LESSEE SHALL NOT DIRECTLY OR INDIRECTLY CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY LIEN ON OR WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE, TITLE THERETO OR ANY INTEREST THEREIN, EXCEPT (a) THE RESPECTIVE RIGHTS OF LESSOR AND LESSEE AS HEREIN PROVIDED; (b) LESSOR'S LIENS WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE; (c) LIENS FOR TAXES EITHER NOT YET DUE OR BEING CONTESTED IN ACCORDANCE WITH SECTION 10 HEREOF AND SO LONG AS ADEQUATE RESERVES ARE MAINTAINED WITH RESPECT TO SUCH LIENS; AND (d) INCHOATE MATERIALMEN'S, MECHANICS', WORKMEN'S, REPAIRMEN'S, EMPLOYEES' OR OTHER LIKE LIENS ARISING IN THE ORDINARY COURSE OF BUSINESS, WHICH EITHER ARE NOT DELINQUENT OR ARE BEING CONTESTED IN GOOD FAITH BY LESSEE, SO LONG AS THE AIRCRAFT OR SUCH ENGINE IS NOT IN DANGER OF BEING LOST, SOLD, CONFISCATED, FORFEITED OR SEIZED AS A RESULT OF ANY SUCH LIEN. LESSEE SHALL PROMPTLY, AT ITS OWN EXPENSE, TAKE SUCH ACTION AS MAY BE NECESSARY TO DULY DISCHARGE ANY LIEN (EXCEPT FOR THE LIENS REFERRED TO IN CLAUSES (a) AND (b) OF THIS SECTION 14) IF THE SAME SHALL ARISE AT ANY TIME WITH RESPECT TO THE AIRCRAFT OR ANY ENGINE. Section 15. Perfection of Title and Further Assurances. If at any time subsequent to the initial recordation of title under this Lease, any filing or recording is reasonably necessary to protect the interests of Owner or Lessor, Lessee, at its own cost and expense and upon request by Lessor, shall cause this Lease, any financing statements with respect hereto, and any and all additional instruments which shall be executed pursuant to the terms hereof, to be kept, filed and recorded and to be reexecuted, refiled and re-recorded in the appropriate office or offices pursuant to applicable Laws, to perfect, protect and preserve the rights and interests of Lessor hereunder and in the Aircraft. At the reasonable request of Lessor, Lessee shall furnish to Lessor an opinion of counsel or other evidence satisfactory to Lessor of each such filing or refiling and recordation or re-recordation. Without limiting the foregoing, Lessee shall do or cause to be done, at Lessee's cost and expense, any and all acts and things which may be required under the terms of the Mortgage Convention to perfect and preserve the title of Owner and the interests of Owner and Lessor in the Aircraft within the jurisdiction of any signatory which has ratified the Mortgage Convention if such jurisdiction is in the territory in which Lessee may operate the Aircraft, as Lessor may reasonably request. Lessee shall also do or cause to be done, at its own expense, any and all acts and things which may be required under the terms of any other Law involving any jurisdiction in which Lessee may operate, or any and all acts and things which Lessor may reasonably request, to perfect and preserve Lessor's ownership rights regarding the Aircraft within any such jurisdiction. In addition, Lessee will promptly and duly execute and deliver to Lessor such further documents and assurances and take such further actions as it may from time to time reasonably request in order to more effectively carry out the intent and purpose of this Lease and to establish and protect the rights and remedies created or intended to be created in favor of Lessor hereunder, including without limitation, if reasonably requested by Lessor at the expense of Lessee, the 44

execution and delivery of supplements or amendments hereto in recordable form, subjecting to this Lease any Replacement Engine and the recording or filing of counterparts thereof, in accordance with the laws of any appropriate jurisdiction. Section 16. Return of Aircraft and Records. (a) Return. On the Expiration Date, Lessee, at its own expense, shall return the Aircraft to Lessor in the condition specified on Exhibit E hereto at the location specified as "Return Location" set forth on Exhibit C hereto, fully equipped with all required Parts and Engines, duly installed thereon, together with Aircraft Documents and records which are complete and acceptable to the DAC, by delivering the same to Lessor at such location. (b) Legal Status Upon Return. Upon the Return Occasion, the Aircraft shall be: (i) free and clear of all Liens, except Lessor's Liens; (ii) duly certified as an airworthy aircraft by the DAC with the current and valid airworthiness certificate installed on the Aircraft; (iii) equipped and in full airworthy condition required to allow the Aircraft to be operated in commercial transportation of passengers under applicable rules and regulations of the DAC and in full compliance with Part 129; (iv) duly registered under the applicable Law of the Country of Registration; (v) in full compliance with the Maintenance Program; (vi) in full compliance with all FAA Airworthiness Directives which by their terms require compliance on or before the ninety (90) days following the Expiration Date; and (vii) in compliance with the requirements of the FAA regulations found at Part 36, Appendix C, Stage 3, noise compliance, without waiver or performance restriction. (c) Engines. Lessee may return the Aircraft on the Return Occasion with an engine not owned by Lessor, so long as (i) such engine was not installed on the Aircraft solely for the purpose of reducing the number of hours or cycles (whichever is the more limiting factor) remaining until the next scheduled restriction in accordance with the Maintenance Program under which the Engines are maintained; (ii) such engine conforms to the requirements set forth in Section 11(b) hereof with respect to a Replacement Engine without regard to flight hours or cycles remaining on LLPs or time since heavy maintenance, except Lessor may in its discretion choose among the engines presented by Lessee as candidates for substitution; (iii) such engine shall conform to the return condition requirements set forth in Section 16(f) hereof; and (iv) Lessee, at its own expense and concurrently with such delivery, furnishes Lessor with a bill of sale, in form and substance reasonably satisfactory to Lessor, with respect to such engine and with evidence that Lessee is transferring full and unencumbered title to such engine (including, if requested, an opinion of Lessee's counsel to the effect of the opinion required by Section 11(b)(iv) hereof) and takes such other action as Lessor may reasonably request in order that title to such engine shall be duly and fully vested in Owner. Lessee's obligation to comply with the terms of this Section 16(c) shall be conditioned on Lessor's transferring, or causing to be transferred, to Lessee title to any Engine not installed on the Aircraft at the Return Occasion, without any representation, warranty or recourse of any kind whatsoever, express or implied, except a warranty that such Engine is free and clear of Liens, other than Liens which Lessee is required to discharge hereunder, or defects in title resulting from acts of Owner or Lessor. (d) Records. Upon the Return Occasion, Lessee shall deliver to Lessor all logs, manuals, and data and inspection, modification and overhaul records which are required to be maintained with respect to the Aircraft and Engines under the Maintenance Program and in 45

accordance with applicable rules and regulations of the DAC. Lessee shall deliver to Lessor a copy of such portions of Lessee's Maintenance Program as are necessary to enable the subsequent operator of the Aircraft to bridge the maintenance of the Aircraft to its own maintenance program; provided, that Lessor agrees to maintain such information in strict confidence and to use such information only for the foregoing purpose, and, prior to providing such information to any other Person, Lessor shall obtain a written agreement to the same effect from such other Person in form and substance reasonably satisfactory to Lessee. All such documents shall have been maintained in English, or be accompanied by a certified English translation. (e) Service Bulletin and Modification Kits. At or upon the return of the Aircraft pursuant to this Section 16, Lessee shall deliver to Lessor, at no cost to Lessor, all service bulletin kits furnished without charge by a manufacturer for installation on the Aircraft which have not been so installed together with appropriate instructions for installation. In the event such uninstalled kits were purchased or manufactured by Lessee for the Aircraft, then Lessor shall have a right to purchase such kits at Lessee's cost for a period of ninety (90) days after return. (f) Condition of Aircraft. Upon the Return Occasion applicable to the Aircraft, Lessee shall return the Aircraft to Lessor in such condition that the Aircraft shall comply with all of the conditions set forth on Exhibit E hereto. (g) Final Inspection. Upon the Return Occasion, Lessee shall make the Aircraft available to Lessor at Lessee's principal maintenance base or at the location at which the "C" check referred to below is being performed for detailed inspection, at Lessee's expense (provided, that Lessee shall not bear any costs or expenses associated with Lessor's representatives), in order to verify that the condition of the Aircraft complies with the requirements set forth above (such inspection being hereinafter referred to as the "Final Inspection"). The Final Inspection shall be conducted concurrently with the "C" Check to be performed immediately prior to the Return Occasion. Lessee shall give Lessor not less than ten (10) days prior written notice of the commencement date of such "C" Check. The period allowed for the Final Inspection shall have such duration as to permit Lessor to verify Lessee's satisfaction of the requirements of Exhibit E and shall continue on consecutive days until all activity required above to be conducted during the Final Inspection has been concluded; provided, however, that Lessor shall use its best efforts to complete the Final Inspection contemporaneously with the completion of such "C" Check. To the extent that any portion of the Final Inspection extends beyond the Expiration Date, the Term shall be deemed to have been automatically extended, and the obligation to pay Rent hereunder continued on a daily basis until the Final Inspection shall have been concluded, provided that such Rent shall be payable only if (i) Lessor provided on a timely basis sufficient personnel to complete the Final Inspection in a timely manner and (ii) the cause of such extension is not directly attributable to Lessor or its personnel. All storage expenses attributable to any extension of the Term pursuant to the preceding sentence shall be payable by Lessee. (h) Aircraft Documentation. In order to enable Lessor to prepare for the Final Inspection of the Aircraft pursuant to Section 16(g) above, Lessee agrees to make available to Lessor at Lessee's principal maintenance base not later than ten (10) days prior to the commencement of such Final Inspection, the Aircraft Documents listed on Exhibit B hereto, together with such other documentation regarding the condition, use, maintenance, operation and history of the Aircraft during Lessee's possession as Lessor may reasonably request. 46

(i) Corrections and Subsequent Corrections. In the event that the Aircraft or any Engine fails upon the Return Occasion to conform to any return condition requirement imposed by this Lease and particularly Section 16(f) and (Exhibit E), Lessor may, without prejudice to the right of Lessee to claim that the Aircraft did comply with such return condition requirement, (i) continue the Lease in effect in the manner provided for in Section 16(g) above with regard to automatic extension until such time as the Aircraft is brought up to the condition required by Section 16(f) above or (ii) accept the return of the Aircraft and thereafter have any such nonconformance corrected, at such time as Lessor may deem appropriate but not to occur later than ninety (90) days following the return of the Aircraft, at commercial rates then charged by the Person selected by Lessor to perform such correction. Any direct expense incurred by Lessor for such correction shall become Supplemental Rent payable by Lessee within thirty (30) days following the submission of a written statement by Lessor to Lessee, identifying the items corrected and setting forth the expense of such correction. Lessee's obligations to pay such Supplemental Rent shall survive the passage of the Expiration Date or other termination of this Lease. (j) Additional Maintenance, Repair or Overhaul. Upon the Return Occasion and upon written request of Lessor made at least fifteen (15) days prior to the Expiration Date, Lessee shall (subject to the availability to Lessee of facilities and manpower) store and insure the Aircraft for a period of up to forty-five (45) days, and perform such additional maintenance, repair, or overhaul of the Aircraft as is requested by Lessor in the same manner and with the same care as used for similar aircraft and engines owned by Lessee, provided that Lessor shall reimburse Lessee for its documented costs, at Lessee's standard contract rate, for such storage, maintenance, repair, or overhaul. Lessor shall reimburse Lessee for its actual cost of insurance in connection with maintaining the Aircraft under Lessee's insurance coverage during the storage period. Such additional maintenance, repair or overhaul shall not extend this Lease. Maintenance requested by Lessor other than that specifically required by the terms of this Lease shall be performed by Lessee and paid for by Lessor at Lessee's standard contract rate for such maintenance as agreed to by Lessor. (k) Functional Check Flight. Immediately prior to the expiration of the Term, a qualified pilot and not more than two (2) technical representatives selected by Lessor, in conjunction with Lessee's flight crew, will accomplish a functional check flight of not more than two (2) hour's durations in accordance with Lessee's procedures and at Lessee's expense to demonstrate the airworthiness of the Aircraft and proper functioning of all systems and components; provided, Lessor shall be responsible for the charges of Lessor's technical representatives. At all times during such functional check flight Lessee's flight crew shall be in command of the Aircraft. Any discrepancy or malfunction detected of an airworthiness or operational nature by normal airline standards shall be corrected at Lessee's expense. To the extent possible, the functional check flight shall be combined with the return of the Aircraft under Section 16(a). (l) Technical Acceptance at Return. Provided that Lessor is reasonably satisfied that all of the conditions for return of the Aircraft set forth in this Lease have been satisfied (either through performance or through the payment of the amounts in lieu thereof specified in Exhibit E hereto), Lessor shall execute and deliver a Technical Acceptance Receipt substantially in the form annexed hereto as Exhibit H with appropriate changes to reflect the circumstances of redelivery of 47

the Aircraft. (m) Maintenance Payments at Redelivery. On the Return Occasion, Lessee shall make Maintenance Payments to Lessor pursuant to Paragraph 5 of Exhibit C, by wire transfer in immediately available funds to the account specified as the Payment Location in Exhibit C. (n) Excusable Delay. Lessee shall not have to pay Rent for any period after the end of the Term during which Lessee did not return the Aircraft to Lessor due to an Excusable Delay. Section 17. Events of Default Any one or more of the following occurrences or events shall constitute an Event of Default: (a) Lessee shall fail to make any payment of Rent to Lessor when due, in full and in the manner and at the place required under this Lease and such payment shall be overdue for a period of **Material Redacted** Business Days following written notice from Lessor; (b) Lessee shall fail to obtain and maintain any insurance required under the provisions of Section 12 hereof; or shall operate the Aircraft outside of the scope of the insurance coverage maintained with respect to the Aircraft; (c) Any representation or warranty made by Lessee herein or in any document or certificate furnished Lessor in connection herewith or therewith or pursuant hereto is incorrect at the time given in any material respect and, if capable of being cured, shall not have been remedied within **Material Redacted** days after notice thereof is given by Lessor to Lessee; (d) Lessee shall fail to timely comply with the provisions of Section 20(i) hereof; (e) Lessee shall fail to timely comply with its obligation under Section 3 hereof to accept delivery of the Aircraft when tendered by Lessor meeting the delivery conditions set forth in Exhibit A and such failure is not cured within **Material Redacted** Business Days; (f) Lessee shall fail to timely comply with its obligations pursuant to Section 14 hereof and such failure shall continue for a period of **Material Redacted** days after written notice thereof is given by Lessor to Lessee; (g) Lessee shall make or permit any unauthorized assignment or transfer of this Lease, or any interest therein, or of the right to possession of the Aircraft, the Airframe, or any Engine; (h) Lessee shall fail to perform or observe any other covenant, condition or agreement to be performed or observed by it pursuant to this Lease and such failure shall continue for a period of **Material Redacted** days after written notice thereof is given by Lessor to Lessee (provided, however, that if such failure relates to a covenant, condition or agreement which is not material (as determined by Lessor in its reasonable discretion) and such failure results from circumstances beyond Lessee's reasonable control and Lessee demonstrates to the reasonable satisfaction of Lessor that Lessee is diligently taking all commercially reasonable actions necessary to remedy such 48

failure, such failure shall not constitute an Event of Default hereunder for as long as such failure remains not material (as determined by Lessor in its reasonable discretion) and outside of the control of Lessee and Lessee is so acting to remedy such failure); (i) **Material Redacted**; (j) Lessee consents to the appointment of a receiver, trustee or liquidator of itself or of a substantial part of its property, or Lessee admits in writing its inability to pay its debts generally as they come due, or makes a general assignment for the benefit of creditors, or Lessee files a voluntary petition in bankruptcy or a voluntary petition seeking reorganization in a proceeding under any bankruptcy laws (as now or hereafter in effect), or an answer admitting the material allegations of a petition filed against Lessee in any such proceeding, or Lessee by voluntary petition, answer or consent seeks relief under the provisions of any bankruptcy or other similar law providing for the reorganization or winding-up of corporations, or provides for an agreement, composition, extension or adjustment with its creditors; (k) An order, judgment or decree is entered by any court, with or without the consent of Lessee, appointing a receiver, trustee or liquidator for Lessee or of all or any substantial part of its property, or all or any substantial part of the property of Lessee is sequestered, and any such order, judgment or decree of appointment or sequestration remains in effect, undismissed, unstayed or unvacated for a period of forty-five (45) days after the date of entry thereof; (l) A petition against Lessee in a proceeding under the bankruptcy, insolvency or other similar Laws (as now or hereafter in effect) of any Governmental Entity is filed and is not withdrawn or dismissed within **Material Redacted** days thereafter, or if, under the provisions of any Law providing for reorganization or winding-up of corporations which may apply to Lessee, any court of competent jurisdiction assumes jurisdiction over, or custody or control of, Lessee or of all or any substantial part of its property and such jurisdiction, custody or control remains in effect, unrelinquished, unstayed or unterminated for a period of **Material Redacted** days; (m) A final judgment for the payment of money not covered by insurance in excess of **Material Redacted**, or final judgments for the payment of money not covered by insurance in excess of **Material Redacted** in the aggregate, shall be rendered against Lessee and the same shall remain undischarged for a period of **Material Redacted** days during which execution thereof shall not be effectively stayed by agreement of the parties involved, stayed by court order or adequately bonded or attachments or other Liens, except for security interests; (n) Attachments or other Liens shall be issued or entered against substantially all of the property of Lessee and shall remain undischarged or unbonded for **Material Redacted** days except for security interests created in connection with monies borrowed or obligations agreed to by Lessee in the ordinary course of its business; (o) Lessee shall default in the payment of any obligation for the payment of borrowed money, for the deferred purchase price of property or for the payment of rent or hire under any lease of aircraft which has a principal amount of **Material Redacted** or more (determined in the case of borrowed money by the amount outstanding under the agreement pursuant to which such borrowed money was borrowed, in the case of a deferred purchase price by the remaining balance 49

and in the case of a lease by the present discounted value of the remaining rent or hire payable thereunder (ignoring any fair market renewal)) when the same becomes due and after giving effect to any applicable grace period, if such nonpayment results in the acceleration of any such indebtedness or any lessor shall have demanded the payment of any liquidated damages or similar amount or has exercised its rights to repossession of such property; or Lessee shall default in the performance of any other term, agreement or condition contained in any material agreement or instrument under or by which any such obligation is created, evidenced or secured, if the effect of such default is to cause such obligation to become due prior to its stated maturity; (p) Lessee voluntarily suspends all or substantially all of its operations or the franchises, concessions, permits, rights or privileges required for the conduct of the business and operations of Lessee shall be revoked, canceled or otherwise terminated or the free and continued use and exercise thereof curtailed or prevented, and as a result of any of the foregoing the preponderant business activity of Lessee shall cease to be that of a commercial airline; or (q) Without the prior written consent of Lessor, the Letter of Credit shall have been canceled, revoked or otherwise terminated prior to its original termination date or amended, modified, altered or replaced or there shall, for any reason, cease to be a letter of credit or letters of credit, as applicable, with terms and conditions and in the amount required hereunder in full force and effect at any time during the Term. Lessee hereby acknowledges that the occurrence of any one of the foregoing Events of Default would represent a material default in the performance of its obligations under this Lease. Section 18. Remedies. Upon the occurrence of any Event of Default and any time thereafter so long as the same shall be continuing, Lessor may, at its option and without notice to Lessee, exercise one or more of the following remedies as Lessor in its sole discretion shall elect, to the extent available and permitted by, and subject to compliance with any mandatory requirements of, applicable Law then in effect; provided that, upon the occurrence of any Event of Default specified in paragraphs (j), (k) or (l) of Section 17, the Lessor shall be entitled automatically, as of the day prior to such occurrence, to exercise any of the following remedies without making demand or giving notice or the taking of any other action: (a) Demand that Lessee, and Lessee shall upon the written demand of Lessor and at Lessee's expense, immediately return the Aircraft to Lessor in the manner specified in such notice, in which event such return shall not be delayed for purposes of complying with the return conditions specified in Section 16 hereof (none of which conditions shall be deemed to affect Lessor's possession of the Aircraft) or delay for any other reason. Notwithstanding the foregoing, at Lessor's option Lessee shall be required thereafter to take such actions as would be required by the provisions of this Lease if the Aircraft were being returned at the end of the Term hereof and Lessor agrees to cooperate with Lessee's required actions. In addition, Lessor, at its option and to the extent permitted by applicable Law, may enter upon the premises where all or any part of the Aircraft is located and take immediate possession of and, at Lessor's sole option, remove the same (and/or any engine which is not an Engine but which is installed on the Airframe, subject to the rights of the owner, lessor or secured party thereof) by summary proceedings or otherwise, all 50

without liability accruing to Lessor for or by reason of such entry or taking of possession whether for the restoration of damage to property, or otherwise, caused by such entry or taking, except damages caused by gross negligence or willful misconduct. (b) Sell at private or public sale, as Lessor may determine, or hold, use, operate or lease to others the Aircraft as Lessor in its sole discretion may determine, all free and clear of any rights to Lessee. (c) Whether or not Lessor shall have exercised, or shall thereafter at any time exercise, any of its rights under paragraph (a) or paragraph (b) of this Section 18, Lessor, by thirty (30) days written notice to Lessee specifying a payment date, may demand that Lessee pay to Lessor, and Lessee shall pay to Lessor, on the payment date specified in such notice, as liquidated damages for loss of bargain and not as a penalty (in lieu of the Basic Rent due for the period commencing after the date specified for payment in such notice), any unpaid Rent for the Aircraft (prorated in the case of Basic Rent on a daily basis) to and including the payment date specified in such notice, plus the amount, if any, by which the aggregate Basic Rent for the remainder of the Term, discounted periodically (equal to installment frequency) to present worth at the interest rate of four percent (4%) per annum, exceeds the fair market rental value (determined pursuant to the Appraisal Procedure) of the Aircraft for the remainder of the Term, after discounting such fair market rental value periodically (equal to installment frequency) to present worth as of the payment date specified in such notice at the interest rate of four percent (4%) per annum. (d) In the event that Lessor, pursuant to Section 18(b) above, shall have relet the Aircraft under a lease which extends at least to the date upon which the Term for the Aircraft would have expired but for Lessee's default, Lessor, in lieu of exercising its rights under Section 18(c) above with respect to the Aircraft, may, if it shall so elect, demand that Lessee pay Lessor, and Lessee shall pay Lessor, as liquidated damages for loss of bargain and not as a penalty (in lieu of the Basic Rent for the Aircraft due after the time of reletting) any unpaid Rent for the Aircraft due up to the date of reletting, plus the amount, if any, by which the aggregate Basic Rent for the Aircraft, which would otherwise have become due over the Term, discounted periodically (equal to installment frequency) to present worth and of the date of reletting at the interest rate of four percent (4%) per annum, exceeds the aggregate basic rental payments to become due under the reletting from the date of such reletting to the date upon which the Term for the Aircraft would have expired but for Lessee's default, discounted periodically (equal to installment frequency) to present worth as of the date of the reletting at the interest rate of four percent (4%) per annum. (e) Proceed by appropriate court action or actions, either at law or in equity, to enforce performance by Lessee of the applicable covenants of this Lease and to recover damages for the breach thereof and to rescind this Lease. (f) Terminate this Lease by written notice (which notice shall be effective upon dispatch) and repossess the Aircraft. (g) Draw upon all amounts under the Security Letter of Credit, Security Deposit, Supplemental Rent, and other supplemental rent, security deposits or letters of credit held by Lessor or Lessor's Affiliates under any of the Related Leases and apply such amounts to amounts owing to Lessor hereunder. 51

In addition to the foregoing, Lessee shall be liable for any and all unpaid Rent, together with interest on such unpaid amounts at the Interest Rate, until satisfaction of all of Lessee's obligations to Lessor hereunder and for all reasonable legal fees and other reasonable costs and expenses incurred by Lessor by reason of the occurrence of any Event of Default or the exercise of Lessor's remedies with respect thereto, including all costs and expenses incurred in connection with the return of the Aircraft in accordance with the terms of Section 16 hereof or in placing the Aircraft in the condition and with airworthiness certification as required by such Section. In effecting any repossession, Lessor and its representatives and agents, to the extent permitted by law, shall: (i) have the right to enter upon any premises where it reasonably believes the Aircraft, the Airframe, an Engine or Part to be located; (ii) not be liable, in conversion or otherwise, for the taking of any personal property of Lessee which is in or attached to the Aircraft, the Airframe, an Engine or Part which is repossessed; provided, however, that Lessor shall return to Lessee all personal property of Lessee, its passengers or other Persons (such as lessors) which were on the Aircraft at the time Lessor re-takes possession of the Aircraft; (iii) not be liable or responsible, in any manner, for any inadvertent damage or injury to any of Lessee's property in repossessing and holding the Aircraft, the Airframe, an Engine or Part, except for that caused by or in connection with Lessor's gross negligence or willful acts; (iv) have the right to maintain possession of and dispose of the Aircraft, the Airframe, an Engine or Part on any premises owned by Lessee or under Lessee's control; and (v) have the right to obtain a key to any premises at which the Aircraft, the Airframe, an Engine or Part, may be located from the landlord or owner thereof. If reasonably required by Lessor, Lessee, at its sole expense, shall assemble and make the Aircraft, the Airframe, an Engine or Part available at a place designated by Lessor in accordance with Section 16 hereof. Lessee hereby agrees that, in the event of the return to or repossession by Lessor of the Aircraft, the Airframe, an Engine or Part, any rights in any warranty (express or implied) heretofore assigned to Lessee or otherwise held by Lessee shall without further act, notice or writing be assigned or reassigned to Lessor, if assignable. Lessee shall be liable to Lessor for all reasonable expenses, disbursements, costs and fees incurred in (i) repossessing, storing, preserving, shipping, maintaining, repairing and refurbishing the Aircraft, the Airframe, an Engine or Part to the condition required by Section 16 hereof and (ii) preparing the Aircraft, the Airframe, an Engine or Part for sale or lease, advertising the sale or lease of the Aircraft, the Airframe, an Engine or Part and selling or releasing the Aircraft, the Airframe, an Engine or Part. Lessor is hereby authorized and instructed, at its option, to make reasonable expenditures which Lessor considers advisable to repair and restore the Aircraft, the Airframe, an Engine or Part to the condition required by Section 16 hereof, all at Lessee's sole expense. At any public sale of the Aircraft, the Airframe, an Engine or Part pursuant to this Section, Lessor may bid for and purchase such property and Lessee agrees that the amounts paid therefor shall be used in the computation contemplated herein. No remedy referred to in this Section 18 is intended to be exclusive, but, to the extent permissible hereunder or under applicable Law, each shall be cumulative and in addition to any other remedy referred to above or otherwise available to Lessor at Law or in equity; and the exercise or beginning of exercise by Lessor of any one or more of such remedies shall not preclude the simultaneous or later exercise by Lessor of any or all of such other remedies. No express or 52

implied waiver by Lessor of any Default or Event of Default shall in any way be, or be construed to be, a waiver of any future or subsequent Default or Event of Default. Lessor acknowledges a duty under New York law to mitigate damages resulting from any Default or Event of Default on the part of Lessee. Section 19. Alienation. LESSOR SHALL HAVE THE RIGHT AT ITS SOLE COST AND EXPENSE TO ASSIGN, SELL OR ENCUMBER ANY INTEREST OF LESSOR IN THE AIRCRAFT OR THIS LEASE AND/OR THE PROCEEDS HEREOF SUBJECT TO THE RIGHTS OF LESSEE UNDER THE PROVISIONS OF THIS LEASE. NO ASSIGNMENT, SALE OR OTHER TRANSFER OF LESSOR'S INTEREST OR CREATION OF ANY LIEN SHALL DIMINISH OR ADVERSELY AFFECT LESSEE'S RIGHTS HEREUNDER OR INCREASE LESSEE'S DUTIES OR THE LIABILITIES OF LESSEE IN RESPECT OF ANY TAX OR UNDER ANY OF ITS INDEMNIFICATION OBLIGATIONS, OR CAUSE LESSEE TO INCUR ANY OBLIGATIONS, COST OR EXPENSE IN EXCESS OF THOSE FOR WHICH IT WOULD HAVE BEEN RESPONSIBLE IN THE ABSENCE OF SUCH ASSIGNMENT, SALE OR TRANSFER. LESSOR AGREES TO OBTAIN THE WRITTEN ACKNOWLEDGMENT OF ANY ASSIGNEE TO LESSEE'S RIGHT TO QUIET ENJOYMENT AS DESCRIBED IN SECTION 20(f). TO EFFECT OR FACILITATE ANY SUCH ASSIGNMENT, SALE OR ENCUMBRANCE, LESSEE AGREES TO PROVIDE, AT LESSOR'S SOLE COST AND EXPENSE, SUCH AGREEMENTS, CONSENTS, CONVEYANCES OR DOCUMENTS AS MAY BE REASONABLY REQUESTED BY LESSOR, WHICH SHALL INCLUDE, WITHOUT LIMITATION, PROVIDED THAT LESSEE CONSENTS TO SUCH A RELEASE, AN UNRESTRICTED RELEASE OF LESSOR FROM ITS OBLIGATIONS UNDER THIS LEASE. LESSEE SHALL NOT UNREASONABLY WITHHOLD ITS CONSENT TO SUCH A RELEASE, AND LESSEE SHALL IN ANY EVENT BE REQUIRED TO SO CONSENT IF LESSOR PROVIDES ADEQUATE ASSURANCE OF PERFORMANCE OF LESSOR'S OBLIGATIONS HEREUNDER BY AN ASSIGNEE. LESSOR SHALL ALSO REIMBURSE LESSEE FOR ANY FEES, EXPENSES OR OTHER COSTS ASSOCIATED WITH ANY FILINGS AND REGISTRATIONS IN THE COUNTRY OF REGISTRATION OR OTHER JURISDICTIONS THAT ARE REQUIRED TO BE MADE IN CONNECTION WITH ANY SUCH SALE, ASSIGNMENT OR OTHER TRANSFER OR THE PERFECTION AND MAINTENANCE OF ANY SUCH LIEN. LESSEE HEREBY AGREES THAT IT WILL NOT ASSERT AGAINST AN ASSIGNEE ANY CLAIM OR DEFENSE WHICH IT MAY HAVE AGAINST LESSOR. THE AGREEMENTS, COVENANTS, OBLIGATIONS, AND LIABILITIES CONTAINED HEREIN INCLUDING, BUT NOT LIMITED TO, ALL OBLIGATIONS TO PAY RENT AND INDEMNIFY EACH INDEMNITEE ARE MADE FOR THE BENEFIT OF EACH INDEMNITEE AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. 53

Section 20. Miscellaneous. (a) Severability and Construction. Any provision of this Lease which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof; any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. To the extent permitted by applicable Law, Lessee hereby waives any provisions of Law which render any provisions hereof prohibited or unenforceable in any respect. This Lease shall constitute an agreement of lease, and nothing herein shall be construed as conveying to Lessee any right, title or interest in the Aircraft or any Engine or Part except as a lessee only. The headings in this Lease are for convenience of reference only and shall not define or limit any of the terms of provisions hereof. Whenever required by the context hereof, the singular shall include the plural and vice versa. Reference to this Lease shall mean this Lease as amended or supplemented from time to time. (b) Governing Law; Jurisdiction. THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE BUT WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES) EXECPT FOR THE PROVISIONS OF SECTION 7-101 OF THE NEW YORK GENERAL OBLIGATIONS LAW (WHICH PROVISIONS THE PARTIES HAVE AGREED FOR AVOIDANCE OF DOUBT ARE INAPPLICABLE TO THIS TRANSACTION) AND EXCEPT FOR MATTERS GOVERNED BY THE FEDERAL LAWS OF THE UNITED STATES. LESSEE AND LESSOR HEREBY IRREVOCABLY CONSENT THAT ANY LEGAL ACTION OR PROCEEDING AGAINST IT OR ANY OF ITS ASSETS WITH RESPECT TO THE LEASE MAY BE BROUGHT IN ANY JURISDICTION WHERE LESSEE OR LESSOR OR ANY OF ITS ASSETS MAY BE FOUND, OR IN ANY COURT OF THE STATE OF NEW YORK OR ANY FEDERAL COURT OF THE UNITED STATES OF AMERICA LOCATED IN NEW YORK, NEW YORK, AS LESSOR MAY ELECT, AND BY EXECUTION AND DELIVERY OF THIS LEASE LESSEE AND LESSOR HEREBY IRREVOCABLY SUBMIT TO AND ACCEPT WITH REGARD TO ANY SUCH ACTION OR PROCEEDINGS, FOR ITSELF AND IN RESPECT OF ITS ASSETS, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. LESSEE AND LESSOR HEREBY AGREE THAT IN THE EVENT THAT ANY JUDICIAL PROCEEDINGS ARE BROUGHT IN THE COUNTRY OF REGISTRATION, NEITHER OWNER NOR THE LESSOR SHALL BE REQUIRED TO POST ANY SECURITY IN ORDER FOR THE LESSOR TO TAKE POSSESSION OF THE AIRCRAFT IN ACCORDANCE WITH THE TERMS OF THIS LEASE. LESSEE AND LESSOR FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED AIRMAIL, POSTAGE PREPAID, TO LESSEE OR LESSOR AT ITS ADDRESS SET FORTH ON EXHIBIT C HERETO. THE FOREGOING, HOWEVER, SHALL NOT LIMIT THE RIGHTS OF LESSOR OR LESSEE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY LEGAL ACTION OR PROCEEDING OR TO OBTAIN EXECUTION OF JUDGMENT IN ANY JURISDICTION. LESSEE AND LESSOR FURTHER AGREE THAT FINAL JUDGMENT AGAINST LESSEE OR LESSOR IN ANY ACTION OR PROCEEDING IN CONNECTION WITH THIS LEASE SHALL BE 54

CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER JURISDICTION WITHIN OR OUTSIDE THE UNITED STATES OF AMERICA BY SUIT ON THE JUDGMENT, A CERTIFIED OR EXEMPLIFIED COPY OF WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND THE AMOUNT OF LESSEE'S OR LESSOR'S INDEBTEDNESS. LESSEE AND LESSOR HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH LESSEE OR LESSOR MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS LEASE BROUGHT IN THE STATE OF NEW YORK, AND HEREBY FURTHER IRREVOCABLY WAIVE ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF NEW YORK HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. The foregoing notwithstanding, the parties agree that they shall endeavor during a period of ten (10) Business Days to settle all disputes which may arise from the application or interpretation of this Lease through direct bilateral talks in the spirit of mutual understanding. (c) Notices. All notices required under the terms and provisions hereof shall be in writing, shall be sent to Lessor or Lessee at their respective addresses set forth on Exhibit C hereto (or such other addresses as the parties may designate from time to time in writing) and, except as otherwise provided herein, such notice shall become effective upon the earlier of actual receipt or the fifth day following the date such notice is sent. (d) Lessor's Right to Perform for Lessee. If Lessee fails to make any payment of Supplemental Rent required to be made by it hereunder or fails to perform or comply with any covenant, agreement or obligation contained herein, Lessor shall have the right but not the obligation to make such payment or conform or comply with such agreement, covenant or obligation, and the amount of such payment and the amount of the reasonable expenses of Lessor incurred in connection with such payment or the performance thereof or compliance therewith, together with interest thereon at the Interest Rate, shall be payable by Lessee to Lessor (as Supplemental Rent) upon demand. Lessor agrees to notify Lessee in writing prior to making any payment under this Section 20(d), unless the Aircraft will be in danger of loss, sale, confiscation, forfeiture or seizure should such payment not be made. The taking of any such action by Lessor pursuant to this Subsection 20(d) shall not constitute a waiver or release of any obligation of Lessee under the Lease, nor a waiver of any Event of Default which may arise out of Lessee's nonperformance of such obligation, nor an election or waiver by Lessor of any remedy or right available to Lessor under or in relation to this Lease. (e) Counterparts. This Lease may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. To the extent, if any, that this Lease constitutes chattel paper (as such term is defined in the Uniform Commercial Code as in effect in any applicable jurisdiction) no security interest in this Lease may be created through the transfer or possession of any counterpart other than the counterpart which has been marked "Original" on the signature page thereof. (f) Quiet Enjoyment. Lessor covenants that so long as an Event of Default shall not have occurred and be continuing, Lessee shall quietly enjoy the Aircraft and all rents, revenues, profits and income thereto, without interference by Owner, Lessor, or by any Person lawfully 55

claiming by or through Owner or Lessor; provided, however, that the proper exercise by Lessor of its rights under or in connection with this Agreement will not constitute such an interference. The foregoing covenant is in lieu of any quiet enjoyment covenant of Lessor which may be available to Lessee under Section 2A-211(i) of the New York Uniform Commercial Code or as may otherwise be implied under applicable Law. (g) Brokers. Each of the parties hereby represents and warrants to the other that it has not paid, agreed to pay or caused to be paid directly or indirectly in any form, any commission, percentage, contingent fee, brokerage or other similar payments of any kind, in connection with the establishment or operation of this Agreement, to any Person (other than fees payable by Lessor and Lessee to their respective legal advisers or compensation payable by Lessor to GECAS for the portfolio management services performed on behalf of Lessor). Each party agrees to indemnify and hold the other harmless from and against any and all claims, suits, damages, costs and expenses (including, but not limited to reasonable attorneys' fees) asserted by any agent, broker or other third party for any commission or compensation of any nature whatsoever based upon this Agreement or the Aircraft, if such claim, suit, damage, cost or expense arises out of any breach by the indemnifying party, its employees or agents of the representation and warranty given hereby. (h) Payments in U.S. Dollars. All amounts to be paid hereunder shall be paid in Dollars, in immediately available funds, and all letters of credit delivered hereunder shall provide for payment in Dollars. Lessee acknowledges that the specification of Dollars in this transaction is of the essence and that Dollars shall be the currency of account in any and all events. The obligations of Lessee hereunder shall not be discharged by an amount paid in another currency, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on prompt conversion to Dollars and transfer to the account specified in Exhibit C under the heading, "Payment Location" under normal banking procedures does not yield the amount of Dollars owing to Lessor. In the event that any payment by Lessee, whether pursuant to judgment or otherwise, upon conversion does not yield such amount of Dollars, Lessor shall have a separate cause of action against Lessee for the additional amount necessary to yield the amount of Dollars due and owing to Lessor. (i) Security Letter of Credit. Subject to the provisions of Section 20(j) below, on the dates of execution and delivery of this Lease, Lessee shall deliver, or shall have delivered, to Lessor, unconditional and irrevocable Letters of Credit, in the amounts specified in Exhibit C hereto under the heading "Deposit". The Letters of Credit are also herein referred to as the "Security Letter of Credit". The Letters of Credit shall remain in full force and effect during a period commencing on the date of delivery of the Letter of Credit and ending on the Required LC Expiry Date. If Lessee fails to pay Rent hereunder or to pay any other sums due or to perform any of the other terms and provisions of this Lease or any document delivered pursuant hereto or is otherwise in Default hereunder, in addition to all other rights Lessor may have under law or hereunder, Lessor may draw upon all or a portion of the amounts of the Security Letters of Credit and may use, apply or retain all or any portion of the funds paid pursuant to the Security Letters of Credit in partial payment for sums due to Lessor by Lessee, to compensate Lessor for any sums it may in its discretion advance as a result of a Default by Lessee, or to apply toward losses or expenses Lessor may suffer or incur as a result of Lessee's Default hereunder. If Lessor draws upon all or any portion of the Security Letters of Credit, such application shall not be deemed a cure of any Default, and within ten (10) days after written demand therefor, Lessee shall cause each of the 56

Security Letters of Credit to be reinstated to the original amounts thereof or cause replacement Letters of Credit to be issued in the original amounts of the Security Letters of Credit and the failure of Lessee to do so shall be a material breach of this Lease by Lessee. (j) Security Deposit. In the event that any portion of the Security Letters of Credit pursuant to the terms of Section 20(i) above are posted in cash on or after the Delivery Date, such cash Security Deposit shall be non-refundable during the term of the Lease, unless and until such time as Lessee provides Lessor a Security Letter of Credit in the amount of such cash Security Deposit. If Lessee fails to pay Rent hereunder or to pay any other sums due or to perform any of the other terms and provisions of this Lease or any document delivered pursuant hereto or is otherwise in Default hereunder, in addition to all other rights Lessor may have under law or under this Lease, Lessor may draw upon all or a portion of the amount of the cash Security Deposit and may use, apply or retain all or any portion of the funds drawn in partial payment for sums due to Lessor by Lessee, to compensate Lessor for any sums it may in its discretion advance as a result of a Default by Lessee, or to apply toward losses or expenses Lessor may suffer or incur as a result of Lessee's Default under this Lease. If Lessor draws upon all or any portion of the cash Security Deposit, such application shall not be deemed a cure of any default, and within five (5) days after written demand therefor, Lessee shall cause such Security Deposit to be reinstated to the original amount thereof and the failure to do so shall be a material breach of this Lease by Lessee. Provided Lessee is not then in default of its obligations under this Lease, such Security Deposit shall be returned to Lessee upon termination of this Lease. (k) Transaction Costs. Lessor and Lessee shall each be responsible for its own costs and expenses incurred in connection with the preparation, negotiation and delivery of this Lease and any other documents or instruments delivered in connection herewith and the transactions contemplated hereby except as otherwise expressly set forth herein. However, Lessee shall be responsible for all costs associated with perfecting the lease in the Country of Registration (and such other filings as may be required pursuant to Section 15 hereof), including (but not limited to) the provision of legal advice and opinions (excluding the fees and expenses of Lessor's Panamanian or other local counsel for the initial perfection of the Lease), stamp duties, translations and registrations, whether required by Lessor or Lessee. Lessee shall also be responsible for all reasonable costs incurred by Lessor in connection with the enforcement or preservation of Lessor's (and Owner's) rights under the Lease (including the fees and expenses of Lessor' Panamanian or other outside local counsel), other than registration of mortgages or liens on the Aircraft initiated by Owner or Lessor. (l) Time is of the Essence. The time stipulated in this Agreement (without prejudice to any grace periods specified in Section 17) for all payments payable by Lessee and Lessor and the prompt, punctual performance of Lessee's or Lessor's other obligations under this Agreement are of the essence of this Agreement. 57

(m) Disclaimer of Consequential Damages. LESSEE AND LESSOR EACH AGREE THAT IT SHALL NOT BE ENTITLED TO RECOVER, AND HEREBY DISCLAIMS AND WAIVES ANY RIGHT THAT IT MAY OTHERWISE HAVE TO RECOVER, CONSEQUENTIAL DAMAGES AS SUCH TERM IS DEFINED IN SECTION 2-A-520 OF THE NEW YORK UNIFORM COMMERCIAL CODE AS A RESULT OF ANY BREACH OR ALLEGED BREACH OF ANY OF THE AGREEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY IT CONTAINED IN THIS LEASE. (n) Agent for Service of Process. Without prejudice to any other mode of service, Lessee: (i) appoints Greenberg, Traurig, et al. 200 Park Avenue, New York, New York 10019 as its agent for service of process relating to any proceedings before the New York courts in connection with this Lease and agrees to maintain the process agent in New York notified to Lessor; (ii) agrees that failure by a process agent to notify Lessee of the process shall not invalidate the proceedings concerned; and (iii) consents to the service of process relating to any such proceedings by prepaid mailing of a copy of the process to Lessee's agent at the address identified in clause (i) above or by prepaid mailing by air mail, certified or registered mail of a copy of the process to Lessee at the address set forth in Exhibit C of this Lease. (o) Entire Agreement; Modification or Revision. This Lease, which shall be deemed to include Lease Supplement No. 1 when signed and delivered by Lessor and Lessee, and Letter Agreement No. 1 are intended to be a complete and exclusive statement of the terms of the agreement of the parties hereto, and this Lease and Letter Agreement No. 1 supersede any prior or contemporaneous agreements, whether oral or in writing. Neither this Lease, Letter Agreement No. 1, nor any term of this Lease or Letter Agreement No. 1 may be modified, rescinded, changed, waived, discharged or terminated except by a writing signed by the party to be charged. Lessor and Lessee acknowledge their agreement to the provision of this Section 20(o) by their initials below.

EXHIBIT A to Aircraft Lease Agreement SCHEDULE AND DESCRIPTION OF AIRCRAFT Model and Manufacturer's Item Manufacturer Configuration Serial Number - ---- ------------------ ------------- -------------- Aircraft The Boeing Company 737-700 28607 Engine* CFM 56-7B24 [_________] Engine* CFM 56-7B24 [_________] * Each of such Engines has 750 or more rated takeoff horsepower or the equivalent of such horsepower. The serial numbers stated under "Aircraft" and "Engines" above, if any are shown, are those advised to Lessor by the Manufacturer as at the date of this Agreement. If the Manufacturer advises of any change to any serial number, the new number will be deemed inserted under "Serial Number" under "Aircraft" and "Engines" above, as the case may be, above. DELIVERY CONDITION REQUIREMENTS On Delivery, the Aircraft shall be as described above and shall be new, ex factory and painted in Lessee's livery. The Aircraft will be in the condition required for delivery pursuant to the Purchase Agreement between the Manufacturer and Lessor and the Aircraft Specification D6-38808-34, Revision A - July 16, 1998, except as amended by change orders initiated by Lessor thereunder, prior to the date of this Lease (which change orders have been delivered to Lessee prior to the date hereof), or change orders initiated by Lessor with the consent of Lessee under the terms thereof after the date of this Lease, which change orders shall have been delivered to Lessee prior to the Delivery Date, and except as further amended by change orders or otherwise pursuant to Letter Agreement No. 1 between Lessor and Lessee so that the Aircraft also conforms to the technical specification and interior configuration for new Boeing 737-700 Aircraft being delivered to Continental. A-1

EXHIBIT B to Aircraft Lease Agreement AIRCRAFT DOCUMENTS A. CERTIFICATES 1. Certificate of Airworthiness (original and one paper copy) B. AIRCRAFT DOCUMENTS AND RECORDS At delivery of the Aircraft the Manufacturer will furnish (or Lessor will furnish, if previously received from Manufacturer) to Lessee such Aircraft and Engine Records as is normally and customarily furnished by the Manufacturer pursuant to the Purchase Agreement between the Manufacturer and Lessor and the Aircraft Specification D6-38808-34, Revision A - July 16, 1998, except as amended by change orders initiated by Lessor thereunder, prior to the date of this Lease (which change orders have been delivered to Lessee prior to the date hereof), or change orders initiated by Lessor with the consent of Lessee under the terms thereof after the date of this Lease, which change orders shall have been delivered to Lessee prior to the Delivery Date, and except as further amended by change orders or otherwise pursuant to Letter Agreement No. 1 between Lessor and Lessee so that the Aircraft also conforms to the technical specification and interior configuration for new Boeing 737-700 Aircraft being delivered to Continental. B-1

EXHIBIT C to Aircraft Lease Agreement CERTAIN FINANCIAL TERMS 1. CONFIDENTIALITY Lessor and Lessee understand that the commercial and financial information contained in this Exhibit C to this Lease Agreement are considered by Lessor and Lessee as proprietary and confidential. Lessor and Lessee each hereby agree, and any of their assignees, upon becoming such shall agree that it will treat this Exhibit C as proprietary and confidential and will not, without the prior written consent of the other, disclose or cause to be disclosed, the terms hereof or thereof to any Person, except to its employees, counsel, underwriters and auditors as necessary or appropriate for the leasing transaction which is the subject hereof, or except (a) as may be required by applicable Law or pursuant to an order, or a valid and binding request, issued by any court or other government entity having jurisdiction over Lessor, Lessee or the assignee of either of them, as the case may be, or (b) as necessary to enable Lessor or its assignee to make transfers, assignments or other dispositions to potential transferees, assignees or participants of its interest in and to the Agreement. 2. DEFINITIONS OF CERTAIN TERMS ACCEPTANCE LOCATION: Seattle, Washington, or such other location as Lessor and Lessee may mutually agree. BASIC RENT: The Basic Rent payable during the Basic Term shall be payable in sixty (60) consecutive monthly installments, in advance on each Basic Rent Payment Date, with each such installment equal to: (a) **Material Redacted** for the first twenty four monthly installments, (b) **Material Redacted** for the next twenty-four monthly installments, and **Material Redacted** for the last twenty four monthly installments,. BASIC RENT PAYMENT DATE: On the first day of the calendar month immediately succeeding the Delivery Date (or on the Delivery Date if delivery occurs on the first day of the calendar month) and on the first day of each succeeding month to and including the Last Basic Rent Payment Date specified below. CASUALTY VALUE: **Material Redacted** COUNTRY OF ORGANIZATION: Panama. C-1

COUNTRY OF REGISTRATION: Panama, or such other country approved in writing by Lessor prior to registration of the Aircraft therein. DEDUCTIBLE AMOUNT: The Deductible Amount shall be **Material Redacted** DELIVERY LOCATION: Seattle, Washington, or such other location as Lessor and Lessee may mutually agree. DEPOSIT: The Deposit will equal **Material Redacted**, payable as follows: (a) **Material Redacted** in cash, receipt whereof is hereby acknowledged, (b) An irrevocable Letter of Credit in the amount of **Material Redacted** at signing of this Agreement, upon receipt of which Lessor shall refund to Lessee the cash deposit referred to in clause (a) above, and (c) An additional irrevocable Letter of Credit in the amount of **Material Redacted** not less than two days prior to delivery of the Aircraft to Lessee. ENGINE MANUFACTURER: CFM INTERNATIONAL ESTIMATED DELIVERY DATE: October, 1999. ESTIMATED ACCEPTANCE DATE: October, 1999. FINAL ACCEPTANCE DATE: The earlier to occur of the date when the Aircraft meets the conditions specified in Exhibit A and is tendered for delivery to Lessee. FSC INDEMNITY MAXIMUM AMOUNTS: For the purposes of determining the amount payable by Lessee under Section 10 (d) (ii) the following maximum amounts shall apply: 1999 **Material Redacted** 2000 **Material Redacted** 2001 **Material Redacted** 2002 **Material Redacted** 2003 **Material Redacted** 2004 **Material Redacted** 2005 **Material Redacted** 2006 **Material Redacted** 2007 **Material Redacted** Residual Period **Material Redacted** INTEREST RATE: LIBOR plus **Material Redacted** per annum, but not to exceed the maximum amount permitted by Law. C-2

INTERIM RENT: If the Aircraft is delivered to Lessee on a date which is not the first day of a calendar month, Interim Rent shall be payable in one installment on the Delivery Date in an amount equal to the product of **Material Redacted** per day times the number of days from and including the Delivery Date to but excluding the First Basic Rent Payment Date. LAST BASIC RENT PAYMENT DATE: The Last Basic Rent Payment Date for the Aircraft shall be the later to occur of October 1, 2004 and the 59th monthly anniversary of the first Basic Rent Payment Date, or such later date as may result from exercise of the Lease Term Renewal Options. LEASE IDENTIFICATION: "Leased from Aviation Financial Services Inc. as Lessor. Owned by Alcyone FSC Corporation." LESSEE'S ADDRESS: Compania Panamena de Aviacion, S.A. Avenida Justo Arosemena y Calle 39 Aptdo. 1572 Panama 1, Republic of Panama Attention: President Telecopier No.: 507-227-1952 Phone No.: 507-227-4551 LESSOR'S ADDRESS: Aviation Financial Services Inc. c/o GE Capital Aviation 201 High Ridge Road Stamford, Connecticut 06927-4900 Attention: Sr. Vice President - Portfolio Management Telecopier No.: 203-357-4585 Phone No.: 203-357-4279 MANUFACTURER: The Boeing Company. MINIMUM LIABILITY COVERAGE: **Material Redacted** OTHER AGREEMENTS: Any aircraft lease agreement, conditional sale agreement or other aircraft secured financing agreement from time to time heretofore or hereafter entered into and in effect between Lessor, any subsidiary, associate or affiliate of Lessor ("a Lessor Affiliate"), or an owner trustee acting on behalf of Lessor or a Lessor Affiliate, on the one hand, and Lessee, on the other hand. PAYMENT LOCATION: Citibank, N.A., New York, New York, ABA 021000089 for the account of Citibank, N.A. San Juan, Puerto Rico, Account No. 10991506 for further credit to Alcyone FSC Credit Corporation, Account No. 0013228019. PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE: **Material Redacted** C-3

RETURN LOCATION: Panama City, Panama, or such other location as may be mutually agreed by Lessor and Lessee. 3. AIRWORTHINESS DIRECTIVES COST SHARING. Notwithstanding any provisions of the Lease which would require the Lessee, at its expense, to comply with ADs by making repairs, alterations or modifications to the Aircraft to accomplish terminating action of the ADs, in the event that Lessee's actual cost, without mark-up, of compliance with an AD for the Aircraft exceeds **Material Redacted**, Lessor will reimburse Lessee a portion of such cost in excess of such **Material Redacted** as determined by the formula: R = [C - **Material Redacted**] x [ 1 - (N-M)/ **Material Redacted**] where: R = Amount to be reimbursed by Lessor to Lessee C = Lessee's actual cost, without mark-up, of modifying the Aircraft to comply with the AD; and M = the month of the Lease Term in which the AD modification is completed. N = the number of months in the Term (or the Term as extended upon Lessee's exercise of Renewal Options hereunder but in no event shall it be less than **Material Redacted**). Following completion of any such modification work, Lessee shall provide Lessor with a written notice signed by an officer or management employee of Lessee specifying the modifications completed, the cost thereof and the amount to be reimbursed by Lessor hereunder and certifying that at the date of such notice no Default arising from Lessee's failure to pay any amounts due or owing under the Lease when due and no Event of Default had occurred and was continuing. Lessee shall provide Lessor with such additional information as Lessor may reasonably request to verify that such modifications have been completed and the cost thereof. Within thirty days following Lessor's verification of the modification work, cost thereof and calculation of the amount of reimbursement owing to Lessee hereunder and providing no Event of Default has occurred and is then continuing, Lessor shall remit to Lessee the amount owing to Lessee hereunder. 4. MAINTENANCE PAYMENTS AT REDELIVERY: Upon redelivery of the Aircraft to Lessor on the Return Occasion but not after the occurrence of a Casualty Occurrence with respect to the Aircraft, and independent of the redelivery conditions required by Exhibit E to the Lease Agreement, maintenance payments shall be made in accordance with the following: C-4

(a) The Airframe shall be returned with 80% of the time remaining until next scheduled D-check or equivalent as specified in the Maintenance Program. (b) Each Engine shall be returned with 80% of the time remaining until next heavy maintenance visit as determined by the expected life remaining based on industry standard mean time between removals for heavy maintenance as reported by the Engine Manufacturer. (c) Each Engine shall be returned with 80% of the time remaining until next scheduled removal on each LLP installed in each engine as specified in the Maintenance Program. (d) Each Landing Gear shall be returned with 80% of the time remaining until next scheduled overhaul as specified in the Maintenance Program. (e) Each APU shall be returned with 80% of the time remaining until next heavy maintenance visit as determined by the expected life remaining based on industry standard mean time between removals for heavy maintenance as reported by the APU manufacturer. (f) Notwithstanding the foregoing, if an item of equipment is returned with fewer hours remaining than specified above, Lessee will pay Lessor for each hour/cycle below 80% of the time remaining. The per hour cost shall be determined by dividing Lessee's average cost for performing the specified maintenance or, in the case of LLPs, the actual purchase cost on the item divided by the interval between maintenance events or, in the case of LLPs, the life limit, as specified above. (g) If an item of equipment is returned with more hours remaining than specified above, Lessee will be entitled to a credit, for each hour above 80% of the time remaining, that can be used to offset any payments required above for the Aircraft or any other Aircraft leased by Lessee from Lessor. The per hour cost shall be determined by dividing Lessee's average cost for performing the specified maintenance or, in the case of LLPs, the actual purchase cost on the item divided by the interval between maintenance events or, in the case of LLPs, the life limit, as specified above. In the event that Lessee's average cost as determined in sub-paragraphs 19 (f) and (g) above is based upon insufficient Lessee experience as reasonably determined by Lessor, than the average of quotes by three independent FAA repair stations to perform such maintenance shall be used in such sub-paragraphs in lieu thereof. C-5

EXHIBIT C to Lease Agreement CERTAIN CONFIDENTIAL AND PROPRIETARY INFORMATION HAS BEEN INTENTIONALLY OMITTED FROM THIS VERSION OF THE EXHIBIT TO PRESERVE ITS CONFIDENTIALITY. CERTAIN DEFINITIONS ACCEPTANCE LOCATION: Seattle, Washington, or such other location as Lessor and Lessee may mutually agree. BASIC RENT PAYMENT DATE: On the first day of the calendar month immediately succeeding the Delivery Date (or on the Delivery Date if delivery occurs on the first day of the calendar month) and on the first day of each succeeding month to and including the Last Basic Rent Payment Date specified below. COUNTRY OF ORGANIZATION: Panama. COUNTRY OF REGISTRATION: Panama, or such other country approved in writing by Lessor prior to registration of the Aircraft therein. DELIVERY LOCATION: Seattle, Washington, or such other location as Lessor and Lessee may mutually agree. ENGINE MANUFACTURER: CFM INTERNATIONAL ESTIMATED DELIVERY DATE: October, 1999. ESTIMATED ACCEPTANCE DATE: October, 1999. FINAL ACCEPTANCE DATE: The earlier to occur of the date when the Aircraft meets the conditions specified in Exhibit A and is tendered for delivery to Lessee. LAST BASIC RENT PAYMENT DATE: The Last Basic Rent Payment Date for the Aircraft shall be the later to occur of October 1, 2004 and the 59th monthly anniversary of the first Basic Rent Payment Date, or such later date as may result from exercise of the Lease Term Renewal Options. LEASE IDENTIFICATION: "Leased from Aviation Financial Services Inc. as Lessor. Owned by Alcyone FSC Corporation." C-1

LESSEE'S ADDRESS: Compania Panamena de Aviacion, S.A. Avenida Justo Arosemena y Calle 39 Aptdo. 1572 Panama 1, Republic of Panama Attention: President Telecopier No.: 507-227-1952 Phone No.: 507-227-4551 LESSOR'S ADDRESS: Aviation Financial Services Inc. c/o GE Capital Aviation 201 High Ridge Road Stamford, Connecticut 06927-4900 Attention: Sr. Vice President - Portfolio Management Telecopier No.: 203-357-4585 Phone No.: 203-357-4279 MANUFACTURER: The Boeing Company. OTHER AGREEMENTS: Any aircraft lease agreement, conditional sale agreement or other aircraft secured financing agreement from time to time heretofore or hereafter entered into and in effect between Lessor, any subsidiary, associate or affiliate of Lessor ("a Lessor Affiliate"), or an owner trustee acting on behalf of Lessor or a Lessor Affiliate, on the one hand, and Lessee, on the other hand. PAYMENT LOCATION: Citibank, N.A., New York, New York, ABA 021000089 for the account of Citibank, N.A. San Juan, Puerto Rico, Account No. 10991506 for further credit to Alcyone FSC Credit Corporation, Account No. 0013228019. RETURN LOCATION: Panama City, Panama, or such other location as may be mutually agreed by Lessor and Lessee. C-2

EXHIBIT D to Aircraft Lease Agreement LEASE SUPPLEMENT NO. 1 LEASE SUPPLEMENT NO. 1, dated __________________, 199__, between Aviation Financial Services Inc., a Delaware corporation ("Lessor"), and Compania Panamena de Aviacion, S.A., a corporation organized under the laws of Panama ("Lessee"). Lessor and Lessee have previously entered into that certain Aircraft Lease Agreement dated as of November 18, 1998 (herein called the "Lease" and the defined terms therein being hereinafter used with the same meaning). The Lease provides for the execution and delivery from time to time of a Lease Supplement substantially in the form hereof for the purpose of leasing the aircraft described below under the Lease as and when delivered by Lessor to Lessee in accordance with the terms thereof. The Lease relates to the Aircraft, Parts and Engines as more precisely described below. A counterpart of the Lease is attached hereto and this Lease Supplement and the Lease shall form one document. In consideration of the premises and other good and sufficient consideration, Lessor and Lessee hereby agree as follows: 1. Lessor hereby delivers and leases to Lessee under the Lease and Lessee hereby accepts and leases from Lessor under the Lease, that certain new Boeing Model 737-700 commercial jet aircraft and Airframe and the two (2) CFM 56-7B24 Engines (each of which Engines has 750 or more rated takeoff horsepower or the equivalent of such horsepower) described in Schedule 1 hereto ("Delivered Aircraft"). 2. The Delivery Date of the Delivered Aircraft is the date of this Lease Supplement set forth in the opening paragraph hereof. 3. The Term for the Delivered Aircraft shall commence on the Delivery Date and shall end on the Expiration Date, which shall be the later to occur of October 31, 2004 and the day preceding the 60th monthly anniversary of the first Basic Rent Payment Date; subject to earlier termination or extension as provided in the Lease. 4. Lessee hereby confirms to Lessor that (i) the Delivered Aircraft and each Engine installed thereon or belonging thereto have been duly marked in accordance with the terms of Section 6(f) of the Lease, (ii) Lessee has accepted the Delivered Aircraft for all purposes hereof and of the Lease, (iii) Lessee has inspected the Delivered Aircraft and the Delivered Aircraft satisfies all of the delivery conditions set forth in the Lease; and (iv) the information set forth on Schedule 2 hereto pertaining to the Airframe, Landing Gear, Engines, Auxiliary Power Unit, and fuel on board at Delivery are correct as of the date hereof. 5. All of the terms and provisions of the Lease are hereby incorporated by reference in this Lease Supplement to the same extent as if fully set forth herein. 6. This Lease Supplement may be executed in any number of counterparts, each of such counterparts, except as provided in Section 20(e) of the Lease, shall for all purposes be deemed to be an original; and all such counterparts shall together constitute but one and the same Lease Supplement. D-1

IN WITNESS WHEREOF, Lessor and Lessee have caused this Lease Supplement No. 1 to Aircraft Lease Agreement to be duly executed as of the day and year first above written. LESSOR: AVIATION FINANCIAL SERVICES INC., a Delaware corporation By: ------------------------------------ Title: --------------------------------- Executed at: --------------------------- LESSEE: COMPANIA PANAMENA DE AVIACION, S.A., a Panama corporation By: ------------------------------------ Title: --------------------------------- Executed at: --------------------------- D-2

STATE OF CONNECTICUT ) ) ss. (STAMFORD) COUNTY OF FAIRFIELD ) On _________, _____, before me, the undersigned, a Notary Public in and for said State, personally appeared __________________, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that she executed the same in her authorized capacity, and that by her signature on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. ---------------------------------------- Notary Public My commission expires: ----------------- (Seal) D-3

SCHEDULE 1 TO LEASE SUPPLEMENT NO. 1 One New Boeing 737-700 Airframe Manufacturer's Serial No. Total Time* Total Cycles* - -------------- ----------- ------------- 28607 ___________ _____________ Installed CFM Engines Model No. Serial No. Total Time* Total Cycles* - ----------- --------------- ----------- ------------- CFM 56-7B24 [_____________] ___________ _____________ CFM 56-7B24 [_____________] ___________ _____________ Each of the above-described Aircraft Engines is 750 or more rated takeoff horsepower or its equivalent. - ---------- * The total time and total cycles referred to above are as of __________ Time, ___________, _____. Such times and cycles are within _____ hours and _____ cycles of the actual hours and cycles at the time of this Lease Supplement. D-4

SCHEDULE 2 TO LEASE SUPPLEMENT NO. 1 Aircraft Status on The Delivery Date Airframe: Number of Hours Since Last Heaviest Maintenance Inspection: _______ hours "C" Check (or Equivalent): Interval: ________________________ Time Since: ______________________ Landing Gear Overhaul: Number of Hours Since Last Overhaul: Left Gear __________________________ hours Right Gear _________________________ hours Nose Gear __________________________ hours Interval: Left Gear _________________________ hours Right Gear ________________________ hours Nose Gear _________________________ hours Engines: Number of Hours Since Last Hot Section Refurbishment: S/N ______:______ hours S/N ______:______ hours Number of Hours Since Last Cold Section Refurbishment: S/N ______:______ hours S/N ______:______ hours D-5

Hot Section Inspection: Interval: ___________________________ Time Since (S/N ________): _______________________________ Time Since (S/N ________): _______________________________ Time Remaining to First Restriction: Engine S/N: __________ Hours: __________ Restriction: __________ Cycles:__________ Restriction: __________ Engine S/N: __________ Hours: __________ Restriction: __________ Cycles:__________ Restriction: __________ Average Hours and Cycles in Life-Limited Parts: Hours: __________ Cycles: _________ Auxiliary Power Unit: Number of Hours Since Last Heavy Shop Visit: __________ hours Hot Section Inspection: Interval: ________________________ Time Since: ______________________ Fuel on Board at Technical Acceptance: _______________________________ Components: P/N Name Overhaul Interval Time Since New - --- ---- ----------------- -------------- D-6

EXHIBIT E to Aircraft Lease Agreement RETURN CONDITION REQUIREMENTS In addition to the requirements set forth in Section 16 of the Lease, on or before the Expiration Date, Lessee, at its own expense, shall return the Aircraft in compliance with all of the following provisions: (1) The Aircraft shall have theretofore been maintained in accordance with Section 6(d) of the Lease 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 Lessee. (2) The Aircraft shall be clean by commercial airline standards. The cockpit shall be "touched-up" as reasonably required in accordance with standard international airline practice and placards replaced as reasonably required, but without requiring removal of panels or instruments. (3) The Aircraft shall have installed the full complement of Engines (as used herein the term "Engines" includes engines for which title will be transferred to Lessor pursuant to Section 16(c) of the Lease) and other equipment, parts, components, accessories, furnishings and loose equipment as when originally delivered to Lessee (excluding leased equipment) and as should remain installed on the Aircraft were Lessee to continue operating the same in continued regular service, each such item properly functioning in accordance with its intended use. (4) The Aircraft shall comply with FAR Part 129, all outstanding DAC Regulations and Airworthiness Directives issued by the FAA affecting such model aircraft which by their terms require compliance on or before ninety (90) days after the Expiration Date of this Lease. (5) The Aircraft shall have a current and valid DAC Certificate of Airworthiness, or at Lessor's request an export certificate of airworthiness issued by DAC. Lessee will permanently repair any damage to the Aircraft that exceeds the DAC's or manufacturer's limits for operation without restrictions. (6) The Aircraft shall be in as good operating condition as when delivered to Lessee hereunder, ordinary wear and tear excepted. (7) Lessee's distinctive markings, such as name, logo and stripes, shall be removed from the Aircraft in a workmanlike manner in accordance with standard industry practice and the Aircraft shall be re-painted all white. (8) The Aircraft shall have the same amount of fuel as it had on the Technical Acceptance Date, but if it has a lesser amount, then the Lessee shall pay to the Lessor on the Return Occasion an amount which equals the current market price for Aircraft jet fuel times the E-1

amount by which the quantity of fuel on the Technical Acceptance Date exceeds the amount of fuel on the Return Occasion. (9) The Aircraft will meet the requirements of FAA regulations found at Part 36, Appendix C, Stage 3 noise compliance as then in effect without waiver or restriction. (10) Lessee shall adhere strictly to the corrosion prevention and treatment cards as prescribed in the Maintenance Program. (11) The Aircraft, except as otherwise provided in the Lease, Letter Agreement No. 1, or as consented to by Lessor, shall be in substantially the same configuration (including, but not limited to, interior seating configuration, galleys and lavatories) as when the Aircraft was originally delivered to Lessee hereunder. (12) Neither the Aircraft nor any Engine shall have any open, deferred, continued, carry over or placarded log book items. (13) At the end of the Term of the Lease, Lessee, at its expense, shall obtain an Export Certificate of Airworthiness for the Aircraft issued by the DAC, if available from DAC. (14) The Aircraft shall receive a complete block "C" Check (or its equivalent), including all phases and multiples and structural inspections as are normally part of such check immediately prior to the Return Occasion in accordance with Lessee's DAC approved Maintenance Program, with all deficiencies corrected. (15) Return of Engines (a) Each Engine (including, without limitation, burner cans) shall have just completed a hot and cold section borescope inspection (which inspection Lessee shall cause to be recorded on videotape and shall provide a copy of such videotape to Lessor on the Return Occasion), and a power assurance shall have been run in accordance with the Maintenance Program or the manufacturer's maintenance manual and any defects discovered in such inspection exceeding manufacturer's in service limits for normal operations shall be corrected at Lessee's expense. Both the borescopes and the power assurance runs shall take place at the Return Location. (b) No Engine shall be on "Watch" for excessive oil consumption, high Exhaust Gas Temperature or any special or out of sequence inspection and each such Engine shall comply with the operations specification of Lessee. (c) No Engine will have less than 3,500 Engine flight hours and 2,500 Engine cycles (3,000 Engine flight hours and 2,000 Engine cycles if the Aircraft is returned at the end of second or third Renewal Term) of expected life remaining to the next scheduled removal. The expected life remaining will be determined in accordance with this Lease by review of the Engine LLP records and the borescope inspection and power assurance run referred to in subparagraph (a) above. E-2

(16) Return of Auxiliary Power Unit The Auxiliary Power Unit ("APU") will be serviceable and be in the same operational condition as it was on the Delivery Date, with temperatures and air outputs within the manufacturer's limits at all operational settings and have a minimum of 3,000 flight hours or half time remaining whichever is less, based on industry standard mean time between removals for heavy maintenance as reported by engine manufacturer. (17) Return of Landing Gear On a Return Occasion, the Landing Gear and wheel wells will be clean, free of leaks and repaired as necessary. Each installed Landing Gear shall have not less than 3,500 flight hours, 2,500 cycles (3,000 flight hours and 2,000 cycles if the Aircraft is returned at the end of second or third Renewal Term) and 12 months remaining to the next scheduled removal as applicable to a particular component in accordance with the Lessee's Maintenance Program. The wheels and brakes will have not less than half of their useful life remaining. (18) Return of Time, Cycle or Calendar Controlled Components On the Return Occasion each time controlled or calendar controlled component on the Aircraft, excluding the Engines (but including any time controlled components thereon), shall have at least 3,500 flight hours, 2,500 cycles (3,000 flight hours and 2,000 cycles if the Aircraft is returned at the end of second or third Renewal Term) and 12 calendar months remaining to next scheduled check or its equivalent overhaul or replacement as applicable to a particular component in accordance with the Lessee's Maintenance Program. Lessee may remove and replace any time controlled component in order to comply with return conditions herein set forth, provided that the replacement component has an equivalent or later part number, has a value, remaining warranty and modification status at least equal to the replaced component and is completely interchangeable as to form, fit and function as the replaced component. E-3

EXHIBIT F-1 to Aircraft Lease Agreement LESSEE'S COUNSEL OPINION [Letterhead of Lessee's Counsel] [Date of Delivery Date] Aviation Financial Services Inc. c/o GE Capital Aviation Services 201 High Ridge Road Stamford, Connecticut 06927-4900 Re: Compania Panamena de Aviacion, S.A. Lease of New Boeing Model 737-700 Aircraft Manufacturer's Serial No. 28607 Dear Sirs: We act as counsel for Compania Panamena de Aviacion, S.A., a company organized under the laws of Panama (the "Lessee") and have reviewed (i) an Aircraft Lease Agreement dated as of November 18, 1998 (the "Lease") between the Lessee and Aviation Financial Services Inc. (the "Lessor"), together with Lease Supplement No. 1 thereto dated the Delivery Date between the Lessee and the Lessor and Letter Agreement No. 1 dated as of November 18, 1998 between the same parties (collectively, the "Lease"). Except as otherwise defined herein, capitalized terms used herein shall have the meanings set forth in the Lease. You have requested us to render an opinion in connection with the transactions governed by the Lease. We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records and other instruments as we have deemed necessary or advisable for the purpose of rendering this opinion. We have assumed the genuineness of all signatures and the authenticity of all documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies or facsimiles. Based upon the foregoing, we are of the opinion that: 1. The Lessee is a company duly organized and validly existing in good standing under the laws of Panama, is duly qualified to hold property and to transact business as an air carrier under the laws of Panama and is duly qualified to carry on business in each jurisdiction in which it conducts business, has full power and authority to carry on its bus