Exhibit 10.12

Dated as of 4 September 2018

Wilmington Trust SP Services (Dublin) Limited

acting not in its individual capacity but solely as trustee under the Trust Agreement

as Existing Lessor

Air Macau Company Limited

as Lessee

and

Contrail Aviation Leasing, LLC

as New Lessor

NOVATION AND AMENDMENT AGREEMENT

relating to an

Aircraft Lease Agreement dated 26 October 2001 in respect of

One (1) Airbus A319-100 aircraft with manufacturer’s serial no. 1790

CONTENTS

THIS NOVATION AND AMENDMENT AGREEMENT (this “Agreement”) is made as of 4 September    2018

BETWEEN:

WHEREAS:

NOW, THEREFORE, in consideration of the provisions and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,

IT IS AGREED as follows:

In this Agreement the following expressions shall have the following meanings:

“Aircraft” has the meaning ascribed to it in the recitals hereto.

“Bill of Sale” means the bill of sale for the Aircraft dated the Effective Time and delivered by the Existing Lessor to the New Lessor for registration purposes.

“Effective Time” has the meaning ascribed to it in Article 9 (Effective Time).

“Effective Time Supplement” means the Effective Time Supplement in the form of Schedule 1 (Form of Effective Time Supplement) to be executed by the Existing Lessor, the New Lessor and the Lessee.

“Existing DPoA” means the power of attorney dated 28 May 2012 granted by the Lessee in favour of the Existing Lessor and International Lease Finance Corporation, relating to the Aircraft.

“Global Side Letter #2” means Global Side Letter #2 to Aircraft Lease Agreements dated 4 November 2011 by and between International Lease Finance Corporation and Air Macau Company Limited

“Lease” has the meaning ascribed to it in the recitals hereto.

“Lease Documents” means the documents (or, as applicable, the specific paragraph(s) of the documents) listed in Schedule 2 (Lease Documents).

“Novated Lease” means the Lease as novated and amended pursuant to this Agreement.

“Novated Lease Documents” means the Lease Documents as novated and amended pursuant to this Agreement.

“Novation Documents” means this Agreement, the Effective Time Supplement and the Replacement Power of Attorney.

“Original Lessor” means International Lease Finance Corporation

“Relevant Interest” has the meaning ascribed to it in Article 4.1 (Relevant Interests).

“Replacement Power Attorney” means a replacement power of attorney, duly notarised and executed in Portuguese (with an English translation), to be granted by the Lessee in favour of the New Lessor substantially in the form of Schedule 3.

“Trust Agreement” means that certain Declaration of Trust (Aircraft 32A-1790 (Ireland) Trust) dated as of October 28, 2011 between the Existing Lessor as trustee and Artemis (Delos) Limited as beneficial owner.

Capitalised terms used, but not defined, in this Agreement shall have the respective meanings assigned to them in the Lease.

In this Agreement, unless the context otherwise requires:

As of and with effect from the Effective Time, and subject to the provisions of Article 2.3 (Pre-Effective Time Rights and Remedies; Indemnities):

Each of the foregoing events and agreements is conditional upon the happening of the others and shall occur simultaneously at the Effective Time.

The parties accordingly agree that, as and with effect from and after the Effective Time (subject to the satisfaction (or the waiver in accordance with Article 5.4 (Waiver or Deferral of Conditions Precedent)) of the conditions precedent set out in Article 5 (Conditions

Precedent)) the Lease Documents are novated and constitute agreements between the New Lessor as lessor and owner and the Lessee as lessee on the terms and conditions of the Novated Lease Documents.

The Lessee and the Existing Lessor agree that they shall have the same rights and remedies against each other as each would have had under the Lease Documents in respect of any losses, liabilities or claims suffered or incurred or brought against or payments due to each other in respect of or attributable to the period prior to the Effective Time as if the Existing Lessor had remained the Lessor under the Lease Documents, and the New Lessor shall not be responsible to either the Lessee or the Existing Lessor in respect of any such losses, liabilities or claims, nor shall the Lessee exercise any set off or counterclaim in respect of any such losses, liabilities or claims against the New Lessor, save that the New Lessor shall be responsible for the application and payment of Reserves in accordance with the Lease (as novated and amended pursuant to this Agreement and as further amended from time to time) (“Relevant Claims”), whether or not those Relevant Claims are attributable to periods arising prior to or on and after the Effective Time.

The Lessee and the Existing Lessor agree the indemnities set out in articles 16 and 17 of the Lease shall survive the termination of the Lease and after the Effective Time.

The Lessee acknowledges that the Aircraft was delivered by the Original Lessor to the Lessee on 25 June 2002 in accordance with the terms of the Lease, that the Lessee is in possession of the Aircraft and that the New Lessor may rely on the Estoppel and Acceptance Certificate dated 25 June 2002 (“Estoppel and Acceptance Certificate”) issued by the Lessee to the Original Lessor as though it had been issued to the New Lessor by the Lessee; and it is acknowledged by all parties hereto that no further physical delivery of the Aircraft by the New Lessor is required or contemplated as a result of this Agreement.

As of, and with effect from and after, the Effective Time the Lease Documents as novated hereby shall be (and is hereby) amended as follows and as so amended shall constitute the Novated Lease Documents:

““LESSOR’s Lender” means one or more banks or financial institutions or other Persons as notified in writing to LESSEE from time to time that provide financing directly or indirectly to LESSOR or any Affiliate of LESSOR in relation to LESSOR’s acquisition, continuing ownership or leasing of the Aircraft and will include any collateral agent or security trustee and any Person acting as agent or security trustee for one or more LESSOR’S Lenders.”;

“THIS AIRCRAFT IS OWNED BY CONTRAIL AVIATION LEASING, LLC

MANUFACTURER’S SERIAL NO: 1790

OWNER’S ADDRESS: 435 INVESTMENT COURT, VERONA, WISCONSIN 53593, UNITED STATES OF AMERICA”;

“THIS ENGINE IS OWNED BY CONTRAIL AVIATION LEASING, LLC

MANUFACTURER’S SERIAL NO: [V11286] [V11287]

OWNER’S ADDRESS: 435 INVESTMENT COURT, VERONA, WISCONSIN 53593, UNITED STATES OF AMERICA”;

“Contrail Aviation Leasing, LLC

435 Investment Court

Verona, Wisconsin 53593

United States of America

As a result of the events referred to in the Recitals and Articles 2 (Novation) and 3 (Lease Amendments), as of the Effective Time, the following interests (each a “Relevant Interest”) will exist in relation to the Aircraft:

The Lessee shall maintain or procure that liability insurance is maintained in respect of the Aircraft with each Indemnitee (as defined in article 17 of the Lease prior to its amendment hereunder) as additional assureds, from the Effective Time until the second anniversary of the Effective Time. The cover shall be on terms and for amounts required by the Lease prior to the Effective Time. The Lessee shall deliver a copy of a certificate of such insurances in relation to the Aircraft to the Existing Lessor prior to the Effective Time and at each annual renewal, a copy of such liability insurances until the expiration of such two-year period as required under this Article 4.2 (Existing Lessor Insurances).

The obligation of the New Lessor to execute and deliver the Effective Time Supplement shall be subject to receipt by the New Lessor of the following in form and substance reasonably satisfactory to the New Lessor:

The obligation of the Lessee to execute and deliver the Effective Time Supplement will be subject to the receipt by the Lessee of the following in form and substance reasonably satisfactory to the Lessee:

The obligation of the Existing Lessor to execute and deliver the Effective Time Supplement will be subject to the receipt by the Existing Lessor of the following in form and substance reasonably satisfactory to the Existing Lessor:

Each of the New Lessor, the Lessee and the Existing Lessor may waive or defer any of such conditions precedent to their own obligations as contemplated in Article 5.1 (New Lessor’s Conditions Precedent), Article 5.2 (Lessee’s Conditions Precedent) or Article 5.3 (Existing Lessor’s Conditions Precedent) respectively, upon such further terms and subject to such further conditions as the Existing Lessor, the New Lessor and the Lessee, as the case may be, think fit.

After the Effective Time, the Lessee will (a) prepare new identification plates for the Aircraft as set forth in article 15 of the Novated Lease, (b) as soon as practicable after the Effective Time and in any event no later than 60 days after the Effective Time, remove the existing identification plates and install the replacement identification plates on the Aircraft and (c) notify the New Lessor of such replacement. The New Lessor agrees to pay or reimburse all of the Lessee’s reasonable out-of-pocket costs and expenses incurred by the Lessee in connection with this Article 6.1 (Fireproof Plates).

The parties will cooperate with one another in order to close the sale of the Aircraft and each Engine at a convenient time when the Aircraft and/or the relevant Engine is in a jurisdiction acceptable to the Existing Lessor and the New Lessor, or over international waters. The Existing Lessor and the New Lessor will notify the Lessee of the dates that are scheduled to be the date of the Effective Time reasonably in advance of Effective Time and the Lessee will provide the Existing Lessor and the New Lessor with the scheduled route of the Aircraft (or any other aircraft on which the relevant Engine is installed) on those dates to the extent such schedule is available at the time of such notification, otherwise as soon as such schedule becomes available.

The Lessee undertakes to provide to the New Lessor, as soon as practicable but in any event within 30 days following the Effective Time, a copy of the Aircraft Station Licence for the Aircraft and a copy of the Certificate of Registration issued by the Macau Civil Aviation Authority each with the name of the New Lessor noted thereon as owner of the Aircraft.

At the New Lessor’s cost and to the extent required under the Novated Lease, the Lessee shall perform and do all such other and further acts and things and execute and deliver any and all such other instruments (including any notification to the Macau Civil Aviation Authority changes in the ownership structure of the Aircraft) as the New Lessor may reasonably require to reflect the change in the identity of the owner and lessor of the Aircraft recited in this Agreement (including, but not limited to, the documents and other evidence specified in Articles 6.3 (Aircraft Documents) and 6.4 (Aviation Authority Filings)) and to perfect or protect the interests of the New Lessor and any other person having a Relevant Interest, and for the purpose of carrying out the intent of and giving the New Lessor the full benefit of the novation effected by this Agreement.

Each of the New Lessor and the Existing Lessor shall, at its own cost, perform and do all such other and further acts and things and execute and deliver any and all such other instruments as may be reasonably required to carry out the intent of this Agreement.

The Lessee represents and warrants to the New Lessor and the Existing Lessor that, as of the date of this Agreement and as of the Effective Time (in each case by reference to the facts and circumstances then existing):

The New Lessor represents and warrants to the Lessee and the Existing Lessor that, as of the date of this Agreement and as of the Effective Time:

The Existing Lessor hereby represents and warrants to the Lessee and the New Lessor that, as of the date of this Agreement and as of the Effective Time:

Each of the Lessee and the Existing Lessor confirms and agrees that:

Save as provided for herein, the Novated Lease Documents and all provisions thereof shall continue in full force and effect as the legal, valid and binding rights and obligations of each of the New Lessor and the Lessee enforceable in accordance with their respective terms. All representations, warranties and agreements contained in this Agreement shall survive the execution of this Agreement.

The provisions of this Agreement shall not be varied otherwise than by an instrument in writing executed by or on behalf of all the parties; provided that the New Lessor and the Lessee shall be entitled to amend, modify or vary the terms of the Novated Lease Documents after the Effective Time without reference to the Existing Lessor.

Every notice, request, direction or other communication under this Agreement shall be made in accordance with article 26 of the Lease and shall be sent:

Contrail Aviation Leasing, LLC

435 Investment Court

Verona, Wisconsin 53593

United States of America

This Agreement may be executed in any number of counterparts and by any party hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which, when taken together, shall constitute one and the same agreement.

The provisions of article 28.14 of the Lease shall apply to this Agreement as if set out in full herein and as if references therein to this Agreement were to this Agreement.

This Agreement, the other Novation Documents and the Novated Lease Documents together constitute the sole and entire agreement between the parties hereto in relation to the novation of the Lease.

To the extent required under the Novated Lease, the Existing Lessor, the New Lessor and the Lessee shall co-operate, at the cost of the New Lessor, to make all necessary filings and registrations in connection with the Novation Documents required under the laws of Macau Special Administrative Region.

If stamp duty in respect of this Agreement is actually imposed on the Lessee in Macau Special Administrative Region (which stamp duty would not have otherwise been imposed but for the novation under this Agreement) and is in addition to stamp duty already imposed on the Lease (which is payable by the Lessee), such stamp duty shall be for the account of the New Lessor unless such stamp duty is levied as a result of the Lessee registering or filing any of the Novated Lease Documents or any of the Novation Documents with the Macau Commercial and Moveable Assets Registry without the prior written consent of the New Lessor.

This Agreement and all non-public information obtained by any party about the another party are confidential and are between the parties to this Agreement only and will not be disclosed by a party to third parties (other than to such party’s auditors or legal advisors; as required in connection with any filings of this Agreement or the Novated Lease Documents, in connection with a financing of the Aircraft, as required for enforcement by any party of its rights and remedies with respect to this Agreement or the Novated Lease Documents or as required by applicable law or for the purposes of any applicable filings and registrations) without the prior written consent of the other parties. If any disclosure will result in this Agreement or the Novated Lease Documents becoming publicly available, the parties will cooperate with one another to obtain confidential treatment as to the commercial terms and other material provisions of this Agreement or the Novated Lease Documents (as applicable).

No party may assign any of its respective rights or obligations hereunder or the benefit of this Agreement, save that the New Lessor may assign any of its rights or the benefit of this Agreement in accordance with article 24 of the Novated Lease.

The provisions of article 27 of the Lease with respect to governing law, jurisdiction and legal proceedings are incorporated in this Agreement as if such provisions were set forth herein, mutatis mutandis.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorised representatives as of the day and year first herein written.

SCHEDULE 1

FORM OF EFFECTIVE TIME SUPPLEMENT

Existing Lessor, New Lessor and Lessee hereby agree as follows:

[Signature Page follows]

SCHEDULE 2

LEASE DOCUMENTS

SCHEDULE 3

FORM OF REPLACEMENT POWER OF ATTORNEY

Air Macau Company Limited hereby irrevocably appoints CONTRAIL AVIATION LEASING, LLC (“CONTRAIL AVIATION LEASING, LLC”), organized and existing under the laws of the State of Wisconsin, United States of America whose principal place of business office is at 435 Investment Court, Verona, Wisconsin 53593, United States of America as Air Macau’s true and lawful attorney so that CONTRAIL AVIATION LEASING, LLC may take any of the following actions in the name of and for Air Macau with respect to the A319-100 aircraft bearing manufacturer’s serial number 1790 (the “Aircraft”) leased by CONTRAIL AVIATION LEASING, LLC to Air Macau pursuant to an Aircraft Lease Agreement dated as of October 26, 2001, as assigned and amended from time to time and as novated and amended pursuant to the Novation and Amendment Agreement dated as of [●] (the “Lease”):

1.    Pursuant to the Lease, Air Macau has procured and is maintaining insurances for the Aircraft. CONTRAIL AVIATION LEASING, LLC has been named sole loss payee on the all risk hull and war risk insurances for the Aircraft. In the event of a total loss or constructive total loss of the Aircraft. CONTRAIL AVIATION LEASING, LLC is entitled to receive insurance proceeds in an amount equal to the Agreed Value (as defined in the Lease). CONTRAIL AVIATION LEASING, LLC may take all action and sign all documents otherwise required to be performed by Air Macau including execution on behalf of Air Macau of an appropriate form of discharge/release document, in order for CONTRAIL AVIATION LEASING, LLC to collect such insurance proceeds.

2.    In the exercise of the rights of CONTRAIL AVIATION LEASING. LLC under the Lease to recover the Aircraft from Air Macau and Macau after termination of the Lease due to an Event of Default (as defined in the Lease) under the Lease or for termination of the Lease due to any other reason. CONTRAIL AVIATION LEASING, LLC may take all action otherwise required to be performed by Air Macau before the authorities and courts in Macau in order to cause the Aircraft to be repossessed by CONTRAIL AVIATION LEASING, LLC, deregistered from the Macau Civil Aviation Authority and/or the Macau Commercial and Moveable Assets Registry or any successor thereof, and any other person or Government Entity (as defined in the Lease) which from time to time has control over civil aviation or the registration, airworthiness or operation of aircraft in Macau (the “Aeronautics Authorities”), operated and exported from Macau

3.    In the exercise of the rights mentioned in paragraphs 1 to 2, CONTRAIL AVIATION LEASING, LLC may make any declarations or statements and sign any public or private documents which may be considered necessary or appropriate.

4.    CONTRAIL AVIATION LEASING, LLC may delegate the powers conferred hereby, in whole or in part, to any individual(s), including but not limited to employees of CONTRAIL AVIATION LEASING, LLC or legal counsel in Macau

CONTRAIL AVIATION LEASING, LLC is empowered to determine in its sole discretion when to exercise the powers conferred upon CONTRAIL AVIATION LEASING, LLC pursuant to this Power of Attorney. Any person, agency or company relying upon this Power of Attorney need not and will not make any determination or require any court judgment as to whether an Event of Default (as defined in the Lease) is outstanding under the Lease or whether the Lease has been terminated.

Air Macau hereby waives any claims against (a) any person acting on the instructions given by CONTRAIL AVIATION LEASING, LLC or its designee pursuant to this Power of Attorney and (b) any person designated by CONTRAIL AVIATION LEASING, LLC or an officer of CONTRAIL AVIATION LEASING, LLC to give instructions pursuant to this Power of Attorney. Air Macau also

agrees to indemnify and hold harmless any person, agency or company which may act in reliance upon this Power of Attorney and pursuant to instructions given by CONTRAIL AVIATION LEASING, LLC or its designee.

Air Macau expressly declares that CONTRAIL AVIATION LEASING, LLC may use this power of attorney to do business with “itself”.

This Power of Attorney is irrevocable as it is granted for the benefit of CONTRAIL AVIATION LEASING, LLC in accordance with Articles 258.3 and 1101 of the Macau Civil Code, and may only be revoked with the approval of CONTRAIL AVIATION LEASING, LLC or when the Aircraft has been returned to the possession of CONTRAIL AVIATION LEASING, LLC, deregistered and exported from Macau

Air Macau Company Limited has made and delivered this Power of Attorney on                  in [●].

Air Macau Company Limited

SIGNATURES

SIGNATURES

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AIRCRAFT LEASE AGREEMENT

Dated as of October 26, 2001

BETWEEN

Companhia De Transportes Aereos Air Macau, Sarl

as LESSEE

and

International Lease Finance Corporation

as LESSOR

NEW AIRCRAFT NO. 1

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TABLE OF CONTENTS

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AIRCRAFT LEASE AGREEMENT

THIS AIRCRAFT LEASE AGREEMENT is made and entered into as of October 26, 2001.

BETWEEN:

Companhia de Transportes Aereos Air Macau, Sarl, a Macau corporation whose address and principal place of business is at 693 Avenida da Praia Grande, Edif. Tai Wah 9-12 Andar, Macau (“LESSEE”) and

International Lease Finance Corporation, a California corporation whose address and principal place of business is at 1999 Avenue of the Stars, 39th Floor, Los Angeles, California 90067, United States of America (“LESSOR”).

The subject matter of this Lease is one (1) new Airbus A319-100 aircraft. In consideration of and subject to the mutual covenants, terms and conditions contained in this Lease, LESSOR hereby agrees to lease to LESSEE and LESSEE hereby agrees to lease from LESSOR the Aircraft for the Lease Term and the parties further agree as follows:

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ARTICLE 1         SUMMARY OF TRANSACTION

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

One new Airbus A319-100

In the month of June 2002, at Hamburg, Germany

10 years

US$ *             , payable as follows (in U.S. Dollars):

Payable monthly in advance and equal to *                                               U.S. Dollars (US$ *              for a MTOW of 70 tonnes, or *                                                                           U.S. Dollars (US$ *             ) for a MTOW of 64 tonnes.

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A total of US$ *              per flight hour, as follows:

Macau

LESSEE’s Maintenance Program

*     % of Airbus’s list price for the Aircraft and any additional LESSEE specified changes and LESSOR purchased equipment (BFE) on the date LESSEE takes delivery of the Aircraft, based upon the invoice provided by Airbus. Such agreed value shall decline by *     % on each anniversary of the date LESSEE takes delivery of the Aircraft.

International Lease Finance Corporation

Account No. *                         

Chase Manhattan Bank

55 Water Street

New York, NY 10041

ABA#              

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ARTICLE 2        DEFINITIONS

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

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

“Aircraft Documentation” means all (a) log books, Aircraft records, manuals and other documents provided to LESSEE in connection with the Aircraft, (b) documents listed in Exhibits K and (c) any other documents required to be maintained during the Lease Term by the Aviation Authority, LESSEE’s Maintenance Program and this Lease.

“Airframe” means the airframe described in Exhibit A together with all Parts relating thereto (except Engines or engines).

“Airworthiness Directives” or “ADs” means all airworthiness directives (or equivalent) and other instructions of the FAA and the Aviation Authority applicable to the Aircraft.

“APU” means (a) the auxiliary power unit of the Aircraft.

“Aviation Authority” means the Civil Aviation Authority of Macau or any Government Entity which under the Laws of Macau from time to time has control over civil aviation or the registration, airworthiness or operation of aircraft in Macau. If the Aircraft is registered in a country other than Macau, “Aviation Authority” means the agency which regulates civil aviation in such other country.

“Aviation Documents” means any or all of the following which at any time may be obtainable from the Aviation Authority: (a) if required, a temporary certificate of airworthiness from the Aviation Authority allowing the Aircraft to be flown after Delivery to the State of Registration, (b) an application for registration of the Aircraft with the appropriate authority in the State of

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Registration, (c) the certificate of registration for the Aircraft issued by the State of Registration, (d) a full certificate of airworthiness for the Aircraft specifying transport category (passenger), (e) an air transport license, (f) an air operator’s certificate, (g) such recordation of LESSOR’s title to the Aircraft and interest in this Lease as may be available in the State of Registration and (h) all such other authorizations, approvals, consents and certificates in the State of Registration as may be required to enable LESSEE lawfully to operate the Aircraft.

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

“Business Day” means a day other than a Saturday or Sunday on which the banks in Macau and the city where LESSOR’s Bank are located are open for the transaction of business of the type required by this Lease.

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

“Creditor Agreement” means the applicable agreement between a Creditor and LESSEE or between Creditors pursuant to which such Creditor owns, leases or has an interest in either an aircraft operated by LESSEE on which an Engine may be installed or in an aircraft engine which may be installed on the Airframe.

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

“Delivery” means the delivery of the Aircraft from LESSOR to LESSEE pursuant to Articles 3 and 6.

“Delivery Date” means the date on which Delivery takes place.

“DGAC” means the Direction Generale de I’Aviation Civile.

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

“Engine” means (a) each of the engines listed on the Estoppel and Acceptance Certificate; (b) any replacement engine acquired by LESSOR and leased to LESSEE pursuant to Article 19.5 following a Total Loss of an Engine; and (c) all Parts installed in or on any of such engines at Delivery (or substituted, renewed or replacement Parts in accordance with this Lease) so long as title thereto is or remains vested in LESSOR in accordance with the terms of Article 12.3.

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“Event of Default” means any of the events referred to in Article 25.2.

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

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

“Geneva Convention” means the Convention on the International Recognition of Rights in Aircraft signed in Geneva, Switzerland on June 19, 1948.

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

“Landing Gear” means the installed main and nose landing gear, components and their associated actuators, side braces and parts.

“Law” means any (a) statute, decree, constitution, regulation, order or any directive of any Government Entity, (b) treaty, pact, compact or other agreement to which any Government Entity is a signatory or party and (c) judicial or administrative interpretation or application of any of the foregoing.

“Lease” means this Aircraft Lease Agreement, together with all Exhibits hereto.

“LESSOR’s Lien” means any Security Interest created by or through LESSOR.

“Maintenance Program” means LESSEE’s maintenance program as approved by the Aviation Authority or such other maintenance program as LESSOR may, in its discretion, accept in writing.

“Manufacturer” means Airbus Industrie, a “Groupement d’Interet Economique” established under Ordonnance No. 67-821 dated September 23, 1967 of the republic of France.

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

“Overhaul” means the full reconditioning of the Aircraft, an Engine, APU, Landing Gear, module or Part, as the case may be, in which such equipment has been fully disassembled; cleaned; thoroughly inspected; and returned to the highest standard specified by the applicable manufacturer’s manual.

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

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

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

“Prime Rate” means the rate of interest from time to time announced by Chase Manhattan Bank in New York as its prime commercial lending rate.

“Prohibited Country” means any country to which the export and/or use of an A319 aircraft with IAE engines attached thereto is not permitted under (a) any United Nations sanctions, (b) the U.K. Export of Goods Control Order 1992, (c) the United States Export Administration Act 1979 (as amended) or any successor legislation and/or the Export Administration Regulations promulgated thereunder, (d) where applicable, the various regulations administered from time to time by the Office of Foreign Assets Control of the U.S. Treasury Department, (e) any similar or corresponding legislation then in effect in the U.S., the United Kingdom, France, Spain or Germany or (f) any subsequent United Nations Sanctions Orders the effect of which prohibits or restricts the export and/or use of A319 aircraft with IAE engines attached thereto to such country.

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

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“State of Registration” means Macau or such other country or state of registration of the Aircraft as LESSOR may, in its absolute discretion, approve in writing.

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

2.2 Specific Definitions. The following terms are defined in the Articles referenced below:

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ARTICLE 3          PLACE AND DATE OF DELIVERY

3.1 Place of Delivery. LESSOR will deliver the Aircraft to LESSEE at Manufacturer’s facility at Hamburg, Germany or such other place as may be agreed in writing between the parties (the “Delivery Location”).

3.2 Scheduled Delivery Date. As of the date of this Lease, Delivery of the Aircraft from Manufacturer to LESSOR is scheduled to occur in the month of June 2002. LESSOR will notify LESSEE from time to time and in a timely manner (always to give at least 30 days’ prior notice) of the target date on which LESSOR expects Delivery to take place (the “Scheduled Delivery Date”).

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

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

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

3.6 Cancellation for Anticipatory Delay. Promptly after LESSOR becomes aware that in Manufacturer’s opinion a delay will cause Delivery to be delayed beyond June 30, 2003, LESSOR will notify LESSEE. By written notice given within ten (10) Business Days after LESSEE’s receipt of such LESSOR notice, either party may by written notice to the other party terminate this Lease and this Lease will terminate on the date of receipt of such notice. In the event of such termination, neither party will have any further liability to the other party except that LESSOR will return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent. If neither party gives notice of termination within such ten (10) Business Days, both parties lose all right to terminate under this Article 3.6 unless otherwise agreed in writing by the parties.

3.7 Cancellation for Delay. If a delay, not caused by LESSEE’s or LESSOR’s breach of this Lease, causes Delivery to be delayed beyond June 30, 2003, either party may terminate this Lease by giving the other party written notice within ten (10) Business Days after such

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date and this Lease will terminate on the date of receipt of such notice. In the event of such termination, neither party will have any further liability to the other party except that LESSOR will return to LESSEE the Security Deposit in accordance with Article 5.1.3 and any prepaid Rent. If neither party gives notice of termination within such ten (10) Business Days, both parties lose all right to terminate under this Article 3.7, unless otherwise agreed in writing by the parties.

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ARTICLE 4         LEASE TERM

4.1 Lease Term. The term of leasing of the Aircraft will commence on the Delivery Date and continue for a term of ten (10) years (“Lease Term”).

4.2 “Expiration Date”. “Expiration Date” means the date on which LESSEE is required to redeliver the Aircraft to LESSOR in the condition required by this Lease on the last day of the Lease Term.

4.3 “Termination Date”. This Lease may in fact terminate on any of the dates set forth below:

The “Termination Date” is the date on which this Lease terminates because one of the above has occurred.

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ARTICLE 5         SECURITY DEPOSIT, RENT, RESERVES AND OTHER PAYMENTS

5.1 Security Deposit.

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5.2 LESSOR Costs. LESSEE will reimburse LESSOR for LESSOR’s out-of-pocket costs in connection with any legal opinion obtained by LESSOR with respect to this Lease and registration and repossession of the Aircraft in the State of Registration.

5.3 Rent.

5.4 Reserves.

A total of US$ *          per flight hour, as follows:

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5.5 LESSOR’s Bank Account. The Security Deposit, Rent, Reserves and any other payment due under this Lease will be paid by wire transfer of immediately available U.S. Dollar funds to LESSOR’s bank account at:

or to such other bank account as LESSOR may from time to time designate by not fewer than ten (10) Business Days’ prior written notice (“LESSOR’s Bank”). When it is stated in this Lease that an installment of the Security Deposit, the monthly Rent, Reserves or any other payment is due or must be paid or made by LESSEE by a specific date, then such payment actually must be received by LESSOR’s Bank on or before such specific date, even if, in order for such payment to be received by LESSOR’s Bank by such specific date, LESSEE must initiate the wire transfer prior to such specific date, provided that LESSEE will not be responsible for any failure or delay on the part of LESSOR’s Bank with respect to such funds, including the failure or delay on the part of LESSOR’s Bank to credit LESSOR’s account with amounts paid by LESSEE.

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5.6 Default Interest. If LESSOR’s Bank does not receive the Rent or any other amount on or before the specific date when due, LESSOR will suffer loss and damage the exact nature and amount of which are difficult or impossible to ascertain. LESSEE will pay LESSOR as supplemental Rent (by way of agreed compensation and not as a penalty) interest on any due and unpaid amounts payable by LESSEE under this Lease. Interest will be calculated at a per annum rate (based on a 360 day year) which is equal to *             percent *     %) plus the Prime Rate in effect on the date on which the amount was originally due for the period from the date the amount originally was due through the date the amount actually is received at LESSOR’s Bank or, in the case of LESSOR’s performance of LESSEE’s obligations hereunder, from the date of payment by LESSOR through the date of LESSEE’s repayment to LESSOR (“Default Interest”). Default Interest will accrue on a day-to-day basis and be compounded monthly.

5.7 No Deductions or Withholdings. All payments by LESSEE under this Lease, including the Security Deposit, Rent, Reserves, Default Interest, fees, indemnities or any other item, will be made in full without any deduction or withholding whether in respect of set-off, counterclaim, duties, or Taxes (as defined in Article 16) imposed in the State of Registration or any jurisdiction from which such payments are made unless LESSEE is prohibited by Law from doing so, in which event LESSEE will gross up the payment amount such that the net payment received by LESSOR after any deduction or withholding equals the amounts called for under this Lease. All payments by LESSOR under this Lease, including the return of the Security Deposit, or any other item, will be made in full without any deduction or withholding whether in respect of set-off, counterclaim, duties, or Taxes (as defined in Article 16) imposed in the U.S. or any jurisdiction from which such payments are made unless LESSOR is prohibited by Law from doing so, in which event LESSOR will gross up the payment amount such that the net payment received by LESSEE after any deduction or withholding equals the amounts called for under this Lease.

5.8 Value Added Taxes. The Rent and other amounts payable by LESSEE under this Lease are exclusive of any value added tax, turnover tax or similar tax or duty.

5.9 Wire Transfer Disbursement Report. At the time of each Rent or other payment, LESSEE will complete and fax to LESSOR a wire transfer disbursement report stating the amount of the payment being made by LESSEE and the allocation of such payment to the Security Deposit, Rent, Reserves, Default Interest and other charges. Notwithstanding the allocation set forth in LESSEE’s report, in the event LESSEE is in default under this Lease, LESSOR will have complete discretion to allocate LESSEE’s payments as LESSOR determines.

5.10 Net Lease.

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

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(b) unavailability or interruption in use of the Aircraft for any reason, other than LESSOR’s breach of the covenant of quiet enjoyment described in Article 21.2, including a requisition thereof or any prohibition or interference with or other restriction against LESSEE’s use, operation or possession of the Aircraft (whether by Law or otherwise), any defect in title, airworthiness, merchantability, fitness for any purpose, condition, design, specification or operation of any kind or nature of the Aircraft, the ineligibility of the Aircraft for any particular use or trade or for registration under the Laws of any jurisdiction or Total Loss of the Aircraft;

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

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

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

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

5.11 Currency Indemnity. If under any applicable Law, whether as a result of a judgment against LESSEE or the liquidation of LESSEE or for any other reason, any payment hereunder is required to be made or recovered in a currency other than Dollars then, to the extent that the payment (when converted into Dollars at the “rate of exchange” on the date of payment or, in the case of a liquidation, the latest date for the determination of liabilities permitted by the applicable Law) falls short of the amount unpaid under this Lease, LESSEE or LESSOR, as applicable, will as a separate and independent obligation, fully indemnify LESSOR or LESSEE, as

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applicable, against the amount of the shortfall. If the amount received by LESSOR or LESSEE, as applicable, upon converting the payment into Dollars exceeds the amount payable under this Lease, LESSOR or LESSEE, as applicable, will remit such excess to the other party. For the purposes of this paragraph “rate of exchange” means the rate at which LESSOR or LESSEE is able on the relevant date to purchase Dollars in New York or London (at LESSOR’S option) with such other currency.

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

5.13 Consideration for Rent and other Amounts. The amount of the Rent and other payments contained herein are in consideration of LESSEE’s waiver of warranties and indemnities set forth in Articles 8 and 17, respectively, and the other provisions of this Lease.

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ARTICLE 6          INVOLVEMENT WITH AIRCRAFT MANUFACTURER

6.1 LESSEE Selection of Aircraft. LESSEE ACKNOWLEDGES THAT THE DESCRIPTION OF THE AIRCRAFT SET FORTH IN THIS LEASE IS BASED UPON INFORMATION SUPPLIED BY MANUFACTURER. LESSEE COVENANTS TO LESSOR THAT LESSEE HAS USED ITS OWN JUDGMENT IN SELECTING THE AIRCRAFT AND HAS DONE SO BASED ON ITS SIZE, DESIGN AND TYPE. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A MANUFACTURER, REPAIRER OR SERVICING AGENT OF THE AIRCRAFT.

6.2 Participation Agreement. LESSEE has the right to inspect the Aircraft during the manufacture process and to attend and observe the acceptance tests of the Aircraft pursuant to the terms of a Participation Agreement to be entered into between LESSEE and LESSOR in the form set forth in Exhibit B.

6.3 Procurement of BFE. LESSEE’s and LESSOR’s technical representatives will meet and determine which of LESSEE or LESSOR will provide specific items of BFE. Such BFE will then be provided to Manufacturer by LESSEE or LESSOR, as applicable, within the time frames required by Manufacturer.

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

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

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

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

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

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ARTICLE 7          PRE-DELIVERY, DELIVERY AND POST-DELIVERY DOCUMENTARY AND OTHER REQUIREMENTS

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

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

(b) if available, a letter from the Aviation Authority in the form and substance of Exhibit E.

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

(b) LESSEE’s counsel will deliver an opinion in form and substance of Exhibit G or as otherwise reasonably satisfactory to LESSOR;

(c) provide LESSOR with documents evidencing that LESSEE has obtained any necessary licenses for the importation and ferrying of the Aircraft into Macau and that all applicable customs duties and sales taxes in respect of the Aircraft have been discharged by LESSEE (or arrangements satisfactory to LESSOR have been made for obtaining or paying for the same);

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(d) provide LESSOR with documents reasonably requested by LESSOR evidencing the issuance of each approval, license and consent which may be required in connection with the remittance to LESSOR of any amount payable under this Lease or the performance by LESSEE of any of its obligations hereunder (including without limitation any exchange control approval);

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

(f) provide LESSOR with a power of attorney empowering LESSEE’s representative, who may be an officer or employee of LESSEE, to accept the Aircraft on behalf of LESSEE;

(g) provide LESSOR with a power of attorney in the form of Exhibit H; and

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

7.2 Delivery Requirements. On the Delivery Date of the Aircraft, each of the following will occur.

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

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

(c) such officer has examined the Creditor Agreements between LESSEE and the other Creditors and none of such Creditor Agreements contains terms which provide

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or contemplate that such Creditors will obtain any right, title or interest in an Engine which is installed on another aircraft (or, if this is not the case, such officer will identify in the certificate the parties, the aircraft and the Creditor Agreements for which this statement is untrue).

7.3 Post-Delivery Requirements.

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

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

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

7.4 LESSOR Delivery Requirements. LESSEE’s obligation to lease the Aircraft from LESSOR hereunder will be conditioned upon the representations and warranties of LESSOR

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set forth in Article 21 being correct at the time given and as if repeated on the Delivery Date. Further, LESSEE’s obligation to lease the Aircraft from LESSOR will be conditioned upon LESSOR delivering to LESSEE a certified copy of the Export Certificate of Airworthiness in respect of the Aircraft issued by the DGAC.

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ARTICLE 8         DISCLAIMERS

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

8.1 “As Is, Where Is”. LESSEE AGREES THAT IT IS LEASING THE AIRCRAFT “AS IS, WHERE IS”. LESSEE UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT NEITHER LESSOR NOR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES OR REPRESENTATIVES HAVE MADE OR WILL BE DEEMED TO HAVE MADE ANY TERM, CONDITION, REPRESENTATION, WARRANTY OR COVENANT EXPRESS OR IMPLIED (WHETHER STATUTORY OR OTHERWISE) AS TO (a) THE CAPACITY, AGE, AIRWORTHINESS, VALUE, QUALITY, DURABILITY, CONFORMITY TO THE PROVISIONS OF THIS LEASE, DESCRIPTION, CONDITION (WHETHER OF THE AIRCRAFT, ANY ENGINE, ANY PART THEREOF OR THE AIRCRAFT DOCUMENTATION), DESIGN, WORKMANSHIP, MATERIALS, MANUFACTURE, CONSTRUCTION, OPERATION, DESCRIPTION, STATE, MERCHANTABILITY, PERFORMANCE, FITNESS FOR ANY PARTICULAR USE OR PURPOSE (INCLUDING THE ABILITY TO OPERATE OR REGISTER THE AIRCRAFT OR USE THE AIRCRAFT DOCUMENTATION IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRCRAFT OR ANY PART THEREOF, AS TO THE ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR CONCEALED, EXTERIOR OR INTERIOR, (b) THE ABSENCE OF ANY INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR OTHER INTELLECTUAL PROPERTY RIGHTS, (c) ANY IMPLIED WARRANTY ARISING FROM COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE OR (d) EXCEPT AS STATED IN ARTICLES 21.1.5 AND 21.2, ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE AIRCRAFT OR ANY PART THEREOF, ALL OF WHICH ARE HEREBY EXPRESSLY EXCLUDED AND EXTINGUISHED.

8.2 Waiver of Warranty of Description. IN CONSIDERATION OF (a) LESSEE’S RIGHTS HEREUNDER TO INSPECT THE AIRCRAFT AND (b) LESSOR’S ASSIGNMENT TO LESSEE OF ANY EXISTING AND ASSIGNABLE WARRANTIES OF MANUFACTURER AND ENGINE MANUFACTURER, LESSEE HEREBY AGREES THAT ITS ACCEPTANCE OF THE AIRCRAFT AT DELIVERY AND ITS EXECUTION AND

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DELIVERY OF THE ESTOPPEL AND ACCEPTANCE CERTIFICATE CONSTITUTE LESSEE’S WAIVER OF THE WARRANTY OF DESCRIPTION, ANY CLAIMS LESSEE MAY HAVE AGAINST LESSOR BASED UPON THE FAILURE OF THE AIRCRAFT TO CONFORM WITH SUCH DESCRIPTION AND ANY AND ALL RIGHTS IT MAY HAVE TO THE REMEDIES SET FORTH IN SECTIONS 10508 THROUGH 10522 OF THE CALIFORNIA COMMERCIAL CODE. EVEN IF AT ANY TIME THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION SUBSTANTIALLY IMPAIRS THE VALUE AND UTILITY OF THE AIRCRAFT AND EITHER (i) LESSEE ACCEPTED THE AIRCRAFT BASED ON A REASONABLE ASSUMPTION THAT THE NONCONFORMITY WOULD BE CURED AND IT WAS NOT SEASONABLY CURED OR (ii) LESSEE ACCEPTED THE AIRCRAFT WITHOUT DISCOVERING THE NONCONFORMITY BUT LESSEE’S ACCEPTANCE OF THE AIRCRAFT WAS REASONABLY INDUCED EITHER BY LESSOR’S ASSURANCES OR BY THE DIFFICULTY OF DISCOVERING ANY DEFECT PRIOR TO ACCEPTANCE, LESSEE AGREES NOT TO LOOK TO LESSOR FOR DAMAGES OR RELIEF ARISING OUT OF THE FAILURE OF THE AIRCRAFT TO CONFORM TO SUCH DESCRIPTION.

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

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

8.5 No LESSOR Liability for Losses. LESSEE agrees that LESSOR will not be liable to LESSEE, any sublessee or any Person, whether in contract or tort and however arising, for any cost, loss or damage (consequential or otherwise) arising out of the condition of the Aircraft, whether or not due in whole or in part to an act or omission or the active or passive negligence of LESSOR.

8.6 No Liability to Repair or Replace. LESSOR will not be liable for any expense in repairing or replacing any item of the Aircraft or be liable to supply another aircraft or any item in lieu of the Aircraft or any Part thereof if the same is lost, confiscated, damaged, destroyed or otherwise rendered unfit for use.

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8.7 No Waiver. Nothing in this Article 8 or elsewhere in this Lease will be deemed to be a waiver by LESSEE of any rights it may have against Manufacturer, the Engine manufacturer or any other Person.

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ARTICLE 9        MANUFACTURERS’ AND VENDORS’ WARRANTIES

9.1 Warranties. As set forth in Article 7.2.5, at Delivery LESSOR will assign to LESSEE for the duration of the Lease Term the benefit of all warranties and indemnities given to LESSOR by Manufacturer and the Engine manufacturer. Effective on the Delivery Date, all other vendor warranties with respect to the Aircraft are hereby assigned by LESSOR to LESSEE.

9.2 Reassignment. On the Termination Date, the benefit of any warranty assigned by LESSOR to LESSEE pursuant to Article 7.2.5 will be reassigned automatically to LESSOR or its designee. LESSEE’s rights under such warranties (including LESSEE’s claims and rights to payment thereunder) will revert to LESSOR during any period in which an Event of Default is continuing. LESSEE at its own cost and expense will do all such things and execute such documents as may be required for this purpose.

9.3 Warranty Claims. LESSEE will diligently and promptly pursue any valid claims it may have against Manufacturer and others under such warranties with respect to the Aircraft and will provide notice of the same to LESSOR.

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ARTICLE 10        OPERATION OF AIRCRAFT

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

10.2 Compliance with Laws. LESSEE agrees throughout the Lease Term to maintain operational control of the Aircraft and use the Aircraft in accordance with applicable Laws of the State of Registration and of any country, state, territory or municipality into or over which LESSEE may operate and in accordance with the applicable regulations of IATA. LESSEE will not employ, suffer or cause the Aircraft to be used in any business which is forbidden by Law or in any manner which may render it liable to condemnation, destruction, seizure, or confiscation by any authority. LESSEE will not permit the Aircraft to fly to any airport or country if so doing would cause LESSOR to be in violation of any U.S. Law.

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

10.4 No Violation of Insurance Policies. LESSEE will not use or permit the Aircraft to be used in any manner or for any purpose which is not covered by the insurance policies LESSEE is required to carry and maintain as set forth in this Lease. LESSEE will not carry any goods of any description excepted or exempted from such policies or do any other act or permit to be done anything which could reasonably be expected to invalidate or limit any such insurance policy.

10.5 Flight Charges.

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ARTICLE 11        SUBLEASES

11.1 No Sublease without LESSOR Consent. LESSEE WILL NOT SUBLEASE OR PART WITH POSSESSION OF THE AIRCRAFT (EXCEPT FOR MAINTENANCE AND REPAIR) AT ANY TIME WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (NOT TO BE UNREASONABLY WITHHELD OR DELAYED) AND IN ACCORDANCE WITH SUCH REQUIREMENTS AS MAY FROM TIME TO TIME BE AGREED IN WRITING BETWEEN LESSOR AND LESSEE. THE WET LEASING OF THE AIRCRAFT DURING THE LEASE TERM (IN WHICH LESSEE AND ITS CREWS RETAIN OPERATIONAL CONTROL OF THE AIRCRAFT) WILL NOT BE CONSIDERED A SUBLEASE OF THE AIRCRAFT.

(a) LESSOR and LESSOR’s Lender (if any) are satisfied (with the support of an independent local legal opinion) that their respective interests as owner of the Aircraft and mortgagee (if any) will be fully recognized and protected in the jurisdiction in which the Aircraft is proposed to be based;

(b) LESSOR is satisfied (in its absolute discretion) and LESSEE has certified to LESSOR’s Lender that the terms of the proposed sublease neither conflict nor are inconsistent with the terms of this Lease; and

(c) the sublease is subject and subordinate to this Lease and prohibits further derivative subleasing.

11.2 Subleasing Proposal Fee. LESSEE will indemnify LESSOR on demand for all out-of-pocket expenses (including legal fees) incurred in connection with LESSOR’s assessment of the subleasing proposal or its implementation.

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11.3 Any Approved Sublease. Any sublease approved by LESSOR will be for a term no greater than the remaining Lease Term and contain provisions consistent with this Lease protecting LESSOR’s title to the Aircraft, providing appropriate LESSOR indemnities, regarding the maintenance and repair standards for the Aircraft, concerning the insurances which will be carried by the sublessee and the circumstances which constitute a Total Loss of the Aircraft. Any such sublease will be subject and subordinate to this Lease. In its sole discretion, LESSOR may require an opinion of counsel in connection with such sublease, including LESSOR’s rights to repossess the Aircraft in the event of an Event of Default hereunder or under the sublease. LESSEE will not amend the terms of any approved sublease without the prior written consent of LESSOR, which will not be unreasonably withheld.

11.4 Assignment of Sublease. At the request of LESSOR, any approved sublease will be assigned to LESSOR as security. LESSEE will deliver the original counterpart of the sublease to LESSOR and make any filings necessary to protect LESSOR’s security interest.

11.5 Continued Responsibility of LESSEE. LESSEE will continue to be responsible for performance of its obligations under this Lease during any period of sublease or wet lease.

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ARTICLE 12        MAINTENANCE OF AIRCRAFT

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

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

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

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

(c) incorporation in the Aircraft of all other service bulletins of Manufacturer, the Engine manufacturer and other vendors which LESSEE schedules to adopt within the Lease Term for the rest of its A319 aircraft fleet. It is the intent of the parties that the Aircraft will not be discriminated from the rest of LESSEE’s fleet in service bulletin compliance (including method of compliance) or other maintenance matters. LESSEE will not discriminate against the Engines with respect to Overhaul build standards and life limited part replacements;

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

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(e) incorporation into the Maintenance Program of an anti-fungus/biological growth and contamination prevention, control and treatment program of all fuel tanks in accordance with Manufacturer’s approved procedures;

(f) providing LESSOR with written summaries of all sampling programs involving or affecting the Aircraft;

(g) maintaining in English and keeping in an up-to-date status the records and historical documents set forth in Attachment 1 of Exhibit K;

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

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

(j) ensuring that Overhauls are accomplished utilizing maintenance and quality control procedures approved by the Aviation Authority and that the repair agency provides a complete record of all work performed during the course of such Overhaul and certifies that such Overhaul was accomplished, that the equipment is airworthy and released for return to service and that the Overhaul was in conformity with the original type design.

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

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

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

12.5 Pooling of Engines and Parts. With LESSOR’s prior written consent, not to be unreasonably withheld, LESSEE may subject the Engines and Parts to normal interchange or pooling agreements with responsible international scheduled commercial air carriers customary in the airline industry and entered into by LESSEE in the ordinary course of its business with respect to its entire A319 fleet so long as (a) in the case of pooling of an Engine, such Engine is returned to LESSEE within two (2) months, (b) no transfer of title to the Engine occurs, (c) all other terms of this Lease continue to be observed with respect to the Engines or Parts, including but not limited to Articles 8, 10, 12, 14, 15, 16, 17, 18 and 19 and (d) LESSEE continues to be fully responsible to LESSOR for the performance of all of its obligations hereunder.

12.6 Installation of Engines on other aircraft. Any Engine removed from the Aircraft may be installed on another aircraft in LESSEE’s fleet which utilizes engines of the same type as the Engine only if one of the situations described in this Article 12.6 exists:

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12.7 Engine Thrust Rating. If an Engine is utilized by LESSEE on the Aircraft or on any other airframe (or if the Engine is utilized by any sublessee or user under a pooling arrangement in accordance with this Lease) at a thrust rating greater than the thrust rating set forth in Exhibit A, LESSEE will promptly notify LESSOR and the Engine Reserve amounts set forth in Article 5.4.1 will be increased in an amount proportional to the accelerated rate of deterioration of the Engine resulting from the increased thrust rating.

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12.9 Performance of Work by Third Parties. Whenever maintenance and repair work on the Aircraft or Engines will be regularly performed by a Person other than LESSEE, such Person will be an FAA-authorized repair station.

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12.11 Information Regarding Maintenance Program. LESSEE will provide LESSOR with a copy of or information regarding the Maintenance Program for the Aircraft, as requested by LESSOR.

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

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ARTICLE 13        USE OF RESERVES

13.1 Airframe Reserves. LESSOR will reimburse LESSEE from the Airframe Reserves for the actual cost of the structural inspection portion of completed scheduled 5 year, 10 year or 24,000 flight cycle complete zonal and structural checks as described in the MPD and the rectification of any structural deficiencies resulting from such inspections, with work performed for all other causes excluded, including those causes set forth in Article 13.5. Subject to Article 16.1 and excluding handling, packaging and shipping charges, reimbursement will be made up to the amount in the Airframe Reserve.

*     %    Fan & Accessory Gearbox

*     %    High Pressure Compressor

*     %    High Pressure Turbine

*     %    Low Pressure Turbine

13.3 Engine LLP Reserves. LESSOR will reimburse LESSEE from the Engine LLP Reserves for an Engine for the actual out-of-pocket materials cost without overhead, mark-up or profit factor associated with the replacement of life-limited Parts in such Engine during completed Engine shop visits (i.e. heavy maintenance visits) requiring off-wing teardown and/or disassembly, with work performed for all other causes excluded, including those causes set forth in Article 13.5. Subject to Article 16.1 and excluding exchange fees and handling, packaging and shipping charges, reimbursement for replacement of life-limited Parts in an Engine will be made up to the amount in the Engine LLP Reserves applicable to such Engine at the time of removal of such Engine.

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

13.5 Reimbursement Adjustment. By way of example, among the exclusions from reimbursement are those items resulting from repairs covered by LESSEE’s or a third party’s insurance, (deductibles being for the account of LESSEE) or warranties or required as a result of an Airworthiness Directive, manufacturer’s service bulletin, faulty maintenance or installation, improper operations, misuse, neglect, accident, incident, ingestion, or other accidental cause. Reimbursement from the Reserves will not be available for the APU, quick engine change (QEC) Parts, thrust reversers, Landing Gear or any of their associated components. All invoices subject to reimbursement from LESSOR will be reduced (by adjustment between LESSEE and LESSOR retroactively if necessary) by the actual amounts received by LESSEE on account of such work from responsible third parties or other sources, such as insurance proceeds, manufacturer’s warranties, guarantees, concessions and credits (including, with respect to Engines, credits due to life remaining on any removed Engine Parts).

13.6 Costs in Excess of Reserves. LESSEE will be responsible for payment of all costs in excess of the amounts reimbursed hereunder. If on any occasion the balance in the Airframe or an Engine Reserve is insufficient to satisfy a claim for reimbursement in respect of the Airframe or such Engine, the shortfall may not be carried forward or made the subject of any further claim for reimbursement.

13.7 Reimbursement after Termination Date. LESSEE may not submit any invoice for reimbursement from the Reserves after the Termination Date unless on or prior to such date LESSEE has notified LESSOR in writing that such outstanding invoice will be submitted after the Termination Date and the anticipated amount of such invoice. So long as LESSEE has provided such notice to LESSOR, LESSEE may then submit such outstanding invoice at any time within six (6) months after the Termination Date. Subject to the foregoing, any balance remaining in the Airframe and Engine Reserves on the Termination Date, including termination on account of a Total Loss of the Aircraft, will be retained by LESSOR.

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ARTICLE 14        TITLE AND REGISTRATION

14.1 Title to the Aircraft During Lease Term. Title to the Aircraft will be and remain vested in LESSOR. LESSOR and LESSEE intend this Lease to be a “true lease”. LESSEE will have no right, title or interest in the Aircraft except as provided in this Lease.

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

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

14.4 Evidence of Registration and Filings. As LESSOR may reasonably request from time to time, LESSEE will furnish to LESSOR an opinion of counsel or other evidence reasonably satisfactory to LESSOR of the registrations and filings required hereunder.