KITTY HAWK INC
AIRFRAME SALE AGREEMENT
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<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>d47987exv10w3.htm
<DESCRIPTION>AIRFRAME SALE AGREEMENT
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Exhibit&nbsp;10.3
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>AIRFRAME SALE AGREEMENT</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">dated as of June&nbsp;27, 2007

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">between

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>KITTY HAWK AIRCARGO, INC.,</B><BR>
Seller,

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">and

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>AIRLEASE INTERNATIONAL, INC.,</B><BR>
Buyer.

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>AIRFRAME SALE AGREEMENT</B></U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS AIRFRAME SALE AGREEMENT</B>, executed this 27<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> day of June, 2007 (the &#147;Execution
Date&#148;), but effective as of May&nbsp;1, 2007 (the &#147;Effective Date&#148;) (this &#147;Agreement&#148;) is between <B>KITTY
HAWK AIRCARGO, INC., </B>a Texas corporation (&#147;Seller&#148;), and <B>AirLease International, Inc., </B>a Texas
corporation (&#147;Buyer&#148;). Capitalized terms used herein, unless otherwise defined herein, shall have
the meanings ascribed to such terms in Section&nbsp;1 of this Agreement.
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RECITALS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS</B>, Seller owns:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Six (6)&nbsp;Boeing 727-200 Airframes Bearing Manufacturer&#146;s Serial Numbers 21269, 20041,
20664, 21512, 21513, and 20997 together with all loose equipment, logbooks, manuals and
records in the possession of Seller, and excluding engines and QEC components (collectively,
&#147;the Airframes&#148;). Each Airframe will be equipped and in the condition required for FAA Part
121 cargo operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>WHEREAS, </B>subject to the terms and conditions of this Agreement, Seller wishes to sell the
Airframes to Buyer, and Buyer wishes to buy the Airframes from Seller.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>NOW, THEREFORE</B>, in consideration of the mutual covenants and premises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U><FONT style="font-variant: SMALL-CAPS"><B>Section</B></FONT> <B>1.</B></U> <U><B>Definitions</B></U><B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following terms, when capitalized, shall have the following meanings for all purposes of
this Agreement, except where the context otherwise requires:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Affiliate</B></U><B>&#148; </B>of any Person means any other Person (i)&nbsp;directly or indirectly
controlling, directly or indirectly controlled by or under direct or indirect common control with
such Person; (ii)&nbsp;that beneficially owns or holds (directly or through a Subsidiary) 50% or more of
the voting power of any class of voting securities of the Person; or (iii)&nbsp;50% or more of the
voting securities (or in the case of a Person which is not a corporation, 50% or more of the equity
interest) of which is beneficially owned or held by the Person or a Subsidiary thereof. For
purposes of this definition, &#147;<U>control</U>&#148; when used with respect to any specified Person shall
mean the power to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise, and the terms
&#147;<U>controlling</U>&#148; and &#147;<U>controlled</U>&#148; have meanings correlative to the foregoing.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Bill of Sale</B></U><B>&#148; </B>means the long form Bill of Sale, in the form attached hereto as
Exhibit &#147;B&#148; from Seller to Buyer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Business Day</B></U>&#148; means any day other than a Saturday, Sunday or day on which commercial
banking institutions are required or authorized by law to close in New York, New York.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Buyer</B></U><B>&#148; </B>has the meaning set forth in the preamble hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Delivery</B></U><B>&#148; </B>means, with respect to the Airframe, the time at which the Buyer obtains
title to such Airframe in accordance with this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Delivery Date</B></U>&#148; means the &#147;Effective Date,&#148; as previously defined.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Delivery Location</B></U>&#148; shall have the meaning set forth in Section&nbsp;3(a).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Delivery Receipt</B></U>&#148; means the Delivery Receipt in the form attached hereto as Exhibit
&#147;A.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Dollars</B></U><B>&#148;
</B>and the sign <B>&#147;</B><U><B>$</B></U><B>&#148; </B>mean the lawful currency of the United States of
America.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Event of Loss</B></U>&#148; means any loss or destruction of the Airframe.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Governmental Body</B></U><B>&#148; </B>means any national government, political subdivision thereof, or
local jurisdiction therein or any instrumentality, board, court, agency or commission thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Losses</B></U><B>&#148; </B>means losses, costs, expenses, fees (including legal fees and disbursements),
payments, demands, liabilities, claims, actions, proceedings, penalties, fines, damages and
judgments of any kind and nature whatsoever (other than Taxes).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;Payment Date&#148; </B>means that date within three (3)&nbsp;business days after the Execution Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Person</B></U><B>&#148; </B>means an individual, corporation, national banking association, partnership,
limited liability company, trust, unincorporated association, joint venture, joint-stock company,
Governmental Body or any other entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Purchase Price</B></U>&#148; means the total sale price for six (6)&nbsp;Airframes shall be one million
four hundred thousand dollars ($1,400,000.00).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Sale Documents</B></U>&#148; means this Agreement, the Bill of Sale and the Delivery Receipt.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Seller&#148;</B></U> has the meaning set forth in the preamble hereto.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;<U><B>Seller Indemnitees</B></U><B>&#148; </B>means Seller and its respective directors, members, managers,
servants, agents, employees, successors and assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&#147;</B><U><B>Subsidiary</B></U><B>&#148; </B>of any Person means any other Person more than 50% of the outstanding
voting stock of which is at the time owned or controlled directly or indirectly by the Person or a
Subsidiary thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><FONT style="font-variant: SMALL-CAPS"><B>Section</B></FONT><B> 2.</B></U> <U><B>Sale of Airframe; Purchase Price</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B><U><B>Sale of Airframe</B></U><B>. </B>Subject to the terms of this Agreement, effective as of the
Delivery Date for the Airframes, the Seller shall sell the Airframes to the Buyer, and the Buyer
shall purchase the Airframes from the Seller. The obligation of the Seller and the Buyer to effect
such sale and purchase shall be subject only to the compliance or waiver of their respective
conditions precedent set forth in Section&nbsp;4 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(b)&nbsp;</B><U><B>Purchase Price</B></U>. The Purchase Price for the Airframes shall be paid by the Buyer
to the Seller on or before the Payment Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<U><B>Payment</B></U>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The payments provided for herein shall be paid to KHA via wire transfer to account number:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Beneficiary: Kitty Hawk Aircargo, Inc.<br>
Capital One, N.A.<br>
14651 Dallas Parkway, Suite&nbsp;300<br>
ABA # 111 901 014<br>
Account # 3620477833
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Swift code: HIBKUS44
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With confirmation of payment concurrently sent to the attention of Jessica Wilson, Chief
Accounting Officer, 1535 W. 20<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> St., P.O. Box 612787, DFW Int&#146;l Airport, TX
75261.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><FONT style="font-variant: SMALL-CAPS"><B>Section</B></FONT><B> 3.</B></U> <U><B>Airframe Delivery, Title, Risk of Loss</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B><U><B>Place of Delivery.</B></U> Delivery of the Airframes shall be at Seller&#146;s Dallas, Texas
headquarters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(<B>b)&nbsp;</B><U><B>Condition of Airframe</B></U><B>. </B>Buyer confirms that the Airframes and the related
logbooks, manuals and records have been made available to it, that it has inspected the Airframes
and such logbooks, manuals and records and the condition of the Airframes, logbooks, manuals
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and
records are acceptable to it for all purposes. Buyer shall be given the opportunity, upon notice
from Seller two days prior to the scheduled Delivery Date of the Airframes, to inspect
such Airframe, logbooks, manuals and records to confirm that same are not in materially different
condition than when inspected and accepted by Buyer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(c)&nbsp;</B><U><B>Title and Risk of Loss</B></U><B>. </B>All right, title and interest in and to the Airframes and
the risk of loss or destruction of, or damage to, the Airframes and all other risks relating
thereto shall pass to Buyer upon the delivery (and release) of the Bill of Sale therefor to Buyer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(d)&nbsp;</B><U><B>Event of Loss</B></U><B>. </B>In the event that, prior to the Payment Date, such Airframe
suffers an Event of Loss, then the Seller shall immediately notify the Buyer in writing of such
occurrence and such notice shall discharge and terminate all obligations and liabilities of the
parties hereunder with respect to such Airframe.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(e)&nbsp;</B><U><B>Force Majeure</B></U><B>. </B>The Seller shall not be liable for any delay or failure in
Delivery of the Airframes or the performance of any other obligation under this Agreement where
such failure or delay is the result of any cause or matter beyond the Seller&#146;s reasonable control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><FONT style="font-variant: SMALL-CAPS"><B>Section&nbsp;4.</B></FONT></U> <U><B>Conditions Precedent</B></U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B>The obligation of the Seller to sell the Airframes on the Delivery Date therefor pursuant
to Section 2(a) hereof shall be subject only to the following conditions precedent, unless, in any
case, waived by the Seller in its sole discretion:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i)&nbsp;Buyer shall have paid in full the Purchase Price for such Airframes and paid it
to Seller in accordance with Section 2(b) hereof;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ii)&nbsp;Buyer shall have executed and delivered the Delivery Receipt for such Airframes
to Seller;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iii)&nbsp;the representations and warranties of the Buyer contained in Section&nbsp;5 hereof
shall be true and accurate in all material respects 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 (in which event such representations
and warranties shall have been true and accurate on and as of such earlier date);
and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iv)&nbsp;such Airframes shall not have suffered an Event of Loss.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(b)&nbsp;</B>The obligation of the Buyer to purchase the Airframes and pay the Purchase Price therefor
on the Delivery Date therefor shall be subject only to the following conditions precedent unless,
in any case, waived by the Buyer in its sole discretion:
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i)&nbsp;the Seller shall have executed and delivered the Bill of Sale for such Airframes
to Buyer;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ii)&nbsp;the Seller shall have executed and delivered the Delivery
Receipt for such Airframes to Buyer;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iii)&nbsp;the Seller shall have executed and delivered to Buyer a
certificate of conformance and non-incident statement on Seller&#146;s letterhead in
a form materially the same as Exhibit &#147;C&#148; attached hereto;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iv)&nbsp;the representations and warranties of the Seller contained in Section&nbsp;5 hereof
shall be true and accurate in all material respects 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 (in which event such representations
and warranties shall have been true and accurate on and as of such earlier date);
and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(v)&nbsp;such Airframes shall not have suffered an Event of Loss prior to the Payment
Date and shall be in the condition required herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><FONT style="font-variant: SMALL-CAPS"><U><B>Section</B></U></FONT><U> <B>5.</B></U> <U><B>Representations and Warranties</B></U><B>.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B><U><B>Representations and Warranties of the Seller</B></U>. The Seller hereby represents and
warrants to the Seller that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i)&nbsp;The Seller is a Texas corporation and has the corporate power and authority to
perform its obligations under this Agreement and the other Sale Documents to which
it is a party and this Agreement and the other Sale Documents to which it is a party
have been duly authorized by all necessary corporate action on the part of Seller;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ii)&nbsp;this Agreement has been duly executed and delivered by the Seller and
constitutes, and each other Sale Document to which it is a party when executed and
delivered by the Seller will constitute, the legal, valid and binding obligation of
the Seller, enforceable in accordance with its terms, subject only to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting creditors&#146;
rights generally and to general equitable principles;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iii)&nbsp;the execution, delivery and performance by the Seller of this Agreement are
not in violation of its certificate of incorporation or by-laws or of any indenture,
mortgage, contract or other agreement to which the Seller is a party or by which it
is bound or of any order or judgment applicable to the Seller or any
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">law, government
rule or regulation binding upon the Seller or applicable to its business generally
and do not require the consent or approval of, or the giving of notice to, the
registration with or the taking of any other action in respect of any Governmental
Body;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iv)&nbsp;there is no litigation or proceeding pending or, to the best knowledge of the
Seller, threatened against the Seller an adverse decision in which would prohibit or
materially frustrate the consummation by the Seller of the transactions contemplated
by this Agreement or any other Sale Document to which it is a party;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(v)&nbsp;as of the Delivery Date, the Seller will be the legal owner of such Airframes
and will transfer to Buyer good and marketable title to such Airframes, free and
clear of all Liens, and;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(vi)&nbsp;as of each of the Delivery Date, the Execution Date and the Payment Date, the
Seller is not, or will not, have any knowledge of any Losses which would otherwise
be covered by or within the scope of Seller&#146;s indemnification of Buyer and Buyer&#146;s
Indemnitees as provided in Section 7(c) of this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(b)&nbsp;</B><U><B>Representations and Warranties of the Buyer</B></U>. The Buyer hereby represents and
warrants to the Seller that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i)&nbsp;The Buyer is Texas corporation and has the power and authority to perform its
obligations under this Agreement and this Agreement has been duly authorized by all
necessary action on the part of Buyer;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ii)&nbsp;this Agreement has been duly executed and delivered by the Buyer and
constitutes the legal, valid and binding obligation of the Buyer, enforceable in
accordance with its terms, subject only to bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors&#146; rights generally and to
general equitable principles;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iii)&nbsp;the execution, delivery and performance by the Buyer of this Agreement are not
in violation of its organizational documents or of any indenture, mortgage, contract
or other agreement to which the Buyer is a party or by which it is bound or of any
order or judgment applicable to the Buyer or any law, government rule or regulation
binding upon the Buyer or applicable to its business generally and do not require
the consent or approval of, or the giving of notice to, the registration with or the
taking of any other action in respect of any Governmental Body;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iv)&nbsp;there is no litigation or proceeding pending or, to the best knowledge of the
Buyer, threatened against the Buyer an adverse decision in which would
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">prohibit or
materially frustrate the consummation by the Buyer of the transactions contemplated
by this Agreement or any other Sale Document to which it is a party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(c)&nbsp;</B>The Seller confirms that acceptance by the Seller of payment of the Purchase Price for the
Airframes pursuant to Section&nbsp;2 hereof on the Payment Date therefor will constitute a certification
by the Seller that its representations and warranties contained in this Section&nbsp;5 are true and
accurate on and as of the Delivery Date and the Payment Date. The Buyer confirms that the payment
by the Buyer of the Purchase Price for the Airframes pursuant to Section&nbsp;2 hereof on the Delivery
Date therefor will constitute a certification by the Buyer that its representations and warranties
contained in this Section&nbsp;5 are true and accurate on and as of the Delivery Date and the Payment
Date.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(d)&nbsp;</B>The representations and warranties contained in this Section&nbsp;5 shall survive the sale of
the Airframes hereunder and the execution and delivery of the agreements contemplated hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(e)&nbsp;</B><U><B>Disclaimer</B></U>. Other than the express representations and warranties of the Seller
set forth above in this Section&nbsp;5 and in the Bill of Sale, the Airframes are being sold hereunder,
&#147;AS IS, WHERE IS&#148; and THE BUYER ACKNOWLEDGES AND AGREES THAT THE SELLER NOR ANY OF ITS AFFILIATES,
OFFICERS, DIRECTORS, MEMBERS, MANAGERS, EMPLOYEES OR REPRESENTATIVES HAS 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)&nbsp;THE CAPACITY, AGE, VALUE, QUALITY, DURABILITY, DESCRIPTION,
CONDITION (WHETHER OF THE AIRFRAME OR ANY PART THEREOF), 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 AIRFRAME OR USE THE
AIRFRAME IN ANY OR ALL JURISDICTIONS) OR SUITABILITY OF THE AIRFRAME, OR ANY PART THEREOF, (b)&nbsp;THE
ABSENCE OF LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, KNOWN OR UNKNOWN, APPARENT OR
CONCEALED, EXTERIOR OR INTERIOR, AND (c)&nbsp;ANY IMPLIED WARRANTY ARISING FROM THE COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, IT BEING UNDERSTOOD THAT NOTHING HEREIN WILL BE
DEEMED TO LIMIT THE BUYER FROM AVAILING ITSELF OF ANY WARRANTIES, COVENANTS, AND REPRESENTATIONS OF
ANY MANUFACTURER.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><FONT style="font-variant: SMALL-CAPS"><B>Section</B></FONT><B> 6.</B></U> <U><B>Taxes</B></U>. The Buyer and the Seller shall reasonably
endeavor to complete this transaction in a manner to avoid or minimize any transaction taxes.
However, if such taxes are due, the Buyer shall pay any and all sales, other applicable transfer,
use, value-added, stamp, registration and other similar taxes and any penalties, fines, additions
to tax or interest thereon, (individually a &#147;<U>Tax</U>&#148;, and collectively called
&#147;<U>Taxes</U>&#148;), imposed upon the Seller by any taxing jurisdiction or authority arising out of
the sale of the Airframe hereunder; <U>provided</U>, <U>however</U>,
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio --> - 8 - <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Buyer shall not have any
obligation to pay Taxes imposed on the Seller by any Governmental Body in the state or country in
which such other party is incorporated, organized or conducts any business. In the event that any
taxes are due, assessed and/or paid by Buyer or Seller, Buyer and Seller each as to each other
agree to assist and cooperate with each other to preserve and obtain any and all refunds or credits
arising therefrom.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><FONT style="font-variant: SMALL-CAPS"><B>Section</B></FONT><B> 7.</B></U> <U><B>Indemnification</B></U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B>Buyer assumes liability for, and hereby agrees to indemnify, protect, save and keep
harmless each Seller Indemnitee from and against any and all Losses which may arise on or after the
Payment Date in any manner out of or in relation to injury to or death of any persons whomsoever or
loss or damage to any property of any Person and which may result from, or arise in any manner out
of, or be attributable to (i)&nbsp;the condition, ownership, leasing, purchase, delivery, possession,
disposition, use or operation of the Airframe or any part thereof either in the air or on the
ground; or (ii)&nbsp;any defect in the Airframe or any part thereof arising from its manufacture or any
material or article used therein or from the design, testing or use thereof or from any
maintenance, service, repair, overhaul or testing of the Airframe, in the case of either (i)&nbsp;or
(ii)&nbsp;in respect of Losses arising out of acts, omissions or events <U><B>after</B></U> the Payment Date;
<I>provided, however</I>, that the Buyer&#146;s obligations under this Section&nbsp;7 to any Seller Indemnitee shall
not extend to any Losses caused by the negligence or willful misconduct of any such Seller
Indemnitee or arising from or related to the lease, use, operation, possession or use of any
Airframe by Seller pursuant to the General Terms Agreement for the lease of the any Airframes
between Buyer and Seller.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(b)&nbsp;</B>The Buyer hereby agrees to indemnify, reimburse, and hold harmless the Seller Indemnitees
from any Losses arising out of (i)&nbsp;the breach by Buyer of any of its representations or warranties
hereunder or any other Sale Document, and (ii)&nbsp;the non-performance by Buyer of its obligations
hereunder or any other Sale Document.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(c)&nbsp;</B>Seller agrees to indemnify, protect, save and keep harmless Buyer and each of Buyer&#146;s
officers, directors, employees, agents, servants and contractors (collectively, &#147;Buyer&#146;s
Indemnitees&#148;) from and against any and all Losses which may have arisen either before the Effective
Date or during the period from and after the Effective Date and on or before the Payment Date, in
any manner out of or in relation to injury to or death of any persons whomsoever or loss or damage
to any property of any Person and which may result from, or arise in any manner out of, or be
attributable to (i)&nbsp;the condition, ownership, leasing, purchase, delivery, possession, disposition,
use or operation of the Airframe or any part thereof either in the air or on the ground; or (ii)
any defect in the Airframe or any part thereof arising from its manufacture or any material or
article used therein or from the design, testing or use thereof or from any maintenance, service,
repair, overhaul or testing of the Airframe, in the case of either (i)&nbsp;or (ii)&nbsp;in respect of Losses
arising out of acts, omissions or events <U><B>prior to</B></U> the Payment Date; <I>provided, however</I>,
that the Seller&#146;s obligations under this Section&nbsp;7 to Buyer or any Buyer&#146;s
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio --> - 9 - <!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Indemnitee shall not
extend to any Losses caused by the negligence or willful misconduct of Buyer or any such Buyer&#146;s
Indemnitee.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><FONT style="font-variant: SMALL-CAPS"><B>Section </B></FONT><B>8</B></U><B>. </B><U><B>Assignment of Manufacturer&#146;s Warranties</B>.</U> The Seller
shall extend to the Buyer the rights and benefits, to the extent that the same are not extinguished
by the sale of the Airframes or the passage of time, of any warranties, service life policies and
patent indemnities of any manufacturer and any maintenance and overhaul agencies of and for such
Airframe which the Seller may have to the extent that the same are assignable and transferable.
The Seller also hereby grants to the Buyer rights of subrogation relating to any claim which the
Seller may have under such warranties (if any) concerning the Airframes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><FONT style="font-variant: SMALL-CAPS"><B>Section </B></FONT><B>9</B></U><B>. </B><U><B>Default and Remedies</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B>The following events shall constitute events of default (hereafter &#147;Events of Default&#148;):
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(i)&nbsp;if the Buyer shall fail to make any payment when due hereunder; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(ii)&nbsp;if either party shall default in the performance of this Agreement and such
default shall continue for five (5)&nbsp;Business Days after written notice of default to
the defaulting party and is not thereafter waived; provided that no Event of Default
shall be deemed to have occurred under this sub-section if the relevant party is
using diligent efforts to cure the default as soon as may be practicable (but, in
any case, within fourteen (14)&nbsp;days after notice from the other party); or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iii)&nbsp;if the Seller or the Buyer shall file a voluntary petition in bankruptcy, or
shall be adjudicated as bankrupt or insolvent, or shall file any petition or answer
seeking any reorganization, composition, readjustment, liquidation or similar relief
for itself under any present statute, law or regulation or any future statute, law
or regulation adopted on or prior to the Delivery Date, or shall seek or consent to,
or acquiesce in, the appointment of any trustee, or shall make any general
assignment for the benefit of creditors, or shall admit in writing its inability to
pay its debts generally as they become due; or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">(iv)&nbsp;if a petition shall be filed against the Seller or the Buyer seeking any
reorganization, composition, readjustment, liquidation or similar relief under any
present statute, law or regulation or any future statute, law or regulation adopted
on or prior to the Delivery Date or if any trustee, receiver or liquidator of either
party is appointed.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio --> - 10 - <!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(b)&nbsp;</B>Upon the occurrence of an Event of Default by one party under this Agreement, the other
party shall be entitled, by notice in writing to the other, to terminate this Agreement and/or
recover such damages and/or remedies as are available to it under applicable Law, and, in addition
to such remedies of Seller, upon the occurrence of an Event of Default by Buyer, Seller shall, as
liquidated damages for loss of a bargain and not as a penalty, retain any Deposit paid to Seller
and Buyer shall have no further right or interest therein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><FONT style="font-variant: SMALL-CAPS"><B>Section</B></FONT><B> 10.</B></U> <U><B>Broker&#146;s Commissions</B></U>. Each party hereto agrees that
should any claim be made for commissions or other amounts by any broker or brokers by or through or
on account of actions of that party, that party shall hold the other parties free and harmless from
any and all claims, demands, liabilities, damages, losses, judgments and expenses of every kind
(including legal fees, costs and related expenses) in connection therewith.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U><FONT style="font-variant: SMALL-CAPS"><B>Section</B></FONT><B> 11.</B></U> <U><B>Miscellaneous</B></U><B>.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(a)&nbsp;</B><U><B>Notice</B></U>. All notices required or permitted hereunder shall be in writing and may
be either telefaxed or sent by internationally recognized overnight courier service, addressed as
follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If to Seller:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">Kitty Hawk Aircargo, Inc.<BR>
P.O. Box 612787<BR>
DFW Airport, Texas 75261-2787<BR>
Telephone: 972-456-2427<BR>
Facsimile: 972-456-2350<BR>
(Attention: Robert Barron)
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If to Buyer:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-left: 9%; margin-top: 6pt">AirLease International, Inc.<BR>
Attn: Harold Woody, President<BR>
204 Whispering Hills Street<BR>
Hot Springs, AR 71901<BR>
(501)&nbsp;318-2341 Fax
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">or to such other address as the party desiring the change advises the others from time to time
through a notice given in accordance with the provisions of this Section&nbsp;11(a). Any such notice
shall be effective and shall be deemed to have been given, in the case of a facsimile, upon
confirmation of receipt of such facsimile by the addressee (provided that if the date of dispatch
is
</DIV>
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">not a Business Day, it shall be deemed to have been received at the opening of business in the
country of the addressee on the next Business Day), and in the case of a notice sent by courier
service, when delivered personally (provided that if delivery is tendered but refused, such notice
shall be deemed effective upon such tender).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(b)&nbsp;</B><U><B>Counterparts</B></U>. This Agreement may be executed in counterparts, and each
counterpart shall be an original, and all counterparts together shall be but one and the same
Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(c)&nbsp;</B><U><B>Applicable Law; Jurisdiction</B></U>. <B>THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN
NEGOTIATED AND MADE IN, AND SHALL BE GOVERNED AND INTERPRETED UNDER THE LAWS OF, THE STATE OF
TEXAS, UNITED STATES, APPLICABLE TO AGREEMENTS MADE BY RESIDENTS THEREOF TO BE ENTIRELY PERFORMED
THEREIN.</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<U><B>Dispute Resolution</B></U><B>: </B>The parties hereby agree that any dispute that arises
under this Lease which is not disposed of by mutual agreement shall be resolved through mediation
and/or arbitration. Specifically, any disputes arising out of or connected with this Lease will be
submitted to mediation in Tarrant County, Texas, in accordance with the rules for alternative
dispute resolutions set forth under Texas law. The parties will mutually cooperate to select the
mediator to be used. Any and all information, negotiation and results of the mediation will remain
confidential.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">In the event that mediation is not successful, any remaining dispute that may arise in connection
with any and all aspects of this Agreement, on the written request of either party, shall be
submitted to binding arbitration in accordance with appropriate statutes of the State of Texas and
the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon the award
rendered by the arbitrators may be entered in any court having appropriate jurisdiction. The
parties agree to act in good faith to select a single, neutral arbitrator. If the parties are
unable to do so within ninety (90)&nbsp;days after one party notifies the other party, in writing, of a
dispute or claim, then each party shall appoint one person as arbitrator, and a third neutral
arbitrator shall be chosen by the two arbitrators previously selected by the parties. The third
arbitrator shall then conduct the arbitration alone. It is provided, however, that if there is no
agreement as to the third arbitrator within sixty (60)&nbsp;days after the notice is served, then the
third arbitrator shall be selected by a district judge in Tarrant County, Texas, having subject
matter jurisdiction over the dispute. In such event, all three arbitrators shall conduct the
arbitration. It is further agreed that the expenses of the arbitration shall be paid in
proportions as the arbitrators decide, except that the successful party in any proceeding seeking
enforcement of the provisions of this agreement shall be entitled to receive from the party not
prevailing reasonable and necessary attorneys&#146; fees and expenses, in addition to any other sums to
which such successful party may be entitled. The arbitrators shall decide the identity of the
successful party for the purposes of the preceding sentence.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --> - 12 - <!-- /Folio -->
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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(e)&nbsp;</B><U><B>Time of the Essence</B></U>. Time shall be of the essence in the performance of the
duties of the parties hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(f)&nbsp;</B><U><B>Captions and Paragraph&nbsp;Headings</B></U>. Captions and paragraph headings used herein are
for convenience only and are not a part of this Agreement and shall not be used in construing it.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(g)&nbsp;</B><U><B>Severability</B></U>. In the event that any one or more of the provisions of this
Agreement shall be invalid, illegal or unenforceable in any respect or in any jurisdiction, the
validity, legality and enforceability of the remaining provisions contained herein or of the same
provisions in any other jurisdiction shall not, in any way, be affected or impaired thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(h)&nbsp;</B><U><B>Further Assurances</B></U>. Seller and Buyer will promptly, at any time and from time to
time, execute and deliver to each other such further instruments and documents and take such
further action as may be required by law or as they may each reasonably request to establish,
maintain and protect their respective rights and remedies and to carry out the intent of the
parties under this Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(i)&nbsp;</B><U><B>Written Changes Only</B></U>. No term or provision of this Agreement may be changed or
waived orally, but only by an instrument in writing signed by the parties hereto.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(j)&nbsp;</B><U><B>Exclusiveness</B></U>. This Agreement and the other Sale Documents are the complete and
exclusive statement of the parties hereto with respect to the subject matter hereof and supersede
all prior oral and written communications, proposals, agreements, representations, statements,
negotiations and undertakings, whether express or implied, between the parties hereto with respect
to the subject matter hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(k)&nbsp;</B><U><B>Terms and Definitions</B></U>. The terms and definitions, as herein contained, shall
include the singular and/or plural, masculine, feminine and/or neuter, successors and/or permitted
assigns wherever the context so requires or admits.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(l)&nbsp;</B><U><B>Successors and Assigns</B></U><B>. </B>This Agreement shall be binding upon, and shall inure to
the benefit of and shall be enforceable by the parties hereto and their respective successors and
assigns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(m)&nbsp;</B><U><B>Confidentiality</B></U><B>. </B>This Agreement and the terms and conditions contained herein
shall be and remain strictly privileged and confidential between the parties, and shall not be
discussed, revealed, disseminated or divulged to the media or general public, or to any other third
party, without the express prior written consent of the other party, which consent shall not be
unreasonably withheld; except that (i)&nbsp;the Buyer may disclose any relevant term to a financial
institution for the purpose of financing the purchase of the Airframe or any technical data to any
potential purchaser or lessee of the Airframe from the Buyer; (ii)&nbsp;the Buyer may disclose any
relevant term to its insurers for the purpose of insuring the Airframe; (iii)&nbsp;either party may
disclose any relevant term to any of its Affiliates; (iv)&nbsp;either party may make any disclosure
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio --> - 13 - <!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">required by generally accepted accounting principles, by applicable Law or by any order of a court
or other Governmental Body; (v)&nbsp;either party may make any disclosure in connection with any
litigation relating to the transactions contemplated by this Agreement; (vi)&nbsp;either party, or their
professional advisors, may make any disclosure to any of its agents, employees, auditors, lawyers,
any Governmental Body having jurisdiction over it or any other person which it in good faith
determines has reason to have knowledge of such information; (vii)&nbsp;either party may make any
disclosure to the extent such information is publicly available through no fault of the party
making the disclosure; (viii)&nbsp;either party may make any disclosure to the extent such disclosure is
necessary to carry out its obligations hereunder; (ix)&nbsp;the Seller may make a press announcement in
respect of the transactions contemplated hereby and may announce the same in any of its shareholder
or other reports; and (x)&nbsp;subject to the Seller having approved the text and content of the same in
advance, the Buyer may make a press announcement in respect of the
transactions contemplated hereby and may announce the same in any of its shareholder or other
reports.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>(n)&nbsp;</B><U><B>Expenses</B></U><B>. </B>Except to the extent provided herein, each party will bear and be
responsible for all costs and expenses incurred or to be incurred by it in connection with this
Agreement and the transactions contemplated hereby.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;REMAINDER OF PAGE INTENTIONALLY LEFT BLANK&#093;
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>IN WITNESS WHEREOF</B>, the parties hereto have executed and delivered this Agreement through
their respective duly authorized officers, as of the date and year first above written.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="49%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>KITTY HAWK AIRCARGO, INC.</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Robbie Barron
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Name: Robbie Barron</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Title: VP &#038; COO</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left"><B>AirLease International, Inc.</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
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    <TD align="left" valign="top">/s/ Harold M. Woody
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
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    <TD colspan="3" valign="top" align="left">Name: Harold M. Woody</TD>
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</TR>
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    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">Title: President</TD>
    <TD>&nbsp;</TD>
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